Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Exelixis, Inc. and its officers or directors [1] Financial Performance - On July 28, 2025, Exelixis reported second-quarter financial results, revealing net product revenues for cabozantinib were approximately 2% below the consensus estimate of $531.3 million [3] - Following the announcement, Exelixis's stock price dropped by $7.45 per share, or 16.78%, closing at $36.94 per share on July 29, 2025 [3] Clinical Development Update - Exelixis decided not to proceed to the phase 3 portion of the STELLAR-305 study in advanced squamous cell carcinoma of the head and neck due to emerging competition and assessment of other commercial opportunities [3]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Exelixis, Inc. and its officers or directors [1] Financial Performance - Exelixis reported net product revenues for cabozantinib at approximately $520.9 million, which is about 2% below the consensus estimate of $531.3 million [3] - Following the announcement of financial results, Exelixis's stock price dropped by $7.45 per share, or 16.78%, closing at $36.94 per share on July 29, 2025 [3] Clinical Development - Exelixis decided not to proceed to the phase 3 portion of the STELLAR-305 study in advanced squamous cell carcinoma of the head and neck due to emerging competition and assessment of other commercial opportunities [3]

Financial Data and Key Metrics Changes - For Q2 2025, total revenues were approximately $568 million, including net product revenues from the cabozantinib franchise of $520 million, which represents a 19% year-over-year growth from $438 million in Q2 2024 [6][11][14] - GAAP net income was approximately $184.8 million, or $0.68 per share basic and $0.65 per share diluted, while non-GAAP net income was approximately $212.6 million, or $0.78 per share basic and $0.75 per share diluted [14] - Gross to net for the cabozantinib franchise in Q2 2025 was 30.2%, higher than the previous quarter, primarily due to increased 340B volume, which now accounts for over 24% of total volume [12][13][68] Business Line Data and Key Metrics Changes - The cabozantinib U.S. business showed robust performance, with significant growth in demand and revenue, particularly from the recently approved neuroendocrine tumor (NET) indications, contributing approximately 4% to total net product revenue [5][6][21] - CABOMETYX maintained its position as the leading TKI for renal cell carcinoma (RCC), with TRx volume growing 18% year-over-year, outpacing the market growth rate by 10 percentage points [17][18] - The launch of CABOMETYX in NETs has rapidly established a 35% new patient market share for oral therapies, indicating strong early uptake [20][21] Market Data and Key Metrics Changes - The company anticipates further updates to its 2025 financial guidance as it builds momentum on the NET launch and explores additional revenue opportunities for the second half of 2025 [7][15] - The competitive landscape for cabozantinib remains strong, with the drug being viewed as the best-in-class oral therapy in the NET market shortly after its approval [22][23] Company Strategy and Development Direction - The company aims to solidify its leadership in oncology drug discovery, development, and commercialization through innovation and collaboration, focusing on expanding the number of cancer patients served [4][5] - Zanzalutinib is positioned as the next oncology franchise opportunity, with ongoing pivotal trials and a focus on high-potential indications [7][8][29] - The company is committed to rigorous capital allocation decisions based on clinical and competitive data, prioritizing existing and new indications for zanzalutinib [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of CABOMETYX and the NET market, highlighting positive prescriber feedback and the drug's potential to become a new standard of care [19][22] - The management team emphasized the importance of continuous assessment of emerging data and the dynamic regulatory environment in guiding future development strategies [39][60] Other Important Information - The company reported a cash and marketable securities balance of approximately $1.4 billion as of June 30, 2025, and continued share repurchases under its authorized plan [15] - The One Big Beautiful Bill Act, signed into law on July 4, 2025, allows for the accelerated deduction of unamortized domestic R&D expenditures, providing a cash tax benefit estimated at $147 million [14] Q&A Session Summary Question: Insights from head and neck data for future studies - Management acknowledged the need for continuous assessments in drug development and indicated that further data will be shared in the future [39][40] Question: Longevity of market share gains for cabozantinib - Management expressed confidence in sustaining market share gains in both RCC and NET, citing strong franchise growth and positive prescriber feedback [42][45] Question: Importance of NLM subset in STELLAR-303 - Management highlighted the significance of overall survival as a gold standard and indicated that they will continue to follow the NLM patient population for further insights [56][57] Question: Pricing dynamics with cabozantinib and 340B volume - Management noted a shift towards the 340B segment, impacting gross to net, and projected gross to net to be closer to 30% [66][68] Question: Future studies for zanzalutinib in CRC - Management confirmed interest in exploring zanzalutinib in earlier lines of therapy, particularly in the adjuvant setting, and emphasized the potential for significant patient impact [84][90]

Casdatifan (Cas) & Cabozantinib (Cabo) Combination Therapy - The combination of Cas and Cabo shows a confirmed Overall Response Rate (ORR) of 46% in patients eligible for a minimum of 12 weeks follow-up [32] - In the Cas + Cabo cohort, 98% of patients experienced any treatment-related Adverse Events (AEs) [46] - The median duration of follow-up for patients on Cas 100mg QD + Cabo 60mg QD was 37 months [43] Casdatifan Development and Market Opportunity - Arcus Biosciences has $1 billion in cash to fund pivotal readouts for Domvanalimab (dom), Quemliclustat (quemli), and Casdatifan (cas), including the PEAK-1 trial [12] - Belzutifan prescriptions have grown 154% from December 2023 to April 2025 [74] - Belzutifan achieved LTM sales of >$560 million in the US, with run rate sales based on April Rx's at $720 million+ [75] Clinical Trial and Future Development - PEAK-1, a Phase 3 study, is expected to initiate imminently for post-IO ccRCC, randomizing patients to either 100mg Casdatifan + Cabozantinib or Placebo + Cabozantinib in a 2:1 ratio with approximately 700 patients [67, 68] - Arcus is targeting a $3 billion market opportunity in IO-naive metastatic ccRCC with Casdatifan + Volrustomig (volru) [85] - Arcus is also targeting a $2 billion market in post-IO metastatic ccRCC with Casdatifan + Cabozantinib [85]

Exelixis (EXEL) Conference Call Summary Company Overview - **Company**: Exelixis, Inc. (EXEL) - **Event**: BofA Annual Healthcare Conference - **Date**: May 14, 2025 Key Points Industry and Company Performance - Exelixis is focused on improving cancer care, particularly through its lead product, cabozantinib (cabo) [3][4] - The company reported strong Q1 performance with a 35% year-over-year growth in total revenue [19] - The commercial organization is described as "best in class" within the biopharma oncology ecosystem [4] Financial Highlights - Exelixis has a strong balance sheet and free cash flow, with approximately $700 million in free cash flow last year, primarily used for share buybacks [10][11] - The company has executed a buyback program, repurchasing about 19%-20% of its float since early 2023, with an additional $500 million approved for buybacks [6][7] - R&D spending is committed to remain around $1 billion annually to support pipeline development [7][9] Pipeline and Product Development - The company is optimistic about the potential of its pipeline, particularly with cabozantinib and Zanza, and is actively seeking additional compounds to enhance its portfolio [8][56] - The recent approval of cabozantinib for NET (neuroendocrine tumors) is expected to drive further growth, with a focus on capturing market share [20][21] - The company is also exploring opportunities in colorectal cancer (CRC) with Zanza, aiming for a broader indication [40][41] Market Strategy and Competitive Position - Exelixis emphasizes a scientific and analytical approach to market share growth, actively engaging with prescribers to educate them about their products [22][23] - The company is positioned uniquely in the market, being the only branded drug in the oral therapy market for NET, which is seen as a significant advantage [26] - The potential for Zanza to capture a larger market share in CRC is highlighted, with expectations of a similar growth trajectory as seen in renal cancer [27] Future Outlook - The company is optimistic about the upcoming data readouts for Zanza and its potential impact on market positioning [49][50] - Exelixis is focused on building franchises and leveraging partnerships, particularly with Merck, to enhance its research capabilities and market presence [48][72] - The management is committed to maintaining operational discipline while exploring growth opportunities, ensuring that investments are aligned with potential returns [14][15] Additional Insights - The company acknowledges the challenges faced in the past but expresses confidence in overcoming these hurdles with a strong team and strategic focus [4][5] - There is a clear emphasis on the importance of data and evidence in driving market acceptance and physician adoption of their therapies [59][61] This summary encapsulates the key insights from the Exelixis conference call, highlighting the company's strategic direction, financial health, and market opportunities within the oncology sector.