Exelixis(EXEL) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2025, total revenues were approximately $599 million, including cabozantinib franchise net product revenues of $546.6 million [16] - Full year 2025 US CABO franchise net product revenues grew 17% to approximately $2.12 billion compared to 2024 [10] - GAAP net income for Q4 2025 was approximately $244.5 million, or $0.92 per share basic [18] - Non-GAAP net income for Q4 2025 was approximately $259.5 million, or $0.97 per share basic [19] - Total operating expenses for Q4 2025 were approximately $363 million, up from $341 million in Q3 2025 [18] Business Line Data and Key Metrics Changes - CABOMETYX maintained its position as the leading TKI for renal cell carcinoma (RCC) and neuroendocrine tumors, with a TRX volume growth of 15% in Q4 2025 compared to Q4 2024 [21][22] - CABOMETYX's market share in the oral TKI market increased from 43% to 46% from Q4 2024 to Q4 2025 [21] - The company is preparing to launch zanzalintinib, with a focus on accelerating growth in the GI franchise [11][24] Market Data and Key Metrics Changes - CABOMETYX's US net product revenues exceeded $100 million for the neuroendocrine tumor indication in 2025 [10] - The market basket growth rate for oral TKIs was 7% for the same period, while CABOMETYX outpaced this growth [22] - The company anticipates significant growth opportunities in the community setting for CABOMETYX [52] Company Strategy and Development Direction - The company aims to build a multi-franchise business in solid tumor oncology, focusing on cabozantinib and zanzalintinib [8] - The strategy includes expanding leadership in gastrointestinal (GI) indications and enhancing the commercial footprint for both CABOMETYX and ZANZA [9][11] - Business development activities are focused on late-stage assets in GU and GI spaces, with a commitment to disciplined investment in high-value opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026 being a transformational year, with expectations to build on the momentum from 2025 [7][36] - The company is focused on maximizing productivity and advancing its early-stage pipeline while preparing for the potential launch of zanzalintinib [27][36] - Management highlighted the importance of addressing unmet medical needs in the colorectal cancer market with the upcoming STELLAR-303 trial results [25][29] Other Important Information - The company repurchased $954 million of its outstanding common stock in 2025, with approximately $590 million remaining under the stock repurchase plan [19][20] - The gross-to-net for the cabozantinib franchise in Q4 2025 was 28.5%, lower than in Q3 2025, primarily due to lower PHS and 340B volume [16] Q&A Session Summary Question: Duration of small manufacturer discount for Zanza and share repurchase cadence - Management indicated that the small manufacturer exemptions are tied to having a single product as the majority revenue source, which is expected to remain for the foreseeable future [40] - The company plans to continue share repurchases as long as shares are perceived as undervalued, with a commitment to complete the current authorization [41] Question: 340B purchasing behavior and Part D redesign impact - Management noted variability in 340B purchasing behavior and expects this to continue, which could impact gross-to-net [43][44] - The company will design its channel for Zanza to optimize results based on past experiences with CABO [45] Question: STELLAR-316 population size and timeline - The estimated population for STELLAR-316 is approximately 20,000-25,000 patients who are MRD positive after definitive therapy [48] Question: Revenue potential for neuroendocrine tumors - Management expressed confidence in the growth potential for CABOMETYX in neuroendocrine tumors, particularly in the community setting [51][52] Question: Zanza trial design and market expectations - Management emphasized the importance of establishing Zanza as a standard of care in RCC and highlighted ongoing discussions for potential combination trials [56][57] Question: Non-clear cell RCC market size and competition - Non-clear cell RCC represents approximately 20% of the RCC market, and the company sees significant potential for growth in this underserved area [83]