Exelixis, Inc. (EXEL) has been a standout performer in the biotech sector, with its stock price rising a significant 20.7% in the past three months, far outpacing the industry’s 6.3% growth. This impressive performance extends beyond the industry, as EXEL has also outperformed both the sector and the S&P 500 Index. The driving force behind Exelixis’ success lies in the exceptional performance of its flagship drug, Cabometyx, coupled with the promising advancements in its pipeline.
Cabometyx continues to dominate as the leading tyrosine kinase inhibitor (TKI) for the treatment of renal cell carcinoma (RCC). Its effectiveness, particularly when used in combination with Bristol Myers’ Opdivo in the first-line setting, has solidified its position in the market. The drug’s growth has also extended into the hepatocellular carcinoma indication. This sustained success underscores the potential for Cabometyx to remain a key revenue driver for Exelixis.
Exelixis is not resting on its laurels; the company is actively pursuing label expansions for Cabometyx, further solidifying its growth prospects. The FDA has accepted Exelixis’ supplemental new drug application (sNDA) for Cabometyx for patients with previously treated advanced pancreatic neuroendocrine tumors (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). This development has received an expedited standard review with a target action date of April 3, 2025. Further, the FDA has granted orphan drug designation to Cabometyx for the treatment of pNET, highlighting its potential in this specific patient population. These developments point to a bright future for Cabometyx and its ability to address a wider range of patient needs.
Beyond Cabometyx, Exelixis is making significant progress in expanding its oncology portfolio. The company is aggressively pursuing its pipeline, seeking to establish itself as a leader in the field. Promising candidates like zanzalintinib, a next-generation oral TKI, and XL309 are showing potential and are strategically being positioned for further development. In the first half of 2025, Exelixis plans to initiate a phase III study, STELLAR-311, to evaluate zanzalintinib compared to everolimus as a first oral therapy in patients with pNET and epNET. Additionally, the company is advancing phase I efforts for XL309 and XB010, demonstrating a commitment to expanding its therapeutic offerings.
Exelixis recognizes the importance of shareholder value and has been actively engaged in share repurchases. The company recently completed its 2024 share repurchase program, having bought back 20.3 million shares of its common stock for a total of $450 million. This commitment to returning value to shareholders is further reflected in the company’s dedication to returning $1 billion to shareholders since the initial $550 million stock repurchase program was authorized in March 2023. The board of directors has authorized the repurchase of up to an additional $500 million of the company’s common stock through the end of 2025, signaling a continued focus on shareholder value.
The financial outlook for Exelixis appears promising. The Zacks Consensus Estimate for 2024 earnings per share has been revised upwards to $1.83 from $1.79 over the past 30 days, reflecting a positive sentiment regarding the company’s future performance.
Exelixis’ strong fundamentals, growth prospects, and commitment to shareholder value make it a compelling investment opportunity in the biotech sector. The company’s successful track record, coupled with its focus on expanding its portfolio and addressing unmet patient needs, positions it for continued growth and success in the years to come. The potential for Cabometyx label expansion, combined with the promising advancements in its pipeline, solidifies Exelixis’ position as a leader in the oncology space.
