Company Reports

Exelixis reported strong second-quarter sales of $437 million from its cabozantinib franchise, representing 7% growth over the same period last year. Cabozantinib comprised nearly 70% of Exelixis’ total revenue in the quarter. We forecast 2024 total revenue exceeding $2 billion thanks to strong performance from the cabozantinib franchise. Exelixis’ results are tracking our expectations, and we maintain our fair value estimate of $18.90 per share.

Exelixis started 2024 in a solid position with total revenue of $425 million in the first quarter, a 4% increase from the prior-year period. We forecast 2024 total revenue of roughly $1.89 billion, driven by strong performance from cabozantinib. The results are in line with our expectations, and we maintain our $18.90 fair value estimate. We view the shares as currently overvalued, trading at a 17% premium to our fair value estimate.

Exelixis is best known for its discovery of cabozantinib, a tyrosine kinase inhibitor (TKI) that was approved in 2012 for medullary thyroid cancer (MTC). This small molecule was later approved for the treatment of renal cell carcinoma (RCC) as well as hepatocellular carcinoma (HCC). The cabozantinib opportunity has room to grow with several late-stage trials evaluating combination therapies. Although cabozantinib has generated strong returns, we believe Exelixis' long-term outlook has a high degree of uncertainty given the company's relatively early-stage pipeline outside of cabozantinib. This is exacerbated by cabozantinib's upcoming patent expiration. We believe generics could impact Exelixis' sales as early as 2027 after cabozantinib's composition of matter patent expires in 2026. The severity of the patent loss would depend on whether secondary patents are upheld in court and whether label expansions are approved.

Exelixis’ 2023 results were highlighted by revenue of $1.8 billion, representing a nearly 14% increase from the prior year. Strong sales volume and a higher average net selling price continued to drive Exelixis’ growth, leading to the cabozantinib molecule achieving $1.6 billion in U.S. net product revenue for the year. We forecast 2024 total revenue of roughly $1.89 billion, primarily driven by strong performance from cabozantinib. We maintain our fair value estimate of $18.90 per share, High Uncertainty Rating, and no economic moat rating. Furthermore, we view shares as fairly valued, currently trading in 3-star territory.

Exelixis’ third-quarter results were highlighted by quarterly net product revenue of nearly $426 million, representing a 16% increase from the prior-year period. Including license and collaboration revenue, third-quarter revenue totaled nearly $472 million. Greater sales volume and a higher average net selling price drove Exelixis’ revenue. We continue to forecast roughly $1.84 billion in total revenue in 2023, driven by strong performance from the cabozantinib franchise. We maintain our fair value estimate of $18.90 per share, High Uncertainty Rating, and no economic moat rating. We view shares as fairly valued, currently trading in 3-star territory.

Exelixis’ second-quarter results were highlighted by quarterly net revenue of nearly $410 million, representing an 18% increase from the prior-year period. Cabometyx drove the increase in net product revenue was thanks to greater sales volume and a higher average net selling price. Exelixis’ lead molecule, cabozantinib, is the active ingredient in two of the company’s three approved drugs: Cabometyx and Cometriq. We continue to forecast over $1.8 billion in total revenue in 2023, driven by strong performance from the cabozantinib products. We maintain our fair value estimate of $18.90 per share, High Uncertainty Rating, and no economic moat rating. Furthermore, we view shares as fairly valued, currently trading in 3-star territory.

Exelixis reported first-quarter results in line with our expectations, highlighted by quarterly net revenue of nearly $363 million, representing a 17% increase from the prior year. Exelixis remains in a healthy financial position, as it ended the quarter with over $1.3 billion in cash and short-term investments. We think this will help fund its research and development expenses as it develops its pipeline candidates. Exelixis is tracking our expectations, and we maintain our fair value estimate of $18.90 per share, no-moat rating, stable moat trend, and High Morningstar Uncertainty Rating. We view shares as fairly valued, currently trading in 3-star territory.

Exelixis is best known for its discovery of cabozantinib, a tyrosine kinase inhibitor (TKI) that was approved in 2012 for medullary thyroid cancer (MTC). This small molecule was later approved for the treatment of renal cell carcinoma (RCC) as well as hepatocellular carcinoma (HCC). The cabozantinib opportunity has room to grow with several late-stage trials evaluating combination therapies. Although cabozantinib has generated strong returns, we believe the long-term outlook has a high degree of uncertainty given the company's relatively early-stage pipeline outside of cabozantinib. This is exacerbated by cabozantinib's upcoming patent expiration. We believe generics could impact Exelixis' sales as early as 2027 after cabozantinib's composition of matter patent expires in 2026. The severity of the patent loss would depend on whether secondary patents are upheld in court and whether label expansions are approved.

Exelixis reported fourth-quarter results in line with our expectations, highlighted by quarterly revenue of nearly $424 million and full-year revenue of $1.6 billion, representing a 12% increase from the prior year. Exelixis is tracking our expectations, and we maintain our fair value estimate of $18.90 per share, no-moat rating, stable moat trend, and High Uncertainty Rating. We view shares as fairly valued, currently trading in 3-star territory.

Exelixis reported third-quarter results in line with our expectations, highlighted by revenue of nearly $412 million, representing a 25% increase from the prior-year period thanks to strong performance of its cabozantinib franchise. Exelixis is tracking our expectations, and we maintain our fair value estimate of $18.90 per share, no-moat rating, and stable moat trend. We view shares as fairly valued, currently trading in 3-star territory.

Exelixis reported solid second-quarter results highlighted by revenue of $419 million, representing a 9% increase from the prior-year period thanks to strong performance of its cabozantinib franchise. Exelixis is tracking our expectations, and management reiterated its 2022 guidance. We maintain our fair value estimate of $18.90 per share, no-moat rating, and stable moat trend. We view shares as fairly valued, currently trading in 3-star territory.

Despite Exelixis’ strong performance from its cabozantinib franchise, we view shares as overvalued, currently trading in 2-star territory. We maintain our fair value estimate of $18.90 per share, no-moat rating, and stable moat trend. Exelixis’ lead molecule, cabozantinib, is the active ingredient in two of the company’s three approved drugs: Cabometyx and Cometriq. The cabozantinib franchise generated over $1 billion in net product revenue in 2021.

Exelixis is best known for its discovery of cabozantinib, a tyrosine kinase inhibitor (TKI) that was first approved in 2012 for medullary thyroid cancer (MTC). This small molecule was later approved in renal cell carcinoma (RCC), as well as hepatocellular carcinoma (HCC). The cabozantinib opportunity has room to grow further with several late-stage trials evaluating combination therapies. Although cabozantinib has generated strong returns, we believe the long-term outlook has a high degree of uncertainty given the company's relatively early-stage pipeline outside of cabozantinib. This is exacerbated by cabozantinib's eventual patent expiration. We believe generics could impact Exelixis' sales as early as 2027 after cabozantinib's composition of matter patent expires in 2026. The severity of the patent loss would depend on whether secondary patents are upheld in court and whether label expansions are approved.

After taking a fresh look at Exelixis, we’ve relaunched coverage with a fair value estimate of $18.90 per share, a no-moat rating, and a stable moat trend. The stock is currently trading in 3-star territory. Exelixis is a biopharmaceutical firm focused on the treatment of cancer. Its lead molecule, cabozantinib, is the active ingredient in two of Exelixis’ three approved drugs: Cabometyx and Cometriq. Cabometyx treats kidney cancer and second-line liver cancer and Cometriq treats medullary thyroid cancer. Exelixis’ third approved drug, Cotellic, treats melanoma.

Exelixis is best known for its discovery of cabozantinib, a tyrosine kinase inhibitor (TKI) that was first approved in 2012 for medullary thyroid cancer (MTC). This small molecule was later approved in renal cell carcinoma (RCC), as well as hepatocellular carcinoma (HCC). The cabozantinib opportunity has room to grow further with several late-stage trials evaluating combination therapies. Although cabozantinib has generated strong returns, we believe the long-term outlook has a high degree of uncertainty given the company's relatively early-stage pipeline outside of cabozantinib. This is exacerbated by cabozantinib's eventual patent expiration; we believe generics could enter as early as 2026 when the composition of matter patent expires or later, depending on whether secondary patents are upheld in court and whether label expansions are approved.

We are dropping coverage of Exelixis. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

We are placing Exelixis under review as we evaluate analyst stock coverage decisions. As a reminder, we provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

We are raising our fair value estimate for Exelixis to $25.50 per share following the release of detailed results of the Checkmate 9ER trial testing Exelixis’ cabozantinib in combination with Bristol Myers’s Opdivo in frontline renal cancer. The positive outcome is not a surprise given that the partners announced positive top-line data in April, but a closer look at the detailed results indicates the cabo and Opdivo combination is well positioned to take on Merck’s Keytruda combined with Pfizer’s Inlyta in the frontline setting. We’ve raised our estimates for cabozantinib sales, and we’re maintaining our no-moat rating for Exelixis.

Exelixis is best known for its discovery of cabozantinib, a tyrosine kinase inhibitor (TKI) that was first approved in 2012 for medullary thyroid cancer (MTC). The small molecule was later approved in renal cell carcinoma (RCC), as well as hepatocellular carcinoma (HCC). The cabo opportunity has room to grow further, with late-stage trials in differentiated thyroid cancer (DTC) and in immuno-oncology combinations in prostate cancer and lung cancer. Although we anticipate robust returns from cabozantinib, we believe the long-term outlook is uncertain given the company's pipeline outside of cabo, which is early-stage and relatively sparse. This is exacerbated by cabozantinib's eventual patent expiration; we believe generics could enter as early as 2026 (when the composition of matter patent expires) or later, depending on whether secondary patents are upheld in court and where label expansions go.

Exelixis’s second-quarter sales surpassed our expectations, primarily due to $40 million in milestones from partners Takeda and Ipsen. The milestone payments helped offset dampened product sales of Cabometyx (for kidney and liver cancers), which were impacted by lower demand due to COVID-19 as well as a reversal of inventory buildup seen in the first quarter. Following these results, we’re maintaining our fair value estimate of $23.50 per share and no-moat rating.