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- Exelixis delivered a major EPS beat driven by strong Cabometyx demand, highlighting the company’s profitability and continued leadership in kidney cancer treatments.
- The biotech is transitioning to a multi-franchise oncology model, with zanzalintinib targeting colorectal cancer and representing a potential $5 billion peak-sales opportunity pending FDA review.
- Heavy R&D investment alongside share buybacks signals confidence in the pipeline, positioning Exelixis for sustained growth beyond its current single-drug revenue base.
- Special Report: [Sponsorship-Ad-6-Format3]
Exelixis Inc. (NASDAQ: EXEL) stock is down about 2% in early trading the day after the company delivered a solid, but mixed earnings report. The company reported earnings per share (EPS) of $0.94, 27% above the consensus estimate and 95% higher year-over-year (YoY).
Higher profitability showed up in the company's operating margin, which management plans to reinvest into research and development as part of its franchise strategy. Exelixis also repurchased $264.5 million of its stock.
The revenue picture was mixed. Revenue of $598.66 million missed expectations of $609.17 million, but was 5% above the $566.76 million reported in the same quarter last year. That revenue was largely driven by Cabometyx, the company's branded formulation of cabozantinib used across multiple cancer types.
Exelixis forecasts 2026 revenue between $2.52 billion and $2.62 billion. An important caveat: that outlook does not include potential sales from zanzalintinib, the pipeline candidate for colorectal cancer, should it receive regulatory approval.
What Makes Exelixis Different?
On one level, Exelixis offers investors a similar risk-reward profile to other biotech companies. But investors should pay attention to the company's franchise strategy.
Exelixis is building comprehensive treatment ecosystems around specific drug molecules, aiming to develop deep expertise in select tumor types with multiple treatment lines and combinations physicians can deploy at different stages.
Put simply, the company is working to have multiple "arrows in its quiver" for specific cancers — first-line, second-line, and combination therapies — positioning itself as a go-to option for oncologists treating kidney, colorectal, and neuroendocrine cancers.
There are two key takeaways from the fourth-quarter report:
- Cabozantinib is effective in kidney cancer both as monotherapy and in combination with immunotherapy; it remains the primary revenue driver today.
- Zanzalintinib is described by the company as "the foundation of future oncology franchises" and has the potential to reach $5 billion in peak annual sales.
Consolidation Now, Growth Later
At roughly 18x trailing twelve-month earnings and 21x forward earnings, EXEL stock trades at a modest premium to the broader biotechnology sector. The company's franchise model and deep pipeline help justify that premium if the expected growth materializes.
The EXEL chart looks constructive, with the stock sitting just below the 50-day simple moving average (SMA), which has recently acted as support. Momentum indicators were neutral heading into earnings; the stock traded about 8.6% below its consensus price target of $46.12.
After the results, Wells Fargo & Company reiterated an Equal Weight rating and raised its price target to $35 from $30. Barclays also raised its target to $44 from $41 on Feb. 4.
While EXEL is currently in a consolidation pattern, if the company's growth targets are met, new all-time highs are plausible within the next 12 months.
Exelixis Is at an Inflection Point
The story isn't only about beating earnings or hitting near-term revenue milestones. Exelixis is transitioning from a single-product company to a multi-franchise oncology player, and 2026 is shaping up to be a pivotal year.
The FDA decision on zanzalintinib in colorectal cancer (PDUFA date: Dec. 3, 2026) represents the company's first major expansion beyond cabozantinib. If approved, it could unlock a potential $5 billion peak sales opportunity and validate the franchise strategy the company is building.
R&D spending is the real indicator to watch. Despite improved profitability, Exelixis is maintaining roughly $1 billion in annual R&D investment while executing share buybacks — a sign of confidence in its pipeline economics. The company is balancing investor returns with aggressive development across seven pivotal trials for zanzalintinib alone, plus four early-stage programs advancing toward full development.
The expanded GI sales team isn't just about near-term revenue growth; it's pre-positioning for a potential zanzalintinib launch later this year. The pieces are coming together for a different kind of biotech story: sustainable, multi-product growth anchored in deep tumor expertise rather than binary, single-drug bets.
