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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).
Profitability showed up in the company's operating margin, which Exelixis intends to reinvest into research and development for its franchise strategy. The company also repurchased $264.5 million of its stock.
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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 top-line strength was largely driven by Cabometyx, the company's branded cabozantinib formulation used across multiple cancer types.
Exelixis is forecasting 2026 revenue between $2.52 billion and $2.62 billion, with an important caveat: that range 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 the same risk-reward profile as other biotech companies. But its franchise strategy warrants a closer look.
Exelixis is building comprehensive treatment ecosystems around specific drug molecules, aiming to develop multiple lines and combinations that physicians can use at different stages of care. Put simply, the company is working to have several arrows in its quiver for particular cancers—first-line, second-line, or combination therapies—so it becomes a go-to choice for oncologists treating kidney, colorectal, or neuroendocrine cancers.
Two key takeaways from the fourth-quarter report:
- Cabozantinib is effective in kidney cancer as both monotherapy and in combination with immunotherapy, and it is the primary current revenue driver.
- Zanzalintinib is positioned 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 for investors expecting future growth.
The EXEL chart looks constructive: the stock is sitting just below the 50-day simple moving average (SMA), which has recently acted as support. Momentum indicators were neutral heading into earnings, and the stock was trading about 8.6% below the consensus price target of $46.12.
After the report, Wells Fargo reiterated an Equal Weight rating on EXEL and raised its price target to $35 from $30. Barclays similarly raised its target to $44 from $41 on Feb. 4.
While EXEL is in a consolidation phase for now, if the company's growth materializes, new all-time highs could be possible within the next 12 months.
Exelixis Is at an Inflection Point
The story isn't just about beating earnings or hitting revenue milestones. Exelixis is evolving from a single-product company into a multi-franchise oncology player, and 2026 is shaping up to be the year that transition becomes tangible.
The FDA decision on zanzalintinib in colorectal cancer (PDUFA date: Dec. 3, 2026) would mark the company's first major expansion beyond cabozantinib. Approval would open the door to a potential $5 billion peak-sales opportunity and validate the franchise approach Exelixis has been building toward.
Importantly, Exelixis is maintaining roughly $1 billion in annual R&D spending while also executing share buybacks — a sign of confidence in its pipeline economics. The company is balancing returns to shareholders with aggressive development across seven pivotal trials for zanzalintinib alone, plus four early-stage programs progressing toward later-stage development.
For context, the expanded gastrointestinal and neuroendocrine (NET) sales teams are not just targeting NET growth; they're positioning the company for a potential zanzalintinib launch later this year. The elements are aligning for a different kind of biotech story: sustainable, multi-product growth anchored in deep tumor expertise rather than a series of binary drug bets.
