Exelixis, Inc. : The cure to cancer?

Exelixis is a U.S.-based biotechnology company that has established itself as a major player in oncology by developing targeted therapies for cancer treatment. Its flagship product, cabozantinib (marketed as CABOMETYX and COMETRIQ), has become a standard of care in advanced renal cell carcinoma (RCC). Exelixis is transitioning from a single-product model toward a multi-franchise oncology company, led by its next-generation drug zanzalintinib, a third-generation oral tyrosine kinase inhibitor (TKI) currently in pivotal trials for multiple cancers. Let's take a closer look.

Exelixis operates within the global oncology therapeutics market, one of the fastest-growing sectors in biopharma. The oncology drug market revenue reached approximately $180 billion in 2023 and is expected to reach $268 billion by 2029, representing a CAGR of 8.6%, driven by rising cancer incidence, earlier diagnosis, and expansion of targeted therapies. Among all cancer treatments, targeted therapies and immuno-oncology agents account for nearly 65% of revenue, with TKIs playing a critical role in solid tumor management.

Growth Drivers include the increasing prevalence of kidney, liver, and thyroid cancers—Exelixis’ core markets—as well as continued clinical success of combination regimens involving TKIs and immune checkpoint inhibitors. However, the industry faces significant risks, such as intensifying competition from generic drugs and biosimilars, pricing pressures in the U.S. and Europe, and long, costly clinical development cycles.

Exelixis has established a strong commercial presence through its cabozantinib franchise, marketed as CABOMETYX® and COMETRIQ®. Cabozantinib is a multi-kinase inhibitor targeting MET, AXL, VEGF receptors, and RET, and has become a standard of care in advanced renal cell carcinoma (RCC), where it is the leading tyrosine kinase inhibitor both as a monotherapy and in combination with Bristol Myers Squibb’s nivolumab. It also holds FDA approvals for previously treated hepatocellular carcinoma (HCC) and for locally advanced or metastatic radioactive iodine–refractory differentiated thyroid cancer (DTC). CABOMETYX generated $1.81 billion in 2024 and outside the U.S., the drug is commercialized through strategic partnerships with Ipsen (Europe and other territories) which delivered $154 million in royalties in 2024, and Takeda (Japan). CABOMETYX recently expanded its addressable market with the FDA approval in March 2025 for previously treated neuroendocrine tumors (NET), an indication with significant unmet need.

Exelixis transition into a multi-franchise oncology company thanks to its lead pipeline candidate: zanzalintinib - a third-generation TKI with enhanced selectivity for VEGF receptors, MET, and TAM kinases. It’s in an extensive late-stage development program comprising six planned or ongoing pivotal trials across colorectal cancer (CRC), non-clear cell RCC, NET, and head and neck squamous cell carcinoma.

Positive top-line results from STELLAR-303 in metastatic CRC were announced in mid-2025, positioning the company to seek regulatory approval in this indication.

STELLAR-303: Pivotal Study of Zanzalintinib + Atezolizumab in mCRC

Additional pivotal data readouts, including from STELLAR-304 in non-clear cell RCC, are expected in 2026.

STELLAR-304: Pivotal Study of Zanzalintinib + Nivolumab in 1L nccRCC

Exelixis projects zanzalintinib could achieve U.S. revenues of $5 billion by 2033, surpassing the cabozantinib franchise. Beyond TKIs, Exelixis is building a diversified pipeline with early-stage assets such as XL309, a USP1 inhibitor targeting BRCA-mutated tumors; XB010, its first internally developed antibody-drug conjugate targeting 5T4; and XB628, a bispecific antibody targeting PD-L1 and NKG2A.

Exelixis Early-Stage Pipeline Programs

The company faces competition in the oncology space from Roche/Genentech, Bristol-Myers Squibb, Merck & Co., Pfizer, and AstraZeneca, all of which have established portfolios of cancer therapies. It also faces large-cap medical companies such as Biogen, Incyte, and BioMarin Pharmaceutical, Vertex Pharmaceuticals, Regeneron Pharmaceuticals, and Moderna.

For the second quarter of 2025, revenue totaled $568.3 million, compared to $637.2 million in Q2 2024. This decline was largely attributable to the absence of a one-time $150 million milestone recognized in the prior-year period. Excluding this milestone, core product sales rose by 19% YoY, reflecting strong commercial execution. For the full year 2025, the company reaffirmed its guidance, projecting total revenues between $2.25 billion and $2.35 billion, with net product revenues expected to range from $2.05 billion to $2.15 billion.

In 2024, Exelixis reported total revenue of $2.17 billion, an increase from $1.83 billion in 2023, representing an 18% YoY growth driven primarily by continued strength in the cabozantinib franchise and higher royalty income from ex-U.S. partners. EBITDA surged to $633 million, up from $196 million in 2023, while EBIT grew 253% to $605 million. Net income increased by 165% to $521 million, and free cash flow reached $671 million, compared with $293 million a year earlier, with a net income margin of 24%. Analysts project revenues to climb to $3 billion by 2027, with EBITDA of $1.47 billion, net income of $1 billion, free cash flow of $1 billion, and an expected margin of 35.5%.

Profitability ratios have improved significantly: ROA rose to 17.7% in 2024 from 6.91% in 2023, while ROE reached 23.1%, up from 8.7%. By 2027, analysts forecast ROA and ROE of approximately 22% and 29%, respectively. Earnings per share have also grown sharply, from $0.56 in 2022 to $1.76 in 2024, with projections of $3.80 by 2027. On valuation, the P/E ratio stood at 18.9x in 2024, below the eight-year historical average of 31.9x, with expectations of 15.6x in 2025 and 9.75x in 2027, reflecting both strong earnings growth and multiple contraction over time.

Although the CABOMETYX patent estate is protected through 2030, early generic entry remains a threat that could compress margins. The company’s heavy reliance on zanzalintinib for future growth adds execution risk - delays or failures in late-stage trials would significantly affect long-term projections. Pricing pressure is another concern, as U.S. and EU reforms targeting oncology drug costs could limit revenue expansion and reduce pricing flexibility. High R&D spending, approaching $1 billion annually, further heightens the stakes; if new therapies underperform commercially, margins will tighten. Finally, regulatory uncertainty and the inherent complexity of clinical development pose ongoing challenges that could delay approvals or alter the competitive landscape.

Exelixis has transformed into a leading oncology company with a dominant position in RCC and expanding opportunities in NET, CRC, and beyond. While risks related to patent cliffs, pricing reforms, and pipeline execution remain, Exelixis’ potential blockbuster status of zanzalintinib present an interesting opportunity for people seeking some sort of risks.