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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, which was 27% above the consensus estimate and 95% higher year over year.
The stronger profit widened operating margins, which Exelixis plans to reinvest into research and development to support its franchise strategy. The company 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 it was 5% higher than the $566.76 million reported in the same quarter last year. That growth was largely driven by Cabometyx, the company's branded formulation of cabozantinib used across multiple cancer types.
Exelixis forecasts 2026 revenue of $2.52 billion to $2.62 billion. 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 the surface, Exelixis has a similar risk-reward profile to many other biotech companies. But investors should pay close attention to its franchise strategy.
Exelixis is building comprehensive treatment ecosystems around specific drug molecules, aiming to develop deep expertise in particular tumor types with multiple treatment lines and combination options that physicians can use at different stages.
Put simply, the company is trying to have multiple arrows in its quiver for key cancers—first-line, second-line, and combination therapies—so it becomes a go-to choice for oncologists treating kidney cancer, colorectal cancer, or neuroendocrine tumors.
Two key takeaways from the fourth-quarter report:
- Cabozantinib is effective in kidney cancer both as monotherapy and combined with immunotherapy, and it remains the primary revenue driver today.
- Zanzalintinib is positioned as "the foundation of future oncology franchises" with the potential for up to $5 billion in peak annual sales.
Consolidation Now, Growth Later
Trading at about 18x trailing twelve-month (TTM) earnings and 21x forward earnings, EXEL carries a slight premium to the broader biotechnology sector. Its franchise model and deep pipeline may justify that premium if the expected growth materializes.
The EXEL chart looks constructive: the stock is sitting just below the 50-day simple moving average (SMA), which recently acted as support. Momentum indicators were neutral heading into earnings, and the stock traded roughly 8.6% below the consensus price target of $46.12.
The day after earnings, Wells Fargo & Company reiterated an Equal Weight rating on EXEL and raised its price target to $35 from $30. Barclays also boosted its target to $44 from $41 on Feb. 4.
For now EXEL is in a consolidation pattern. If the company's growth story plays out, all-time highs could be achievable within the next 12 months.
Exelixis Is at an Inflection Point
The story is not just about beating expectations or clearing revenue hurdles. 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. Approval would create a path to the roughly $5 billion peak-sales opportunity management forecasts and would validate the franchise approach.
R&D spending is the real signal. Despite strong profitability, Exelixis is maintaining roughly $1 billion in annual R&D while also buying back shares — a sign of confidence in its pipeline. The company is balancing investor returns with aggressive development across seven pivotal zanzalintinib trials and four early-stage programs advancing toward full development.
For context, the expanded gastrointestinal and NET (neuroendocrine tumor) sales teams are not just about near-term growth; they are pre-positioning the company for a potential zanzalintinib launch later this year. The pieces are moving into place for a different kind of biotech story: sustainable, multi-product growth anchored in deep tumor expertise rather than single, binary drug bets.
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