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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.
That profit expanded operating margins, which management said will be reinvested into research and development to support its franchise strategy. Exelixis also repurchased $264.5 million of its stock.
The revenue picture was mixed. Revenue of $598.66 million missed the $609.17 million consensus but was 5% higher than the $566.76 million reported in the same quarter a year earlier. That growth 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, though that range does not include potential sales from zanzalintinib, its colorectal cancer candidate that is awaiting regulatory review.
What Makes Exelixis Different?
On the surface, Exelixis carries the typical risk-reward profile of a biotech company. What sets it apart is its franchise strategy.
Exelixis is building comprehensive treatment ecosystems around specific drug molecules, aiming to develop deep expertise in particular tumor types with multiple lines of therapy and combination regimens physicians can use at different stages of care.
In plain terms, the company is creating multiple treatment "arrows in its quiver" for cancers such as kidney, colorectal and neuroendocrine tumors — spanning first-line, second-line and combination approaches — to become a preferred option for oncologists.
Two takeaways from the fourth-quarter report:
- Cabozantinib is effective in kidney cancer both as monotherapy and in combination with immunotherapy, and it is the primary revenue driver today.
- Zanzalintinib is being positioned as "the foundation of future oncology franchises," with management projecting up to $5 billion in potential peak annual sales.
Consolidation Now, Growth Later
EXEL trades at roughly 18x trailing twelve-month earnings and 21x forward earnings, a slight premium to the broader biotechnology sector. Its franchise model and 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 has recently acted as support. Momentum indicators were neutral heading into the report, and the stock sat about 8.6% below the consensus price target of $46.12.
The day after earnings, Wells Fargo reiterated an Equal Weight rating and raised its price target to $35 from $30. Barclays recently raised its target to $44 from $41 on Feb. 4.
While EXEL is in a consolidation pattern now, successful execution of its growth plan could push the stock to all-time highs within the next 12 months.
Exelixis Is at an Inflection Point
The story isn't just about beating earnings or hitting revenue targets. Exelixis is transitioning from a single-product company to a multi-franchise oncology player, and 2026 is shaping up to be a pivotal year in that shift.
The FDA decision on zanzalintinib in colorectal cancer (Prescription Drug User Fee Act (PDUFA) date: Dec. 3, 2026) represents the company's first major step beyond cabozantinib. If approved, zanzalintinib could open the door to a potential $5 billion peak sales opportunity and validate the franchise approach Exelixis is pursuing.
The real signal is in R&D spending. Despite rising profitability, Exelixis is maintaining roughly $1 billion in annual R&D investment while also executing share buybacks — a sign of confidence in its pipeline economics. That spending supports seven pivotal trials for zanzalintinib alone, plus four early-stage programs advancing toward later development.
For context, the expanded GI sales team is not just about near-term sales growth; it is pre-positioning the company for a potential zanzalintinib launch later this year. The pieces are being put into place for a different kind of biotech story: sustainable, multi-product growth anchored in deep tumor expertise rather than a single binary drug bet.
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