• Shares in Exelixis have surged more than 100% over the past year.
• Drivers have been strong cabozantinib sales and a promising new FDA approval in neuroendocrine tumors.
• Six pivotal trials are underway for the company’s next-generation drug zanzalintinib—including a high-stakes readout in metastatic colorectal cancer.
• The company’s stock offers an attractive setup for investors betting on the next big oncology breakout.

Exelixis (EXEL) is no stranger to defying expectations. Once considered a one-drug biotech, the company has turned cabozantinib into a major oncology franchise — recently strengthened by a new U.S. Food and Drug Administration approval in neuroendocrine tumors. But the bigger story may be what comes next: the company is advancing six pivotal trials in 2025 for its next-generation drug zanzalintinib, targeting some of the toughest cancers in the clinic, including metastatic colorectal cancer.

Shares have more than doubled in price over the past year, reflecting investors’ growing optimism about commercial execution and pipeline potential. With a clean balance sheet, strong cash flow and a late-stage pipeline approaching critical mass, Exelixis is entering a year that could redefine its trajectory — and reward investors who are willing to bet ahead of the data. Today, we explore what’s at stake, what to watch and why we think the stock is worth owning.

Anchored by cabo, preparing for the next chapter

Exelixis, a mid-cap oncology company with headquarters in Alameda, California, is pursuing a highly focused mission: To extend and improve the lives of cancer patients by developing targeted therapies. It’s carved a niche in the biopharmaceutical business, largely on the strength of its flagship drug, cabozantinib, which is marketed as Cabometyx (tablet) and Cometriq (capsule). Since its initial FDA approval in 2016, cabozantinib has steadily expanded its clinical distribution and now serves as a treatment for advanced kidney, liver, thyroid and, most recently, neuroendocrine tumors (NETs). It’s one of the more notable examples of a “pipeline-in-a-product,” generating durable growth in revenue both through label expansions and collaborative commercialization.

While cabozantinib has anchored the company’s success, it also represents a source of concentration risk. The drug continues to post impressive gains — buoyed by leading market share in renal cell carcinoma and momentum from the new NETs indication — but its exclusivity is finite. Patent protections are expected to expire by 2031, with some generic threats delayed but not eliminated following legal settlements. That looming overhang has pushed Exelixis into a pivotal transition phase, where much of its future success hinges on the successful development of zanzalintinib, a next-generation multikinase inhibitor that aims to pick up where cabozantinib leaves off.

To that end, the company is advancing a broad clinical program, with six pivotal trials in motion during 2025. These studies are targeting some of oncology’s more treatment-resistant challenges, including metastatic colorectal cancer (mCRC), non-clear cell renal cell carcinoma (RCC), head and neck squamous cell carcinoma (HNSCC), and an expanded set of NETs. Among these, STELLAR-303 stands out as a high-stakes catalyst: a 900-patient Phase 3 trial evaluating zanzalintinib plus atezolizumab vs. standard-of-care regorafenib in heavily pretreated mCRC patients. This is a notoriously tough patient group with limited treatment options, and a positive readout could shift the company’s outlook and investors’ sentiment.

The Exelixis story, then, is one of both stability and urgency. Cabozantinib remains a best-in-class treatment with blockbuster potential to treat multiple cancers, but the clock is ticking. Zanzalintinib offers a promising, albeit still unproven, path forward. With a full slate of late-stage trials underway and the potential for multiple data readouts in the back half of 2025, the company is entering a critical period that could either validate its pipeline strategy or raise questions about its post-cabo potential. 

A healthy Q1

Exelixis entered 2025 with strong momentum, and its Q1 earnings report provided further basis for optimism. The company posted total revenue of $555 million in the first quarter, representing a 30% year-over-year gain. The vast majority of that came from cabozantinib, which drove $513 million in net product revenue—up an impressive 36% from Q1 2024. Much of that growth stemmed from continued success in frontline renal cell carcinoma, particularly the cabo/nivolumab combination regimen, but the newly approved neuroendocrine tumor (NET) indication also contributed to incremental upside.

Profitability also came in strong. Exelixis posted GAAP net income of $160 million for the quarter, or $0.57 per share, with non-GAAP earnings reaching $0.64 per share — both ahead of consensus expectations. Operating expenses totaled $369 million, in line with projections, as the company continues to invest heavily in zanzalintinib and other clinical-stage programs. Management also discontinued XL495 because safety concerns, a sign that capital is being deployed with discipline.

Exelixis ended Q1 with approximately $1.65 billion in cash and marketable securities and no long-term debt. Encouragingly, the company raised full-year guidance by $100 million, now calling for $2.05 to $2.15 billion in net product revenue and $2.25 to $2.35 billion in total revenue. It repurchased $289 million worth of shares during the previous quarter, retiring roughly 8 million shares at an average price of $35.83. This program follows a February authorization of an additional $500 million in buybacks, giving the company ample flexibility to continue returning capital to shareholders.

Taken together, the Q1 figures paint a picture of a company succeeding commercially, operationally and financially. Cabozantinib remains a dominant oncology franchise, and early signals from the NET launch suggest more growth could be on the way. But with pivotal zanzalintinib trials approaching key data readouts this year, investors will be watching closely to see whether Exelixis can sustain its robust growth.

At an inflection point

From a valuation standpoint, Exelixis offers a compelling, if somewhat nuanced, case. The company currently trades with a P/E ratio of 20.9—below the biotech sector median of 26.3. That’s notable given the company’s double-digit revenue growth, expanding margins and clean balance sheet. While many oncology-focused biotechs are unprofitable or highly leveraged, Exelixis is generating strong free cash flow and posting net income north of $500 million annually. That profitability alone helps justify a valuation premium — and yet shares still trade at a discount to peers on a pure earnings basis.

Other metrics, however, paint a more mixed picture. The Exelixis price-to-sales (P/S) ratio of 5.7 is considerably higher than the sector median of 3.1, suggesting investors are already assigning a healthy premium to its existing revenue base. Similarly, the stock’s price-to-book ratio of 6.0 sits well above the sector average of 2.1, reflecting both investor confidence and the company’s capital-light model. Unlike asset-heavy pharma giants, Exelixis doesn’t rely on sprawling manufacturing infrastructure or legacy pipelines. Instead, its valuation hinges more directly on the market’s belief in future pipeline success — particularly with zanzalintinib.

And therein lies the crux of the valuation debate. On one hand, Exelixis just posted a record quarter, raised its full-year outlook and continues to grow its flagship franchise. On the other, the market appears to be cautiously discounting the uncertainty tied to zanzalintinib’s late-stage trials. That wariness is echoed in analyst sentiment: Of the 21 analysts covering the company, 11 rate the stock a “buy” or “overweight,” while the other 10 recommend holding the stock. The average price target is $41 — about 10% below current levels — implying that for many analysts, the stock’s near-term prospects are fully priced in. 

Taken together, Exelixis may not look “cheap” on every metric, but it stands out as one of the few profitable, high-growth biotechnology stocks with a deepening pipeline and a strong financial position. As such, the company’s valuation appears to reflect a fair balance between Cabometyx’s steady cash flow and the high-stakes readouts ahead for zanzalintinib. If the pipeline delivers, today’s valuation could prove to be a bargain in hindsight. But even if the data is mixed, Exelixis still has the balance sheet, brand equity and commercial momentum to remain a solid player in oncology for years to come.

Takeaways

Exelixis occupies a rare and attractive position in the biotech sector: It’s a profitable, cash-rich oncology company with a blockbuster drug on the market and a deep pipeline approaching critical mass. Cabozantinib continues to generate strong growth, bolstered by its new neuroendocrine tumor approval and entrenched leadership in renal cell carcinoma. With nearly $1.75 billion in cash, no debt and a buyback program in place, the company has the financial firepower to invest aggressively in its next act without diluting shareholders — a rarity among mid-cap biotech names.

The central question now is whether the company can successfully transition from cabozantinib to zanzalintinib. The stakes are high: The most closely watched trial— that of STELLAR-303 in metastatic colorectal cancer — expected to report data in the second half of 2025. While early results have been encouraging, they’re far from conclusive. Failure in key trials would raise serious questions about the pipeline’s ability to support long-term growth. That said, even modest success in one or two indications could de-risk the story and spark a re-rating of the stock.

For investors, the setup looks increasingly attractive. Valuation remains reasonable, cabozantinib provides a durable earnings floor and a series of near-term catalysts could unlock further upside. With a clean balance sheet, a growing commercial footprint and a potentially undervalued pipeline, Exelixis also stands out as a natural acquisition candidate for larger oncology players, adding a layer of optionality to the investment case. While risk remains in the transition to zanzalintinib, the company’s strategic positioning, operational discipline,and financial strength help tilt the risk-reward in favor of long-term investors. Based on the company’s ability to deliver in the months ahead, we rate shares a “buy.”

Andrew Prochnow, Luckbox analyst-at-large, has traded the global financial markets for more than 15 years, including 10 years as a professional options trader.

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