Exelixis, Inc. (EXEL) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance with tightened revenue guidance and lowered expense guidance. Product development is promising, with potential NDA filings and pivotal trials. The Q&A section reveals confidence in market strategy, particularly in colorectal cancer and RCC. Despite some uncertainties in 340B purchasing and pricing trends, the overall sentiment is positive, supported by a significant share repurchase plan. The absence of market cap data limits the precision of the prediction, but the positive financial and strategic outlook suggests a likely stock price increase.
Key Financial Performance
Full year 2025 U.S. cabo franchise net product revenues $2.12 billion, a 17% increase year-over-year. The growth was driven by strong performance of CABOMETYX in RCC and neuroendocrine tumors.
Fourth quarter 2025 U.S. cabo franchise net product revenues $547 million, a 6% increase year-over-year. This growth reflects continued strong performance in the market.
Global cabo franchise net product revenues (Q4 and full year 2025) $754 million (Q4) and $2.89 billion (full year). The growth was attributed to Exelixis and its partners' efforts.
CABOMETYX net product revenues (Q4 2025) $544.7 million. The gross-to-net ratio was 28.5%, lower than the previous quarter due to reduced PHS and 340B volume.
Royalties from Ipsen and Takeda (Q4 2025) $52.8 million. These royalties were earned from their sales of cabozantinib.
Total operating expenses (Q4 2025) $363 million, up from $341 million in Q3 2025. The increase was due to higher manufacturing costs, NDA filing fees, personnel expenses, and marketing costs.
Provision for income taxes (Q4 2025) $8.2 million, down from $58.8 million in Q3 2025. The decrease was related to specific items recognized in Q4.
GAAP net income (Q4 2025) $244.5 million or $0.92 per share basic and $0.88 per share diluted. This reflects the company's profitability for the quarter.
Non-GAAP net income (Q4 2025) $259.5 million or $0.97 per share basic and $0.94 per share diluted. This excludes $15 million of stock-based compensation expense.
Cash and marketable securities (Year-end 2025) $1.66 billion. This reflects the company's strong financial position.
Stock repurchase (Fiscal year 2025) $954 million spent, retiring 24 million shares at an average price of $39.61 per share. This reflects the company's capital allocation strategy.
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Operating Highlights
Cabozantinib (CABOMETYX): Maintained its position as the leading TKI for RCC and the market leader for neuroendocrine tumors in the oral second-line plus segment. U.S. net product revenues grew 17% to $2.12 billion in 2025 compared to 2024. Global revenues reached $2.89 billion.
Zanzalintinib (Zanza): NDA accepted for zanza/atezo combination in third-line plus CRC based on STELLAR-303 data. Seven pivotal trials ongoing or planned. Positioned as the next oncology franchise opportunity.
GI Sales Team Expansion: Expanded GI sales team to accelerate CABOMETYX growth in neuroendocrine tumors and prepare for zanza launch in CRC.
Colorectal Cancer (CRC) Market: STELLAR-303 data positions zanza as a potential new standard of care for third-line plus CRC patients. Planning STELLAR-316 trial for MRD-positive CRC patients.
Financial Performance: 2025 total revenues reached $599 million in Q4 and $2.89 billion for the year. CABOMETYX U.S. net product revenues grew 17% year-over-year.
Pipeline Development: Four molecules in early clinical development and multiple ADC programs advancing. Focused on identifying next franchise molecules beyond cabo and zanza.
Franchise Strategy: Focused on building multi-franchise business in solid tumor oncology with cabozantinib and zanzalintinib as foundational assets.
Business Development: Pursuing late-stage assets in GU and GI oncology with back-end loaded pay-for-success transactions.
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Risk or Challenges
Regulatory Review and Approval Processes: The company faces risks related to regulatory review and approval processes, particularly for new drug applications like zanzalintinib. Delays or rejections could impact strategic timelines and financial performance.
Market Competition: Exelixis operates in a highly competitive oncology market. The success of its products like CABOMETYX and zanzalintinib depends on maintaining market share against competitors offering alternative therapies.
Dependence on Collaboration Partners: The company relies on collaboration partners for clinical trials and commercialization. Any issues with these partners could disrupt operations and strategic goals.
Economic and Pricing Pressures: Exelixis is subject to government drug pricing policies, including a 2% discount on Medicare Part D sales in 2026, which could affect profit margins.
Clinical Trial Execution: Challenges in clinical trial execution, such as patient recruitment and site performance, could delay the development of new drugs like zanzalintinib.
Supply Chain and Manufacturing Costs: Higher manufacturing costs for drug development candidates and potential supply chain disruptions could increase operational expenses.
Capital Allocation and Financial Risks: The company’s capital allocation strategy, including share repurchase programs and investments in pipeline development, carries financial risks if expected returns are not realized.
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Guidance & Outlook
Revenue Growth: Exelixis expects to build on its strong growth momentum from 2025 into 2026, with a focus on expanding its oncology franchises.
Product Launches: The company plans to launch zanzalintinib (zanza) in 2026, pending regulatory approval, with a PDUFA target action date of December 3, 2026. This launch is expected to establish zanza as a new oncology franchise.
Clinical Trials: Exelixis is advancing seven pivotal trials for zanzalintinib, including STELLAR-303, STELLAR-316, STELLAR-201, STELLAR-311, and STELLAR-304. Results from STELLAR-304 are expected mid-2026, which could lead to a second NDA filing for zanza.
Market Expansion: The company is expanding its GI sales team to support the growth of CABOMETYX in neuroendocrine tumors and to prepare for the potential launch of zanza in colorectal cancer.
Pipeline Development: Exelixis is focused on advancing its early-stage pipeline, including four molecules currently in clinical development and additional small molecule and ADC programs.
Capital Allocation: The company plans to use its strong balance sheet and expected free cash flows to advance pipeline priorities, pursue external molecules, and continue its share repurchase program.
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Shareholder Return Plan
Share Repurchase Program: During fiscal year 2025, Exelixis repurchased $954 million of the company's outstanding common stock, resulting in the retirement of approximately 24 million shares at an average price per share of $39.61. As of the end of fiscal year 2025, approximately $590 million remained under the $750 million stock repurchase plan authorized by the company's Board in October 2025.
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Key Q&A
Q:How long will the company benefit from the small manufacturer discount for zanza?
A:The small manufacturer exemptions are tied to having a single product that constitutes the majority of revenue. The cutoff is around 20% for a second product to come into play. The company expects to benefit from this for the foreseeable future, but it is too early to speculate on the timing of when this could change.
Q:What is the company's plan for share repurchases in the new year?
A:The company plans to continue share repurchases as long as they feel undervalued. They have $590 million left from the $750 million authorization and are committed to completing it this year.
Q:Can you comment on recent 340B purchasing behavior and its potential impact on zanza?
A:There has been variability in 340B purchasing behavior, which is expected to continue through 2026. This could impact the gross-to-net due to the heavily discounted nature of this segment. The company plans to optimize the channel for zanza based on their experience with cabo.
Q:What is the estimated population size for STELLAR-316 in colorectal cancer?
A:The estimated population size is based on approximately 20% of patients who have completed definitive therapy and are positive based on the ctDNA test from Natera. This translates to an opportunity of 20,000 to 25,000 patients.
Q:What is the revenue potential for NET and what is the strategy for growth?
A:The company achieved $100 million in net revenue for NET in 2025 and sees room for growth, particularly in the community setting. They have expanded their GI sales team to reach further into the community and change prescribing behavior.
Q:Why did the company and Merck choose to run a trial like LITESPARK-033 in the post-adjuvant first-line RCC setting?
A:The company aims to position zanza as a standard of care for RCC in the 2030s. They are targeting future standard-of-care evolution and have three ongoing or planned pivotal trials in RCC. They are also exploring potential combination partners with orthogonal mechanisms of action.
Q:Is there increased utility of cabo monotherapy in the first-line setting?
A:Cabo monotherapy has always had reasonable utilization in the first-line setting, particularly based on the CABOSUN study. It continues to have a role in the monotherapy segment of the population.
Q:How will positive non-liver met OS data impact the commercial strategy for CRC?
A:Positive non-liver met OS data will help elucidate the benefit across advanced third-line plus CRC. The data is expected to address significant unmet medical needs and resonate positively with oncologists and patients.
Q:What are the company's interactions with the FDA regarding the STELLAR-303 NDA?
A:The company is actively engaging with the FDA on the STELLAR-303 NDA and is sharing all relevant data, including the non-liver mets data and 120-day safety updates, as part of the normal review process.
Q:What is the company's strategy for maintaining cabo's lead in the RCC market?
A:The company is confident in cabo's position in the RCC market and is closely monitoring competitive data. They emphasize the importance of overall survival data to raise the standard of care and believe cabo's data has ripened well.
Q:What is the expected growth for RCC in 2026?
A:The company expects significant growth in RCC in 2026, driven by new patient starts and continued focus on the first-line market.
Q:What is the company's perspective on higher launch pricing trends for cancer therapies?
A:The company acknowledges the trend of higher launch pricing but refrains from speculating on the reasons. They will keep potential pricing opportunities for zanza confidential until the appropriate time.
Q:What is the market size and expectations for non-clear cell RCC?
A:Non-clear cell RCC represents approximately 20% of renal cell carcinoma. The company believes the STELLAR-304 trial will be significant in addressing this underserved population and sees it as an entry point for zanza in RCC.
Q:Will dose optimization data for zanza be used in the STELLAR-316 trial?
A:The company uses the optimal dose for each pivotal study based on factors like stage of disease and combination partners. They will continue this approach for STELLAR-316.
Q:What is the expected launch trajectory for zanza in CRC?
A:The company sees significant unmet medical need in CRC and expects a fragmented market to provide opportunities for impact. They are fully prepared for a potential launch and are optimistic about the combination's reception.
Q:What is the communication plan for STELLAR-304 top-line results?
A:The company will determine the communication plan for STELLAR-304 top-line results closer to the time, considering factors like data and timing.
Q:What is the company's view on the competitive landscape for non-clear cell RCC?
A:The company believes the STELLAR-304 trial will be impactful due to its focus on an underserved population. They emphasize the importance of specific Phase III data for non-clear cell RCC.
Q:What is the company's expectation for RCC growth in 2026?
A:The company expects growth in RCC to come from both new patient starts and maintaining share in the first-line market.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer to the question about potential zanza pricing, citing confidentiality and refraining from speculating on industry trends.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CRC patient
Conference today
Exelixis franchise
GI franchise
GI sale
III trial
JPMorgan
MRD therapy
NDA combination
NDA filing
PDUFA
Phase II
Phase III
Physicians
President Research
RCC
Research Development
action
analysis endpoint
approach
cabo franchise
cancer GI
community
decrease
depth
effort
endpoint survival
experience
franchise framework
franchise molecule
franchise tumor
middle
midyear
modality
number patient
opportunity trial
product tumor
step
test
testing
trial combination
trial site
tumor indication
tumor oncology
EXEL Transcript
Exelixis, Inc. (EXEL) Q4 2025 Earnings Call Transcript
Positive2-10
The earnings call summary indicates strong financial performance with tightened revenue guidance and lowered expense guidance. Product development is promising, with potential NDA filings and pivotal trials. The Q&A section reveals confidence in market strategy, particularly in colorectal cancer and RCC. Despite some uncertainties in 340B purchasing and pricing trends, the overall sentiment is positive, supported by a significant share repurchase plan. The absence of market cap data limits the precision of the prediction, but the positive financial and strategic outlook suggests a likely stock price increase.
Exelixis, Inc. (EXEL) Presents at 44th Annual J.P. Morgan Healthcare Conference Transcript
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Exelixis, Inc. (EXEL) Q3 2025 Earnings Call Transcript
Positive11-4
The earnings call summary shows strong growth potential in the cabozantinib franchise and promising developments in zanzalintinib. The strategic focus on expanding market share, positive trial results, and careful capital allocation indicate a positive outlook. Although management avoided some questions, the overall sentiment is optimistic, supported by ongoing R&D investments and share repurchases. The positive feedback from ESMO and potential market share gains further strengthen this outlook.
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