Exelixis (EXEL): Riding the Oncology Wave to Multi-Year Dominance

The oncology market is undergoing a seismic shift, and Exelixis, Inc. (NASDAQ: EXEL) stands at the epicenter. With a 36% surge in U.S. revenue for its lead drug CABOMETYX® in Q1 2025, a landmark FDA approval in neuroendocrine tumors (NET), and a pipeline brimming with near-term catalysts, EXEL is primed for multi-year outperformance. This is a story of execution, innovation, and valuation asymmetry—investors would be remiss not to act before the catalysts crystallize.

The Surge in CABOMETYX® Demand: Proof of Market Traction

Exelixis delivered a blockbuster quarter, with U.S. net product revenue from CABOMETYX® soaring to $513.3 million in Q1 2025—a 36% year-over-year leap. This growth was fueled by a perfect storm of factors: expanding patient starts in existing indications, a 2.8% U.S. price increase, and the rapid uptake of its newly approved NET indication. The FDA’s March 2025 approval for advanced NET—marking CABOMETYX® as the first and only systemic treatment for this indication—has unlocked a $500 million+ market with no direct competitors.

The data is unequivocal: CABOMETYX® is not just holding its own but accelerating. The company’s raised FY2025 guidance—total revenues now expected between $2.25 billion and $2.35 billion—reflects this confidence. Yet, the stock has yet to fully incorporate these positives.

NET Approval: A $500M+ Market with No Rivals

The NET approval is a game-changer. With an estimated 18,000 new cases of NET in the U.S. annually, and CABOMETYX® now the sole approved therapy for advanced NET patients, Exelixis has a monopoly in a niche but lucrative space. Analysts estimate peak sales for this indication alone could approach $500 million, with pricing power intact due to the drug’s life-extending profile.

The commercial execution has been flawless. Within hours of the FDA’s green light, Exelixis mobilized its salesforce, targeting both pancreatic and extra-pancreatic NET patients. This rapid launch is already reflected in Q1’s numbers and will compound in subsequent quarters. Competitors? None. Current treatments for NET are either unapproved or lack CABOMETYX®’s efficacy, creating a moat of first-mover advantage.

Zanzalintinib: The Next Wave of Catalysts

While CABOMETYX® is driving today’s growth, the real upside lies in zanzalintinib, a next-generation tyrosine kinase inhibitor (TKI) targeting hard-to-treat cancers. Three pivotal trials—STELLAR-303 (colorectal cancer), STELLAR-304 (non-clear cell renal cell carcinoma), and STELLAR-305 (small cell lung cancer)—are on track to report data by late 2025. Success here could add $1 billion+ in peak sales and solidify EXEL’s position as a multi-product oncology leader.

The stakes are high, but the science is compelling. Zanzalintinib’s preclinical data showed superior efficacy compared to CABOMETYX® in certain tumor models, suggesting it could address treatment-resistant cases. Even a partial win in one indication would be transformative.

Financial Fortitude: A Strong Balance Sheet and Share Buybacks

Exelixis’ financial health is a pillar of confidence. With $1.3 billion in cash and no debt, the company is well-positioned to fund its pipeline while returning capital to shareholders. The $494.5 million repurchased YTD in 2025 (under a $1 billion authorization) has reduced shares outstanding by 11% since early 2023, directly boosting EPS.

The tax hit in Q1—a one-time jump to $46.1 million—should not deter investors. This reflects the company’s strong U.S. profitability, and the non-GAAP EPS of $0.62 (vs. $0.17 in 2024) paints a clearer picture of its earnings power.

Why EXEL is Undervalued—and Why to Buy Now

At a 16.2x forward P/E ratio, EXEL trades at a discount to peers like BMS (BMY) (27.5x) and Ipsen (IPSEY) (20.8x), despite its higher growth trajectory. The market is underappreciating both CABOMETYX®’s dominance and zanzalintinib’s potential.

The catalysts are time-sensitive: the first zanzalintinib data readout could come as soon as Q4 2025, with the NET launch ramp-up already underway. This creates a “buy the dip” opportunity ahead of these inflection points.

Final Call: Act Before the Catalysts Fire

Exelixis is a rare blend of execution, innovation, and valuation upside. The Q1 results and raised guidance confirm CABOMETYX®’s staying power, while zanzalintinib’s 2025 milestones offer asymmetric upside. With a fortress balance sheet and buybacks fueling EPS growth, EXEL is a buy for investors seeking a multi-year winner in oncology.

The question isn’t whether EXEL will deliver—it already has—but whether you’ll be on board before the market catches up.

Rating: Buy
Price Target: $50+ by end of 2025