Exelixis' Franchise Evolution: Clinical Milestones Fueling Next-Gen Growth Engine

Moving beyond the established performance of cabozantinib, Exelixis is charting a new path to sustain long‑term growth. The company will host its 2025 R&D Day virtually on December 10, 2025, to present progress on next‑generation oncology franchises according to the company's announcement. The webcast will remain accessible for one year, allowing investors to review the detailed agenda later.

Exelixis' pipeline includes zanzalintinib combinations for cancers such as renal cell carcinoma, colorectal cancer, and neuroendocrine tumors as detailed in the company's pipeline overview. The pipeline also features antibody‑drug conjugates (ADCs), tyrosine kinase inhibitors (TKIs), and immunotherapies, with several programs in the investigational new drug stage.

This multi‑modality approach aims to diversify revenue streams, reduce reliance on a single product, and expand potential market opportunities in immunotherapy and ADCs, which target multiple tumor types.

Clinical development carries inherent uncertainties: trial outcomes could be negative, regulatory agencies may request additional data, and competition from other modalities could affect market adoption.

The upcoming R&D Day will provide deeper insight into the pipeline's potential, offering a clearer view of Exelixis' long-term investment logic.

Revenue Momentum and Penetration Pressures

Exelixis is on track for a significant revenue surge in 2025, fueled by strong performance in its core oncology assets and promising pipeline advancements, though execution risks around new drug launches remain a key consideration. The company reported $597.8 million in Q3 2025 revenue, a substantial portion driven by $542.9 million in U.S. sales of its cabozantinib franchise, which continues to gain traction across renal cell carcinoma and neuroendocrine tumors according to Q3 financial results. This existing product momentum provides a solid foundation as the firm pursues its ambitious target of expanding total revenue from around $1.3 billion to approximately $2.15 billion by the end of the year as projected in the company's 2025 R&D presentation.

The critical driver for this growth projection is the advancement of zanzalintinib, a next-generation therapy for colorectal cancer and other solid tumors. Recent positive results from the phase 3 STELLAR-303 trial have bolstered confidence, enabling Exelixis to plan a U.S. new drug application submission for zanzalintinib combined with atezolizumab by year-end 2025. Success hinges on securing regulatory approval and, more importantly, achieving rapid market adoption post-launch. Competition in the colorectal cancer and renal cell carcinoma space is intense, and the path to widespread clinical penetration for a new combination therapy involves significant commercialization hurdles and potential pricing pressures.

Balancing this growth optimism is the reality of high-cost drug development and commercialization. Exelixis' 2025 R&D strategy emphasizes building new franchises in renal cell carcinoma, colorectal cancer, and neuroendocrine tumors through collaborations and advanced modalities like ADCs and bispecific antibodies. While strategic partnerships can share development costs and potentially accelerate progress, they also involve complex negotiations and may limit full capture of future revenues. The substantial investment required to bring pipeline candidates like zanzalintinib through phase 3 trials and into the market means that any delays or setbacks will directly impact the timeline and certainty of reaching the projected $2.15 billion revenue milestone.

Ultimately, Exelixis faces a critical inflection point. Its existing cabozantinib sales provide near-term revenue strength, but the long-term trajectory toward becoming a top-five solid tumor oncology leader and achieving the $2.15 billion goal rests heavily on zanzalintinib's successful commercial launch and market penetration. The company must navigate intense competition, achieve rapid uptake, and manage the substantial costs associated with both launching a new blockbuster and funding ongoing R&D. Failure to execute flawlessly on zanzalintinib's commercialization, or significant setbacks in its pipeline, could derail the ambitious growth plan despite the current financial momentum.

Clinical Catalysts and Regulatory Pathways

Cabozantinib's clinical performance is strengthening its market position. Recent subgroup analysis from Exelixis's CABINET trial demonstrated cabozantinib reduced disease progression or death by 81% in advanced lung or thymic neuroendocrine tumors compared to placebo, with patients living a median 8.2 months without progression versus 2.7 months on placebo. This substantial efficacy gain directly supported the drug's U.S. approval in March 2025 and subsequent European Union approval in July 2025, expanding its use beyond renal cell carcinoma into aggressive, treatment-limited tumor types. While strong sales continue in its established indications, these new approvals provide a near-term revenue diversification anchor.

Zanzalintinib's development is advancing rapidly through pivotal trials. Results from the STELLAR-303 phase 3 study in advanced colorectal cancer, where zanzalintinib was combined with atezolizumab, met its primary endpoint and now underpins Exelixis's plan to submit a U.S. New Drug Application by year-end 2025. If approved, this could establish zanzalintinib as a novel immunotherapy backbone in a large patient population. Further along the pipeline, the STELLAR-311 trial – testing zanzalintinib as a potential first-line treatment for neuroendocrine tumors – remains on track for a regulatory filing in 2026, contingent on continued positive data readouts. While these clinical milestones offer significant upside, the path to commercial success hinges on the FDA and EMA accepting the trial data and navigating potential safety or efficacy nuances during review.

Both assets represent tangible near-term catalysts distinct from the company's existing renal cell carcinoma franchise. The progression risk reduction for cabozantinib in neuroendocrine tumors is clinically meaningful, and the colorectal cancer phase 3 data provides a strong foundation for regulatory submission. However, investors should note that approval timelines can shift, and even with positive trials, market acceptance and reimbursement remain uncertain until products are launched and commercialized.

Guardrails and Execution Risks

Exelixis's growth thesis hinges on successfully transitioning from cabozantinib dominance to a diversified oncology portfolio. While the projected revenue surge from roughly $1.3 billion to $2.15 billion by FY 2025 as outlined in the company's 2025 R&D presentation is ambitious, several key execution risks demand scrutiny. The most immediate threat lies in renal cell carcinoma, where Merck's Keytruda-based combination therapies are intensifying competition. This pressure could erode cabozantinib's market share and potentially limit the pricing power needed to sustain high growth rates. Furthermore, the company's strategy to diversify relies heavily on advancing next-generation assets like its antibody-drug conjugates (ADCs) and bispecific antibodies, currently in earlier stages of development as described in the company's clinical pipeline. Significant late-stage trial failures in these ADC (e.g., XB773, XB404) or bispecific (e.g., XB628) candidates would constitute major setbacks, undermining the pathway to becoming a top-five solid tumor oncology leader. Additionally, the progress of zanzalintinib, positioned as a key future TKI candidate following its phase 3 success in RCC, faces a timeline risk regarding its New Drug Application (NDA) submission. Delays in filing this NDA could postpone commercialization and revenue generation, contradicting the aggressive growth trajectory outlined. Therefore, while the ambition is clear, tangible progress beyond cabozantinib and overcoming competitive headwinds remain unproven execution challenges critical to validating the long-term thesis.

Investment Thesis and Catalyst Tracking

Building on Exelixis's recent financial results and clinical advancements, the core thesis centers on zanzalintinib as the primary catalyst for potential valuation re-rating. The company plans to submit a new drug application (NDA) for zanzalintinib in the United States by the end of 2025, following positive data from the STELLAR-303 trial in advanced colorectal cancer combined with atezolizumab as reported in the company's Q3 financial results. These results, alongside other ongoing studies like STELLAR-311, are expected to be featured in key medical conferences in 2025, underscoring zanzalintinib's promise as a next-generation therapy.

Meanwhile, cabozantinib serves as a near-term stability anchor, with U.S. sales reaching $542.9 million in Q3 2025 alone, driven by growth in renal cell carcinoma and neuroendocrine tumors (NETs). Recent clinical data show cabozantinib reduced disease progression or death by 81% in patients with advanced lung or thymic NETs, contributing to U.S. and EU approvals in 2025 and expanding its treatment footprint according to the company's subgroup analysis.

However, the path forward carries risks. The oncology market is fiercely competitive, with multiple players developing similar targeted therapies for renal cell carcinoma and other cancers, potentially intensifying pricing pressures on new entrants like zanzalintinib. Additionally, partnership dependencies for development and commercialization could introduce execution uncertainties, though Exelixis's strong pipeline and revenue growth provide a buffer against short-term volatility.