Exelixis and Ipsen's Breakthrough Approval of CABOMETYX in Neuroendocrine Tumors: A Game Changer in a High-Growth Oncology Niche

The European Commission's June 2025 approval of CABOMETYX (cabozantinib) for advanced neuroendocrine tumors (NETs) marks a seismic shift in a historically fragmented oncology niche. Developed by Exelixis in collaboration with Ipsen, this first-in-class systemic therapy now holds exclusive EU approval for previously treated NET patients, regardless of tumor site or grade. Backed by the groundbreaking CABINET trial—showing a 77% and 62% reduction in disease progression or death risk for pancreatic and extra-pancreatic NETs, respectively—the drug's launch positions Exelixis and Ipsen to dominate a market rife with unmet needs, rising incidence, and robust pricing power.

A Market in Transition: Unmet Needs and Strategic Gaps

Neuroendocrine tumors, a rare and heterogeneous group of malignancies, have long been underserved. While somatostatin analogs (SSAs) and radioligand therapies like LUTATHERA have carved out a place in the treatment landscape, these options remain limited to specific subpopulations and stages of disease. For patients with well-differentiated, metastatic NETs who have progressed beyond SSAs, the therapeutic void is stark. The CABINET trial addressed this gap directly, demonstrating a median progression-free survival (PFS) of 13.8 months for pancreatic NETs and 8.4 months for extra-pancreatic NETs—versus 4.4 and 3.9 months on placebo. These results, published in the New England Journal of Medicine, underscore CABOMETYX's ability to delay disease progression in a patient cohort with historically poor outcomes.

The EU's neuroendocrine tumor treatment market, valued at $1.96 billion in 2024, is projected to grow at a 10.5% CAGR, reaching $4.35 billion by 2032. This expansion is driven by rising diagnostic accuracy, increased adoption of advanced therapies, and the emergence of alpha-emitter radioligands. Yet, the market remains highly fragmented, with no single therapy dominating across all NET subtypes. CABOMETYX's broad label—covering both pancreatic and extra-pancreatic NETs—positions it as a universal solution in a space where most treatments are siloed.

Strategic Positioning: First-Mover Advantage and Pricing Power

The approval of CABOMETYX in the EU is not just a regulatory win—it's a strategic masterstroke. Ipsen, which holds exclusive commercial rights outside the U.S. and Japan, now commands a first-mover advantage in a market where no systemic therapy had previously secured approval for this indication. This exclusivity is critical given the high unmet need: 27% of NET patients are diagnosed with lung NETs, a subset with no approved treatment options post-progression.

Pricing power further amplifies the opportunity. While the text does not disclose exact figures, the drug's orphan drug designation and demonstrated clinical superiority suggest a premium valuation. In the U.S., where CABOMETYX was approved in March 2025, its pricing is likely to align with other high-efficacy oncology agents. The EU's reimbursement landscape, though more complex, favors therapies with robust clinical data, particularly in rare diseases. With CABOMETYX showing a favorable safety profile and maintaining health-related quality of life (as highlighted at ASCO 2025), payers may be incentivized to cover the drug despite its potential cost.

Competitive Dynamics: Navigating the Next-Gen Therapies

The net market is on the cusp of a paradigm shift, with alpha-emitter radioligands like ITM-11 and RYZ101 entering late-stage trials. While these agents may capture a portion of the market, their adoption faces hurdles: high costs, specialized administration requirements, and limited availability of isotopes. CABOMETYX, by contrast, is an oral, small-molecule inhibitor with a simpler administration model. Its broad mechanism of action—targeting VEGFR, MET, and RET pathways—also positions it to address resistance mechanisms that may arise with monotherapy approaches.

Moreover, the drug's label in the EU is expansive, covering patients regardless of tumor site or grade. This flexibility is a stark contrast to radioligand therapies, which often require specific receptor expressions (e.g., somatostatin receptors). As the market evolves, CABOMETYX's versatility could allow it to maintain a dominant share, even as newer agents enter the fray.

Investment Implications: A Long-Term Play in a High-Growth Niche

For investors, the approval of CABOMETYX represents a rare combination of clinical differentiation, regulatory momentum, and market tailwinds. The EU's 27-member-state footprint, plus Norway, Liechtenstein, and Iceland, offers a vast addressable market. With the global NET treatment market expected to grow to $4.89 billion by 2034, Exelixis and Ipsen are poised to capture a significant portion of this expansion.

However, risks remain. The high cost of novel therapies could strain reimbursement systems, particularly in emerging markets. Additionally, the emergence of alpha-emitters may erode market share over the long term. Yet, these challenges are outweighed by the drug's first-mover advantage, strong clinical data, and the structural growth of the NET market itself.

Conclusion: A Catalyst-Driven Opportunity

Exelixis and Ipsen's CABOMETYX approval is more than a regulatory milestone—it's a catalyst for long-term value creation. By addressing a critical unmet need with a therapy that delivers durable clinical benefits, the duo has positioned itself at the forefront of a niche poised for explosive growth. For investors seeking exposure to innovation in rare cancers, this is a compelling long-term opportunity. The key will be monitoring adoption rates, pricing negotiations, and the emergence of next-gen therapies—but for now, the fundamentals are undeniably strong.

Investment Takeaway: Buy into the long-term potential of CABOMETYX by investing in Exelixis and Ipsen, with a focus on the EU's expanding NET market. The drug's first-mover advantage, combined with the structural growth of the sector, makes this a high-conviction play in a fragmented oncology landscape.