Exelixis Plummets 4.2% Amid Biotech Sector Turmoil: What's Fueling the Selloff?

Summary
• Exelixis (EXEL) trades at $44.25, down 4.2% intraday, with a 52-week range of $31.90–$49.62
• Sector leader Amgen (AMGN) declines 3.14%, signaling broader biotech sector weakness
• Technicals show a short-term bullish trend but a bearish intraday reversal

Exelixis’ sharp decline has drawn attention as the biotech sector grapples with regulatory uncertainty and profit-taking pressures. With the stock trading near its 200-day moving average and elevated implied volatility in options, traders are recalibrating positions ahead of key support levels. The sector’s mixed performance underscores the fragility of momentum-driven rallies in a high-interest-rate environment.

Biotech Sector Volatility Drives Exelixis' Sharp Decline
The selloff in Exelixis mirrors a broader retreat in biotech equities, driven by profit-taking after a recent rally and lingering concerns over regulatory scrutiny. While no company-specific news triggered the move, the sector’s exposure to high R&D costs and uncertain approval timelines has amplified sensitivity to macroeconomic shifts. Elevated implied volatility in options (272.15% for the 29-strike put) suggests traders are hedging against further downside, particularly as the stock tests its 200-day moving average at $40.48.

Biotech Sector Suffers Broad Selloff as AMGN Leads Decline
Amgen’s 3.14% intraday drop as the sector leader highlights systemic pressures. While Exelixis’ decline is more pronounced, both stocks face similar headwinds: rising interest rates discounting future cash flows and regulatory risks for pipeline assets. The sector’s 16.5x dynamic P/E ratio remains elevated, making it vulnerable to macroeconomic shifts. However, Exelixis’ smaller market cap and higher debt-to-equity ratio amplify its volatility relative to peers.

Options Playbook: Capitalizing on Biotech’s Volatility
• MACD: 0.605 (bullish), Signal Line: 0.662 (bearish), Histogram: -0.057 (divergence)
• RSI: 67.64 (overbought), Bollinger Bands: $39.55–$47.62 (bearish contraction)
• 200D MA: $40.48 (below price), 30D MA: $43.57 (resistance)

Exelixis’ technicals suggest a bearish reversal despite short-term bullish trends. Key levels to watch: $43.58 (30D MA) and $42.37 (200D support). The 200-day average acts as a critical floor; a break below $40.48 could trigger a 10% correction. With no leveraged ETF data available, options remain the primary vehicle for positioning.

Top Option 1: EXEL20260116C35 (Call, $35 strike, 1/16/2026)
• IV: 160.62% (high volatility)
• Leverage: 4.80% (moderate)
• Delta: 0.854 (high sensitivity)
• Theta: -0.2687 (rapid time decay)
• Gamma: 0.0205 (strong price sensitivity)
• Turnover: 1,840 (liquid)
This call option offers asymmetric upside if the stock rebounds above $35, leveraging high gamma to capitalize on volatility. A 5% downside scenario (to $42.04) yields a 14.71% return on the contract.

Top Option 2: EXEL20260116P35 (Put, $35 strike, 1/16/2026)
• IV: 163.57% (high volatility)
• Leverage: 442.05% (aggressive)
• Delta: -0.1488 (moderate bearishness)
• Theta: -0.1114 (slow decay)
• Gamma: 0.0204 (strong sensitivity)
• Turnover: 0 (low liquidity)
This put offers high leverage for a bearish bet, though liquidity constraints may limit entry. A 5% downside scenario (to $42.04) generates a 100%+ return on the put’s intrinsic value.

Trading View: Aggressive bulls may consider EXEL20260116C35 into a bounce above $35, while bears should monitor the 200-day MA. If $40.48 breaks, the EXEL20260116P35 put could offer short-side potential.

Backtest Exelixis Stock Performance
The backtest of EXEL's performance after a -4% intraday plunge from 2022 to now shows favorable short-to-medium-term gains. The 3-Day win rate is 55.93%, the 10-Day win rate is 54.66%, and the 30-Day win rate is 65.25%. Although the maximum return during the backtest period is only 6.96%, the overall trend indicates a positive rebound from the intraday plunge.

Biotech’s Crossroads: Hold, Hedge, or Hike?
Exelixis’ 4.2% drop reflects the sector’s fragility amid macroeconomic headwinds and regulatory uncertainty. While technicals hint at a potential rebound above $35, the 200-day moving average at $40.48 remains a critical test. Traders should prioritize options with high gamma and moderate delta to navigate volatility. With sector leader Amgen down 3.14%, biotech’s near-term outlook hinges on earnings resilience and Fed policy clarity. Watch for $40.48 breakdown or a $35 retest to dictate next steps.