Exelixis Plunges 16% as Revenue Miss and Pipeline Setback Shatter Investor Confidence—What’s Next for the Biotech Giant?

Summary
• Exelixis (EXEL) slumps 16.2% intraday, trading at $37.195 amid a $44.39 previous close.
• Q2 2025 revenue of $568.3M falls short of $531.3M estimates, driven by Cabozantinib sales underperformance.
• Zanzalintinib trial in HNSCC halted, signaling strategic pivot and heightened risk for 2030 revenue pipeline.
• Analysts at RBC and Jefferies adjust price targets, while Zacks upgrades EXEL to a 'Strong Buy' despite the selloff.

The sharp decline in Exelixis’ stock price reflects a perfect storm of near-term revenue disappointment and long-term pipeline uncertainty. With Cabozantinib’s growth momentum faltering and a key experimental asset shelved, investors are recalibrating expectations. The stock’s intraday range—from $38.445 to $36.8125—underscores the volatility as the market digests these developments.

Revenue Shortfall and Pipeline Discontinuation Trigger Investor Flight
Exelixis’ 16.2% intraday drop stems from two critical catalysts: a 2% revenue miss on Cabozantinib sales and the abrupt halt of its zanzalintinib trial in head-and-neck cancer. Cabozantinib’s underperformance—despite a 20% YoY increase—was attributed to aggressive gross-to-net deductions (30.2% in Q2) and declining clinical trial sales. Meanwhile, the discontinuation of zanzalintinib, a potential $1B+ asset, signals a strategic retreat in a competitive HNSCC landscape. Analysts at BofA and RBC flagged these moves as red flags for revenue sustainability, particularly as Cabometyx faces exclusivity loss in 2030. The decision to abandon zanzalintinib also raises questions about Exelixis’ ability to innovate under pressure, compounding near-term uncertainty.

Options and ETF Playbook: Navigating the Biotech Bear Case
• 200-day average: $37.04 (near current price); RSI: 54.68 (neutral); MACD: 0.53 (bearish divergence from signal line 0.61); Bollinger Bands: $43.25–$46.01 (price at 43.25 level).

The technical outlook for EXEL is bearish in the near term, with price action forming a bearish engulfing pattern and RSI hovering near neutral territory. Key support levels at $36.66 (200D low) and $37.04 (200D SMA) are critical to monitor. While the Zacks Rank upgrade hints at earnings optimism, the options market tells a different story. Two contracts stand out for bearish positioning: EXEL20250815P35 (put option) and EXEL20250815C37 (call option).

• EXEL20250815P35: Put option with $35 strike, 33% implied volatility (moderate), 128.57% turnover, and 115.94% leverage ratio. Delta of -0.199 (moderate sensitivity to price decay), theta of -0.0026 (minimal time decay), and gamma of 0.1005 (high sensitivity to price swings).

• EXEL20250815C37: Call option with $37 strike, 32.25% IV (reasonable), 39,030 turnover, and 32.26% leverage. Delta of 0.541 (moderate directional bias), theta of -0.0758 (aggressive time decay), and gamma of 0.1493 (high responsiveness to price movement).

Payoff Analysis: Under a 5% downside scenario (price at $35.34), the put option (P35) would yield a $0.85 payoff (strike price of $35 vs. $35.34). The call option (C37) would expire worthless. The P35’s high leverage and gamma make it ideal for capitalizing on a sharp drop, while the C37’s high theta risks erosion if the stock consolidates. Aggressive bears should prioritize the P35, while cautious bulls might wait for a bounce above $37.04 before considering the C37.

Backtest Exelixis Stock Performance
The performance of EXEL after a -16% intraday plunge was generally positive, with 54.99% of days experiencing a return within 3 days and 58.32% experiencing a return within 10 days. The maximum return during the backtest period was 10.86%, indicating that while there was some volatility, the stock had the potential for recovery.

Act Fast: The Biotech Bear Case is in Motion—Position for a Break Below $36.65
Exelixis’ 16.2% plunge signals a critical inflection point, with the stock now teetering near key support levels. The bearish technical setup, coupled with the halted zanzalintinib trial and Cabozantinib’s revenue headwinds, suggests further downside is likely unless the stock reclaims $37.04. For context, sector leader Amgen (AMGN) is trading flat with a 0.65% intraday gain, highlighting Exelixis’ underperformance. Investors should prioritize the EXEL20250815P35 put option for short-term bearish exposure, while monitoring the $36.65 (200D low) and $37.04 (200D SMA) levels. A breakdown below $36.65 would validate a deeper correction, while a rebound above $37.04 could signal a short-term rebound. Take action now: if $36.65 breaks, the P35 put offers high leverage. If $37.04 holds, consider a cautious long setup.