Exelixis Plunges 16.33%: What's Next for the Biotech Giant?

Summary
• Exelixis (EXEL) tumbles 16.33% intraday, trading at $37.14 after a 12% pre-market slide
• Q2 revenue misses estimates by $9.1 million, citing higher gross-to-net deductions and clinical trial sales decline
• Halts zanzalintinib development in HNSCC, citing competitive landscape and strategic prioritization

Exelixis Inc. (NASDAQ:EXEL) is experiencing a historic intraday selloff, with its share price collapsing to $37.14—well below its 52-week low of $23.21. The stock has traded between $36.81 and $38.45, reflecting a volatile session driven by earnings disappointment and strategic program cuts. Analysts are now recalibrating expectations as the biotech firm navigates a pivotal juncture in its product lifecycle.

Revenue Miss and Strategic Shifts Trigger Sharp Decline
Exelixis’ 16.33% intraday drop follows a Q2 revenue shortfall of $9.1 million (2% below consensus) and the discontinuation of zanzalintinib in head-and-neck cancer trials. Cabozantinib sales fell short due to increased 340B program volumes and a 90% year-over-year decline in clinical trial revenues. The strategic decision to halt zanzalintinib—despite Phase 2 data—reflects a recalibration toward higher-potential indications. Analysts at RBC and Jefferies note the move prioritizes Cabometyx’s growth in neuroendocrine tumors but signals limited near-term upside from zanzalintinib, exacerbating investor concerns.

Options Playbook: Capitalizing on Volatility and Technical Breakdowns
• Technical indicators: 200-day MA at $37.04 (near current price), RSI at 54.68 (neutral), MACD (-0.085) below signal line (bearish divergence)
• Bollinger Bands: $43.25–$46.01 (price near lower band, suggesting oversold conditions)

The stock is trading near its 200-day moving average and lower Bollinger Band, signaling a potential oversold rebound. However, the bearish engulfing candlestick pattern and MACD divergence suggest continued weakness. For options, focus on high-leverage puts with moderate deltas and reasonable implied volatility:

• EXEL20250815P35
- Put option, strike $35, expiration 2025-08-15
- IV: 33.73% (moderate), Leverage: 115.94%, Delta: -0.199 (moderate), Theta: -0.0026 (low decay), Gamma: 0.1005 (high sensitivity), Turnover: 1155
- IV (Implied Volatility): Reflects market uncertainty; Leverage amplifies returns; Delta indicates moderate directional exposure; Gamma ensures sensitivity to price swings.
- This contract offers a 115% leverage ratio with moderate delta, ideal for a 5% downside scenario where payoff could reach $2.14 (max(0, 35.28 - 35)).

• EXEL20250815P34
- Put option, strike $34, expiration 2025-08-15
- IV: 36.74% (moderate), Leverage: 185.50%, Delta: -0.1278 (moderate), Theta: -0.0054 (low decay), Gamma: 0.0691 (moderate), Turnover: 267
- Leverage and IV suggest strong bearish potential; Gamma ensures responsiveness to price movement.
- A 5% downside scenario could yield $3.14 payoff (max(0, 35.28 - 34)).

Aggressive bears may consider EXEL20250815P35 for a potential $2.14 payoff if the stock breaks below $36.66 (200-day support). For a balanced approach, EXEL20250815P34 offers higher leverage with moderate risk.

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.

Rebound or Reckoning? Key Levels to Watch Before August 15
Exelixis’ near-term trajectory hinges on its ability to rebound above $37.04 (200-day MA) or confirm a breakdown below $36.66 (200D support). The options market suggests continued volatility, with puts like EXEL20250815P35 and P34 offering asymmetric risk-reward. Meanwhile, sector leader Amgen (AMGN) remains stable at +0.64% intraday, underscoring the biotech sector’s divergence. Investors should monitor Cabometyx’s performance in neuroendocrine tumors and potential catalysts from the STELLAR-303 trial. Action: Short-term bears target $34–$35, while bulls watch for a rebound above $38.45 (intraday high).