Exelixis Earnings Call: CABOMETYX Strength, ZANZA Catalyst

Exelixis ((EXEL)) has held its Q4 earnings call. Read on for the main highlights of the call.

Exelixis’ latest earnings call struck an optimistic tone, with management highlighting robust CABOMETYX growth, a pivotal regulatory win for ZANZA, and a strong cash position supporting heavy share buybacks. While rising expenses and tighter gross‑to‑net dynamics temper near‑term margins, the company framed these as strategic investments ahead of major pipeline inflection points.

Cabozantinib Franchise Delivers Double-Digit Full-Year Growth

Exelixis reported that its U.S. cabozantinib franchise net product revenue grew about 17% in 2025 to roughly $2.12 billion, underscoring durable demand. In the fourth quarter, U.S. cabozantinib revenue rose around 6% year over year to $547 million, while global cabozantinib franchise revenue reached approximately $754 million in Q4 and $2.89 billion for the full year.

CABOMETYX Maintains Leadership Across Key Oncology Segments

CABOMETYX remained the top prescribed TKI in renal cell carcinoma and the leading TKI plus immunotherapy combination in first-line RCC, reinforcing its entrenched position in kidney cancer care. The drug also strengthened its foothold in neuroendocrine tumors, becoming the number-one oral agent in second-line and later settings, with U.S. NET revenues surpassing $100 million in 2025.

ZANZA NDA Acceptance Marks Major Colorectal Cancer Milestone

The FDA accepted the NDA for zanzalintinib in combination with atezolizumab for third-line and later colorectal cancer based on the STELLAR-303 trial, marking a key regulatory milestone. STELLAR-303 met one of its two dual primary endpoints by delivering a 20% reduction in risk of death in the intent-to-treat population, with a PDUFA decision expected in December and a crucial non-liver-metastases OS readout due midyear.

Broad ZANZA Pivotal Program Targets Multiple Tumor Types

Management highlighted a rapidly expanding ZANZA development plan, now featuring seven ongoing or planned pivotal studies across colorectal cancer, neuroendocrine tumors, non-clear cell RCC, and meningioma. Collaborations, including participation in Merck’s LightSPARK 33 and other combination efforts, could extend ZANZA’s reach and create multiple shots on goal for future commercial expansion.

Balance Sheet Strength Fuels Aggressive Share Repurchases

Exelixis closed 2025 with about $1.66 billion in cash and marketable securities, providing ample flexibility for both R&D and capital returns. The company repurchased roughly $954 million of stock during the year, retiring around 24 million shares at an average price of $39.61, and still has about $590 million left under its current buyback authorization.

Early-Stage Pipeline Builds Beyond CABO and ZANZA

The company is advancing four early clinical candidates—XL-309, XP-010, XB-628, and XB-371—reflecting a deliberate push to diversify beyond its flagship products. Additional small molecule and antibody-drug conjugate programs are also progressing, aimed at building a broader, sustainable oncology franchise that can support growth in the next decade.

Rising Operating Costs Pressure Near-Term Profitability

Operating expenses excluding restructuring climbed to about $363 million in Q4 2025 from $341 million a year earlier, as Exelixis ramped up investment across the business. Higher manufacturing spending for pipeline candidates, NDA-related fees, increased personnel costs, and stepping up marketing activity all weighed on margins and are likely to remain headwinds in the near term.

Gross-to-Net Headwinds and Channel Variability Emerge

The cabozantinib franchise posted a Q4 gross-to-net of 28.5%, but management guided to a higher 31–32% for full-year 2026, signaling more pressure on realized pricing. The shift reflects volume fluctuations in certain channels and the company’s new classification as a specified small manufacturer, which triggers an additional 2% Medicare Part D discount and lowers net revenue percentages.

Regulatory Overhang Persists Around ZANZA’s Dual Endpoints

While STELLAR-303 achieved a statistically meaningful OS benefit in the overall colorectal cancer population, the non-liver-metastases OS endpoint remained immature at the analysis cutoff. Management acknowledged that regulatory risk lingers until the pending NLM OS results read out midyear and health authorities complete their review, potentially influencing the breadth of any approval.

Competitive Oncology Landscape Raises Execution Bar

Exelixis operates in crowded RCC and CRC markets where new mechanism combinations and survival data can quickly reshape standards of care. Management stressed that future RCC success will likely hinge on best-in-class overall survival results, as multiple external trials and combination regimens vie for share and could pressure CABOMETYX if competitors post superior outcomes.

Multiple Upcoming Trial Readouts Will Shape Growth Trajectory

The company’s long-term growth thesis leans heavily on positive outcomes from several pivotal trials, including STELLAR-316, STELLAR-304, and partnered Merck studies like LightSPARK. Management acknowledged that negative or inconclusive data from any of these programs could materially reset expectations for franchise expansion and overall earnings power.

Commercial Build-Out Drives Higher Near-Term Investment

Exelixis accelerated expansion of its gastrointestinal-focused sales force in January to support rising CABOMETYX use in NET and prepare for a potential ZANZA launch. These initiatives contributed to higher Q4 personnel and marketing spending, and management signaled that elevated commercial investments are likely to persist as the company gears up for additional product introductions.

Guidance Highlights Margin Pressure but Capital Return Commitment

For 2026, Exelixis guided to a cabozantinib gross-to-net rate of 31–32%, explicitly incorporating the 2% Medicare Part D discount and signaling tighter margins despite ongoing revenue growth. Management reiterated its intent to complete the remaining approximately $590 million in share repurchases under the existing program this year, while relying on a $1.66 billion cash cushion and 2025 profitability to fund both buybacks and pipeline investment.

Exelixis’ earnings call painted the picture of a company entering a pivotal period, with strong CABOMETYX cash flows funding an ambitious ZANZA program and a growing early-stage pipeline. Investors are being asked to look past near-term cost and pricing headwinds and focus on multiple upcoming trial and regulatory catalysts that could determine whether today’s momentum translates into long-term value creation.