Exelixis ((EXEL)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Exelixis struck an upbeat tone on its latest earnings call, underscoring robust growth from CABOMETYX, strong profits and a sizeable cash pile even as reimbursement headwinds, a sharply higher tax bill and pipeline complexity tempered the narrative. Management framed upcoming ZANZA readouts as the next major value driver, leaving investors weighing solid execution today against clinical and regulatory risk ahead.
Revenue expansion led by cabozantinib franchise
Exelixis reported about $611 million in total revenue for Q1 2026, powered by its cabozantinib franchise. U.S. cabo net product revenue rose 8% year over year to $555 million and global cabo revenue climbed 12.5% to $764 million, with CABOMETYX contributing $552.8 million including clinical trial sales.
Profits remain strong with ample cash on hand
GAAP net income reached roughly $210.5 million, translating to $0.81 basic and $0.79 diluted EPS, while non-GAAP earnings rose to $232.8 million, or $0.90 basic and $0.87 diluted. The company ended the quarter with about $1.4 billion in cash and marketable securities, giving it flexibility to fund R&D and capital allocation.
Commercial momentum and share gains for CABOMETYX
CABOMETYX continued to outgrow its market, with total prescriptions rising 14% versus Q1 2025 compared with 7% growth for the broader oral TKI basket. Market share increased three points to 47%, and the drug posted record new patient starts along with its highest first-line renal cell carcinoma share for the CABOMETYX plus nivolumab combo.
Share repurchases underscore capital return focus
The company leaned into buybacks, repurchasing about $430.8 million of stock in the quarter and retiring roughly 10 million shares at an average price of $42.99. Exelixis still has $159.4 million remaining under its $750 million plan and added a fresh $50 million authorization, signaling confidence in long-term cash generation.
ZANZA advances with pivotal STELLAR program
Regulatory momentum for ZANZA is building, with a U.S. review underway for the ZANZA plus atezolizumab combo in third-line-plus colorectal cancer after STELLAR-303 showed a 20% reduction in risk of death in the overall population. The broader ZANZA program now spans seven pivotal trials, including studies in colorectal cancer, non–clear cell RCC, neuroendocrine tumors, meningioma and adjuvant minimal residual disease.
Pivotal trial enrollment and timelines progressing
Management highlighted healthy clinical execution, noting that STELLAR-311 in neuroendocrine tumors is enrolling faster than expected. Enrollment for STELLAR-304 in non–clear cell RCC is complete, with top-line data targeted for the second half of 2026, while the MRD-focused STELLAR-316 colorectal study is expected to start around midyear in a high-risk patient subset.
Building the next wave of oncology assets
Beyond cabo and ZANZA, Exelixis is advancing four early-phase molecules, XL309, XB010, XB628 and XB371, through Phase 1 testing. Additional discovery programs, including antibody-drug conjugates such as DLL3-targeted XB773, are being positioned as potential future franchises to diversify revenue and sustain growth.
Disciplined spending with lower operating expenses
Total operating expenses came in at about $359 million, modestly below the $363 million level a year earlier. The company cited lower clinical trial costs as a key driver, partly offset by higher headcount-related expenses and stock-based compensation as it invests in its expanding pipeline.
Gross-to-net pressure weighs on realized sales
Despite strong volume, net product revenue faced headwinds as gross-to-net deductions for the cabozantinib franchise rose to 30.2%. Management pointed to higher 340B program volume, increased Medicare Part D discounts and rebates, and expanded co-pay support as the main drivers of this margin drag.
Tax provision jump impacts bottom line
Exelixis’ tax bill surged, with the provision for income taxes climbing to approximately $57.2 million compared with $8.2 million in the prior quarter. The company linked the spike primarily to items recognized in the fourth quarter of 2025, creating a notable but non-recurring hit to net income.
Pipeline outcomes and competition introduce uncertainty
Management acknowledged that ZANZA’s commercial trajectory depends on several key readouts, including the maturing non-liver metastasis endpoint from STELLAR-303 and the slightly delayed STELLAR-304 results in the back half of 2026. They also flagged complexity in RCC combinations, referencing a recent triplet failure as evidence that tolerability and partner selection could shape competitive dynamics.
Choppy trial sales and rising cost base
The company cautioned that clinical trial sales will remain volatile from quarter to quarter, limiting their reliability as a growth driver. At the same time, higher personnel-related spending and equity compensation are offsetting some gains from lower trial costs, underscoring ongoing cost-management needs as the pipeline scales.
Reliance on partners and external market forces
Several pivotal efforts for ZANZA, including combination programs with major pharma collaborators, are tightly linked to partner execution and shifts in treatment standards. Exelixis reiterated that regulatory decisions, competitive moves and trial operations could materially influence outcomes across its late-stage portfolio.
Guidance supported by Q1 performance and execution
Exelixis reaffirmed its full-year 2026 outlook, arguing that Q1 trends in revenue, prescriptions and profitability validate its guidance ranges. With cabozantinib TRx up 14%, market share rising to 47%, operating expenses stable, over $1.4 billion in cash and sizable ongoing buybacks, management signaled continued confidence in delivering on its financial and strategic targets.
Exelixis’ call painted a picture of a company executing well today while preparing for a pivotal inflection in its pipeline. Investors are being rewarded with solid earnings, cash returns and market-share gains, yet the next leg of upside will hinge on ZANZA data, regulatory outcomes and the company’s ability to navigate a complex and competitive oncology landscape.