Leerink upgrades Exelixis to Outperform following ESMO presentation

As previously reported, Leerink upgraded Exelixis (EXEL) to Outperform from Market Perform with a price target of $48, up from $38, following the ESMO presentation of the Phase 3 STELLAR-303 trial evaluating zanzalintinib plus atezolizumab versus regorafenib in 3L non MSI-high metastatic colorectal cancer. While the stock was pressured on these data, down 12%, the firm thinks the trial established a number of important levers critical to its longer-term investment thesis. Importantly, Leerink believes STELLAR-303 established that zanzalintinib is approvable in this setting, opening the door for the next generation TKI to offset cabo revenues following patent expiry in 2028.