Exelixis Advances Zanzalintinib Pipeline with Natera Collaboration in Colorectal Cancer Study

What happened

Exelixis has teamed with Natera for the phase III STELLAR-316 trial testing zanzalintinib in resected stage II/III colorectal cancer, building on positive overall survival data from STELLAR-303 in metastatic colorectal cancer highlighted in the DeepValue report. This collaboration expands zanzalintinib's development into the adjuvant setting, which could enhance its market potential beyond the core cabozantinib franchise that generated $568 million in Q2 2025 revenues. However, the move is incremental rather than transformative, as zanzalintinib is already a key pipeline asset, and success in this new study is uncertain given clinical hurdles and competitive pressures in colorectal cancer. Exelixis's strong financial position, with ~$1.39 billion in cash and marketable securities, supports this R&D investment without straining resources, aligning with its strategy to diversify beyond cabozantinib. Investors should view this as a logical step in pipeline execution but remain critical of potential delays and efficacy challenges that could impact long-term value.

Implication

If successful, STELLAR-316 may open the adjuvant colorectal cancer market for zanzalintinib, adding a potential revenue stream to complement the cabozantinib franchise. Funding from Exelixis's cash-generative operations minimizes financial risk, supporting self-funded R&D as noted in the DeepValue report. Yet, the study faces significant challenges, including patient recruitment, efficacy versus existing standards, and potential regulatory delays. Competitive intensity in colorectal cancer, with established players like regorafenib, could limit market share even upon approval. Long-term, this reinforces pipeline depth, but investors must weigh it against ongoing risks from cabozantinib patent litigation and pricing pressures.

Thesis delta

The collaboration with Natera for STELLAR-316 does not materially shift the BUY thesis but adds incremental optionality for zanzalintinib in adjuvant colorectal cancer. It underscores Exelixis's active pipeline development, already priced into the optimistic stance, and maintains the need to monitor clinical progress and competitive responses closely.