Exelixis Outlines Aggressive 2026 Growth Plan Amid Strong Cabozantinib Performance and Zanzalintinib Pipeline Momentum

What happened

Exelixis announced preliminary unaudited financial results for fiscal year 2025 and provided guidance for 2026, positioning the year as critical for clinical, regulatory, and commercial advancements. This update leverages the company's cash-generative cabozantinib franchise, which reported Q2 2025 revenues of $568 million and a solid liquidity position of approximately $1.39 billion, as highlighted in recent filings. Management projects 2026 will drive cabozantinib growth while accelerating zanzalintinib toward a potential second commercial franchise, building on positive overall survival data from the STELLAR-303 trial in mCRC. Investors should view this optimistic portrayal with skepticism, as the company still grapples with cabozantinib patent litigation, competitive pressures in RCC and mCRC, and margin compression from royalty agreements. Overall, the announcement aligns with the existing BUY thesis by emphasizing self-funded diversification, but it underscores the need for rigorous execution against persistent risks.

Implication

The guidance suggests cabozantinib's cash flows will continue to fund R&D independently, reducing reliance on external capital and supporting buybacks. Zanzalintinib's progress could mitigate revenue concentration risk, offering a new growth leg if regulatory milestones are met. However, the vague financial targets in the news require scrutiny, as historical performance and future updates will be key to validating management's confidence. Capital allocation, including remaining buyback authorization, provides downside support but must not distract from investing in high-priority programs to sustain innovation. Investors should monitor quarterly results, STELLAR-303 final analysis, and patent litigation outcomes to gauge whether the 2026 priorities translate into tangible value amid competitive and operational challenges.

Thesis delta

The news confirms the BUY thesis by highlighting cabozantinib's stability and zanzalintinib's pipeline progress, aligning with expected growth drivers. No significant shift is introduced, but the delta lies in increased emphasis on 2026 execution risks, such as meeting guidance and navigating litigation, which could temper optimism if mismanaged. Investors should maintain the stance while closely watching for deviations from the outlined priorities and financial targets.