Exelixis (EXEL) Q1 2025: Cabo Franchise Grows 36% as NET Launch Expands Oncology Opportunity
Exelixis delivered a pivotal quarter, raising guidance as its Cabo franchise extended market share and new NET approvals unlocked an incremental growth lever. The company’s execution in renal cell carcinoma (RCC) and rapid mobilization in neuroendocrine tumors (NET) are reshaping its commercial trajectory, while pipeline advances and disciplined capital allocation reinforce its multi-franchise oncology ambitions. Investors should monitor the pace of NET adoption and upcoming pivotal Zanza data as key determinants of sustained outperformance.
Summary
- Market Share Expansion: CaboMedix outperformed competitors, driving both absolute and relative prescription growth in RCC.
- NET Approval Momentum: Early NET launch feedback is positive, with Exelixis leveraging deep prescriber relationships for rapid uptake.
- Pipeline Progression: Multiple pivotal Zanza readouts and IND filings set the stage for portfolio diversification in 2025.
Performance Analysis
Exelixis reported robust top-line growth, underpinned by the Cabo franchise’s dominance in RCC and a new revenue stream from the NET indication. U.S. Cabo net product revenue climbed sharply, reflecting both increased demand and market share gains. The franchise’s global footprint, supported by partners Ipsen and Takeda, contributed additional royalty streams, highlighting the value of Exelixis’s collaborative commercialization model, where partners commercialize in non-U.S. markets in exchange for royalties.
Operating expenses decreased sequentially, driven by lower R&D and manufacturing outlays, while general and administrative costs ticked higher as commercial activities ramped. The company’s strong cash generation enabled continued share repurchases, with nearly $300 million deployed in Q1. Notably, Exelixis raised its full-year revenue guidance by $100 million, a move anchored in base business strength rather than speculative NET contributions.
- Prescription Share Gains: CaboMedix grew total prescription (TRX) share from 40% to 44% YoY, outpacing all competitors in the TKI basket.
- New Indication Uptake: Early NET launch efforts targeted over 70% of key prescribers within three weeks, aiming to accelerate adoption in a $1 billion U.S. market.
- Expense Control: Lower clinical and manufacturing costs provided operating leverage, partially offset by higher commercial spend.
Exelixis’s commercial strength, prudent cost discipline, and capital allocation reinforce its financial resilience as it enters a year rich with clinical catalysts.
Executive Commentary
"We continue to execute on our strategy to build a multi-compound, multi-franchise oncology enterprise. We expect 2025 to be a very busy and highly productive time for the company. I think it's safe to say that we have reached another critical inflection point in recent Exelixis history, and we're energized to take things to the next level as we move forward into the second quarter and beyond."
Mike Morrissey, President and CEO
"We're increasing our net product revenue guidance to $2.05 billion to $2.15 billion, which increases the midpoint of our net product revenue guidance range by $100 million when compared to our previously provided net product revenue guidance. We're also making a corresponding increase to our total revenue guidance, which is now $2.25 billion to $2.35 billion."
Chris Senner, Chief Financial Officer
Strategic Positioning
1. RCC Franchise Leadership
CaboMedix has solidified its position as the leading tyrosine kinase inhibitor (TKI, a class of targeted cancer therapy) in renal cell carcinoma, capturing both total and new prescription share in a highly competitive market. The Checkmate 9ER five-year follow-up data bolstered clinical differentiation, resonating with prescribers and supporting continued frontline adoption.
2. NET Indication Launch
The FDA approval for neuroendocrine tumors marks a strategic expansion, tapping into a largely generic-penetrated segment with a branded oral therapy. Exelixis’s commercial team mobilized rapidly, leveraging established relationships to reach the majority of targeted NET prescribers within weeks. Early signals suggest strong physician enthusiasm and broad label utility, positioning CaboMedix to become a new standard of care in second and third-line NET treatment.
3. Pipeline Diversification and Clinical Execution
Zanzalitinib (Zanza, next-generation VEGFR TKI) is advancing as Exelixis’s next major oncology franchise, with pivotal trial readouts in colorectal cancer, non-clear cell RCC, and head and neck cancer expected in the second half. The company is also progressing multiple INDs for novel assets, including the bispecific antibody XB628 and tissue factor ADC XB371, reinforcing its commitment to innovation-driven growth.
4. Capital Allocation and Business Development
Exelixis maintains a disciplined capital allocation framework, balancing internal R&D investment, opportunistic share repurchases, and focused business development. Management emphasized a preference for late-stage, high-conviction oncology assets that align with existing franchise strengths, eschewing speculative or “cheap” deals in favor of value-accretive transactions.
5. Commercial Organization as a Competitive Moat
The company’s deep physician relationships and full-scale commercial infrastructure provide a significant advantage in launching new indications and defending market share, especially against generic competitors in the NET space.
Key Considerations
Exelixis’s Q1 performance underscores the power of franchise focus, rapid execution, and pipeline maturation to drive sustained value creation.
Key Considerations:
- Base Business Outperformance: The majority of guidance raise stems from RCC momentum, not unproven NET ramp, highlighting the durability of the core franchise.
- NET Ramp Trajectory: Early prescriber feedback is strong, but the pace and breadth of adoption will be a key determinant of upside in 2025 and beyond.
- Pipeline Catalysts: Multiple pivotal Zanza readouts and IND filings could reshape the company’s long-term growth profile, with colorectal and non-clear cell RCC data particularly material.
- Capital Flexibility: A robust balance sheet enables Exelixis to pursue share buybacks, pipeline investment, and selective M&A without compromising optionality.
- Commercial Leverage: The company’s ability to quickly mobilize its sales force and penetrate new physician segments is a core differentiator, especially in the fragmented NET landscape.
Risks
Key risks include the uncertain pace of NET indication uptake, potential competitive responses in RCC and NET, and clinical trial setbacks for Zanza or other pipeline assets. Regulatory headwinds, evolving Medicare reimbursement, and market access dynamics could also impact profitability. Exelixis’s reliance on a concentrated oncology portfolio and execution risk around new launches and late-stage development should remain front of mind for investors.
Forward Outlook
For Q2 2025, Exelixis guided to:
- Continued strong CaboMedix performance in RCC and early NET ramp.
- Stable gross-to-net in the 29% to 30% range, with no material seasonality expected.
For full-year 2025, management raised guidance:
- Net product revenue: $2.05 billion to $2.15 billion
- Total revenue: $2.25 billion to $2.35 billion
Management highlighted several factors that will shape the year:
- Additional guidance updates may occur as NET launch trends clarify.
- Pivotal Zanza trial readouts in H2 2025 will be major value inflection points.
Takeaways
Exelixis’s Q1 results validate its commercial execution and set the stage for a year rich in clinical and commercial catalysts.
- Cabo Franchise Momentum: Market share and volume gains in RCC are driving outperformance, with the NET launch offering incremental upside if adoption trends persist.
- Pipeline Optionality: Zanza’s pivotal data and multiple INDs position Exelixis for portfolio diversification and long-term growth beyond the Cabo franchise.
- Investor Focus: Watch for NET prescription ramp, Zanza clinical milestones, and capital deployment discipline as key signals for sustained value creation.
Conclusion
Exelixis delivered a decisive step forward in Q1 2025, with commercial strength, pipeline progress, and a disciplined capital strategy. The company’s ability to execute across multiple fronts positions it as a leading oncology innovator, but the pace of NET adoption and Zanza trial outcomes will determine whether this momentum is durable or fleeting.
Industry Read-Through
Exelixis’s performance offers a barometer for the broader oncology sector, highlighting the value of differentiated clinical data, franchise focus, and commercial agility in driving market share against entrenched and generic competitors. The rapid mobilization for new indication launches sets a benchmark for execution, while the company’s willingness to raise guidance based on base business strength—not speculative pipeline hopes—underscores the importance of operational discipline. Pipeline diversification and capital allocation strategies will remain central themes for oncology peers navigating similar inflection points in 2025.