Exelixis (EXEL) Q3 2025: CABO Neuroendocrine Tumor Demand Jumps 50% as GI Franchise Expansion Accelerates
Exelixis delivered a high-momentum Q3, marked by robust CABO franchise growth and a sharp pivot toward GI oncology leadership. The neuroendocrine tumor (NET) launch is exceeding expectations, with rapid share gains and a surge in demand, while Zanzalitinib’s pivotal CRC results signal a potential second blockbuster franchise. Shareholder capital returns are ramping alongside pipeline investments, setting up a multi-franchise oncology model for 2026 and beyond.
Summary
- GI Franchise Buildout: Exelixis is accelerating its GI sales force expansion to capture NET and CRC opportunities ahead of ZANSA launches.
- Pipeline Progression: Zanzalitinib’s pivotal CRC trial delivered the first OS benefit in non-MSI-high patients, establishing clinical differentiation.
- Capital Allocation Shift: Share buyback authorization increased by $750 million, reflecting confidence in cash flow and undervaluation.
Performance Analysis
Exelixis posted a strong Q3, with the CABO franchise maintaining its market leadership and outpacing competitors in both renal cell carcinoma (RCC) and neuroendocrine tumors (NET). U.S. CABO net product revenues grew 14% year-over-year, driven by expanding indications and robust new patient share, especially in the oral second-line-plus NET segment, where CABO captured over 40% of new patients. The company’s global CABO revenues, including partners Ipsen and Takeda, also saw double-digit growth, highlighting the durability of the franchise.
The neuroendocrine tumor indication emerged as a major growth vector, with demand up more than 50% sequentially and now contributing 6% of total CABO demand. This performance is notable given the segment’s historical reliance on generics and limited innovation. Exelixis’ commercial execution was further evidenced by CABO’s four-point market share gain in the oral TKI basket, reaching 46% and outperforming peers. On the expense side, a $19.8 million restructuring charge was offset by lower SG&A, demonstrating ongoing cost discipline even as the company invests in its sales force and R&D pipeline.
- NET Launch Outperformance: CABO’s rapid adoption in NETs is raising 2025 revenue expectations above $100 million for the indication.
- RCC Franchise Resilience: CABOMedix remains the top TKI in RCC, with first-line new patient share at all-time highs.
- Expense Management: Restructuring costs were absorbed without derailing R&D and commercial expansion plans.
Management’s confidence is reflected in narrowed revenue guidance toward the upper end of prior ranges and an expanded share buyback program, signaling conviction in both operational momentum and valuation.
Executive Commentary
"Accelerating R&D momentum coupled with flawless commercial execution has the potential to transform our business as we bring new treatment options to patients and build value for shareholders."
Mike Morrissey, President and CEO
"We are narrowing our total revenue and net product revenue guidance to the upper end of our previously provided guidance ranges."
Chris Center, Chief Financial Officer
Strategic Positioning
1. GI Franchise Expansion and Sales Force Scaling
Exelixis is rapidly building out its gastrointestinal (GI) commercial infrastructure, with an immediate focus on neuroendocrine tumors and colorectal cancer (CRC). The company is expediting the full GI sales team buildout in Q4 2025 to accelerate CABO’s NET uptake and prepare for ZANSA’s expected CRC approval. This move positions Exelixis to leverage its experience in hepatocellular carcinoma and RCC as it targets the heavily community-treated GI market.
2. Zanzalitinib: Pivotal CRC Data and Franchise Potential
Zanzalitinib (ZANSA) delivered a pivotal win in the STELLAR-303 trial, marking the first time an immunotherapy-containing regimen has shown an overall survival benefit in non-MSI-high, third-line-plus CRC patients. The combination with atezolizumab reduced the risk of death by 20% in the ITT population, with a median OS of 10.9 months. This clinical differentiation, coupled with a chemo-free regimen, positions ZANSA as a potential new standard and a commercial anchor for a second major franchise.
3. CABO Franchise Durability and Market Leadership
CABO continues to dominate the RCC market and is now rapidly scaling in NETs, supported by positive physician perception and broad label utility. The brand is benefiting from a best-in-class reputation, robust refill dynamics, and first-mover advantage in the second-line-plus NET segment, where competitors are primarily generics.
4. Early Pipeline and ADC Differentiation
Exelixis’ early-stage pipeline is advancing, with four molecules in phase one and differentiated antibody-drug conjugate (ADC) candidates like XB371. The company is leveraging novel mechanisms—such as tandem mechanism release linkers—to potentially improve payload stability and tumor targeting, aiming to sustain innovation beyond its current franchises.
5. Capital Allocation: Balanced Investment and Shareholder Returns
With $1.6 billion in cash and marketable securities, Exelixis is balancing aggressive R&D investment, business development, and a stepped-up share repurchase program. The $750 million new buyback authorization underscores management’s view of the stock as undervalued and confidence in future cash flows.
Key Considerations
This quarter marks a pivotal inflection for Exelixis as it deepens its GI oncology focus while maintaining leadership in RCC and expanding its innovation pipeline.
Key Considerations:
- GI Commercial Infrastructure Ramp: The accelerated sales force buildout is intended to maximize both current NET momentum and future CRC launches.
- CRC Market Dynamics: The third-line-plus CRC market remains fragmented, but ZANSA’s chemo-free, immunotherapy-based regimen is positioned to capture share from all major competitors.
- Label Breadth and Regulatory Timing: The planned NDA submission for ZANSA in CRC targets the ITT population for broadest possible label, with additional subgroup data expected mid-2026.
- Pipeline Optionality: Multiple phase one assets and collaborations (e.g., with Merck on ZANSA combinations) provide long-term growth levers and diversification.
- Capital Allocation Discipline: Management asserts it can fund R&D, business development, and buybacks simultaneously, reflecting strong free cash flow and balance sheet health.
Risks
Key risks include regulatory uncertainty for ZANSA’s CRC approval, especially given evolving market standards and the complexity of dual primary endpoints. The GI franchise buildout entails execution risk and increased SG&A, while competitive launches (e.g., new IO or TKI regimens) could impact share gains. Macroeconomic or policy changes affecting drug pricing or reimbursement also pose structural challenges.
Forward Outlook
For Q4 2025, Exelixis guided to:
- Narrowed total revenue and net product revenue at the upper end of prior ranges
- Gross-to-net for CABO franchise around 30%
For full-year 2025, management raised confidence by tightening guidance:
- Total revenue: $2.3 to $2.35 billion
- Net product revenue: $2.1 to $2.15 billion
- R&D expense: $850 to $900 million (down $75 million)
- SG&A: $500 to $525 million
- Tax rate: 17% to 18%
Management highlighted several factors that will shape 2026:
- Final data from ZANSA pivotal CRC and RCC trials
- Continued NET launch momentum and GI sales force scaling
Takeaways
Exelixis is executing a dual-pronged strategy: maximizing CABO’s mature franchises while investing heavily in ZANSA’s clinical and commercial potential.
- Multi-Franchise Oncology Model: CABO’s resilience and ZANSA’s pivotal CRC data underpin a transition to a diversified, GI-centric growth story.
- Commercial Execution: The rapid NET launch and GI sales force expansion are setting a template for future launches and market penetration.
- Innovation Pipeline: Early-stage assets and differentiated ADC technology offer optionality beyond current franchises, though clinical risk remains.
Conclusion
Exelixis’ Q3 results confirm the company’s ability to scale mature brands while pivoting decisively into new oncology markets. With CABO’s momentum and ZANSA’s clinical validation, the company is positioned for multi-year growth, though execution and regulatory risks warrant close monitoring.
Industry Read-Through
The strong adoption of CABO in NETs and the clinical success of ZANSA in CRC highlight the growing importance of differentiated, chemo-free regimens in GI oncology. The rapid GI sales force expansion signals that community oncology remains a key battleground for new launches. Competitors with immunotherapy or TKI assets should note the value placed on real-world differentiation and broad label utility, while ADC innovation continues to be a focus for late-stage pipeline expansion across the sector.