Exelixis beats Q1 estimates, announces $750m buyback as zanzalintinib decision looms
Shares trade near $50 as investors weigh strong fundamentals and cash position against binary catalyst risk in December
Exelixis has reported first-quarter 2026 financial results that exceeded consensus estimates by 14.02%, reinforcing its position as a cash-generative player in the oncology sector. The Alameda-based company posted non-GAAP earnings per share of $0.87 on revenue of $610.81 million, representing a 9.97 per cent year-on-year increase. Operating income surged 34.51 per cent, while net income climbed 31.86 per cent, marking the fourth consecutive earnings beat with surprise margins ranging between 14.02 per cent and 17.17 per cent.
The results were underpinned by robust performance in the global cabozantinib franchise, which includes the key drug CABOMETYX. Revenue from the franchise grew 12.5 per cent year-on-year to $764 million in the first quarter. CABOMETYX remains the number one prescribed tyrosine kinase inhibitor in renal cell carcinoma, providing a stable revenue base that has attracted defensive capital rotation from investors seeking profitable healthcare names amid richly valued growth stocks.
In a move to return capital to shareholders, Exelixis announced a new $750 million share buyback authorisation valid through December 2027. This follows the completion of a prior $750 million programme. The company currently holds approximately $1.4 billion in cash and marketable securities, supporting its balance sheet as it navigates near-term clinical milestones. The stock has gained 12.05 per cent over the past month and 14.15 per cent year-to-date, trading near $50 with a trailing price-to-earnings ratio of 17.
Market attention is now focused on the December 3, 2026, Prescription Drug User Fee Act decision for zanzalintinib in metastatic colorectal cancer. Chief Executive Officer Michael Morrissey has identified the drug as the top priority for the organisation, citing a market opportunity estimated at approximately $1.5 billion. Full-year 2026 revenue guidance is set between $2.525 billion and $2.625 billion, explicitly excluding any contribution from zanzalintinib, which leaves room for potential upside if the drug receives approval.
Analysts remain cautiously optimistic, with consensus ratings comprising one strong buy, nine buys, and nine holds, alongside a target price of $49.65. H.C. Wainwright maintains a Buy rating with a $54 price target. However, concentration risk remains a key factor, as the cabozantinib franchise generates the overwhelming majority of revenue. Regulatory delays or clinical disappointments in other pipeline assets, such as the LightSpark-012 readout, could impact sentiment, though the low beta of 0.385 suggests relative stability compared to broader market volatility.
