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On Thursday, BofA Securities analysts adjusted their outlook on Exelixis stock (NASDAQ: NASDAQ:EXEL), raising the price target to $46 from $45 while keeping a Neutral rating. The decision reflects the firm’s updated assessment of Exelixis’ zanza pipeline asset, which is gaining significance as it approaches key milestones in the second half of 2025. The company, which has achieved an impressive 92% return over the past year and maintains a robust 97% gross margin, appears undervalued according to InvestingPro Fair Value analysis.
The analysts highlighted the importance of upcoming readouts for the zanza asset, particularly in renal cell carcinoma (RCC) and colorectal cancer (CRC). They consider the Phase 3 CRC readout to be the most critical, as it could potentially narrow the gap between zanza’s de-risked peak sales and current levels of Cabo, another Exelixis product. With annual revenue of $2.3 billion and a perfect Piotroski Score of 9 (one of 11 key insights available on InvestingPro), the company demonstrates strong financial fundamentals heading into these crucial trials.
Despite the potential for positive outcomes, the analysts remain cautious about the broader CRC population’s success. They continue to heavily discount zanza’s success in this area, noting that recent changes to the statistical analysis plan do not provide a positive outlook for the stock.
Without a win in the CRC intent-to-treat population, the analysts believe investors will only see peak sales for zanza ranging between $500 million to $1 billion over the next few years. This outlook is contingent on future catalysts, leading them to reiterate their Neutral rating.
The price target adjustment to $46 reflects an expectation of slightly higher sales for the zanza asset, though the overall outlook remains measured as Exelixis navigates upcoming challenges and opportunities.
In other recent news, Exelixis reported strong results from its STELLAR-002 trial, examining the efficacy of zanzalintinib in combination with nivolumab or a fixed-dose combination of nivolumab and relatlimab in patients with advanced clear cell renal cell carcinoma. The trial demonstrated a 63% objective response rate and a 90% disease control rate for the combination with nivolumab, while the fixed-dose combination showed a 40% objective response rate with the same disease control rate. Additionally, Exelixis’s Cabometyx sales reached $511 million, marking a 36% increase year-over-year, surpassing both Stifel’s and consensus estimates. This impressive sales performance led to Stifel raising its price target on Exelixis stock to $38, maintaining a Hold rating. Meanwhile, TD Cowen raised its price target to $44, maintaining a Buy rating, citing robust quarterly results and increased financial guidance. Citizens JMP also reiterated a Market Outperform rating with a $47 price target after discussions with Exelixis management about the zanza franchise. The company has adjusted the endpoint of its STELLAR-303 trial to focus on Overall Survival in both Intention-To-Treat and non-liver metastasis patients. Exelixis’s ongoing strategic adjustments in its clinical trials continue to enhance the efficiency of its research efforts.
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