Leerink lifts Exelixis stock target to $33 post FDA approval

On Wednesday, Leerink Partners updated their financial outlook on Exelixis (NASDAQ:EXEL) shares, raising the price target to $33.00 from $32.00, while maintaining a Market Perform rating. The adjustment follows the FDA’s approval of a supplemental New Drug Application (sNDA) for cabozantinib, Exelixis’s treatment for neuroendocrine tumors, both pancreatic (pNET) and extra-pancreatic (epNET). The company, which boasts a perfect Piotroski Score of 9 according to InvestingPro data, has demonstrated robust financial health with an impressive 18.5% revenue growth over the last twelve months.

The FDA’s decision arrived ahead of the expected Prescription Drug User Fee Act (PDUFA) date of April 3, 2025. According to the label, the median progression-free survival (mPFS) was significantly longer in patients treated with cabozantinib compared to those given a placebo. For pNET, mPFS was 13.8 months versus 3.3 months, and for epNET, 8.5 months compared to 4.2 months.

Leerink’s analysis highlighted that these results are in line with data from the CABINET study presented at the European Society for Medical (TASE:BLWV) Oncology (ESMO) in 2024. However, the overall survival (OS) data showed a slight erosion in the hazard ratio (HR) for pNET and epNET from the ESMO 2024 update to the FDA’s recent approval.

The safety profile of cabozantinib was described as consistent with the approved product label, with a notable percentage of patients experiencing serious adverse events (AEs) and some requiring dose reductions or discontinuation of the treatment. The FDA press release and Exelixis’s announcement emphasized readiness to support the new indications for cabozantinib, which targets a significant number of NET prescribers in the US.

Exelixis’s previous financial guidance for fiscal year 2025, which forecasts net product revenues between approximately $1.95 billion and $2.05 billion, and total revenues between $2.15 billion and $2.25 billion, did not include contributions from the NET indication. The company is expected to provide updated guidance during its first-quarter 2025 earnings call, scheduled for May 13. With a current market capitalization of $10.55 billion and strong liquidity metrics showing current assets significantly exceeding short-term obligations, Exelixis maintains a solid financial position. (InvestingPro subscribers have access to 13 additional key insights about Exelixis’s financial health and growth prospects.) Leerink estimates around $75 million in revenue from cabozantinib for NET in 2025, with a projection of reaching approximately $750 million in peak sales before loss of exclusivity impacts starting in 2030.

Looking ahead, Leerink anticipates additional pivotal trial readouts and updates for Exelixis in the second half of 2025, which include multiple studies such as STELLAR-303 for third-line or higher metastatic colorectal cancer (mCRC), STELLAR-304 for first-line non-clear cell renal cell carcinoma (nccRCC), and a decision on advancing STELLAR-305 to phase 3 in first-line PD-L1 positive head and neck squamous cell carcinoma (HNSCC). Trading near its 52-week high of $40.02, InvestingPro analysis suggests the stock remains slightly undervalued based on its comprehensive Fair Value calculations, with five analysts recently revising their earnings estimates upward for the upcoming period.

In other recent news, Exelixis, Inc. received FDA approval for CABOMETYX® (cabozantinib) to treat certain advanced neuroendocrine tumors (NET). This approval marks the first systemic treatment for previously treated NET, based on the phase 3 CABINET trial demonstrating significant progression-free survival benefits. Following this development, Citi maintained a Buy rating on Exelixis with a $45 price target, highlighting the approval as a positive development despite uncertainties about the market opportunity size for NET treatments.

Additionally, Stifel adjusted its stance on Exelixis, raising the stock price target from $30 to $36 while maintaining a Hold rating. Factors influencing this adjustment include anticipated moderation in operational expenditure growth and the completion of a significant share repurchase program by 2025. Meanwhile, JMP Securities maintained a Market Outperform rating with a $41 price target, noting that Exelixis’ fourth-quarter 2024 revenue met market expectations.

JMP Securities also emphasized the developmental focus on zanzalintinib, a drug considered a potential $5 billion opportunity. The company aims to differentiate zanzalintinib from cabozantinib by improving performance gaps in certain clinical areas. These recent developments indicate Exelixis’ commitment to advancing its cancer treatment pipeline and addressing unmet medical needs.

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