Stifel maintains Exelixis stock hold, $36 target post FDA nod

On Wednesday, the U.S. Food and Drug Administration (FDA) approved Exelixis Inc ’s (NASDAQ:EXEL) Cabometyx for the treatment of adult and pediatric patients over 12 years old with previously treated advanced neuroendocrine tumors (NETs). This approval came ahead of the anticipated April 3 Prescription Drug User Fee Act (PDUFA) date. The $10.37 billion market cap company, which boasts an impressive 18.49% revenue growth and a perfect Piotroski Score of 9, continues to demonstrate strong market performance. According to InvestingPro analysis, Exelixis maintains excellent financial health with a "GREAT" overall score, suggesting solid fundamentals supporting its growth trajectory.

Stifel analysts, including Stephen Willey, have reiterated a Hold rating on Exelixis stock, maintaining a price target of $36.00. The expanded indication for Cabometyx includes a broad claim that is agnostic to the primary tumor site, grade, somatostatin expression, and functional status, aligning with what analysts and investors expected based on data from the Phase 3 CABINET trial. With the stock trading near its 52-week high of $40.02 and showing a remarkable 59.72% return over the past year, InvestingPro data reveals 13 additional key insights about Exelixis’s market position and growth potential, available to subscribers.

Exelixis management has indicated readiness to support the commercialization of this expanded indication immediately upon approval. Analysts believe that the National Comprehensive Cancer Network’s (NCCN) January 2025 inclusion of Cabometyx as a recommended treatment option within its updated NET Treatment Guidelines will contribute to a boost in first-quarter 2025 sales.

Stifel’s current projections for Exelixis include incremental U.S. Cabometyx sales of $82 million, $187 million, and $236 million for the fiscal years 2025, 2026, and 2027, respectively. These figures already take into account both pre-approval and post-approval utilization in advanced NETs.

Additionally, the European Medicines Agency (EMA) is reviewing a Marketing Authorization Application (MAA) for NET label expansion submitted by Exelixis’ EU partner, Ipsen (EPA:IPN). The analysts’ model assumes a second-half 2025 approval by the EMA.

Looking beyond Cabometyx’s life-cycle, Stifel anticipates benefits from the upcoming Phase 3 STELLAR-311 trial, which will evaluate zanzalintinib versus everolimus as the first tyrosine kinase inhibitor therapy in NET patients. This trial underpins the analysts’ estimate of approximately $850 million in U.S. sales from zanzalintinib for NETs.

The upcoming American Association for Cancer Research (AACR) meeting, scheduled for April 25-30, is expected to provide further insights into Exelixis’ wholly-owned and earlier-stage pipeline. Moreover, second-half 2025 topline data from the Phase 3 STELLAR-303 trial, which is assessing atezolizumab/zanzalintinib versus regorafenib in third-line metastatic colorectal cancer (mCRC), is anticipated to be the next significant catalyst for the company’s stock.

In other recent news, Exelixis has received FDA approval for its drug cabozantinib, marketed as Cabometyx, to treat certain advanced neuroendocrine tumors (NET), marking its sixth FDA approval in the U.S. This approval is based on the successful phase 3 CABINET trial, which demonstrated significant improvements in progression-free survival for both pancreatic and extra-pancreatic NET patients. Following this development, Leerink Partners raised their price target for Exelixis shares to $33, while Citi maintained a Buy rating with a $45 target, citing the approval as a positive development. Stifel also adjusted their price target to $36, noting anticipated operational expenditure growth moderation and the completion of a share repurchase program as factors. JMP Securities maintained a Market Outperform rating with a $41 price target, emphasizing Exelixis’ focus on developing zanzalintinib, which is seen as a potential $5 billion opportunity. Exelixis has announced plans to initiate the STELLAR-311 pivotal trial in 2025, further demonstrating its commitment to advancing cancer treatment. The company’s previous financial guidance for fiscal year 2025 projected net product revenues between $1.95 billion and $2.05 billion, excluding contributions from the new NET indication. Analysts and investors will be watching for updated financial guidance during Exelixis’s first-quarter 2025 earnings call.

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