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Investing.com -- Shares of Exelixis Inc (NASDAQ:EXEL). shares sank more than 12% in pre-market trading on Tuesday following the company’s second-quarter earnings report and a decision to discontinue advancement of its experimental cancer drug zanzalintinib in a head-and-neck cancer trial.
Exelixis reported total revenues of $568.3 million for the quarter ended June 30, 2025, including $520.2 million in net product revenues from cabozantinib (Cabometyx) and $48.2 million in collaboration revenues.
Net product revenues for cabozantinib were approximately 2% below the consensus estimate of $531.3 million, though they represented a 20% increase compared to the same quarter last year.
“While we accounted for both in our preview, the miss could be from a higher IMS capture rate (+2% vs historical ~declines Q/Q). That said, we cont. to think FY guide is doable even w/ pot’l high capture rates,” said analysts at Jefferies in a note.
GAAP net income was $184.8 million, or $0.65 per diluted share, exceeding consensus estimates of $163.2 million and $0.57 per share, respectively, according to Leerink Partners.
The company’s announcement that it would not move forward with the Phase 3 portion of the STELLAR-305 trial evaluating zanzalintinib in first-line head-and-neck squamous cell carcinoma (HNSCC) contributed to the decline in share price.
Exelixis said zanzalintinib did not meet internal criteria to proceed, citing the competitive treatment landscape. The company did not release detailed results from the Phase 2 portion of the trial.
Cabometyx revenues fell short of expectations due in part to higher gross-to-net deductions and a decline in clinical trial sales, according to analysts at BofA Global Research.
Jefferies noted that gross-to-net deductions reached 30.2% in the quarter, driven by increased 340B program volumes.
The brokerage reported that clinical trial revenues dropped to $0.6 million from about $12 million in the previous quarter.
Despite the quarterly revenue shortfall, Exelixis maintained its full-year 2025 guidance, projecting total revenues between $2.25 billion and $2.35 billion, with net product revenues between $2.05 billion and $2.15 billion.
Company management stated that the decision to halt development of zanzalintinib in HNSCC was based on strategic considerations, including prioritization of other indications with greater potential for success and commercial opportunity.