Exelixis — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $658.7 million for the quarter ended September 30, 2026, compared to $597.8 million in the same period in 2025.
• Net product revenues were $604.9 million, up from $542.9 million in the prior year period, driven by increased sales volume and average net selling price.
• Collaboration revenues were $53.8 million, down from $54.8 million in the prior year period, due to lower milestone-related revenues and development cost reimbursements, partially offset by higher royalty revenues from Ipsen Pharma SAS.
• Research and development expenses were $209.5 million, increasing from $199.2 million in the prior year period due to higher personnel and clinical trial costs.
• Selling, general and administrative expenses were $154.6 million, up from $123.7 million in the prior year period, driven by increases in personnel, marketing, and legal fees.
• GAAP net income was $218.1 million ($0.85 diluted EPS), compared to $193.6 million ($0.69 diluted EPS) in the prior year period.
• Non-GAAP net income was $240.2 million ($0.94 diluted EPS), compared to $217.9 million ($0.78 diluted EPS) in the prior year period.
• Provision for income taxes was $64.7 million for the quarter, compared to $58.8 million in the prior year period.

Guidance and Future Outlook:

• Updated fiscal year 2026 total revenues guidance remains $2.500 billion to $2.550 billion.
• Updated fiscal year 2026 net product revenues guidance remains $2.300 billion to $2.350 billion, inclusive of a 3.0% wholesale acquisition cost increase for CABOMETYX and COMETRIQ effective January 1, 2026.
• Cost of goods sold as a percentage of net product revenues guidance is updated to approximately 4%, compared to the previous range of 3.5% to 4.5%.
• Research and development expenses guidance remains $825 million to $875 million.
• Selling, general and administrative expenses guidance remains $575 million to $625 million.
• Effective tax rate guidance is updated to 16% to 18%, compared to the previous range of 21% to 23%.
• Guidance does not currently reflect revenues from a potential U.S. regulatory approval and commercial launch of zanzalintinib for previously treated metastatic colorectal cancer (CRC).

Business Segments and Product Lines:

• The cabozantinib franchise generated $604.9 million in U.S. net product revenues, comprising $603.2 million from CABOMETYX and $1.8 million from COMETRIQ.
• Exelixis earned $51.8 million in royalty revenues from collaboration partners Ipsen and Takeda based on cabozantinib sales outside the U.S.
• Zanzalintinib development program is advancing with trial initiations and enrollment progress for ongoing studies.
• Phase 3 STELLAR-316 trial evaluating zanzalintinib in resected stage II/III CRC with molecular residual disease (MRD+) was initiated in collaboration with Merck and Natera.
• Enrollment is progressing rapidly for Phase 2/3 STELLAR-311 trial evaluating zanzalintinib versus everolimus in advanced neuroendocrine tumors.
• Topline results for Phase 3 STELLAR-304 trial in non-clear cell renal cell carcinoma are expected in the first quarter of 2027.
• Merck-sponsored Phase 3 LITESPARK-033 and LITESPARK-034 trials evaluating zanzalintinib with WELIREG in advanced renal cell carcinoma are active and enrolling.
• Expansion cohorts for metastatic bladder cancer and metastatic castration-resistant prostate cancer (mCRPC) were initiated in the Phase 1b/2 STELLAR-002 study.
• Phase 2 STELLAR-202 trial in squamous non-small cell lung cancer (NSCLC) was initiated in October 2026.
• Enrollment is ongoing in Phase 2 STELLAR-201 trial for recurrent meningioma.

Market and Competitive Landscape:

• The U.S. FDA is reviewing the New Drug Application (NDA) for zanzalintinib in combination with atezolizumab for previously treated metastatic CRC, with a PDUFA target action date of March 3, 2027.
• The FDA extended the review period for the zanzalintinib NDA by three months in September 2026 following submission of updated safety and efficacy data.
• The Phase 3 STELLAR-303 trial met its dual primary endpoint of overall survival in the intention-to-treat population; a non-statistically significant trend in overall survival favoring zanzalintinib was observed in the non-liver metastases subpopulation.

Risks and Challenges:

• The FDA may require additional information, further extend the review period, or may not approve the NDA for zanzalintinib in a timely fashion.
• Clinical trial results for zanzalintinib and other product candidates may fail to demonstrate safety and/or efficacy.
• Dependence on collaboration partners for regulatory approvals, commercialization, and clinical trial execution.
• Potential for competitors to obtain approval for generic versions or competing products.
• Risks associated with market acceptance, coverage, and reimbursement for CABOMETYX and other products.
• Patent litigation outcomes and the timing of generic market entry for cabozantinib.

Management Commentary and Tone:

• CEO Michael M. Morrissey stated the company continued to execute across key priorities, driving the cabozantinib franchise forward while preparing for zanzalintinib as the next potential franchise opportunity.
• Management expressed enthusiasm around the zanzalintinib franchise and commitment to disciplined capital deployment, including R&D investment, stock repurchases, and external innovation evaluation.
• Management noted the organization focused on trial initiations, enrollment progress, and planning for the next wave of pivotal trials for zanzalintinib.

Other Key Points:

• As of the end of the third quarter of 2026, Exelixis repurchased $402.1 million of common stock under the May 2026 Stock Repurchase Program at an average price of $54.03 per share.
• Since March 2023, Exelixis has repurchased a total of $3.2 billion of common stock, retiring 97.8 million shares at an average price of $32.25 per share.
• On October 28, 2026, Exelixis entered into a settlement and license agreement with Azurity Pharmaceuticals to resolve litigation, granting Azurity a license to market its proposed product in the U.S. beginning December 1, 2030.
• The U.S. Court of Appeals for the Federal Circuit affirmed a favorable district court decision in Exelixis' patent lawsuit against MSN Laboratories, upholding the validity of three patents and setting the effective date of any MSN ANDA approval no earlier than January 15, 2030.
• A separate consolidated litigation trial involving U.S. Patent No. 12,128,039 is scheduled for November 2026.