EXEL Tops Q2 Earnings Estimates, Misses on Sales, Lowers '26 View

Including stock-based compensation expense, EPS was 82 cents compared with 65 cents in the year-ago period.

The bottom-line growth benefited from higher operating income and a decrease in shares outstanding due to ongoing buybacks.

Revenues rose 10.6% year over year to $628.7 million but missed the Zacks Consensus Estimate of $635 million.  

The stock is trading down in response to the second-quarter results.

Year to date, Exelixis’ shares have risen 25.5% compared with the industry’s growth of 3.6%.

Image Source: Zacks Investment Research

EXEL's Product Sales Maintain Growth

Net product revenues increased to $573.03 million from $520.01 million in the year-ago quarter, primarily due to higher sales volume.

Cabometyx (cabozantinib) generated revenues of $570.6 million, which missed the Zacks Consensus Estimate of $578 million and our model estimate of $575 million. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma.

Cabometyx remained the leading prescribed tyrosine kinase inhibitor (TKI) in RCC. Its total prescription share within the company’s tracked oral TKI market basket increased to 47% from 45% a year earlier, while prescription volume rose 12%, outpacing the market basket’s 6% growth.

In March 2025, Exelixis obtained FDA approval for the label expansion of Cabometyx for the treatment of adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pancreatic and extra-pancreatic neuroendocrine tumors (pNET). The drug was also approved for adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated extra-pancreatic NET (epNET).  

However, the neuroendocrine tumor indication expanded more gradually than management had projected. Exelixis attributed the slower ramp to the relatively indolent nature of NET, less frequent patient scans and longer transitions between therapies. 

Cometriq (cabozantinib capsules) generated $2.4 million in net product revenues for treating medullary thyroid cancer.  

Collaboration revenues rose 15.4% to $55.7 million. The improvement reflected higher royalties on cabozantinib sales outside the United States by partner Ipsen, partly offset by lower development cost reimbursements. Exelixis earned $53.2 million in royalty revenues from partners Ipsen and Takeda during the quarter.

EXEL's Costs Rise as Operating Income Expands

Research and development expenses increased 5.8% year over year to $211.99 million due to higher clinical trial, manufacturing and collaboration costs as Exelixis continued investing in zanzalintinib and other pipeline candidates.

Selling, general and administrative expenses rose 9.5% to $147.63 million, reflecting higher marketing and personnel costs. Despite the increased spending, operating income climbed 16.3% to $248.41 million, and the operating margin expanded to 39.5% from 37.6%.

Exelixis Lowers Its 2026 Revenue Outlook

Management lowered and narrowed its 2026 total revenue guidance to $2.50-$2.55 billion from $2.525-$2.625 billion. Net product revenue guidance was reduced to $2.30-$2.35 billion from $2.325-$2.425 billion, primarily because of the slower-than-expected NET ramp.

The revised outlook excludes potential revenues from zanzalintinib in previously treated metastatic colorectal cancer. Exelixis also reduced its R&D expense forecast to $825-$875 million from $875-$925 million. Its SG&A expense projection remained unchanged at $575-$625 million.

EXEL Advances Share Repurchase Program

Exelixis repurchased $311.6 million of the company’s shares in the second quarter, completing the $750 million share repurchase program (SRP) launched in October 2025.

The company also began repurchases under a new $750 million SRP authorized in May 2026, which runs through Dec. 31, 2027. Since launching its first SRP in March 2023, Exelixis has repurchased $2.9 billion of stock, retiring 93.3 million shares at an average price of $31.12 per share as of the end of the second quarter of 2026.

EXEL Advances Its Zanzalintinib Pipeline

The FDA is reviewing zanzalintinib in combination with Roche’s RHHBY Tecentriq for previously treated metastatic colorectal cancer, with a target action date of Dec. 3, 2026. Its approval would establish zanzalintinib as Exelixis’ second commercial oncology franchise and broaden its portfolio beyond cabozantinib.

In June 2026, Exelixis reported final phase III STELLAR-303 results showing a non-statistically significant overall survival trend favoring zanzalintinib plus Tecentriq over regorafenib in the non-liver metastases (NLM) subgroup of previously treated non-MSI-high metastatic colorectal cancer. The study had previously met its other dual primary endpoint of overall survival in the intent-to-treat population, which included all randomized patients regardless of the presence of active liver metastases, as reported in June 2025.

Roche’s Tecentriq is a cancer immunotherapy that is approved around the world, either alone or in combination with targeted therapies and/or chemotherapies, for various types of cancer.

EXEL has collaborated with Merck & Co. MRK to evaluate zanzalintinib, in combination with subcutaneous Keytruda Qlex in the planned phase III STELLAR-316 study for resected stage II/III colorectal cancer (CRC).

Under the agreement, Exelixis will sponsor the STELLAR-316 study, while Merck will provide Keytruda Qlex for use in the same. Keytruda is approved for several types of cancer.

Exelixis expects to initiate STELLAR-316 shortly, which will evaluate zanzalintinib with and without Keytruda Qlex in patients with resected stage II/III CRC who, following definitive therapy, have tested positive for molecular residual disease (MRD+) and have no radiographic evidence of disease — a high-risk population with substantial unmet need.

Earlier this year, Exelixis partnered with Natera (NTRA), a global leader in cell-free DNA and precision medicine, for this study.

Natera will supply its Signatera assay to identify eligible MRD-positive patients for enrollment, further integrating precision medicine into the program.

The Merck partnership extends beyond colorectal cancer. In April 2026, Merck initiated the phase III LITESPARK-034 trial evaluating zanzalintinib plus Welireg versus Welireg and placebo in previously treated advanced RCC patients who progressed after PD-1/L1 and VEGFR-TKI therapies.

This marks the second Merck-sponsored phase III study under the collaboration, following LITESPARK-033 (launched in December 2025), which is assessing the combination against cabozantinib in first-line advanced RCC post-adjuvant immunotherapy.

In May 2026, Exelixis announced the initiation of STELLAR-201, a phase II study evaluating zanzalintinib in patients with recurrent Grade I/II/III meningioma with relapse or progression following radiation and/or surgery or those who are not candidates for these therapies.

Our Take on EXEL’s Q2 Performance

While EXEL beat earnings expectations and Cabometyx remains the leading prescribed TKI in RCC, the revenue miss and lowered guidance underscore the company's continued reliance on Cabometyx and uncertainty around the pace of the NET franchise ramp.

Zanzalintinib represents the company’s most significant near-term catalyst. A potential approval for the candidate will be a significant boost for EXEL’s oncology pipeline.

EXEL’s Zacks Rank

Exelixis currently carries a Zacks Rank #4 (Sell).  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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