Key insights
- Exelixis' Q1 earnings are expected to show growth, but investors are focused on the sustainability of its kidney cancer franchise, CABOMETYX, amid increasing competition and patent concerns. Analysts are watching for updates on zanzalintinib, a next-generation kinase inhibitor. RBC Capital maintains a hold rating due to concerns about revenue stability and modest near-term growth.
Exelixis Inc. reports first-quarter earnings after the market close Tuesday, with investors focused on whether the biotech can sustain growth in its flagship kidney cancer franchise amid intensifying competition and a looming patent cliff.
Analysts expect earnings of 77 cents a share on revenue of $608.95 million for the quarter ended March, representing year-over-year growth of 24% and 10%, respectively. However, the forecast marks a sequential decline from the 97 cents a share Exelixis earned in the fourth quarter, even as revenue is expected to tick higher from $598.66 million.
Wall Street rates the $11.2 billion oncology company a buy, with a consensus price target of $47.53 implying roughly 8% upside from the current $44.17 share price. EPS estimates have risen modestly over the past two months, climbing 0.69%, though they’ve remained flat over the past week. Revenue estimates have edged down 0.47% over the past 60 days.
The Alameda, Calif.-based company trades at a forward price-to-earnings ratio of 11.91, below its trailing multiple of 14.34, reflecting expectations for accelerating profit growth. CABOMETYX, Exelixis’s market-leading drug for renal cell carcinoma, has shown continued strength in RCC and rapid uptake in neuroendocrine tumors, driving revenue gains.
What Investors Are Watching
The sustainability of the CABOMETYX franchise tops the watch list. RBC Capital analyst Leonid Timashev noted that "a setback for a competitor can help keep EXEL’s RCC franchise competitive," though he maintained a hold rating with a $43 target, citing concerns about revenue stability and modest near-term growth.
The competitive landscape in renal cell carcinoma remains intense, with Merck and other pharmaceutical companies advancing combination therapies pairing checkpoint inhibitors with kinase inhibitors in the RCC market.
Longer-term, investors will watch for updates on zanzalintinib, Exelixis’s next-generation kinase inhibitor designed to build a second commercial franchise. The FDA accepted the company’s application for zanzalintinib in metastatic colorectal cancer, with a decision date of December 3, 2026. The drug represents a critical part of the company’s strategy to diversify beyond CABOMETYX, whose core composition of matter patent expires in August 2026.
Recent Results
In February, Exelixis reported fourth-quarter earnings that beat expectations by 21%, posting 97 cents a share versus the 80-cent consensus. However, revenue of $598.66 million came in slightly below the $604.56 million forecast, a rare miss that underscored the challenges of maintaining consistent top-line growth.
Whether Exelixis can sustain its RCC momentum while navigating patent expiration and building its pipeline will determine if the company delivers on management’s promise of a "milestone-rich" 2026.
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