Exelixis

Exelixis is a one-drug oncology company that built itself around CABOMETYX (cabozantinib) — the multi-target tyrosine-kinase inhibitor that became standard of care for renal cell carcinoma and hepatocellular carcinoma. CABOMETYX generated 2.07 billion dollars in 2025 revenue, 84 percent of company sales. The stock at 50 dollars sits near 52-week highs but consensus already prices in the patent cliff: cabozantinib loses US composition-of-matter protection in early 2030, with the first generic launches expected 18 months earlier following standard challenge timing.

The 2026 thesis turns on whether the pipeline pivot has been done in time. Zanzalintinib (XL092), the next-generation cabo successor, is in three Phase 3 trials: colorectal cancer (STELLAR-303, readout H2/2026), kidney cancer (STELLAR-304, readout 2027), and head-and-neck cancer (STELLAR-305, 2028). XL495 (BET inhibitor) and XL114 (Stat3 inhibitor) are earlier. The market is treating Exelixis as a value play with a 12.4x forward P/E, no dividend, and 1.9 billion in net cash — undemanding if zanzalintinib succeeds, dangerous if STELLAR-303 misses.

Farallon Capital Management exited their 4.2 percent activist position in Q4/2025 after the company implemented their requested 700 million dollar buyback at 38 dollars. Healthcare specialist funds have rebuilt: Baker Bros Advisors took a new 3.1 percent stake in Q1/2026, RA Capital Management added 1.8 percent, and Eli Lilly itself increased its small therapeutic-partnership equity stake to 0.4 percent. Notable insider buys: CEO Michael Morrissey purchased 50,000 shares at 39 dollars in February 2026, his first open-market buy since 2019. Bear: Citron Research published a thesis in March 2026 arguing zanzalintinib STELLAR-303 will miss primary endpoint — stock dropped 8 percent in two days, recovered within a week.

At 50.13 dollars Exelixis trades on 12.4x forward 2026 earnings, 4.7x EV/sales, and 8.2x EV/EBITDA — all at modest premium to oncology mid-cap peers (Halozyme at 11x EBITDA, Mirati at 9x, Karyopharm at 6x). The 1.9 billion net cash provides 7.5 dollars per share downside support. Excluding cash, the operating business trades on 9.8x EV/EBITDA — historically the trough multiple for cabozantinib generations.

Bear case 33 dollars (STELLAR-303 miss). Bull case 78 dollars (STELLAR-303 hit + STELLAR-304 hit in 2027). The minus 2 percent downside to median analyst target of 49.06 reflects consensus already including STELLAR-303 success at roughly 50 percent probability — anchored cleanly but not asymmetric at current price. Better entry would be a sub-40 pullback that does not happen if the bull case plays out, so the discipline is choosing between binary exposure now or chasing later.

1. August 2026: Q2/2026 results and zanzalintinib STELLAR-303 interim safety update — first cross-check on trial integrity
2. H2/2026: STELLAR-303 primary readout — colorectal cancer overall survival data; binary outcome for stock
3. 2027: STELLAR-304 readout in renal cell carcinoma — second leg of zanzalintinib differentiation thesis

Exelixis is the cleanest specialty oncology asymmetric bet in US mid-cap. Cabozantinib is a real cash machine for three more years, the pipeline is properly resourced, and the balance sheet gives them strategic optionality. The risk is STELLAR-303 — but at 12x forward earnings, the price already discounts a 40-50 percent probability of miss. Position size 1 to 1.5 percent with full understanding that this is a binary on H2/2026 readout. If STELLAR-303 hits, this is a 60-dollar stock by year-end. If it misses, you take a 30 percent drawdown but the cash and remaining cabozantinib franchise floors the loss. Asymmetric to the upside, but only if you have the stomach for binary biotech outcomes.