Exelixis stock catapulted to a record high Wednesday after the biotech leader trounced first-quarter expectations and raised its 2025 sales outlook by $100 million.
The company is best known for Cabometyx, a treatment for a form of kidney cancer called renal cell carcinoma, or RCC. But in March, the Food and Drug Administration approved Cabometyx to treat patients with pancreatic neuroendocrine tumors. These tumors arise from the neuroendocrine cells of the digestive tract and other organs, including the lungs and pancreas.
Once Cabometyx snagged that approval, Exelixis "literally hit the ground sprinting" to get the new launch underway, RBC Capital Markets analyst Gregory Renza said in a report, quoting the biotech company's executives. He noted the guidance hike doesn't fully factor in the opportunity from the new pool of Cabometyx-eligible patients.
On Wednesday, Exelixis stock shot up 20.8% to 44.65.
Exelixis Stock Gains From Momentum In Cabometyx
Exelixis' first quarter represented a beat all the way around. The company delivered adjusted profit of 62 cents a share, beating forecasts by a whopping 72%. Sales also topped expectations at $555.4 million, vs. calls for $500 million, according to FactSet.
Earnings skyrocketed 417% year over year, while sales climbed 31%.
Exelixis credited accelerating growth in Cabometyx for its strong growth. In addition to RCC, the drug treats forms of liver and thyroid cancer. Cabometyx generated more than 92% of Exelixis' first-quarter sales. Cometriq, a treatment for medullary thyroid cancer, brought in the balance of sales.
But RBC's Renza is looking closely at what's next for Exelixis.
He said the company also has three study readouts looming for zanzalintinib, which it's testing as a treatment for several types of solid tumors. Zanzalintinib could be especially important for Exelixis with Cabometyx set to lose patent protection in 2030, he said.
"Our thesis for EXEL's sustainable growth has remained centered on zanza's commercial potential," he said in a report.
Renza kept his outperform rating and 40 price target on Exelixis stock.
Hiked Outlook Beats Expectations
Bullishly, Exelixis raised its sales outlook by $100 million at the midpoint. The company now calls for $2.25 billion to $2.35 billion in sales. Analysts projected $2.25 billion in sales.
Shares have a strong IBD Digital Composite Rating of 96 out of a best-possible 99. This means Exelixis stock outranks 96% of all stocks in terms of fundamental and technical measures. Shares also have a strong Relative Strength Rating 93, a measurement of 12-month performance.
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