Exelixis stock surged Monday after the biotech company said its next-generation cancer drug showed promise in a study of patients with hard-to-treat colon cancer.
The company tested a combination of its drug, zanzalintinib, with Roche's Tecentriq. Patients given the experimental regimen showed a statistically significant improvement in overall survival compared to those given a drug called regorafenib. Bayer sells regorafenib under the brand name Stivarga.
The news "marks an important first milestone for our zanzalintinib pivotal development program," Exelixis Chief Medical Officer Amy Peterson said in a statement.
Exelixis stock jumped 7.4% to close at 43.37, pulling back from steeper premarket gains.
Study Ongoing
Exelixis' results include all patients regardless whether they finished the study, and those with and without liver metastases. Colorectal cancer often spreads to the liver. Exelixis says it will continue the study to assess overall survival — a measure that examines whether patients die of any cause — in patients without liver metastases.
This is a large commercial opportunity worth $875 million, William Blair analyst Andy Hsieh said in a client note.
He notes Exelixis is also testing zanzalintinib in patients with kidney and head-and-neck cancers, as well as neuroendocrine tumors. The former two studies are expected to read out later this year.
"Management previously guided that zanzalintinib could achieve $5 billion in U.S. net product sales (unadjusted) in 2033, split 45%/45% between genitourinary and gastrointestinal cancers, with the head-and-net opportunity contributing the remaining 10%," he said. "The initial positive results from (the study called) STELLAR-303 represent the first step toward achieving this goal."
Hsieh kept his outperform rating on Exelixis stock.
Cabometyx Moves Onto Zanzalintinib
Exelixis is well known for its drug, Cabometyx. Now, Cabometyx is passing the baton onto the next-generation drug, zanzalintinib, Hsieh said.
Leerink Partners analyst Andrew Berens expects Exelixis to present the full results in October at the European Society for Medical Oncology meeting. But he's less sure about zanzalintinib's future. The company previously planned to assess overall survival only in patients without liver metastases. Later, the company decided to expand the assessment to all patients.
"We think questions remain whether the revision could be a regulatory issue for the (Food and Drug Administration), given the proximity between when the primary endpoint was changed (first announced May 13 on the 1Q25 earnings call) and the topline release yesterday," he said in a report.
He rates Exelixis stock a market perform.
Shares have a strong IBD Digital Composite Rating of 98, putting them in the leading 2% of all stocks when it comes to fundamental and technical measures.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
