Exelixis (EXEL): Cash Machine Today, Real Pipeline Tomorrow
A profitable oncology mid-cap with fresh labels and a pivotal OS win, now fighting for the breakout
Exelixis is that rare biotech that already throws off real cash. The CABOMETYX franchise funds heavy R&D, a new NET label just expanded the pie, and zanzalintinib delivered an OS win in colorectal cancer. We pulled the last 4 quarters from our model to check the math: strong margins, strong cash conversion, a net-cash balance sheet, and room to run if the transition asset keeps hitting.
Key Takeaways
Revenue $2.23B TTM, net income $602M, FCF ~$754M from your sheets
New NET approvals in the U.S. and EU expand CABO
Zanzalintinib posted an OS win in mCRC (STELLAR-303), the next act is real
Valuation ~14x EV/EBITDA, 4.6x EV/Sales, ~6.9% FCF yield, a justifiable premium vs peers
Trade plan: buy $36–38.5, confirm/add above $40.5–41.5, targets $42.7 → $45.5 → $49.5, risk below $34.5 / $31.4
What Exelixis Does
Exelixis ($EXEL) is an oncology biotech that’s already profitable. Its core drug is CABOMETYX (cabozantinib), approved in kidney, liver, thyroid, and now neuroendocrine tumors (NET), with fresh FDA (Mar 2025) and EU (Jul 2025) approvals widening its use. CABO is the cash engine and funds the next wave.
The Pipeline
Zanzalintinib (XL092): next-gen TKI. Just posted an overall survival win in metastatic colorectal cancer (STELLAR-303). Phase 3s also running in kidney and NET.
Early programs: ADCs (XB010, XB371), a bispecific (XB628), and USP1 inhibitor (XL309), all in Phase 1.
IP runway: CABOMETYX protected until 2031 in the U.S., giving a clear bridge to zan.
CABO delivers cash today, zan is the proven successor, and early assets are long-dated optionality.
Fundamental Analysis
Quality of earnings
Exelixis is rare among biotechs: it has the profile of a cash compounder. Over the last twelve months (TTM), revenue reached $2.23B with gross margin ~97%. That’s not a typo, CABOMETYX and the royalty streams carry minimal COGS. On the expense side, Exelixis spent heavily on R&D ($884M, ~40% of sales) while keeping SG&A tight ($518M, ~23% of sales). Even with this reinvestment, operating margin sits at 31%, net margin at 27%, and free cash flow margin at ~34%. These are exceptional levels in oncology, closer to a specialty pharma than a research-stage biotech.
Cash generation and balance sheet
Free cash flow hit $754M TTM, converting more than 100% of net income into cash. The balance sheet is strong: $791M in cash + short-term investments, just $180M in debt, leaving ~$610M net cash. That flexibility means Exelixis can fund late-stage trials and early pipeline bets without dilution.
Growth dynamics
Revenue is still growing +10.7% YoY TTM, with net income up +72% YoY as operating leverage kicks in. The new FDA and EU labels for NET should sustain mid-single-digit top-line growth near term, offsetting RCC/HCC maturity. Longer term, the zanzalintinib program (already validated with a pivotal OS win) is positioned to drive the next growth leg.
Capital allocation
Management is returning capital: nearly $800M of stock buybacks completed by mid-2025, reducing diluted shares outstanding by ~13% in two years. For a biotech, this is unusual, it signals both confidence and excess cash beyond R&D needs.
Valuation context
At ~$38/share, Exelixis carries a market cap ~$10.9B, EV ~$10.3B. That works out to:
P/E TTM ~18x
EV/Sales ~4.6x
EV/EBITDA ~14x
FCF yield ~6.9%
Against peers:
Incyte (INCY) trades ~10–11x EV/EBITDA, ~3.7x sales
Jazz (JAZZ) trades ~6x EV/EBITDA, ~1.7x sales
Exelixis is on the expensive side, but unlike many peers, it has:
Net cash, not net debt
A pivotal OS win for its next-gen TKI (already de-risked)
A defined IP runway to 2031
That explains the premium multiple.
The fundamentals make the case clear, Exelixis is not a speculative biotech, but a profitable oncology company reinvesting ~40% of revenue into R&D while still compounding cash. It trades at a premium to peers, but the premium looks justified by its cash profile, buybacks, and pipeline visibility.
Technical Analysis
Big picture (weekly chart)
Exelixis has been trending upward but is now pausing under resistance. The 0.382 Fibonacci retracement sits around $38.4, which the stock has held as support. Below that, the 0.50 retrace near $34.9 and the 0.618 retrace near $31.4 are the next structural supports. These are the lines where longer-term buyers typically step in.
On the upside, the chart shows a clear ceiling: $40.5 is the prior pivot and first breakout trigger. If price can reclaim that level, the next Fibonacci extensions line up at $42.7, $45.5, and then the prior high around $49.5–50.0.
Momentum (daily chart)
MACD is curling up from a deeply negative position, showing downside momentum is fading.
RSI has climbed out of oversold territory and is heading through the mid-40s, a constructive sign.
EMAs (20, 50, 100, 200) are converging. When they bunch together, it often precedes a bigger directional move. The battleground is between $39–41.
Ichimoku cloud: price is trading just below the cloud, with resistance stretching from $39.5–42.8. A daily or weekly close above that zone would flip the trend back to bullish.
The stock is in a holding pattern, supported in the high $30s but capped just below $41. A decisive move either way will likely set the next trend.
Support zone: $36.0–38.5 (buy zone if it holds).
Breakout trigger: $40.5–41.5 (confirmation of strength).
Targets: $42.7 → $45.5 → $49.5.
Invalidation: below $34.5 (trend weakens), hard stop below $31.4.
Our Trade Approach
Starter: $36.0–38.5
Add on strength: daily/weekly close > $40.5–41.5
Stops: trim on weekly close < $34.5; invalidate below $31.4
Targets: $42.7, $45.5, $49.5–50 across 6–18 months
Sizing: keep max loss from entry to $34.5 within 2.5–3% portfolio heat
Bottom line
EXEL is one of the few cash-generators in biotech with a credible hand-off to a next-gen asset. With fresh labels and a pivotal win, we want exposure on weakness and confirmation above $40s. If zan timelines or labels slip, I’ll tighten risk fast; otherwise, let the compounding do the work.
This analysis is for informational and educational purposes only and should not be considered investment advice.