Can Label Expansion of Cabometyx Fuel Further Growth for EXEL?

Exelixis’ (EXEL) lead drug, Cabometyx, a tyrosine kinase inhibitor (TKI), is one of the leading drugs for the treatment of renal cell carcinoma (RCC).

The FDA approval for the label expansion of Cabometyx for the treatment of adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pancreatic and extra-pancreatic neuroendocrine tumors (NET), in March 2025, is a significant boost for EXEL.

Cabometyx is now the first and only systemic treatment that is FDA approved for previously treated NET, regardless of primary tumor site, grade, somatostatin receptor expression and functional status. Per Exelixis, Cabometyx is the first broadly applicable new oral small molecule therapy in nine years for NET.

The initial uptake for this indication is strong. Demand for this new indication was just over 4% of the total demand for cabozantinib in the second quarter. The drug has already captured 35% of the new patient share for oral therapies for this indication.

In July, Exelixis announced that its partner Ipsen has received regulatory approval for Cabometyx for adult patients with unresectable or metastatic, well-differentiated extra-pancreatic and pNET neuroendocrine tumors who have progressed following at least one prior systemic therapy (other than somatostatin analogues) in the EU.

EXEL expects Cabometyx to be broadly used across patient and tumor characteristics, including patients with NET arising in the pancreas, GI tract and lung across all tumor grades, functional and SSTR status and those who have received prior treatment with Novartis’ (NVS) Lutathera.

Competition for EXEL’s Cabometyx

Cabometyx faces competition from NVS’ radioligand therapy Lutathera, which is also used to treat adults and children aged 12 years and older with a type of cancer known as gastroenteropancreatic neuroendocrine tumors (GEP-NETs) that are positive for the hormone receptor somatostatin, including GEP-NETs in the foregut, midgut and hindgut.

Novartis is investigating a broad portfolio of RLTs, exploring new isotopes, ligands and combination therapies to look beyond GEP-NETs.

Cabometyx faces stiff competition in the RCC space from the combination of Merck’s (MRK) Keytruda (pembrolizumab) and Inlyta (axitinib).

On a standalone basis, MRK’s Keytruda is indicated for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions.

MRK’s Welireg (belzutifan) is also indicated for the treatment of adult patients with advanced RCC following a programmed death receptor-1 (PD-1) or programmed death-ligand 1 (PD-L1) inhibitor and a vascular endothelial growth factor tyrosine kinase inhibitor (VEGF-TKI).

EXEL’s Price Performance, Valuation & Estimates

Shares of the biotech company have gained 13.8% year to date compared with the industry’s growth of 4%.

From a valuation standpoint, EXEL is expensive. Going by the price/sales ratio, its shares currently trade at 4.07x forward sales, higher than its mean of 3.64x and the biotech industry’s 1.58x.

The bottom-line estimate for 2025 has risen from $2.65 to $2.68, while that for 2026 has decreased to $3.08 from $3.13 over the past 30 days.

EXEL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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