Exelixis' Q1 Earnings: Will Cabometyx Maintain Momentum?

Investors will focus on lead drug Cabometyx’s performance when Exelixis EXEL reports first-quarter 2025 results shortly.

The Zacks Consensus Estimate for sales and earnings is pegged at $502.8 million and 42 cents per share, respectively.  (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Exelixis’ Earnings Surprise History

Exelixis beat on earnings in three of the trailing four quarters and missed in the remaining one, the average surprise being 26.87%. In the last reported quarter, the company beat on earnings by 7.84%.

Factors at Play in Q1

Exelixis generates revenues from net product sales, license revenues and collaboration and service revenues.

Net product revenues have likely increased in the first quarter, driven by a rise in Cabometyx sales volumes and average net selling price.

Cabometyx is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. The drug maintains its status as the leading TKI for RCC, both in the front-line IO+TKI market and the second-line monotherapy segment. The trend is likely to have continued in the first quarter.

The Zacks Consensus Estimate for sales of the drug is pegged at $434 million and our model estimate for the same is pinned at $457.3 million.

Collaboration revenues increased in the previous quarter on higher royalty revenues for the sales of cabozantinib outside of the United States generated by collaboration partners, Ipsen Pharma SAS and Takeda Pharmaceutical Company Limited. The trend is likely to have continued in the to-be-reported quarter.  

Last month, the FDA approved 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 neuroendocrine tumors (pNET).

Simultaneously, the drug was approved for adult and pediatric patients (12 years of age and older) with previously treated, unresectable, locally advanced or metastatic, well-differentiated extra-pancreatic NET (epNET). Additional updates on the same are expected.

The board recently authorized the repurchase of up to an additional $500 million of the company’s common stock before Dec. 31, 2025. Exelixis plans to complete the currently ongoing $500 million stock repurchase program (announced in August 2024) in the second quarter of 2025 and commence repurchases under the newly authorized program thereafter.

The bottom line has likely gained from the ongoing share repurchases.Operating expenses might have increased due to costs associated with the broader portfolio.

What Our Model Predicts for EXEL

Our proven model predicts an earnings beat for EXEL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here, as you will see below.

Earnings ESP: Earnings ESP for Exelixis is +7.14% as the Zacks Consensus Estimate is pegged at 42 cents per share, while the Most Accurate Estimate is pinned at 45 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Exelixis Price Performance

The company’s shares have gained 11.4% year to date against the industry's decline of 3.7%.

Stocks to Consider

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this reporting cycle.

argenx ARGX has an Earnings ESP of +10.92% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ARGX beat on earnings in two of the last four quarters and missed in the other two, delivering an average surprise of 345.11%.

Vertex Pharmaceuticals VRTX has an Earnings ESP of +0.40% and a Zacks Rank #3 at present. 

VRTX beat on earnings in two of the trailing four quarters and missed in the remaining two, the average surprise being 2.58%. The company will report first-quarter results on May 5, 2025.

AstraZeneca AZN has an Earnings ESP of +2.73% and a Zacks Rank #3 at present.

AZN is scheduled to release first-quarter results on April 29, 2025. AstraZeneca beat on earnings in three of the trailing four quarters and missed in the remaining one, the average surprise being 3.16%.



 

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

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