Exelixis Inc. (NASDAQ:EXEL) shares dropped more than 12% in pre-market trading Tuesday following its Q2 earnings report and the announcement to discontinue development of its experimental cancer drug zanzalintinib in a head-and-neck cancer trial.
For the quarter ending June 30, 2025, Exelixis reported total revenues of $568.3 million, including $520.2 million in net product revenues from cabozantinib (Cabometyx) and $48.2 million from collaborations. While net product revenues for Cabometyx were roughly 2% below the consensus estimate of $531.3 million, they still marked a 20% increase compared to the same quarter last year.
“While we accounted for both in our preview, the miss could be from a higher IMS capture rate (+2% vs historical ~declines Q/Q). That said, we cont. to think FY guide is doable even w/ pot’l high capture rates,” noted Jefferies analysts in a research update.
GAAP net income came in at $184.8 million, or $0.65 per diluted share, exceeding expectations of $163.2 million and $0.57 per share, according to Leerink Partners.
The share price decline followed the company’s decision not to advance the Phase 3 portion of the STELLAR-305 trial for zanzalintinib in first-line head-and-neck squamous cell carcinoma (HNSCC). Exelixis stated the drug did not meet internal benchmarks to proceed, citing a competitive treatment landscape, but did not disclose detailed Phase 2 results.
Analysts at BofA Global Research attributed the revenue shortfall in part to higher gross-to-net deductions and lower clinical trial sales. Jefferies highlighted that gross-to-net deductions reached 30.2% in the quarter, driven by increased 340B program volumes, while clinical trial revenues fell sharply to $0.6 million from about $12 million in the previous quarter.
Despite the revenue miss, Exelixis reaffirmed its full-year 2025 guidance, forecasting total revenues between $2.25 billion and $2.35 billion, with net product revenues of $2.05 billion to $2.15 billion.
Company leadership explained the zanzalintinib halt was a strategic choice to focus on indications with higher potential for commercial success.
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