Stock Analysis & Valuation Exelixis, Inc. (EX9.DE)

• Previous Close: €32.28
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	14.00	-57
Graham Formula	39.20	21

Strategic Investment Analysis

Company Overview

Exelixis, Inc. (EX9.DE) is a leading oncology-focused biotechnology company headquartered in Alameda, California, specializing in the discovery, development, and commercialization of innovative cancer treatments. The company’s flagship products, CABOMETYX and COMETRIQ, are derived from cabozantinib, a multi-tyrosine kinase inhibitor targeting key pathways in cancer progression. CABOMETYX is approved for advanced renal cell carcinoma (RCC) and hepatocellular carcinoma (HCC), while COMETRIQ treats metastatic medullary thyroid cancer. Additionally, Exelixis markets COTELLIC, a MEK inhibitor for advanced melanoma, and MINNEBRO for hypertension in Japan. The company’s robust pipeline includes promising candidates like XL092 (a next-gen kinase inhibitor), XB002 (an antibody-drug conjugate), and XL102 (a CDK7 inhibitor), positioning it strongly in the competitive oncology space. With strategic collaborations with Ipsen, Takeda, Roche, and others, Exelixis leverages global partnerships to expand its therapeutic reach. As a mid-cap biotech firm (€9.2B market cap), Exelixis combines clinical innovation with commercial execution, making it a key player in precision oncology.

Investment Summary

Exelixis presents a compelling investment case due to its established commercial portfolio (CABOMETYX contributes ~90% of revenue) and a diversified pipeline targeting high-need cancers. The company’s revenue (€2.17B in FY2023) and profitability (€521M net income) reflect strong execution, while its low beta (0.54) suggests relative resilience to market volatility. However, reliance on CABOMETYX (~€1.9B in 2023 sales) poses concentration risk, and upcoming patent expiries (2026–2031) necessitate pipeline success. Pipeline catalysts like XL092 (Phase III for RCC) and XB002 (Phase I/II) could diversify revenue streams. With €217M cash and manageable debt (€216M), Exelixis is well-capitalized but faces competition from larger oncology players. Investors should weigh its growth potential against pipeline execution risks and pricing pressures in oncology.

Competitive Analysis

Exelixis competes in the targeted oncology therapy market, where its key advantage lies in cabozantinib’s broad applicability (RCC, HCC, thyroid cancer) and first-mover status in niche indications. CABOMETYX’s differentiation stems from its multi-kinase inhibition (MET, AXL, VEGF), which addresses resistance mechanisms in RCC. However, the company faces intense competition from blockbuster PD-1/L1 inhibitors (e.g., Merck’s Keytruda) and next-gen TKIs like Eisai’s Lenvima. Exelixis mitigates this through combination therapies (e.g., CABOMETYX + Opdivo) and lifecycle management (new formulations). Its partnerships with Ipsen (ex-U.S. commercialization) and Roche (COTELLIC) enhance global reach but dilute margins. Pipeline-wise, Exelixis lags behind larger peers in immuno-oncology but focuses on underserved targets (e.g., CDK7). The lack of a dividend (€0/share) and R&D intensity (20% of revenue) align with its growth-biotech profile. Competitive threats include biosimilars for VEGF inhibitors and novel ADCs from Seagen/Astellas.

Major Competitors

• Merck & Co. (MRK): Merck dominates oncology with Keytruda (PD-1 inhibitor, ~$25B annual sales), overshadowing Exelixis in immuno-oncology. Its vast resources enable rapid combo-therapy development, but Merck lacks a strong TKI portfolio. Exelixis’s cabozantinib complements Keytruda in RCC, creating collaboration potential.
• Pfizer Inc. (PFE): Pfizer’s oncology unit (e.g., Ibrance, Xtandi) competes in niche markets but lacks a dominant TKI. Its acquisition of Seagen strengthens ADC capabilities, rivaling Exelixis’s XB002. Pfizer’s global scale poses a threat, but Exelixis’s focus on kinase inhibitors provides differentiation.
• Bristol-Myers Squibb (BMY): BMS’s Opdivo (PD-1) and Yervoy compete in RCC/HCC, often combined with Exelixis’s CABOMETYX. BMS’s broader pipeline and financial depth are strengths, but Exelixis’s cabozantinib remains a preferred combo partner due to its mechanism.
• Eisai Co. (EISAF): Eisai’s Lenvima (VEGFR/FGFR inhibitor) directly competes with CABOMETYX in RCC/HCC. Its partnership with Merck boosts reach, but Exelixis’s superior efficacy data in later-line RCC sustains its market share. Eisai’s stronger presence in Asia is a regional advantage.
• Roche Holding (RHHBY): Roche’s Avastin (VEGF inhibitor) and Tecentriq (PD-L1) compete in HCC. Roche’s diagnostics-integrated approach and global infrastructure are strengths, but Exelixis’s targeted TKIs offer precision advantages in refractory cases.