Exelixis (NASDAQ:EXEL) shares fell around 4% intra-day today after BofA Securities analysts downgraded the company from Buy to Neutral, while raising the price target slightly to $39 from $35. The downgrade followed a substantial 37% surge in Exelixis’ stock, driven by a favorable outcome in its Cabo IP dispute and a strong third-quarter update.
With Cabometyx (Cabo), Exelixis’ flagship oncology asset, entering the mature phase of its product life cycle, investor focus has increasingly shifted toward the company’s pipeline, particularly its next-generation TKI candidate, zanza. However, the analysts identified 2025 as a catalyst-light year for Exelixis, tempering near-term expectations.
Three key factors contributed to the cautious outlook. First, zanza’s pivotal Phase 3 data in late-line colorectal cancer (3L+ CRC), projected to deliver peak sales under $500 million, appeared already priced into the stock. Second, the Phase 1/2 basket trial for zanza remained in early exploratory stages, offering limited upside in the near term. Lastly, while Cabo’s label expansion into neuroendocrine tumors (NET) was anticipated, the indication was not expected to meaningfully contribute to Exelixis’ net present value (NPV).