On Wednesday, Citi maintained its Buy rating on Exelixis (NASDAQ:EXEL) stock and increased the price target to $38.00 from $31.00 following the company's third-quarter financial results. Exelixis outperformed expectations with higher top-line revenue and GAAP EPS, attributed to the robust performance of its drug cabozantinib.
The medication's total market share in first-line renal cell carcinoma (1L RCC) climbed to 42.4%, up from 40.8% in the second quarter, solidifying its status as the most prescribed tyrosine kinase inhibitor (TKI) for this indication.
The positive financial outcomes coincide with a significant legal victory in the MSN II ANDA litigation, which effectively extends the patent protection of cabozantinib until 2030, previously set to expire in 2026. This resolution has removed a considerable uncertainty for the stock, providing a more secure outlook for Exelixis's flagship product.
Exelixis's forward-looking prospects include the potential label expansion of cabozantinib into treating neuroendocrine tumors (NET), which has now been factored into Citi's valuation. Additionally, the firm is keeping an eye on the long-term commercial potential of zanza, another product in Exelixis's pipeline.
The updated price target reflects adjustments to Citi's financial model for Exelixis, which now accounts for cabozantinib's opportunities in the NET segment and fine-tunes operating expense and revenue projections. The new target represents a significant increase from the previous estimate, indicating confidence in the company's growth trajectory and drug portfolio.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.