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What changed in EXELIXIS, INC.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of EXELIXIS, INC.'s 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+587 added−595 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-11)

Top changes in EXELIXIS, INC.'s 2026 10-K

587 paragraphs added · 595 removed · 449 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

203 edited+52 added−67 removed234 unchanged
Biggest changeThe laws that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute (AKS), which prohibits, among other things, knowingly and willfully, soliciting, receiving, offering or paying remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to government, claims for payment that are false or fraudulent; making a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government; • the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security, transmission and breach reporting of individually identifiable health information.
Biggest changeThe laws that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute (AKS), which prohibits, among other things, knowingly and willfully, soliciting, receiving, offering or paying remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for, either the referral of an individual, or the purchase, lease, 25 Table of Contents order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, such as the federal False Claims Act, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to government, claims for payment that are false or fraudulent; making a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government; • the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security, transmission and breach reporting of individually identifiable health information; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; • the federal transparency requirements under the Physician Payment Sunshine Act, often referred to as the Open Payments program, requires certain manufacturers to track and report to the Centers for Medicare & Medicaid Services (CMS) annually certain payments and other transfers of value provided to various health professionals (including, among others, physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), physician assistants, nurse practitioners, and clinical nurse specialists) and teaching hospitals, as well as physician ownership and investment interests in the reporting manufacturers; and • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.
XL309 has potential in patients whose tumors are no longer responsive to PARP inhibitors (PARPi), including ovarian, breast and prostate cancers. XL309 also has potential in combination with PARPi agents to deepen and prolong the response seen to PARPi, as well as to broaden the activity beyond that observed in patients with tumors that harbor a BRCA1/2 mutation.
XL309 has potential in patients whose tumors are no longer responsive to PARP inhibitors (PARPi), including ovarian, breast and prostate cancers. XL309 also has potential in combination with PARPi agents to deepen and prolong the response seen with PARPi, as well as to broaden the activity beyond that observed in patients with tumors that harbor a BRCA1/2 mutation.
The period of market exclusivity may be reduced to six years if at the end of the fifth year it is established that the criteria for orphan designation are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.
The period of orphan market exclusivity may be reduced to six years if at the end of the fifth year it is established that the criteria for orphan designation are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.
If the disputed points cannot be resolved, the matter is eventually referred to the Coordination Group on Mutual Recognition and Decentralized Procedures in the first instance to reach an agreement and failing to reach such an agreement, a referral to the EMA and the CHMP for arbitration that will result in an opinion to form the basis of a decision to be issued by the EC binding on all Member States.
If the disputed points cannot be resolved, the matter is eventually referred to the Coordination Group on Mutual Recognition and Decentralized Procedures in the first instance to reach an agreement and failing to reach such an agreement, a referral to the EMA and the CHMP for arbitration that will result in an opinion to form the basis of a decision to be issued by the EC binding on all Member States of the EEA.
Thus, the second- and later-line market for HCC therapies has become increasingly competitive, and we believe this trend may continue over the coming years, with monotherapy CABOMETYX maintaining an important place in the HCC treatment landscape. The FDA approved the HCC indication for CABOMETYX in January 2019 was based on our phase 3 pivotal study, CELESTIAL.
Thus, the second- and later-line market for HCC therapies has become increasingly competitive, and we believe this trend may continue over the coming years, with monotherapy CABOMETYX maintaining an important place in the HCC treatment landscape. The FDA approved the HCC indication for CABOMETYX in January 2019 based on our phase 3 pivotal study, CELESTIAL.
We also rely on our third-party contract manufacturers to source materials such as excipients, components and reagents, which are required to manufacture our drug substance and finished drug product. We have established and continue to maintain substantial safety stock inventories for our drug substance and drug products, and we store these quantities in multiple locations.
We also rely on our third-party contract manufacturers to source materials such as excipients, components and reagents, which are required to manufacture our drug substance and finished drug product. We have established and continue to maintain safety stock inventories for our drug substance and drug products, and we store these quantities in multiple locations.
We also have contracted with a third-party logistics provider, with multiple distribution locations, to provide shipping and warehousing services for our commercial supply of both CABOMETYX and COMETRIQ in the U.S.
We also have contracted with a third-party logistics provider, with multiple distribution locations, to provide shipping, storage and warehousing services for our commercial supply of both CABOMETYX and COMETRIQ in the U.S.
In particular, there have been several recent U.S. Congressional inquiries, hearings and proposed and enacted federal legislation and rules, as well as executive orders and sub-regulatory guidance that may impact pricing for pharmaceutical products.
In particular, there have been recent U.S. Congressional inquiries, hearings and proposed and enacted federal legislation and rules, as well as executive orders and sub-regulatory guidance that may impact pricing for pharmaceutical products.
(a member of the Roche Group) (Genentech); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor (MR), approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo).
(a member of the Roche Group) (Genentech); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo).
Approximately 5% to 15% of differentiated thyroid tumors are resistant to RAI treatment. With limited treatment options, these patients have a life expectancy of only three to six years from the time metastatic lesions are detected.
Approximately 5% to 15% of differentiated thyroid tumors are resistant to RAI treatment. With limited treatment options, these patients have a life expectancy of three to six years from the time metastatic lesions are detected.
In both the mutual recognition and decentralized procedures, the RMS reviews the application and submits its assessment of the application to the Member States where marketing authorizations are being sought, referred to as Concerned Member States.
In both the mutual recognition and decentralized procedures, the RMS reviews the application and submits its assessment of the application to the Member States of the EEA where marketing authorizations are being sought, referred to as Concerned Member States.
Other cost-control initiatives are similarly focused on affordability and accessibility, such as the Regulation on Health Technology Assessment (HTA Regulation) adopted in December 2021 and entering into effect in January 2025, as well as other upcoming legislative and policy changes aimed at increasing cooperation between EU Member States, and once enacted these initiatives may further impact the price and reimbursement status of many medicinal products.
Other cost-control initiatives are similarly focused on affordability and accessibility, such as the Regulation on Health Technology Assessment (HTA Regulation) adopted in December 2021 and entering into effect in January 2025, as well as other upcoming legislative and policy changes aimed at increasing cooperation between Member States of the EEA, and once enacted these initiatives may further impact the price and reimbursement status of many medicinal products.
Item 1. Business. Overview Exelixis, Inc. (Exelixis, we, our or us) is an oncology company innovating next-generation medicines and combination regimens at the forefront of cancer care.
Item 1. Business. Overview Exelixis, Inc. (Exelixis, we, our or us) is an oncology company innovating next-generation medicines and regimens at the forefront of cancer care.
We strive to live these values every day across the company, integrating them into everything from our interview, hiring and onboarding processes, to our performance evaluation, rewards and promotion programs. We provide generous compensation packages designed to attract and retain high-quality employees, and all of our employees are eligible for cash bonuses and grants of long-term incentive awards.
We strive to live these values every day across the company, integrating them into everything from our interview, hiring and onboarding processes, to our performance evaluation, rewards and recognition programs. We provide generous compensation packages designed to attract and retain high-quality employees, and all of our employees are eligible for cash bonuses and grants of long-term incentive awards.
While existing clinical trials could continue to be conducted under the rules of Directive 2001/20/EC until January 31, 2025, any clinical trial initiated on or after January 31, 2023, must comply with the rules of the new regulation. Under EU regulatory systems, a company may submit a marketing authorization application (MAA) either under centralized or decentralized procedure.
While existing clinical trials could continue to be conducted under the rules of Directive 2001/20/EC until January 31, 2025, any clinical trial initiated on or after January 31, 2023, must comply with the rules of the new regulation. Under EEA regulatory systems, a company may submit a marketing authorization application (MAA) either under centralized or decentralized procedure.
ADU-1805 is currently being evaluated in a phase 1 clinical trial to explore its pharmacokinetics, safety, tolerability and preliminary anti-tumor activity in patients with advanced or metastatic refractory solid tumors, and enrollment is ongoing. The ADU-1805 study includes plans to investigate the compound’s potential in combination with approved ICIs, including pembrolizumab.
ADU-1805 is currently being evaluated in a phase 1 clinical trial to explore its pharmacokinetics, safety, tolerability and preliminary anti-tumor activity in patients with advanced or metastatic refractory solid tumors as monotherapy and in combination with pembrolizumab. The ADU-1805 study includes plans to investigate the compound’s potential in combination with approved ICIs, including pembrolizumab. Enrollment is ongoing.
With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise, and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules, biotherapeutics and antibody-drug conjugates (ADCs). Sales related to cabozantinib account for the majority of our revenues.
With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules and biotherapeutics, such as antibody-drug conjugates (ADCs). Sales related to cabozantinib account for the majority of our revenues.
Our inclusive benefits are also designed to support family life with options including, among others, generous parental leave policies, grandparent leave, adoption, surrogacy and fertility programs, new parent and nursing mother support programs, mental health services, childcare tuition subsidy and tutoring services, dependent care for children and adults, family care coordination, and pet insurance.
Our inclusive benefits are also designed to support family life with options including, among others, generous parental leave policies, grandparent leave, adoption, surrogacy and fertility programs, new parent and nursing mother support programs, childcare tuition subsidy and tutoring services, dependent care for children and adults, family care coordination, and pet insurance.
The FDA may initially issue a Refuse to File letter for an incomplete NDA or sNDA, or it may deny approval of an NDA or sNDA by way of a Complete Response letter if the applicable regulatory criteria are not satisfied, or alternatively require additional clinical and/or nonclinical data and/or an additional phase 3 pivotal clinical trial.
The FDA may initially issue a Refuse to File letter for an incomplete NDA or sNDA, or it may deny approval of an NDA or sNDA by way of a Complete Response letter if the applicable regulatory criteria are not satisfied, and can require additional clinical and/or nonclinical data and/or an additional phase 3 pivotal clinical trial.
Historically, products launched in EU Member States and other non-U.S. jurisdictions do not follow the price structures of the U.S., and they generally tend to be priced significantly lower. Competition There are many companies focused on the development of small molecules, antibodies and other treatments for cancer.
Historically, products launched in Member States of the EEA and other non-U.S. jurisdictions do not follow the price structures of the U.S., and they generally tend to be priced significantly lower. Competition There are many companies focused on the development of small molecules, antibodies and other treatments for cancer.
Outside the U.S., the EMA’s approval of CABOMETYX provided physicians in the EU with a second approved therapy for the second-line treatment of this aggressive and difficult-to-treat cancer, and approvals from Health Canada and the Japanese PMDA brought a much-needed treatment option to HCC patients in those countries.
Outside the U.S., the EMA’s approval of CABOMETYX provided physicians in the EEA with a second approved therapy for the second-line treatment of this aggressive and difficult-to-treat cancer, and approvals from Health Canada and the Japanese PMDA brought a much-needed treatment option to HCC patients in those countries.
Biopharmaceutical companies have since developed new and demonstrably more effective therapies for previously untreated patients, including ICI combination therapies. These new treatment options have improved longer-term outcomes for HCC patients, thereby resulting in a greater number of them receiving multiple lines of therapy.
Biopharmaceutical companies have since developed new and demonstrably more effective therapies for previously untreated HCC patients, including ICI combination therapies. These new treatment options have improved longer-term outcomes for HCC patients, thereby resulting in a greater number of people receiving multiple lines of therapy.
Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities of countries outside of the U.S. before we can commence clinical trials in such countries and approval of the regulators of such countries or economic areas, such as the EU, before we may market products in those countries or areas.
Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities of countries outside of the U.S. before we can commence clinical trials in such countries and approval of the regulators of such countries or economic areas, such as the EEA, before we may market products in those countries or areas.
For physicians treating these types of cancer, cabozantinib has become or is becoming an important medicine in their selection of effective therapies. The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech, Inc.
For physicians treating these types of cancer, cabozantinib has become or is becoming an important medicine in their selection of effective therapies. 3 Table of Contents The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech, Inc.
For example, in August 2024, we announced the initiation of a phase 1 clinical trial evaluating XB010, both as a monotherapy and in combination with pembrolizumab, in patients with advanced solid tumors, following the FDA’s acceptance of our IND application, and enrollment is ongoing.
In August 2024, we announced the initiation of a phase 1 clinical trial evaluating XB010, both as a monotherapy and in combination with pembrolizumab, in patients with advanced solid tumors, following the FDA’s acceptance of our IND application, and enrollment is ongoing.
Taken together with the promising anti-tumor activity, we believe zanzalintinib is positioned to be a best-in-class VEGF-receptor TKI in a wide range of solid tumors when used as a monotherapy, as well as in combination regimens.
Taken together with its promising anti-tumor activity, we believe zanzalintinib is positioned to be a best-in-class VEGF-receptor TKI in a wide range of solid tumors when used as a monotherapy, as well as when used in combination regimens.
The RTOR program, which allows an applicant to pre-submit components of the NDA or BLA to allow the FDA to review clinical data before the complete filing is submitted, aims to explore a more efficient review process to ensure that safe and effective treatments are available to patients as early as possible, while maintaining and improving review quality.
The RTOR program, which allows an applicant to pre-submit components of the NDA or BLA to allow the FDA to review clinical data before the complete filing is submitted, aims to explore a more efficient review process to ensure that safe and effective treatments are available to 22 Table of Contents patients as early as possible, while maintaining and improving review quality.
In addition to the Member States of the EU, Japan, the U.K. and Canada, CABOMETYX is also approved for previously treated HCC indications in Brazil, Taiwan, South Korea, Australia and Hong Kong, among other countries.
In addition to the Member States of the EEA, Japan, the U.K. and Canada, CABOMETYX is also approved for previously treated HCC indications in Brazil, Taiwan, South Korea, Australia and Hong Kong, among other countries.
The decentralized procedure is used when the product in question has yet to be granted a marketing authorization in any Member State. Under this procedure the applicant can select the Member State that will act as the RMS.
The decentralized procedure is used when the product in question has yet to be granted a marketing authorization in any Member State. Under this procedure the applicant can select the Member State of the EEA that will act as the RMS.
Third-party payers may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a third-party payer’s decision to provide coverage for a drug product does not guarantee what reimbursement rate, if any, will be approved.
Third-party payers may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a third-party payer’s decision to provide coverage for a drug product 27 Table of Contents does not guarantee what reimbursement rate, if any, will be approved.
It is difficult to predict how these changes will affect sales of CABOMETYX during 2025 and going forward. CABOMETYX - HCC: We believe the principal competition for CABOMETYX in previously treated HCC includes: Bayer’s regorafenib and Eisai’s lenvatinib. The competitive landscape for HCC has changed with the increased adoption of ICI combination therapies in the first-line setting.
It is difficult to accurately predict how these changes will affect sales of CABOMETYX during 2026 and going forward. CABOMETYX - HCC: We believe the principal competition for CABOMETYX in previously treated HCC includes: Bayer’s regorafenib and Eisai’s lenvatinib. The competitive landscape for HCC has changed with the increased adoption of ICI combination therapies in the first-line setting.
We cannot predict the ultimate outcome of these ANDA submissions and/or any related lawsuits and/or IPRs or other challenges that may arise with respect to our patents and patent applications or provide assurance that these lawsuits and/or administrative proceedings will prevent the introduction of a generic version of CABOMETYX for any particular length of time, or at all.
We cannot predict the ultimate outcome of these ANDA and 505(b)(2) submissions and/or any related lawsuits and/or IPRs or other challenges that may arise with respect to our patents and patent applications or provide assurance that these lawsuits and/or administrative proceedings will prevent the introduction of a generic version of CABOMETYX for any particular length of time, or at all.
Federal Trade Commission (FTC) issued a policy statement, supported by the FDA, warning brand pharmaceutical companies that they could face legal action under the FTC Act if they improperly list patents in the Orange Book, and the FTC subsequently initiated challenges against patents held by brand pharmaceutical companies and listed in the Orange Book under the FDA’s patent listing dispute process.
Federal Trade Commission (FTC) issued a policy statement, supported by the FDA, warning brand pharmaceutical companies that they could face legal action under the FTC Act if they improperly list patents in the Orange Book, and the FTC subsequently initiated, and continues to initiate, challenges against patents held by brand pharmaceutical companies and listed in the Orange Book under the FDA’s patent listing dispute process.
To our knowledge, we own all global patents necessary for the continued sale and development of cabozantinib and cobimetinib, and we either own or have in-licensed all global patents for our other product candidates, as further described below. Cabozantinib Cabozantinib is covered by more than 15 issued patents in the U.S., building from U.S.
To our knowledge, we own all global patents necessary for the continued 32 Table of Contents sale and development of cabozantinib and cobimetinib, and we either own or have in-licensed all global patents for our other product candidates, as further described below. Cabozantinib Cabozantinib is covered by more than 15 issued patents in the U.S., building from U.S.
In October 2016, we announced positive results from CABOSUN, a randomized, open-label, active-controlled phase 2 trial conducted by the Alliance for Clinical Trials in Oncology (the Alliance), comparing cabozantinib with sunitinib in patients with previously untreated advanced RCC with intermediate- or poor-risk disease.
In October 2016, we announced positive results from CABOSUN, a randomized, open-label, active-controlled phase 2 investigator-sponsored trial (IST) conducted by the Alliance for Clinical Trials in Oncology (the Alliance), comparing cabozantinib with sunitinib in patients with previously untreated advanced RCC with intermediate- or poor-risk disease.
These efforts are led by our experienced scientists, including some of the same scientists who led the efforts to discover cabozantinib, cobimetinib and esaxerenone, each of which are now commercially distributed drug products.
These efforts are led by our experienced scientists, including some of the same scientists who led the efforts to discover cabozantinib, cobimetinib and esaxerenone, all of which are now commercially distributed drug products.
(or for which there is no reasonable expectation that the cost of developing and making available the drug in the U.S. for such disease or condition will be recovered from sales of the drug in the U.S.). Certain of the incentives turn on the drug first being designated as an orphan drug.
(or for which there is no reasonable expectation that the cost of developing and making available the drug in the U.S. for such disease or condition will be recovered from sales of the drug in the U.S.). Certain of the incentives turn on the drug first being 21 Table of Contents designated as an orphan drug.
This has led to increased competition due to the increase in prescribing and sequencing of TKIs in subsequent lines of therapy as more patients overall receive multiple lines of therapy. It is difficult to predict how these changes will affect sales of CABOMETYX during 2025 and going forward.
This has led to increased competition due to the increase in prescribing and sequencing of TKIs in subsequent lines of therapy as more patients overall receive multiple lines of therapy. It is difficult to accurately predict how these changes will affect sales of CABOMETYX during 2026 and going forward.
We have other filed patent applications and issued patents in the U.S. and other selected countries covering certain synthetic methods, salts, polymorphs, formulations, prodrugs, metabolites and/or combinations of cabozantinib that, if issued, are anticipated to expire as late as 2037.
We have other filed patent applications and 33 Table of Contents issued patents in the U.S. and other selected countries covering certain synthetic methods, salts, polymorphs, formulations, prodrugs, metabolites and/or combinations of cabozantinib that, if issued, are anticipated to expire as late as 2037.
Additionally, there are a variety of therapies being developed for advanced RCC, including: the combination of Merck & Co.’s belzutifan and Eisai’s lenvatinib; the combination of Merck & Co.’s pembrolizumab and belzutifan and Eisai’s lenvatinib; the combination of Merck & Co.’s pembrolizumab and quavonlimab and Eisai’s lenvatinib; and Merck & Co.’s pembrolizumab (administered subcutaneously).
Additionally, there are a variety of therapies being developed for advanced RCC, including: the combination of Merck & Co.’s belzutifan and Eisai’s lenvatinib; the combination of Merck & Co.’s pembrolizumab and belzutifan and Eisai’s lenvatinib; and the combination of Merck & Co.’s pembrolizumab and quavonlimab and Eisai’s lenvatinib.
In addition, the National Comprehensive Cancer Network (NCCN), the nation’s foremost non-profit alliance of leading cancer centers, has included the combination of CABOMETYX with nivolumab in its Clinical Practice Guidelines for Kidney Cancer as a Category 1 preferred option for the first-line treatment of patients with clear cell RCC across all risk groups, and as a Category 2A other recommended option for first-line nccRCC.
In addition, the National Comprehensive Cancer Network (NCCN), the nation’s foremost non-profit alliance of leading cancer centers, has included the combination of CABOMETYX with nivolumab in its Clinical Practice Guidelines for Kidney Cancer as a Category 1 preferred option for the first-line treatment of patients with ccRCC across all risk groups, and as a Category 2A other recommended option for first-line nccRCC.
XL309 Development Program In September 2023, we entered into an exclusive global license agreement with Insilico Medicine US, Inc. and its affiliate, Insilico Medicine Hong Kong Limited, along with their parent company and certain other affiliated entities (individually and collectively referred to as Insilico).
In September 2023, we entered into an exclusive global license agreement with Insilico Medicine US, Inc. and its affiliate, Insilico Medicine Hong Kong Limited, along with their parent company and certain other affiliated entities (individually and collectively referred to as Insilico).
The collaboration agreement has been subsequently amended on multiple occasions, including in December 2016 to include commercialization rights in Canada. We have also agreed to collaborate with Ipsen on the development of cabozantinib for current and potential future indications.
The collaboration agreement has been subsequently amended on multiple occasions, including in December 2016 to include commercialization rights in Canada. We have also agreed to collaborate with Ipsen on the development of cabozantinib for 13 Table of Contents current and potential future indications.
We are an equal opportunity employer and maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2024, was 57% non-white and 51% women.
We are an equal opportunity employer and maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2025, was 57% non-white and 50% women.
Examples of such programs include fast 22 Table of C o n t e n t s track designation, breakthrough therapy designation, priority review and accelerated approval, and the eligibility criteria of and benefits for each program vary: • Fast track designation is a process designed to facilitate the development and expedite the review of drugs intended to treat serious or life-threatening diseases or conditions that demonstrate the potential to fill unmet medical needs, by providing, among other things, eligibility for accelerated approval if relevant criteria are met, and rolling review, which allows submission of individually completed sections of an NDA for FDA review before the entire submission is completed. • Breakthrough therapy designation is a process designed to expedite the development and review of drugs that are intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
Examples of such programs include fast track designation, breakthrough therapy designation, priority review and accelerated approval, and the eligibility criteria of and benefits for each program vary: • Fast track designation is a process designed to facilitate the development and expedite the review of drugs intended to treat serious or life-threatening diseases or conditions that demonstrate the potential to fill unmet medical needs, by providing, among other things, eligibility for accelerated approval if relevant criteria are met, and rolling review, which allows submission of individually completed sections of an NDA for FDA review before the entire submission is completed. • Breakthrough therapy designation is a process designed to expedite the development and review of drugs that are intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
We later amended this agreement to obtain broad rights to develop the in-licensed anti-TF antibodies, allowing us to advance preclinical development of XB371, an ADC consisting of a topoisomerase payload conjugated to a TF-targeting monoclonal antibody. • Invenra.
We later amended this agreement to obtain broad rights to develop the in-licensed anti-TF antibodies, allowing us to advance preclinical development of XB371, an ADC consisting of a topoisomerase payload conjugated to a TF-targeting monoclonal antibody. 17 Table of Contents • Invenra.
For descriptions of our ongoing clinical trials evaluating zanzalintinib in combination with other therapies, see “—Exelixis Development Programs—Pipeline Development Programs — Advancing Exelixis’ Future Cancer Therapy Candidates—Zanzalintinib Development Program.” Research Collaborations and In-licensing Arrangements As part of our pipeline expansion efforts, we have entered several research collaborations and in-licensing arrangements, as well other strategic transactions that collectively incorporate a wide range of technology platforms and assets and increase our probability of success.
For descriptions of our ongoing clinical trials evaluating zanzalintinib in combination with other therapies, see “—Exelixis Development Programs—Pipeline Development Programs — Advancing Exelixis’ Future Cancer Therapy Candidates—Small Molecule Programs—Zanzalintinib Development Program.” 16 Table of Contents Research Collaborations, In-licensing Arrangements and Strategic Transactions As part of our pipeline expansion efforts, we have entered several research collaborations and in-licensing arrangements, as well as other strategic transactions that collectively incorporate a wide range of technology platforms and assets and increase our probability of success.
Differentiated Thyroid Cancer - An Opportunity for CABOMETYX to Help an Underserved Patient Population Approximately 44,000 new cases of thyroid cancer will be diagnosed in the U.S. in 2025. Differentiated thyroid tumors, which make up about 90% of all thyroid cancers, are typically treated with surgery followed by ablation of the remaining thyroid with RAI.
Differentiated Thyroid Cancer - An Opportunity for CABOMETYX to Help an Underserved Patient Population Approximately 45,000 new cases of thyroid cancer will be diagnosed in the U.S. in 2026. Differentiated thyroid tumors, which make up about 90% of all thyroid cancers, are typically treated with surgery followed by ablation of the remaining thyroid with RAI.
The ORR for the 26 patients who had received prior VEGF receptor-TKIs was 35%, including responses in four of the 17 patients (24%) who had received prior cabozantinib. Preliminary results from a randomized expansion cohort of patients with metastatic CRC (n=107) from STELLAR-001 were presented at the ASCO GI 2025.
The ORR for the 26 patients who had received prior VEGF receptor-TKIs was 35%, including responses in four of the 17 patients (24%) who had received prior cabozantinib. Preliminary results from a randomized expansion cohort of patients with metastatic CRC (n=107) from STELLAR-001 were presented at the ASCO Gastrointestinal Cancers Symposium in January 2025 (ASCO GI 2025).
Pricing and reimbursement negotiations with governmental authorities or payers in EU Member States can take six to 12 months or longer after the initial marketing authorization is granted for a product, or after the marketing authorization for a new indication is granted.
Pricing and reimbursement negotiations with governmental authorities or payers in Member States of the EEA can take six to 12 months or longer after the initial marketing authorization is granted for a product, or after the marketing authorization for a new indication is granted.
We have established recommended doses of zanzalintinib for these combination regimens and are exploring them in a diverse array of solid tumor expansion cohorts, including clear cell RCC, nccRCC, HCC, mCRPC and CRC. The key efficacy endpoints are investigator-assessed ORR per RECIST v. 1.1, PFS and OS.
We have established recommended doses of zanzalintinib for these combination regimens and are exploring them in a diverse array of solid tumor expansion cohorts, including ccRCC, nccRCC, HCC, mCRPC and CRC. The key efficacy endpoints are investigator-assessed ORR per RECIST v. 1.1, PFS and OS.
We continually monitor and evaluate the performance of our third-party contract manufacturers on an ongoing basis for compliance with these requirements and to affirm their continuing capabilities to meet both our commercial and clinical needs.
We continually monitor and evaluate the performance of our third-party contract manufacturers on an ongoing basis for compliance and to affirm their continuing capabilities to meet both our commercial and clinical needs.
We store drug substance at third-party facilities and provide appropriate amounts to our third-party drug product contract manufacturers, who manufacture, package and label our specified quantities of finished goods for COMETRIQ and CABOMETYX.
We store drug substance at third-party facilities and provide appropriate amounts to our third-party drug product contract manufacturers, who manufacture, package and label our specified quantities of finished goods for clinical and commercial products (COMETRIQ and CABOMETYX).
XB010 is our first ADC advanced internally and consists of an MMAE payload conjugated to a mAb targeting the tumor antigen 5T4. XB010 was constructed using Catalent’s SMARTag site-specific bioconjugation platform, and its 5T4-targeting mAb was discovered in collaboration with Invenra.
XB010 is our first ADC advanced internally and consists of an MMAE payload conjugated to a mAb targeting the tumor antigen 5T4. XB010 was constructed using Catalent’s SMARTag site-specific bioconjugation platform, and its 5T4-targeting mAb was discovered in collaboration with Invenra. 12 Table of Contents XB628.
Upon receipt of Orphan Drug Designation, the sponsor is eligible for tax credits of up to 25% for qualified clinical trial expenses and waiver of the PDUFA application fee. In addition, upon marketing approval, an orphan drug could be eligible for seven years of market exclusivity.
Upon receipt of Orphan Drug Designation, the sponsor is eligible for tax credits of up to 25% for qualified clinical trial expenses and waiver of the Prescription Drug User Fee Act application fee. In addition, upon marketing approval, an orphan drug could be eligible for seven years of market exclusivity.
A Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profits the medicinal product generates for the company placing it on the market.
A Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls 29 Table of Contents on the profits the medicinal product generates for the company placing it on the market.
Further, the increased emphasis on managed healthcare in the U.S. and on country-specific and national pricing and reimbursement controls in the EU will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations.
Further, the increased emphasis on managed healthcare in the U.S. and on country-specific and national pricing and reimbursement controls in the Member States of the EEA will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations.
Medullary Thyroid Cancer - COMETRIQ, the First Commercial Approval of Cabozantinib Estimates suggest that there will be approximately 970 MTC cases diagnosed in the U.S. in 2025, and COMETRIQ has served as an important treatment option for these patients since January 2013. The FDA approved COMETRIQ for progressive, metastatic MTC based on our phase 3 trial, EXAM.
Medullary Thyroid Cancer - COMETRIQ, the First Commercial Approval of Cabozantinib Estimates suggest that there will be approximately 1,000 MTC cases diagnosed in the U.S. in 2026, and COMETRIQ has served as an important treatment option for these patients since January 2013. The FDA approved COMETRIQ for progressive, metastatic MTC based on our phase 3 pivotal trial, EXAM.
Should the combination of zanzalintinib and atezolizumab be approved for the treatment of these CRC patients, we believe its principal competition may include the following approved therapies or therapies in late-stage development: Bayer’s regorafenib; Taiho Oncoloy’s trifluridine/tipiracil; the combination of Taiho Oncoloy’s trifluridine/tipiracil and Roche’s bevacizumab; Takeda’s fruquintinib; the combination of Agenus’ botensilimab and balstilimab; and the combination of Amgen’s sotorasib and panitumumab.
Should the combination of zanzalintinib and atezolizumab be approved for the treatment of these CRC patients, we believe its principal competition may include the following approved therapies or therapies in late-stage development: Bayer’s regorafenib; Taiho Oncology’s trifluridine/tipiracil; the combination of Taiho Oncology’s trifluridine/tipiracil and Roche’s bevacizumab; Takeda’s fruquintinib; and the combination of Agenus’ botensilimab and balstilimab.
Phase 2 studies are typically well controlled, closely monitored, and conducted in a relatively small number of patients, usually involving no more than several hundred subjects. 21 Table of C o n t e n t s • Phase 3 studies are conducted to gather the additional information about effectiveness and safety across a higher number of patients and evaluate the overall benefit-risk relationship of the product candidate following earlier phase evaluations, which will have provided preliminary evidence suggesting an effective dosage range and acceptable safety profile for the product candidate.
Phase 2 studies are typically well controlled, closely monitored, and conducted in a relatively small number of patients, usually involving no more than several hundred subjects. • Phase 3 studies are conducted to gather the additional information about effectiveness and safety across a higher number of patients and evaluate the overall benefit-risk relationship of the product candidate following earlier phase evaluations, which will have provided preliminary evidence suggesting an effective dosage range and acceptable safety profile for the product candidate.
As of December 31, 2024, we have earned royalties of $47.1 million on net sales of cabozantinib by Takeda since the inception of the collaboration agreement. Consistent with our historical agreement with GSK, we are required to pay a 3% royalty to Royalty Pharma on total net sales of any product containing cabozantinib, including net sales by Takeda.
As of December 31, 2025, we have earned royalties of $60.3 million on net sales of cabozantinib by Takeda since the inception of the collaboration agreement. Consistent with our historical agreement with GSK, we are required to pay a 3% royalty to Royalty Pharma on total net sales of any product containing cabozantinib, including net sales by Takeda.
In the EU, orphan designation is available 25 Table of C o n t e n t s for products in development which are either: (a) intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the EU; or (b) intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition affecting a larger number of persons but when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the medicinal product.
In the EU, orphan designation is available for products in development which are either: (a) intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the EU; or (b) intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition affecting a larger number of persons but when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the medicinal product.
However, it is unclear how the IRA will be effectuated or changed under the new Trump Administration and the degree of impact that the IRA will ultimately have upon our business remains unclear. In addition, the U.S. pharmaceutical industry has also been significantly impacted by other major legislative initiatives and related political contests.
However, it is unclear how the IRA will be effectuated or changed under the current U.S. administration as well as the degree of impact that the IRA will ultimately have upon our business. In addition, the U.S. pharmaceutical industry has also been significantly impacted by other major legislative initiatives and related political contests.
Accordingly, we are evaluating zanzalintinib in a growing development program that builds on our prior experience with cabozantinib and targets indications with high unmet need. Beyond our established collaborations, we will continue to explore additional opportunities for novel combinations with zanzalintinib. STELLAR-001 - Advanced Solid Tumors .
Accordingly, we are evaluating zanzalintinib in a robust and growing development program that builds on our prior experience with cabozantinib and targets indications with high unmet need, including RCC, CRC, NET and meningioma. Beyond our established collaborations, we will continue to explore additional opportunities for novel combinations with zanzalintinib. STELLAR-001 - Advanced Solid Tumors .
The IRA contains a limited exception for small biotech drug manufacturers, which applies on a drug-specific basis, and qualifying drugs will be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential maximum fair price in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year (small biotech exception).
The IRA contains a limited exception for small biotech drug manufacturers, which applies on a drug-specific basis, and provides that qualifying drugs will be exempt from selection for pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential MFP in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year (small biotech exception).
The mutual recognition procedure provides for the EU Member States selected by the applicant to mutually recognize a national marketing authorization that has already been granted by the competent authority of another Member State, referred to as the Reference Member State (RMS).
The mutual recognition procedure provides for the Member States of the EEA selected by the applicant to mutually recognize a national 24 Table of Contents marketing authorization that has already been granted by the competent authority of another Member State of the EEA, referred to as the Reference Member State (RMS).
We have not experienced significant production delays or seen significant impairment to our supply chain as a result of the ongoing geopolitical hostilities in Eastern Europe and the Middle East or other global events.
We have not experienced significant production delays or seen significant impairment to our supply chain as a result of the ongoing geopolitical hostilities in Eastern Europe and the Middle East, the political, economic, and social instability in Venezuela or other global events.
Although HCC is the most common form of liver cancer, making up about three-fourths of the more than 42,200 cases of liver cancer estimated to be diagnosed in the U.S. during 2025, this patient population has long been underserved. Prior to 2017, therapies for the treatment of HCC were limited in number.
Although HCC is the most common form of liver cancer, making up almost three-fourths of the more than approximately 42,000 cases of liver cancer estimated to be diagnosed in the U.S. during 2026, this patient population has long been underserved. Prior to 2017, therapies for the treatment of HCC were limited in number.
Patent No. 11,542,259, and we have pending patent applications in the U.S. and other selected countries covering the composition of matter, certain synthetic methods, salts, polymorphs, 34 Table of C o n t e n t s formulations and combinations of zanzalintinib that, if issued, are anticipated to expire between 2039 and 2044, excluding any potential patent term adjustments and/or extensions.
Patent No. 11,542,259, and we have pending patent applications and other issued patents in the U.S. and other selected countries covering the composition of matter, certain synthetic methods, salts, polymorphs, formulations and combinations of zanzalintinib that, if issued, are anticipated to expire between 2039 and 2044, excluding any potential patent term adjustments and/or extensions.
We continue to pursue additional patents and patent term extensions in the U.S. covering various aspects of our cabozantinib products that may, if issued, extend exclusivity beyond the expiration of the patents listed in the table. 33 Table of C o n t e n t s Product Patent No.
We continue to pursue additional patents and patent term extensions in the U.S. covering various aspects of our cabozantinib products that may, if issued, extend exclusivity beyond the expiration of the patents listed in the table. Product Patent No.
General Subject Matter Patent Expiration CABOMETYX 7,579,473 Composition of matter 2026 8,497,284 Methods of treatment 2024 8,877,776 Salt and polymorphic forms of cabozantinib 2030 9,724,342 Formulations of cabozantinib 2033 10,034,873 Methods of treatment 2031 10,039,757 Methods of treatment 2031 11,091,439 Crystalline salt forms of cabozantinib 2030 11,091,440 Pharmaceutical composition 2030 11,098,015 Methods of treatment 2030 11,298,349 Pharmaceutical composition essentially free of impurities 2032 12,128,039 Pharmaceutical composition essentially free of impurities 2032 COMETRIQ 7,579,473 Composition of matter 2026 8,877,776 Salt and polymorphic forms of cabozantinib 2030 9,717,720 Formulations of cabozantinib 2032 11,091,439 Crystalline salt forms of cabozantinib 2030 11,091,440 Pharmaceutical composition 2030 11,098,015 Methods of treatment 2030 11,298,349 Pharmaceutical composition essentially free of impurities 2032 12,128,039 Pharmaceutical composition essentially free of impurities 2032 Some of our cabozantinib patents have been subject to patent litigation with companies that filed ANDAs seeking to market generic versions of CABOMETYX, as well as others that seek inter partes review (IPR) before the Patent Trial and Appeal Board.
General Subject Matter Patent Expiration CABOMETYX 7,579,473 Composition of matter 2026 8,877,776 Salt and polymorphic forms of cabozantinib 2030 9,724,342 Formulations of cabozantinib 2033 10,034,873 Methods of treatment 2031 10,039,757 Methods of treatment 2031 11,091,439 Crystalline salt forms of cabozantinib 2030 11,091,440 Pharmaceutical composition 2030 11,098,015 Methods of treatment 2030 11,298,349 Pharmaceutical composition essentially free of impurities 2032 12,128,039 Pharmaceutical composition essentially free of impurities 2032 COMETRIQ 7,579,473 Composition of matter 2026 8,877,776 Salt and polymorphic forms of cabozantinib 2030 9,717,720 Formulations of cabozantinib 2032 11,091,439 Crystalline salt forms of cabozantinib 2030 11,091,440 Pharmaceutical composition 2030 11,098,015 Methods of treatment 2030 11,298,349 Pharmaceutical composition essentially free of impurities 2032 12,128,039 Pharmaceutical composition essentially free of impurities 2032 Some of our cabozantinib patents have been subject to patent litigation with companies that filed ANDAs or 505(b)(2) applications seeking to market generic or other versions of CABOMETYX or cabozantinib, and some of our cabozantinib patents have been the subject of requests by others for inter partes review (IPR) before the Patent Trial and Appeal Board.
The study is divided into two parts: a dose-escalation phase, which was completed in 2018; and an expansion cohort phase, which completed enrollment in January 2022. Enrollment in the expansion phase of this study included 20 combination therapy tumor expansion cohorts in non-small cell lung cancer (NSCLC), mCRPC, RCC and various other tumor types. CONTACT trials.
The study is divided into two parts: a dose-escalation phase, which was completed in 2018; and an expansion cohort phase, which completed enrollment in January 2022. Enrollment in the expansion phase of this study included 20 combination therapy tumor expansion cohorts in non-small cell lung cancer (NSCLC), extra-pelvic metastatic castration-resistant prostate cancer (mCRPC), RCC and various other tumor types.
As of December 31, 2024, we have earned royalties of $671.9 million on net sales of cabozantinib by Ipsen since the inception of the collaboration agreement.
As of December 31, 2025, we have earned royalties of $837.9 million on net sales of cabozantinib by Ipsen since the inception of the collaboration agreement.
Changes to our obligations under these government pricing programs occur frequently and program requirements are often ambiguous, and we cannot predict 27 Table of C o n t e n t s how future guidance or rules would affect our profitability (including the potential for increases in our overall Medicaid rebate liability and the obligation to charge greatly reduced prices to covered entities).
Changes to our obligations under these government pricing programs occur frequently and program requirements are often ambiguous, and we cannot predict how future guidance or rules would affect our profitability (including the potential for increases in our overall Medicaid rebate liability and the obligation to charge greatly reduced prices to covered entities).
For the second primary endpoint of OS, the final analysis for CONTACT-02, which was presented during the GU Tumours Proffered Paper Session: GU Tumours at the European Society for Medical Oncology Congress in September 2024 (ESMO 2024), showed a trend that favored the combination of cabozantinib and atezolizumab but was not statistically significant.
For the second primary endpoint of OS, the final analysis for CONTACT-02, which was presented during the GU Tumours Proffered Paper Session at the European Society for Medical Oncology (ESMO) Congress in September 2024, demonstrated a trend favoring the combination of cabozantinib and atezolizumab; however, it was not statistically significant.
Under the agreement, Insilico granted us global rights to develop and commercialize XL309 in exchange for an upfront payment to Insilico of $80 million. Insilico is also eligible to receive future development, commercial, and sales-based milestone payments, as well as tiered royalties on net sales.
In September 2023, we entered into an exclusive global license agreement with Insilico. Under the agreement, Insilico granted us global rights to develop and commercialize XL309 in exchange for an upfront payment to Insilico of $80 million. Insilico is also eligible to receive future development, commercial, and sales-based milestone payments, as well as tiered royalties on net sales.
As of the date of this Annual Report on Form 10-K, CMS has informed us that we have qualified for the small biotech exception with respect to our cabozantinib franchise products through 2027. We intend to apply to CMS to maintain the small biotech exception each year through 2030.
As of the date of this Annual Report on Form 10-K, we have qualified for the small biotech exception with respect to our cabozantinib franchise products through 2027. We intend to apply to CMS to maintain our small biotech exception and price floor each year through 2030.
Specifically with respect to CABOMETYX, we entered into agreements with secondary contract manufacturing organizations to produce additional commercial supplies of CABOMETYX tablets and cabozantinib drug substance, which bolsters our commercial supply chain and serves to mitigate the risk of supply chain interruptions or other failures.
Specifically with respect to CABOMETYX, we entered into agreements with secondary contract manufacturing organizations to produce additional commercial supplies of CABOMETYX tablets and cabozantinib drug substance, bolstering our supply chain robustness in order to mitigate the risk of supply chain interruptions or other failures.
Separately, in November 2023, CMS released final guidance on another program, the Medicare Part D Manufacturer Discount Program (Part D Discount Program), which will require manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
Separately, in December 2024, CMS released final guidance on another program, the Medicare Part D Manufacturer Discount Program (Part D Discount Program), which requires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
For instance, in August 2022, former President Biden signed the Inflation Reduction Act of 2022 (IRA), which introduced substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D (the Medicare Drug Price Negotiation Program).
The Inflation Reduction Act of 2022 (IRA) introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D (the Medicare Drug Price Negotiation Program).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor instance, in August 2022, former President Biden signed the IRA, which among other things: enables CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program; subjects drug manufacturers to potential civil monetary penalties and a significant excise tax for offering a price that is not equal to or less than the government-imposed “maximum fair price” under the law; imposes Medicare rebates for certain Part B and Part D drugs where relevant pricing metrics associated with the products increase faster than inflation; and redesigns the funding and benefit structure of the Medicare Part D program, potentially increasing manufacturer liability while capping annual out-of-pocket drug expenses for Medicare beneficiaries.
Biggest changeSuch proposals and actions include: • use of mandated discounts, rebates, restrictive formularies, or other reference-based price controls, such as most favored nation (MFN) or international reference pricing, direct-to-consumer sales of prescription drugs, as well as price transparency reporting obligations; • restrictions on Medicaid funding; • efforts to reevaluate, reduce or limit the price patients pay for pharmaceutical products; • implementation of additional data collection and transparency reporting regarding drug pricing, rebates, fees and other remuneration provided by drug manufacturers; • tariffs on imported pharmaceuticals, or their components; • revisions to rules associated with the calculation of average manufacturer price and average sales price; best price and rebate liability (including broadening the circumstances under which products are subject to rebates and recent changes CMS made to the calculation of average sales price for the Medicare Part B program regarding the treatment of fees as “bona fide service fees” and for bundled sales, which CMS could seek to implement in the Medicaid Drug Rebate Program, and which in turn could impact our rebate liability) for the Medicaid Drug Rebate Program, along with CMS’ stated objective to consider potential future rulemaking that if implemented, could significantly increase manufacturer rebate liability; and • reevaluation of safe harbors under the federal Anti-Kickback Statute (AKS). 37 Table of Contents The IRA, which, among other things: enables CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program; subjects drug manufacturers to potential civil monetary penalties and a significant excise tax for offering a price that is not equal to or less than the government-imposed MFP under the law; imposes Medicare rebates for certain Part B and Part D drugs where relevant pricing metrics associated with the products increase faster than inflation; and redesigns the funding and benefit structure of the Medicare Part D program, potentially increasing manufacturer liability while capping annual out-of-pocket drug expenses for Medicare beneficiaries.
These events may include: • lack of acceptable efficacy or a tolerable safety profile; • being placed on clinical hold by the FDA due to safety or effectiveness concerns; • negative or inconclusive clinical trial results that require us to conduct further testing or to abandon projects; • discovery or commercialization by our competitors of other compounds or therapies that demonstrate potentially superior safety or efficacy profiles as compared to cabozantinib, zanzalintinib or our other product candidates; • our inability to identify and maintain a sufficient number of clinical trial sites; • lower-than-anticipated patient registration or enrollment in our clinical testing; • additional complexities posed by clinical trials evaluating cabozantinib, zanzalintinib or our other product candidates in combination with other therapies, including extended timelines to provide for collaboration on clinical development planning, the failure by our collaboration partners to provide us with an adequate and timely supply of product that complies with the applicable quality and regulatory requirements for a combination trial; • reduced staffing or shortages in laboratory supplies and other resources necessary to complete the trials; • replacement of staff at the FDA’s OCE that changes OCE’s view of the acceptability of the design, conduct, or data produced by our clinical trials; • failure of our third-party contract research organizations or investigators to satisfy their contractual obligations, including deviating from any trial protocols or failing to adhere to appropriate recordkeeping or data integrity requirements; and • withholding of authorization from regulators or institutional review boards to commence or conduct clinical trials or delays, variations, suspensions or terminations of clinical research for various reasons, including noncompliance with regulatory requirements or a determination by these regulators and institutional review boards that participating patients are being exposed to unacceptable health risks.
These events may include: • lack of acceptable efficacy or a tolerable safety profile; • being placed on clinical hold by the FDA due to safety or effectiveness concerns; • negative or inconclusive clinical trial results that require us to conduct further testing or to abandon projects; • discovery or commercialization by our competitors of other compounds or therapies that demonstrate potentially superior safety or efficacy profiles as compared to cabozantinib, zanzalintinib or our other product candidates; • our inability to identify and maintain a sufficient number of clinical trial sites; • lower-than-anticipated patient registration or enrollment in our clinical testing; • additional complexities posed by clinical trials evaluating cabozantinib, zanzalintinib or our other product candidates in combination with other therapies, including extended timelines to provide for collaboration on clinical development planning, the failure by our collaboration partners to provide us with an adequate and timely supply of product that complies with the applicable quality and regulatory requirements for a combination trial; • reduced staffing or shortages in laboratory supplies and other resources necessary to complete clinical trials; • replacement of staff at the FDA’s OCE that changes OCE’s view of the acceptability of the design, conduct, or data produced by our clinical trials; • failure of our third-party contract research organizations or investigators to satisfy their contractual obligations, including deviating from any trial protocols or failing to adhere to appropriate recordkeeping or data integrity requirements; and • withholding of authorization from regulators or institutional review boards to commence or conduct clinical trials or delays, variations, suspensions or terminations of clinical research for various reasons, including noncompliance with regulatory requirements or a determination by these regulators and institutional review boards that participating patients are being exposed to unacceptable health risks.
Even if the FDA or a comparable authority in another jurisdiction grants accelerated approval for cabozantinib in one or more new indications or for one of our other product candidates, including zanzalintinib, such accelerated approval may be limited, imposing significant restrictions on the indicated uses, conditions for use, labeling, distribution, and/or production of the product and would impose requirements for post-marketing studies, including additional research and clinical trials, all of which may result in significant expense and limit our and our collaboration partners’ ability to commercialize cabozantinib, zanzalintinib or our other product candidates in any new indications.
Even if the FDA or a comparable authority in another jurisdiction grants accelerated approval for cabozantinib in one or more new indications or for zanzalintinib or one of our other product candidates, such accelerated approval may be limited, imposing significant restrictions on the indicated uses, conditions for use, labeling, distribution, and/or production of the product and would impose requirements for post-marketing studies, including additional research and clinical trials, all of which may result in significant expense and limit our and our collaboration partners’ ability to commercialize cabozantinib, zanzalintinib or our other product candidates in any new indications.
There has also been increased scrutiny surrounding the disclosures of payments made to medical researchers from companies in the pharmaceutical industry, and it is possible that the academic and other institutions that employ these medical researchers may prevent us from engaging them as scientific advisors and contractors or otherwise limit our access to these experts, or that the scientific advisors themselves may now be more reluctant to work with industry partners.
There has also been scrutiny surrounding the disclosures of payments made to medical researchers from companies in the pharmaceutical industry, and it is possible that the academic and other institutions that employ these medical researchers may prevent us from engaging them as scientific advisors and contractors or otherwise limit our access to these experts, or that the scientific advisors themselves may now be more reluctant to work with industry partners.
For example, the Ensuring Innovation Act, enacted in April 2021, amended the FDA’s statutory authority for granting NCE exclusivity to reflect the agency’s existing regulations and longstanding interpretation that award NCE exclusivity based on a drug’s active moiety, as opposed to its active ingredient, which is intended to limit the applicability of NCE exclusivity, thereby potentially facilitating generic competition.
For example, the Ensuring Innovation Act, enacted in April 2021, amended the FDA’s statutory authority for granting NCE exclusivity to reflect the FDA’s existing regulations and longstanding interpretation that award NCE exclusivity based on a drug’s active moiety, as opposed to its active ingredient, which is intended to limit the applicability of NCE exclusivity, thereby potentially facilitating generic competition.
Should our compliance controls prove ineffective at preventing or mitigating the risk and impact of improper business conduct or inaccurate reporting, we could be subject to enforcement of the following, including, without limitation: • the federal AKS; • federal Civil Monetary Penalties law, including the beneficiary inducement provisions; • the Eliminating Kickbacks in Recovery Act; • the FDCA and its implementing regulations; • federal civil and criminal false claims laws, including the civil False Claims Act, and the Civil Monetary Penalties Law; • federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the HIPAA and its implementing regulation, as amended; • state law equivalents of each of the above federal laws; • state laws concerning contract pharmacy arrangements and related obligations of drug manufacturers; • state and local laws and regulations that require drug manufacturers to file reports relating to marketing activities, payments and other remuneration and items of value provided to healthcare professionals and entities; • state and federal pharmaceutical price and price reporting laws and regulations; • European countries’ national laws mandating public disclosure of transfers of value to healthcare professionals, healthcare organizations and other entities active in the healthcare sector, as well as requirements for prior review and/or approval of agreements with healthcare professionals; and • laws and regulations in effect in foreign jurisdictions where drug manufacturers, or third party entities operating on behalf of drug manufacturers (including clinical research organizations), are conducting clinical trial activities.
Should our compliance controls prove ineffective at preventing or mitigating the risk and impact of improper business conduct or inaccurate reporting, we could be subject to enforcement of the following, including, without limitation: • the federal AKS; • federal Civil Monetary Penalties law, including the beneficiary inducement provisions; • the Eliminating Kickbacks in Recovery Act; • the FDCA and its implementing regulations; • federal civil and criminal false claims laws, including the civil False Claims Act, and the Civil Monetary Penalties Law; • federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the HIPAA and its implementing regulation, as amended; • state law equivalents of each of the above federal laws; • state laws concerning contract pharmacy arrangements and related obligations of drug manufacturers; • state and local laws and regulations that require drug manufacturers to file reports relating to marketing activities, payments and other remuneration and items of value provided to healthcare professionals and entities; • state and federal pharmaceutical price and price reporting laws and regulations, including the provisions enacted through the IRA; • European countries’ national laws mandating public disclosure of transfers of value to healthcare professionals, healthcare organizations and other entities active in the healthcare sector, as well as requirements for prior review and/or approval of agreements with healthcare professionals; and • laws and regulations in effect in foreign jurisdictions where drug manufacturers, or third party entities operating on behalf of drug manufacturers (including clinical research organizations), are conducting clinical trial activities.
We do not operate our own manufacturing or distribution facilities for CMC development activities, preclinical, clinical or commercial production and distribution for our current products and new product candidates. Instead, we mostly rely on various third-party contract manufacturing organizations to conduct these operations on our behalf in accordance with cGMP.
We do not operate our own manufacturing or distribution facilities for CMC development activities, clinical or commercial production and distribution for our current products and new product candidates. Instead, we mostly rely on various third-party contract manufacturing organizations to conduct these operations on our behalf in accordance with cGMP.
There are also equivalent procedures in the EU permitting authorization of generic versions of medicinal products authorized in the EU once related data and market exclusivity periods have expired. The U.S. federal government has also taken numerous legislative and regulatory actions to expedite the development and approval of generic drugs.
There are also equivalent procedures in the EEA permitting authorization of generic versions of medicinal products authorized in the EU once related data and market exclusivity periods have expired. The U.S. federal government has also taken numerous legislative and regulatory actions to expedite the development and approval of generic drugs.
Depending on the outcome of the ongoing litigation or any specific proceedings involving us, we may be required to modify or suspend our 340B Program Integrity Initiative.
Depending on the outcome of the ongoing litigation or any specific proceedings involving us, however, we may be required to modify or suspend our 340B Program Integrity Initiative.
If our operations are found, or even alleged, to be in violation of the laws described above or other governmental regulations that apply to us, we, or our officers or employees, may be subject to significant penalties, including administrative civil and criminal penalties, damages, fines, regulatory penalties, the curtailment or restructuring of our operations, exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, imprisonment, reputational harm, additional reporting requirements and oversight through a Corporate Integrity Agreement or other monitoring agreement, any of which would adversely affect our ability to sell our products and operate our business and also adversely affect our financial results.
If our operations are found, or even alleged, to be in violation of the laws described above or other governmental regulations that apply to us, we, or our officers or employees, may be subject to significant penalties, including administrative civil and criminal penalties, damages, fines, regulatory penalties, the curtailment or restructuring of our operations, exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, imprisonment, reputational harm, additional reporting requirements and oversight through a Corporate Integrity Agreement or other monitoring agreement, any of which would 49 Table of Contents adversely affect our ability to sell our products and operate our business and also adversely affect our financial results.
Moreover, the Russian Federation has and may further limit protections on patents originating from certain countries (including the U.S.) in response to sanctions relating to the ongoing Russia-Ukraine war, and in general, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop infringement.
Moreover, the Russian Federation has and may further limit protections on patents originating from certain countries (including the U.S.) in response to sanctions relating to the ongoing Russia-Ukraine conflict, and in general, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop infringement.
The FDA can also approve a 505(b)(2) NDA that relies in part on the agency’s findings of safety and/or effectiveness for a previously approved drug, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use.
The FDA can also approve a 505(b)(2) NDA that relies in part on the FDA’s findings of safety and/or effectiveness for a previously approved drug, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the third parties must be replaced or if the quality or accuracy of the data they generate or provide is compromised due to their failure to adhere to our clinical trial or data security protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for or commercialize cabozantinib beyond currently approved indications or obtain regulatory approval for zanzalintinib or our other product candidates.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the third parties must be replaced or if the quality or accuracy of 47 Table of Contents the data they generate or provide is compromised due to their failure to adhere to our clinical trial or data security protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for or commercialize cabozantinib beyond currently approved indications or obtain regulatory approval for zanzalintinib or our other product candidates.
We have since received confirmation that the HRSA will assign an ADR panel to the claim, and responded to the complaint in October 2024. At this time it is unclear what, if any, liabilities we might incur as a party to this ADR proceeding.
We have since received confirmation that the HRSA will assign an ADR panel to the claim and responded to the complaint in October 2024. At this time, it remains unclear what, if any, liabilities we might incur as a party to this ADR proceeding.
We have established clinical and commercial collaborations with leading biopharmaceutical companies for the development and commercialization of our products, and our dependence on these collaboration partners subjects us to a number of risks, including, but not limited to: • our collaboration partners’ decision to terminate our collaboration, or their failure to comply with the terms of our collaboration agreements and related ancillary agreements, either intentionally or as a result of negligence or other insufficient performance; • our inability to control the amount and timing of resources that our collaboration partners devote to the development or commercialization of our products; • the possibility that our collaboration partners may stop or delay clinical trials, fail to supply us on a timely basis with product required for a combination trial, or deliver product that fails to meet appropriate quality and regulatory standards; 45 Table of C o n t e n t s • disputes that may arise between us and our collaboration partners that result in the delay or termination of the development or commercialization of our products or product candidates, or that diminish or delay receipt of the economic benefits we are entitled to receive under the collaboration, or that result in costly litigation or arbitration; • the possibility that our collaboration partners may experience financial difficulties that prevent them from fulfilling their obligations under our agreements; • our collaboration partners’ inability to obtain regulatory approvals in a timely manner, or at all; • our collaboration partners’ failure to comply with legal and regulatory requirements relevant to the authorization, marketing, distribution and supply of our marketed products in the territories outside the U.S. where they are approved; and • our collaboration partners’ failure to properly maintain or defend our intellectual property rights or their use of our intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation.
We have established clinical and commercial collaborations with leading biopharmaceutical companies for the development and commercialization of our products, and our dependence on these collaboration partners subjects us to a number of risks, including, but not limited to: • our collaboration partners’ decision to terminate our collaboration, or their failure to comply with the terms of our collaboration agreements and related ancillary agreements, either intentionally or as a result of negligence or other insufficient performance; • our inability to control the amount and timing of resources that our collaboration partners devote to the development or commercialization of our products; • the possibility that our collaboration partners may stop or delay clinical trials, fail to supply us on a timely basis with product required for a combination trial, or deliver product that fails to meet appropriate quality and regulatory standards; • disputes that may arise between us and our collaboration partners that result in the delay or termination of the development or commercialization of our products or product candidates, or that diminish or delay receipt of the economic benefits we are entitled to receive under the collaboration, or that result in costly litigation or arbitration; • the possibility that our collaboration partners may experience financial difficulties that prevent them from fulfilling their obligations under our agreements; • our collaboration partners’ inability to obtain regulatory approvals in a timely manner, or at all; 46 Table of Contents • our collaboration partners’ failure to comply with legal and regulatory requirements relevant to the authorization, marketing, distribution and supply of our marketed products in the territories outside the U.S. where they are approved; and • our collaboration partners’ failure to properly maintain or defend our intellectual property rights or their use of our intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation.
Many of our competitors have greater capital resources, larger research and development staff and facilities, deeper organizational regulatory experience and more extensive product manufacturing and commercial capabilities than we do, which may afford them a competitive advantage.
Some of our competitors have greater capital resources, larger research and development staff and facilities, deeper organizational regulatory experience and more extensive product manufacturing and commercial capabilities than we do, which may afford them a competitive advantage.
The IRA also contains the limited small biotech exception, which applies on a drug-specific basis. Qualifying drugs may be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential maximum fair price in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year.
The IRA also contains the limited small biotech exception, which applies on a drug-specific basis. Qualifying drugs may be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential MFP in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year.
We are competing for talent with numerous commercial- and precommercial-stage, oncology-focused biopharmaceutical companies seeking to build out and maintain their commercial organizations, as well as larger biopharmaceutical organizations that have extensive, well-funded and more experienced sales and marketing operations, and we may be unable to maintain or adequately scale our commercial organization as a result of such competition.
We are competing for talent with numerous commercial- and precommercial-stage, oncology-focused biopharmaceutical companies seeking to build out and maintain their commercial organizations, as well as larger biopharmaceutical organizations that have extensive, well-funded and more experienced sales and marketing operations, and we may be unable to maintain or adequately scale our commercial organization because of such competition.
Our issued patents have been and may in the future be challenged by third parties as invalid or unenforceable under U.S. or foreign laws, or they may be infringed by third parties, and we are from time to time involved in the defense and enforcement of our patents or other intellectual property rights in a court of law, U.S.
Our issued patents have been and may in the future be challenged by third parties as invalid or unenforceable under U.S. or foreign laws, or they may be infringed by third 51 Table of Contents parties, and we are from time to time involved in the defense and enforcement of our patents or other intellectual property rights in a court of law, U.S.
These and other factors could have a material adverse impact on the market price of our common stock. In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have historically experienced significant volatility that has often been unrelated or disproportionate to the operating performance of particular companies.
These and other factors could have a material adverse impact on the market price of our common stock. In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have historically experienced and may continue to experience significant volatility that has often been unrelated or disproportionate to the operating performance of particular companies.
If our third-party contract manufacturers, distributors and suppliers do not continue to supply us with our products or product candidates in a timely fashion and in compliance with applicable quality and regulatory requirements, or if they otherwise fail or refuse to comply with their obligations to us under our manufacturing, distribution and supply arrangements, we may not have adequate remedies for any breach.
If our third-party contract manufacturers, distributors and suppliers do not continue to supply us with our products or product candidates in a timely fashion and in compliance with applicable quality 48 Table of Contents and regulatory requirements, or if they otherwise fail or refuse to comply with their obligations to us under our manufacturing, distribution and supply arrangements, we may not have adequate remedies for any breach.
The trading price of our common stock has been highly volatile, and it may remain highly volatile or fluctuate substantially due to factors such as the following, many of which we cannot control: • the announcement of FDA or other regulatory approval or non-approval, or delays in the FDA or other regulatory review process with respect to cabozantinib, zanzalintinib or our other product candidates, our collaboration partners’ product candidates being developed in combination with either cabozantinib, zanzalintinib or our other product candidates, or our competitors’ product candidates; • the commercial performance of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products, including royalties paid under our collaboration and license agreements; • adverse or inconclusive results or announcements related to our or our collaboration partners’ clinical trials or delays in those clinical trials; • the timing of achievement of our clinical, regulatory, partnering, commercial and other milestones for the cabozantinib franchise, zanzalintinib or any of our other product candidates or programs; • our ability to make future investments in the expansion of our pipeline through drug discovery, including future research collaborations, in-licensing arrangements and other strategic transactions; • our ability to obtain the materials and services, including an adequate product supply for any approved drug product, from our third-party vendors or do so at acceptable prices; • the timing and amount of expenses incurred for clinical development and manufacturing of cabozantinib, zanzalintinib and our other product candidates; • actions taken by regulatory agencies, both in the U.S. and abroad, with respect to cabozantinib or our clinical trials for zanzalintinib or our other product candidates; • unanticipated regulatory actions taken by the FDA as a result of changing FDA standards and practices concerning the review of product candidates, including approvals at earlier stages of clinical development or with lesser developed data sets and expedited reviews; • the announcement of new products or clinical trial data by our competitors; • the announcement of regulatory applications, such as MSN’s, Teva’s, Cipla’s and Sun’s respective ANDAs, seeking approval of generic versions of our marketed products; • quarterly variations in our or our competitors’ results of operations; • changes in our relationships with our collaboration partners, including the termination or modification of our agreements, or other events or conflicts that may affect our collaboration partners’ timing and willingness to develop, or if approved, commercialize our products and product candidates out-licensed to them; • the announcement of an in-licensed product candidate or strategic acquisition; • litigation, including intellectual property infringement and product liability lawsuits, involving us; • changes in earnings estimates or recommendations by securities analysts, or financial guidance from our management team, and any failure to achieve the operating results projected by securities analysts or by our management team; 53 Table of C o n t e n t s • the entry into new financing arrangements; • developments in the biopharmaceutical industry; • sales of large blocks of our common stock or sales of our common stock by our executive officers, directors and significant stockholders; • the announcement of a repurchase of our common stock; • additions and departures of key personnel or board members; • the disposition of any of our technologies or compounds; and • general market, macroeconomic and political conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
The trading price of our common stock has been highly volatile, and it may remain highly volatile or fluctuate substantially due to factors such as the following, many of which we cannot control: • the announcement of FDA or other regulatory approval or non-approval, or delays in the FDA or other regulatory review process with respect to cabozantinib, zanzalintinib or our other product candidates, our collaboration partners’ product candidates being developed in combination with either cabozantinib, zanzalintinib or our other product candidates, or our competitors’ product candidates; • the commercial performance of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products, including royalties paid under our collaboration and license agreements; • adverse or inconclusive results or announcements related to our or our collaboration partners’ clinical trials or delays in those clinical trials; • the timing of achievement of our clinical, regulatory, partnering, commercial and other milestones for the cabozantinib franchise, zanzalintinib or any of our other product candidates or programs; • our ability to make future investments in the expansion of our pipeline through drug discovery, including future research collaborations, in-licensing arrangements and other strategic transactions; • our ability to obtain the materials and services, including an adequate product supply for any approved drug product, from our third-party vendors or do so at acceptable prices; • the timing and amount of expenses incurred for clinical development and manufacturing of cabozantinib, zanzalintinib and our other product candidates; • actions taken by regulatory agencies, both in the U.S. and abroad, with respect to cabozantinib or our clinical trials for zanzalintinib or our other product candidates; • unanticipated regulatory actions taken by the FDA as a result of changing FDA standards and practices concerning the review of product candidates, including approvals at earlier stages of clinical development or with lesser developed data sets and expedited reviews; • the announcement of new products or clinical trial data by our competitors; • the announcement of regulatory applications, such as MSN’s, Teva’s, Cipla’s, Biocon’s and Sun’s respective ANDAs, seeking approval of generic versions of our marketed products, and Azurity’s and Handa’s 505(b)(2) NDAs seeking approval of a different solid formulation or salt of cabozantinib; • quarterly variations in our or our competitors’ results of operations; • changes in our relationships with our collaboration partners, including the termination or modification of our agreements, or other events or conflicts that may affect our collaboration partners’ timing and willingness to develop, or if approved, commercialize our products and product candidates out-licensed to them; • the announcement of an in-licensed product candidate or strategic acquisition; • litigation, including intellectual property infringement and product liability lawsuits, involving us; • changes in earnings estimates or recommendations by securities analysts, or financial guidance from our management team, and any failure to achieve the operating results projected by securities analysts or by our management team; • the entry into new financing arrangements; 54 Table of Contents • developments in the biopharmaceutical industry; • sales of large blocks of our common stock or sales of our common stock by our executive officers, directors and significant stockholders; • the announcement of a repurchase of our common stock; • additions and departures of key personnel or board members; • the disposition of any of our technologies or compounds; and • general market, macroeconomic and political conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
Our dependence on our relationships with these research and in-licensing partners subjects us to numerous risks, including, but not limited to: • our research and in-licensing partners’ decision to terminate our relationship, or their failure to comply with the terms of our agreements, either intentionally or as a result of negligent performance; • disputes that may arise between us and our research and in-licensing partners that result in the delay or termination of research and development activities with respect to any in-licensed assets or supporting technology platforms; • the possibility that our research and in-licensing partners may experience financial difficulties that prevent them from fulfilling their obligations under our agreements; • our research and in-licensing partners’ failure to retain essential staff, which is crucial for fulfilling their obligations under our agreements; • the possibility that our research and in-licensing partners’ technology may be superseded or otherwise no longer be competitive; • the possibility that our research and in-licensing partners may be acquired, and that any acquiring entity may not honor our partners’ research commitments or otherwise fail to continue fulfilling their obligations under our agreements; • our research and in-licensing partners’ failure to properly maintain or defend their intellectual property rights or their use of third-party intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our license to develop these assets or utilize technology platforms; • laws, regulations or practices imposed by countries or regions outside the U.S. that could impact or inhibit scientific research or the development of healthcare products by foreign competitors or otherwise disadvantage healthcare products made by foreign competitors, as well as general political or economic instability in those countries, any of which could complicate, interfere with or impede our relationships with our ex-U.S. research, development and in-licensing partners; and • our research and in-licensing partners’ failure to comply with applicable healthcare laws, as well as established laws and regulations related to Good Practice guidelines.
Our dependence on our relationships with these research and in-licensing partners subjects us to numerous risks, including, but not limited to: • our research and in-licensing partners’ decision to terminate our relationship, or their failure to comply with the terms of our agreements, either intentionally or as a result of negligent performance; • disputes that may arise between us and our research and in-licensing partners that result in the delay or termination of research and development activities with respect to any in-licensed assets or supporting technology platforms; • the possibility that our research and in-licensing partners may experience financial difficulties that prevent them from fulfilling their obligations under our agreements; • our research and in-licensing partners’ failure to retain essential staff, which is crucial for fulfilling their obligations under our agreements; • the possibility that our research and in-licensing partners’ technology may be superseded or otherwise no longer be competitive; • the possibility that our research and in-licensing partners may be acquired, and that any acquiring entity may not honor our partners’ research commitments or otherwise fail to continue fulfilling their obligations under our agreements; • our research and in-licensing partners’ failure to properly maintain or defend their intellectual property rights or their use of third-party intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our license to develop these assets or utilize technology platforms; • laws, regulations or practices imposed by countries or regions outside the U.S. that could impact or inhibit scientific research or the development of healthcare products by foreign competitors or otherwise disadvantage healthcare products made by foreign competitors, as well as general political or economic instability or downturn in those countries, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers, restrictions, or threats of such actions and the related uncertainty thereof, any of which could complicate, interfere with or impede our relationships with our ex-U.S. research, development and in-licensing partners; and • our research and in-licensing partners’ failure to comply with applicable healthcare laws, as well as established laws and regulations related to Good Practice guidelines.
Patent and Trademark Office IPR review or reexamination proceeding, foreign opposition proceeding or related legal and administrative proceeding in the U.S. and elsewhere. The costs of defending our patents or enforcing our proprietary rights in post-issuance administrative proceedings and litigation can be substantial and the outcome can be uncertain.
Patent and Trademark Office inter partes review or reexamination proceeding, foreign opposition proceeding or related legal and administrative proceeding in the U.S. and elsewhere. The costs of defending our patents or enforcing our proprietary rights in post-issuance administrative proceedings and litigation can be substantial and the outcome can be uncertain.
Should MSN, Teva, Cipla, Sun or any other third parties receive FDA approval of an ANDA or a 505(b)(2) NDA with respect to cabozantinib, it is possible that such company or companies could introduce generic versions of our marketed products before our patents expire if they do not infringe our patents or if it is determined that our patents are invalid or unenforceable, and the resulting generic competition could have a material adverse impact on our business, financial condition and results of operations.
However, should MSN, Teva, Cipla, Sun, Biocon, Azurity, Handa, or any other third parties receive FDA approval of an ANDA or a 505(b)(2) NDA with respect to cabozantinib, it is possible that such company or companies could introduce generic versions or otherwise competitor versions of our marketed products before our patents expire if they do not infringe our patents or if it is determined that our patents are invalid or unenforceable, and the resulting generic competition could have a material adverse impact on our business, financial condition and results of operations.
The introduction of or changes in tariffs or trade barriers, such as the enactment of tariffs on goods imported into the United States, including, but not limited to, the proposed tariffs on goods imported from China, Mexico and Canada (including raw materials and components used in our manufacturing processes), could also increase the costs of our finished drug product.
Significant changes in tariffs or other trade barriers, such as the enactment of tariffs on goods imported into the United States, including, but not limited to, tariffs on goods imported from China, Mexico and Canada (including raw materials and components used in our manufacturing processes) or the introduction of additional tariffs or other trade barriers, could also increase the costs of our finished drug product.
Our ability to increase or maintain revenues from sales of CABOMETYX for its approved indications is, and if approved for additional indications will be, highly dependent upon the extent of market acceptance of CABOMETYX among physicians, patients, foreign and U.S. government healthcare payers such as Medicare and Medicaid, commercial healthcare plans and the medical community.
Our ability to increase or maintain revenues from sales of CABOMETYX for its approved indications is highly dependent upon the extent of market acceptance of CABOMETYX among physicians, patients, foreign and U.S. government healthcare payers such as Medicare and Medicaid, commercial healthcare plans and the medical community.
Our efforts to accomplish and report on these topics subjects us to risks, any of which could have a material adverse impact on our business, including specifically market perception and the market price of our common stock.
Our efforts to accomplish and report on these topics subjects us to risks, any of which 55 Table of Contents could have a material adverse impact on our business, including specifically market perception and the market price of our common stock.
Artificial intelligence (AI) software is increasingly being used in the biopharmaceutical industry, including, in limited instances, by us. The misuse of AI-based software could result in inadvertent access and use of confidential information (including personal and proprietary data) of our employees, clinical trial participants, or other third parties, leading to the loss of trade-secrets or other intellectual property.
AI software is increasingly being used in the biopharmaceutical industry, including, in limited instances, by us. The misuse of AI-based software could result in inadvertent disclosure and improper use of confidential information (including personal and proprietary data) of our employees, clinical trial participants, or other third parties, leading to the loss of trade-secrets or other intellectual property.
Our disclosures related to environmental, social and governance matters subjects us to risks, including risks to our market perception and stock price. The focus of governments, investors and other stakeholders on environmental, social and governance (ESG) practices and disclosures is constantly shifting and expectations in this area are evolving.
Our disclosures related to environmental, social and governance matters subjects us to risks, including risks to our market perception and stock price. The focus of governments, investors and other stakeholders on environmental, social and governance (ESG) practices and disclosures is constantly shifting and expectations in this area continue to evolve.
In December 2024, the Federal Circuit ruled that, to be listed in the Orange Book, a patent must claim the active ingredient of the drug product. If affirmed on appeal, this decision may limit the number of patents brand pharmaceutical companies may list in the Orange Book.
In December 2024, the Federal Circuit ruled that, to be listed in the Orange Book, a patent must claim the active ingredient of the drug product. This decision may limit the number of patents brand pharmaceutical companies may list in the Orange Book.
As our operations continue to grow in these areas, we are expanding internal CMC development laboratories to augment our external network focusing on our product candidates.
As our operations continue to grow in these areas, we are expanding internal CMC development laboratories to include preclinical, and continue to augment our external network focusing on our product candidates.
Should we or our hub providers receive a subpoena or other process, regardless of whether we are ultimately found to have complied with the regulations governing patient assistance and other product support programs, this type of government investigation could negatively impact our business practices, harm our reputation, divert the attention of management and increase our expenses.
Should we or our hub providers receive a subpoena or other process, regardless of whether we are ultimately found to have complied with the prevailing industry guidance and enforcement standards governing patient assistance and other product support programs, this type of government investigation could negatively impact our business practices, harm our reputation, divert the attention of management and increase our expenses.
If patents covering technologies required by our operations are issued to others, we may have to obtain licenses from third parties, which may not be available on commercially reasonable 51 Table of C o n t e n t s terms, or at all, and may require us to pay substantial royalties, grant a cross-license to some of our patents to another patent holder or redesign the formulation of a product candidate so that we do not infringe third-party patents, which may be impossible to accomplish or could require substantial time and expense.
If patents covering technologies required by our operations are issued to others, we may have to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, and may require us to pay substantial royalties, grant a cross-license to some of our patents to another patent holder or redesign the formulation of a product candidate so that we do not infringe third-party patents, which may 52 Table of Contents be impossible to accomplish or could require substantial time and expense.
In addition, there have been, and may in the future be, initiatives at both the federal and state level or legal challenges that could significantly modify the terms and scope of government-provided health insurance coverage, ranging from changes to or litigation opposing some or all of the provisions of the PPACA, to establishing a single-payer, national health insurance system, to more limited “buy-in” options to existing public health insurance programs, any of which could have a significant impact on the healthcare industry.
In addition, there have been, and may in the future be, initiatives at both the federal and state level or legal challenges that could significantly modify the terms and scope of government-provided health insurance coverage, ranging from changes to or litigation opposing some or all of the provisions of the Patient Protection and Affordable Care Act of 2010, as amended, to establishing a single-payer, national health insurance system, to more limited “buy-in” options to existing public health insurance programs, any of which could have a significant impact on the healthcare industry.
If enacted, we and any third parties we might engage may be unable to adapt to any changes implemented as a result of such measures, and we could face difficulties in maintaining or increasing profitability or otherwise experience a material adverse impact on our business, financial condition and results of operations.
If proposed changes are ultimately enacted, we and any third parties we might engage may be unable to adapt to any changes implemented because of such measures, and we could face difficulties in maintaining or increasing profitability or otherwise experience a material adverse impact on our business, financial condition and results of operations.
Although we reported net income of $521.3 million and $207.8 million for the fiscal years ended December 31, 2024 and 2023, respectively, we may not be able to maintain or increase profitability on a quarterly or annual basis, and we are unable to predict the extent of future profits or losses.
Although we reported net income of $782.6 million and $521.3 million for the fiscal years ended December 31, 2025 and 2024, respectively, we may not be able to maintain or increase profitability on a quarterly or annual basis, and we are unable to predict the extent of future profits or losses.
Risks Related to the Commercialization of Our Products Our ability to grow our company is dependent upon the commercial success of CABOMETYX in its approved indications and the continued clinical development, regulatory approval, clinical acceptance and commercial success of the cabozantinib franchise in additional indications.
Risks Related to the Commercialization of Our Marketed Products Our ability to grow our company is dependent upon the commercial success of CABOMETYX in its approved indications and, to a lesser degree, the continued clinical development, regulatory approval, clinical acceptance and commercial success of the cabozantinib franchise.
Additionally, cost-control initiatives, increasingly based on affordability and accessibility, as well as post-marketing assessments of the added value of CABOMETYX and COMETRIQ as compared to existing treatments, could influence the prices paid for and net revenues we realize from CABOMETYX and COMETRIQ, or the indications for which we are able to 40 Table of C o n t e n t s obtain reimbursement, which would result in lower license revenues to us.
Additionally, cost-control initiatives, increasingly based on affordability and accessibility, as well as post-marketing assessments of the added value of CABOMETYX and COMETRIQ as compared to existing treatments, could influence the prices paid for and net revenues we realize from CABOMETYX and COMETRIQ, or the indications for which we are able to obtain reimbursement, which would result in lower license revenues to us.
The ongoing Russia-Ukraine and Israel-Hamas conflicts have had modest impacts on our clinical development operations and may continue to have adverse impacts on the ability of clinical sites and enrolled patients to adhere to trial protocols for in-office clinical visits and other procedures, our ability to supply clinical sites with cabozantinib, zanzalintinib or other study drugs and to pay clinical sites and investigators for work performed, as well as our ability to collect data and conduct site monitoring visits, all of which could undermine the data quality for patients enrolled at these clinical sites.
The ongoing conflicts between Russia and Ukraine and in the Middle East and the political, economic and social instability in Venezuela have had modest impacts on our clinical development operations and may continue to have adverse impacts on the ability of clinical sites and enrolled patients to adhere to trial protocols for in-office clinical visits and other procedures, our ability to supply clinical sites with cabozantinib, zanzalintinib or other study drugs and to pay clinical sites and investigators for work performed, as well as our ability to collect data and conduct site monitoring visits, all of which could undermine the data quality for patients enrolled at these clinical sites.
The FDA has also been tightening the requirements for confirmatory studies for drugs approved via accelerated approval under additional authorities the Agency received in Section 3210 of the FDORA (incorporated in the 2023 Appropriations Act).
The FDA has also been tightening the requirements for confirmatory studies for drugs approved via accelerated approval under additional authorities the FDA received in Section 3210 of the FDORA (incorporated in Section 3222 of the 44 Table of Contents 2023 Appropriations Act).
Further, Section 3222 of the 2023 Appropriations Act requires the FDA to make therapeutic equivalence determinations for 505(b)(2) NDAs at the time of approval, or up to 180 days thereafter, if requested by the applicant.
Further, Section 3222 of the Consolidated Appropriations Act, 2023, enacted on December 29, 2022 (2023 Appropriations Act), requires the FDA to make therapeutic equivalence determinations for 505(b)(2) NDAs at the time of approval, or up to 180 days thereafter, if requested by the applicant.
For example, action by the new Trump Administration to limit federal agency budgets or personnel, may result in reductions to the FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.
For example, action by the current U.S. administration to further limit federal agency budgets or personnel, may result in reductions to the FDA’s budget, workforce, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.
The duration and the cost of clinical trials vary significantly due to a number of factors, including, but not limited to: the characteristics of the product candidate under investigation; the number of patients who ultimately participate in the clinical trial; the duration of patient follow-up; the number of clinical sites included in the trial; 43 Table of C o n t e n t s and the length of time required to enroll eligible patients.
The duration and the cost of clinical trials vary significantly due to a number of factors, including, but not limited to: the characteristics of the product candidate under investigation; the number of patients who ultimately participate in the clinical trial; the duration of patient follow-up; the number of clinical sites included in the trial; and the length of time required to enroll eligible patients.
CMS is also in the process of implementing the Medicare Prescription Payment Plan, under which Medicare Part D beneficiaries may opt to make their cost-sharing payments in capped monthly installments; CMS expects that this program will most likely benefit those beneficiaries with high cost-sharing early in their respective plan years.
In April 2025, CMS finalized regulations implementing the Medicare Prescription Payment Plan, under which Medicare Part D beneficiaries may opt to make their cost-sharing payments in capped monthly installments; CMS expects that this program will most likely benefit those beneficiaries with high cost-sharing early in their respective plan years.
Moreover, in September 2023, the FTC issued a policy statement, supported by the FDA, warning brand pharmaceutical companies that they could face legal action under the FTC Act if they improperly list patents in the Orange Book, and it subsequently initiated challenges against patents held by brand pharmaceutical companies and listed in the Orange Book 41 Table of C o n t e n t s under the FDA’s patent listing dispute process.
Moreover, in September 2023, the FTC issued a policy statement, supported by the FDA, warning brand pharmaceutical companies that they could face legal action under the FTC 41 Table of Contents Act if they improperly list patents in the Orange Book, and it subsequently initiated, and continues to initiate, challenges against patents held by brand pharmaceutical companies and listed in the Orange Book under the FDA’s patent listing dispute process.
Separately, in November 2023, CMS released final guidance on the Part D Discount Program, which will require manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
Separately, in December 2024, CMS released final guidance on the Part D Discount Program, which requires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
Clinical testing of cabozantinib for new indications, or of our other product candidates, such as zanzalintinib, is a lengthy, costly, complex and uncertain process that may ultimately fail to demonstrate sufficiently differentiated safety and efficacy data for those products to compete in our highly competitive market environment.
Clinical testing of our product candidates is a lengthy, costly, complex and uncertain process that may ultimately fail to demonstrate sufficiently differentiated safety and efficacy data for those products to compete in our highly competitive market environment.
Our third-party contract manufacturers may not be able to produce or deliver material on a timely basis or manufacture material with the required quality standards, or in the quantity required to meet our preclinical, clinical 47 Table of C o n t e n t s development and commercial needs and applicable regulatory requirements.
Our third-party contract manufacturers may not be able to produce or deliver material on a timely basis or manufacture material with the required quality standards, or in the quantity required to meet our preclinical, clinical development and commercial needs and applicable regulatory requirements.
T he Departments of Labor, Treasury, and Health and Human Services stated their intent to address the application of this policy to large group market and self-insured plans in future rulemaking.
The Departments of Labor, Treasury, and HHS stated their intent to address the application of this policy to large group market and self-insured plans in future rulemaking.
We anticipate that for the foreseeable future, our ability to maintain or meaningfully increase cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the highly competitive indications for which it is approved, and possibly for other indications for which cabozantinib is currently being evaluated in potentially label-enabling clinical trials, if warranted by the data generated from these trials.
We anticipate that for the foreseeable future, our ability to maintain or meaningfully increase cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in 35 Table of Contents combination with other therapies, as a treatment for the highly competitive indications for which it is approved, and possibly for other indications for which cabozantinib is currently being or will be evaluated in clinical trials.
Moreover, our continued 52 Table of C o n t e n t s compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our research, development and production efforts. We face potential product liability exposure far in excess of our limited insurance coverage.
Moreover, our continued compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our research, development and production efforts. 53 Table of Contents We face potential product liability exposure far in excess of our limited insurance coverage.
We may also be unable to in-license or acquire additional investigational oncology assets and technologies on acceptable terms that would allow us to realize an appropriate return on our investment.
Furthermore, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We may also be unable to in-license or acquire additional investigational oncology assets and technologies on acceptable terms that would allow us to realize an appropriate return on our investment.
As we received notice from CMS that we qualify for the "specified small manufacturer” designation, we are eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program from 2025 to 2031.
As we received notice from CMS that we qualify for the "specified small manufacturer” designation, we are eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program from 2025 to 2031. In November 2025, CMS issued a proposed rule on the Part D Discount Program that largely codifies the final guidance.
Should one or all of our collaboration partners decline to support future planned clinical trials, we will be entirely responsible for financing the further development of the cabozantinib franchise, zanzalintinib or our other product candidates and, as a result, the burden of clinical trial expenses we incur associated with our business plans may be materially greater than currently anticipated, which could have a material adverse impact on our business, financial condition and results of operations.
Should one or all of our collaboration partners decline to support future planned clinical trials, we will be entirely responsible for financing the further development of the cabozantinib franchise, zanzalintinib or our other product candidates and, as a result, the burden of clinical trial expenses we incur associated with our business plans may be materially greater than currently anticipated, which could have a material adverse impact on our business, financial condition and results of operations. 43 Table of Contents We may not be able to pursue the further development of the cabozantinib franchise, zanzalintinib or our other product candidates or meet current or future requirements of the FDA or regulatory authorities in other jurisdictions in accordance with our stated timelines or at all.
At the state level, legislatures and regulatory agencies have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on pricing or reimbursement at the state government level, limitations on discounts to patients, advance notices of price increases, marketing cost disclosure and transparency measures, and, in some cases, policies to encourage importation from other countries (subject to federal approval) and bulk purchasing.
In addition to such drug pricing and transparency matters, other state legislative and regulatory initiatives include proposals designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on pricing or reimbursement at the state government level, limitations on discounts to patients, advance notices of price increases, marketing cost disclosure and transparency measures, and, in some cases, policies to encourage importation from other countries (subject to federal approval) and bulk purchasing.
In November 2023, we received from several covered entities a 340B Program Administrative Dispute Resolution (ADR) petition, seeking to invoke an administrative adjudication process overseen by the HHS’ Health Resources and Services Administration (HRSA). The petitioners contend that the Company’s 340B Program Integrity Initiative caused them to be overcharged for CABOMETYX and COMETRIQ.
Several manufacturers are challenging the HHS’ position in litigation. Relatedly, in November 2023, we received from several covered entities a 340B Program ADR petition seeking to invoke an administrative adjudication process overseen by the HRSA. The petitioners contend that our 340B Program Integrity Initiative caused them to be overcharged for CABOMETYX and COMETRIQ.
If revenue from CABOMETYX decreases or remains flat, or if we are unable to expand the 36 Table of C o n t e n t s number of labeled indications for which CABOMETYX is approved, or if we or our collaboration partners fail to achieve anticipated product royalties and collaboration milestones, we may need to reduce our operating expenses, access other sources of cash or otherwise modify our business plans, which could have a material adverse impact on our business, financial condition and results of operations.
If revenue from CABOMETYX decreases or remains flat, or if we or our collaboration partners fail to achieve anticipated product royalties and collaboration milestones, we may need to reduce our operating expenses, access other sources of cash or otherwise modify our business plans, which could have a material adverse impact on our business, financial condition and results of operations.
Although such attempts to reform the U.S. healthcare system have not significantly impacted our business to date, it is possible that additional legislative, executive and judicial activities in the future could have a material adverse impact on our business, financial condition and results of operations.
Although such attempts to reform the U.S. healthcare system have not significantly impacted our business to date, it is possible that additional legislative, executive and judicial activities in the future could have a material adverse impact on our business, financial condition and results of operations. 38 Table of Contents In addition, the current U.S. administration has indicated that it plans to pursue additional policies aimed at lowering prescription drug costs.
Regardless of the regulatory approach, the introduction of a generic version of cabozantinib would likely decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations.
We expect that generic cabozantinib products would be offered at a significantly lower price compared to our marketed cabozantinib products. Regardless of the regulatory approach, the introduction of a generic version of cabozantinib would likely decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations.
However, the in-licensing and acquisition of investigational oncology assets and technologies is a highly competitive area, and many other companies are pursuing the same or similar investigational oncology assets and technologies to those that we may consider attractive.
However, the in-licensing and acquisition of investigational oncology assets and technologies is a highly competitive area, and many other companies are pursuing the same or similar investigational oncology assets and technologies to those that we may consider attractive. Larger companies with more capital resources and more extensive clinical development and commercialization capabilities may have a competitive advantage over us.
Although we have not yet experienced significant production delays or seen significant impairment to our supply chain as a result of the ongoing hostilities in Eastern Europe and the Middle East or other global events, our third-party contract manufacturers, distributors and suppliers could experience operational delays due to lack of capacity or resources, facility closures and other hardships as a result of these types of global events, which could impact our supply chain by potentially causing delays to or disruptions in the supply of our preclinical, clinical or commercial products.
Although we have not yet experienced significant production delays or seen significant impairment to our supply chain as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East, the political, economic and social instability in Venezuela or other global events, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers, restrictions, or threats of such actions and the related uncertainty thereof, our third-party contract manufacturers, distributors and suppliers could experience operational delays due to lack of capacity or resources, facility closures and other hardships as a result of these types of global events, which could impact our supply chain by potentially causing delays to or disruptions in the supply of our preclinical, clinical or commercial products.
Our failure or perceived failure to pursue or achieve our ESG objectives, or to maintain our ESG practices that meet evolving stakeholder expectations or expanding legal requirements, could have a material adverse impact on our market perception and stock price, as well as expose us to government enforcement actions and private litigation. Item 1B. Unresolved Staff Comments. None.
Our failure or perceived failure to pursue or achieve our ESG objectives, or to maintain our ESG practices that meet evolving stakeholder expectations or expanding legal requirements (which are continually evolving and may emphasize different priorities than the ones we focus on or none at all), could have a material adverse impact on our market perception and stock price, as well as expose us to government enforcement actions and private litigation.
Even if the required regulatory approvals to market CABOMETYX for additional indications are achieved, we and our collaboration partners may not be able to commercialize CABOMETYX effectively and successfully in these additional indications.
We cannot be certain that these clinical trials will demonstrate adequate safety and efficacy to receive regulatory approval, and even if the required regulatory approvals to market CABOMETYX for additional indications are achieved, we and our collaboration partners may not be able to commercialize CABOMETYX effectively and successfully in such indications.
In addition, policy-based activities could delay the approval of an application for cabozantinib, zanzalintinib, or our other product candidates. For example, the FDA’s OCE has many initiatives aimed at improving oncology drug development, some of which may lead to the need for additional studies, such as dose optimization . Many of these initiatives are based on guidance issued by OCE.
For example, the FDA’s OCE has many initiatives aimed at improving oncology drug development, some of which may lead to the need for additional studies, such as dose optimization. Many of these initiatives are based on guidance issued by OCE.
For example, product candidates and preclinical development candidates may, on further study, be shown to have inadequate efficacy, harmful side effects, suboptimal pharmaceutical profiles or other characteristics suggesting that they are unlikely to become commercially viable products.
Notwithstanding this investment, many drug discovery programs that initially show promise will ultimately fail to yield clinical product candidates for multiple reasons. For example, product candidates and preclinical development candidates may, on further study, be shown to have inadequate efficacy, harmful side effects, suboptimal pharmaceutical profiles or other characteristics suggesting that they are unlikely to become commercially viable products.
Likewise, as a result of significant changes in U.S. or global political and macroeconomic conditions, including inflation, fluctuating interest rates, as well as policies governing foreign trade (including tariffs) and healthcare spending and delivery, or the ongoing hostilities in Eastern Europe and the Middle East, the financial markets could continue to experience significant volatility that could also continue to negatively impact the markets for biotechnology and pharmaceutical stocks.
Likewise, as a result of significant changes in U.S. or global political and macroeconomic conditions, including the potential for local and/or global economic downturn or recession, inflation, fluctuating interest rates, as well as policies governing foreign trade, including tariffs or the imposition of new tariffs, trade wars, barriers, restrictions, or threats of such actions and the related uncertainty thereof, and healthcare spending and delivery, the ongoing conflicts between Russia and Ukraine and in the Middle East, or the political, economic and social instability in Venezuela, the financial markets could continue to experience significant volatility that could also continue to negatively impact the markets for biotechnology and pharmaceutical stocks.
The timing of the entrance of generic competitors to CABOMETYX and legislative and regulatory action designed to reduce barriers to the development, approval and adoption of generic drugs in the U.S. could limit the revenue we derive from our products, most notably CABOMETYX, which could have a material adverse impact on our business, financial condition and results of operations.
Such initiatives, particularly the Regulation on Health Technology Assessment adopted in December 2021 and entered into application in January 2025, may further impact the price and reimbursement status of CABOMETYX and COMETRIQ. 40 Table of Contents The timing of the entrance of generic competitors to CABOMETYX and legislative and regulatory action designed to reduce barriers to the development, approval and adoption of generic drugs in the U.S. could limit the revenue we derive from our products, most notably CABOMETYX, which could have a material adverse impact on our business, financial condition and results of operations.
If the FDA chooses to withdraw those guidance documents for any reason it may affect our ability to gain regulatory approval based on studies that relied on those guidance documents. The FDA also continues to develop and finalize guidance documents t hat further refine the development process for oncology drug products.
If the FDA chooses to withdraw those guidance documents for any reason it may affect our ability to gain regulatory approval based on studies that relied on those guidance documents.
Should we fail to provide adequate 49 Table of C o n t e n t s privacy or data security protections or maintain compliance with these laws and regulations, including the CCPA, as amended by the CPRA, as well as the GDPR, we could be subject to sanctions or other penalties, litigation, an increase in our cost of doing business and questions concerning the validity of our data processing activities, including clinical trials.
Should we fail to provide adequate privacy or data security protections or maintain compliance with these laws and regulations, including the CCPA, as amended by the CPRA, as well as the GDPR, we could be subject to sanctions or other penalties, litigation, an increase in our cost of doing business and questions concerning the validity of our data processing activities, including clinical trials. 50 Table of Contents Risks Related to Our Information Technology and Intellectual Property Data breaches and other cybersecurity incidents impacting our information technology operations and infrastructure could compromise our intellectual property or other sensitive information, damage our operations and cause significant harm to our business and reputation.
Clinical trials are inherently risky and may reveal that cabozantinib, despite its approval for certain indications, or a new product candidate, such as zanzalintinib, is ineffective or has an unacceptable safety profile with respect to an intended use.
Clinical trials are inherently risky and may reveal that a product candidate is ineffective or has an unacceptable safety profile with respect to an intended use. This also applies to the testing of new indications for cabozantinib, or the clinical development of zanzalintinib, or any of our other product candidates.
It is possible that MSN or Sun or other companies, following FDA approval of an ANDA or 505(b)(2) NDA, could introduce generic or otherwise competitor versions of our marketed products before our patents expire if they do not infringe our patents or if it is determined that our patents are invalid or unenforceable, and we expect that generic cabozantinib products would be offered at a significantly lower price compared to our marketed cabozantinib products.
It is possible that MSN, Azurity, Handa, or other companies, will obtain FDA approval of an ANDA or 505(b)(2) NDA, and introduce generic or otherwise competitor versions of cabozantinib before our patents expire if they do not infringe our patents or if it is determined that our patents are invalid or unenforceable.
We will be able to protect our intellectual property rights from unauthorized use by third parties only to the extent that our technologies are 50 Table of C o n t e n t s covered by valid and enforceable patents or are effectively maintained as trade secrets.
The patent positions of biopharmaceutical companies, including our patent position, are generally uncertain and involve complex legal and factual questions. We will be able to protect our intellectual property rights from unauthorized use by third parties only to the extent that our technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets.
If we are unable to maintain or scale our commercial function appropriately, we may not be able to maximize product revenues, which could have a material adverse impact on our business, financial condition and results of operations. 37 Table of C o n t e n t s If we are unable to obtain or maintain coverage and reimbursement for our products from government and other third-party payers, our business will suffer.
If we are unable to maintain or scale our commercial function appropriately, we may 36 Table of Contents not be able to maximize product revenues, which could have a material adverse impact on our business, financial condition and results of operations.
Such risks may be outside of our control and the criteria by which our ESG practices and disclosures are assessed may 54 Table of C o n t e n t s change due to the evolving regulatory requirements affecting ESG standards and disclosures, which could result in increased expectations for us with respect to ESG matters and cause us to undertake costly initiatives to satisfy such new criteria.
Such risks may be outside of our control and the criteria by which our ESG practices and disclosures are assessed may change due to the evolving regulatory requirements affecting ESG standards and disclosures, which could result in changed expectations for us with respect to ESG matters (including those in support of or in opposition to ESG principles).
We face, and will continue to face, intense competition from biopharmaceutical companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing scientific and clinical research activities similar to ours.
Further, our competitors may in-license and develop new commercial products that could render our products, and those of our collaboration partners, obsolete or noncompetitive. We face, and will continue to face, intense competition from biopharmaceutical companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing scientific and clinical research activities similar to ours.
Such results may significantly decrease the likelihood of regulatory approval of a product candidate or of an approved product for a new indication. Moreover, the results of preliminary studies do not necessarily predict clinical or commercial success, and late-stage or other potentially label-enabling clinical trials may fail to confirm the results observed in early-stage trials or preliminary studies.
Furthermore, the results of preliminary studies do not necessarily predict clinical or commercial success, and late-stage or other 42 Table of Contents potentially label-enabling clinical trials may fail to confirm the results observed in early-stage trials or preliminary studies.
These federal and state healthcare laws and regulations govern drug marketing practices, including off-label promotion, and also impact our current and future business arrangements with third parties, including various healthcare 48 Table of C o n t e n t s entities.
These federal and state healthcare laws and regulations govern prescription drug marketing practices, including off-label promotion and direct-to-consumer (DTC) advertisements. These laws and regulations may also affect our current and future business arrangements with third parties, including various healthcare entities.
Competition is intense for experienced clinical, commercial, scientific and pharmaceutical operations personnel, and we may be unable to retain or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products. In addition, our reduction in workforce announced in January 2024 may adversely affect our ability to attract and retain employees.
Competition is intense for experienced clinical, commercial, scientific and pharmaceutical operations personnel, and we may be unable to retain or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products. Furthermore, the majority of our employees are employed “at will” and, therefore, may leave our employment at any time.
Third parties may also attempt to invalidate or design around our patents, or assert that they are invalid or otherwise unenforceable, and seek to introduce generic versions of cabozantinib. For example, we received Paragraph IV certification notice letters from MSN, Teva Pharmaceutical Industries Limited, Teva Pharmaceuticals Development, Inc. and Teva Pharmaceuticals USA, Inc.
Third parties may also attempt to invalidate or design around our patents, or assert that they are invalid or otherwise unenforceable, and seek to introduce generic versions of cabozantinib.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe InfoSec Committee evaluates the implications of cybersecurity incidents to determine whether such incidents have had or are reasonably likely to have a material effect on our business strategy, financial condition, and results of operations.
Biggest changeThe Incident Response Team develops a coordinated response strategy, entailing risk containment, notification processes, system restoration, incident documentation and assessment, data preservation and forensic analysis. The InfoSec Committee evaluates the implications of cybersecurity incidents to determine whether such incidents have had or are reasonably likely to have a material effect on our business strategy, financial condition, and results of operations.
We and our third-party service providers have frequently been the target of cybersecurity threats and expect them to continue, and for an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Governance Board of Directors and Board Committees.
We and our third-party service providers have frequently been the target of cybersecurity threats and expect them to continue, and for an additional description of these cybersecurity risks and potential related impacts on us, see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. 56 Table of Contents Governance Board of Directors and Board Committees.
In particular, the Risk Committee assists the Board in its oversight of management’s 55 Table of C o n t e n t s responsibility to assess, manage and mitigate risks associated with the Company’s business and operational activities and to administer the Company’s various compliance programs, in each case including data privacy and cybersecurity concerns.
In particular, the Risk Committee assists the Board in its oversight of management’s responsibility to assess, manage and mitigate risks associated with the Company’s business and operational activities and to administer the Company’s various compliance programs, in each case including data privacy and cybersecurity concerns.
Item 1C. Cybersecurity. Risk Management and Strategy We maintain a cybersecurity and information security program, which leverages best practices and standards. Risks from cybersecurity threats are regularly evaluated as part of our broader risk management activities and as a fundamental component of our internal control system.
Item 1C. Cybersecurity. Risk Management and Strategy We maintain cybersecurity and information security programs, which focus on securing our digital ecosystem, through policies and procedures, technical controls and human practices. Risks from cybersecurity threats are regularly evaluated as part of our broader risk management activities and as a fundamental component of our internal control system.
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The Incident Response Team aims to develop a coordinated response strategy, entailing risk containment, notification processes, system restoration, incident documentation and assessment, data preservation and forensic analysis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters is located in Alameda, California, where we lease approximately 610,000 square feet of office and laboratory space under multiple leases. During the third quarter of 2024, we recorded an impairment charge related to leased facilities we have no plan on utilizing in the near term.
Biggest changeItem 2. Properties. Our corporate headquarters is located in Alameda, California, where we lease approximately 610,000 square feet of office and laboratory space under multiple leases. In 2025, we exited approximately 40,000 square feet of our office and laboratory space in the Greater Philadelphia area as part of our 2024 corporate restructuring plan.
Removed
We are currently marketing approximately 215,000 square feet for sublease in Alameda, California. We have approximately 64,000 square feet of office and laboratory space in the Greater Philadelphia area. In 2025, we will be exiting approximately 40,000 square feet of our laboratory space in the Greater Philadelphia area as part of our restructuring plan approved in early 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The information required to be set forth under this Item 3 is incorporated by reference to “Note 12. Commitments and Contingencies – Legal Proceedings” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.
Biggest changeItem 3. Legal Proceedings. The information required to be set forth under this Item 3 is incorporated by reference to “Note 12. Commitments and Contingencies – Legal Proceedings” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of June 30, 2024, we completed the repurchase of 20.3 million shares of common stock for an aggregate purchase price of $450.0 million pursuant to our stock repurchase program. In August 2024, our Board of Directors authorized a stock repurchase program to acquire up to $500.0 million of our outstanding common stock before the end of 2025.
Biggest changeIn February 2025, our Board of Directors authorized the repurchase of up to an additional $500.0 million of our outstanding common stock before December 31, 2025. In October 2025, our Board of Directors authorized the repurchase of up to an additional $750.0 million of our common stock before December 31, 2026 (the October 2025 SRP).
The following graph compares, for the five-year period ended December 31, 2024, the cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index.
The following graph compares, for the five-year period ended December 31, 2025, the cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index.
The timing and amount of any stock repurchases under the stock repurchase program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of our common stock and general market conditions.
The timing and amount of any stock repurchases under the SRPs will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of our common stock and general market conditions.
Stock repurchases under the program may be made from time to time through a variety of methods, which may include open market purchases, in block trades, 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods.
Stock repurchases under these SRPs may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock has traded on the Nasdaq Global Select Market under the symbol “EXEL” since April 11, 2000. Holders On February 3, 2025, there were 305 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock has traded on the Nasdaq Global Select Market under the symbol “EXEL” since April 11, 2000. Holders On February 2, 2026, there were 288 holders of record of our common stock.
The number of record holders is based upon the actual number of holders registered on our books at such date and does not include holders of shares in “street names” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies. Dividends Since inception, we have not paid dividends on our common stock.
The number of record holders is based upon the actual number of holders registered on our books at such date and does not include holders of shares in 57 Table of Contents “street names” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.
The program does not obligate us to acquire any particular amount of our common stock, and the stock repurchase program may be modified, suspended or discontinued at any time without prior notice.
These SRPs do not obligate us to acquire any amount of our common stock, and the SRPs may be modified, suspended or discontinued at any time without prior notice.
The graph assumes that $100 was invested on December 31, 2019 in each of our common stock, the Nasdaq Composite Total Return Index and the Nasdaq Biotechnology Total Return Index and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested on December 31, 2020 in each of our common stock, the Nasdaq Composite Total Return Index and the Nasdaq Biotechnology Total Return Index and assumes reinvestment of any dividends.
The following table summarizes the stock repurchase activity for the three months ended December 31, 2024 and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program (in thousands, except per share data): Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program September 28, 2024 - November 1, 2024 590 $ 29.00 590 $ 470,511 November 2, 2024 - November 29, 2024 2,390 $ 35.24 2,390 $ 386,277 November 30, 2024 - January 3, 2025 2,654 $ 34.64 2,654 $ 294,361 Total 5,634 5,634 57 Table of C o n t e n t s Performance This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act of 1933, as amended.
The following table summarizes the stock repurchase activity for the three months ended December 31, 2025 and the approximate dollar value of shares that may yet be purchased pursuant to our SRPs (in thousands, except per share data): Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program October 4, 2025 - October 31, 2025 — $ — — $ 854,737 November 1, 2025 - November 28, 2025 2,457 $ 42.61 2,457 $ 750,000 November 29, 2025 - January 2, 2026 3,669 $ 43.54 3,669 $ 590,225 Total 6,126 6,126 Performance This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act of 1933, as amended.
We currently do not plan to pay any cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities by us during the year ended December 31, 2024.
Dividends Since inception, we have not paid dividends on our common stock. We currently do not plan to pay any cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors.
Stock Repurchase Programs In January 2024, our Board of Directors authorized a stock repurchase program to acquire up to $450.0 million of our outstanding common stock before the end of 2024.
Unregistered Sales of Equity Securities There were no unregistered sales of equity securities by us during the year ended December 31, 2025. Stock Repurchase Programs In August 2024, our Board of Directors authorized a stock repurchase program (SRP) to acquire up to $500.0 million of our outstanding common stock before December 31, 2025.
During the third and fourth quarter of 2024, we repurchased 6.1 million shares of common stock for an aggregate purchase price of $205.6 million. As of December 31, 2024, approximately $294.4 million remained available for future stock repurchases before the end of 2025.
As of December 31, 2025, we have repurchased 30.2 million shares of common stock for an aggregate purchase price of $1,159.7 million under these SRPs and have completed the SRPs authorized in August 2024 and February 2025. As of December 31, 2025, approximately $590.2 million remained available under the October 2025 SRP for future stock repurchases before December 31, 2026.
Year Ended December 31, 2019 2020 2021 2022 2023 2024 Exelixis, Inc. 100 118 107 94 141 200 Nasdaq Composite Total Return 100 144 176 119 172 226 Nasdaq Biotechnology Total Return 100 129 129 116 121 122 Item 6. [Reserved]
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 58 Table of Contents Year Ended December 31, 2020 2021 2022 2023 2024 2025 Exelixis, Inc. 100 91 80 120 169 217 Nasdaq Composite Total Return 100 122 82 119 157 187 Nasdaq Biotechnology Total Return 100 100 90 94 95 125 Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 6, 2024. 65 Table of C o n t e n t s Revenues Revenues by category were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Net product revenues $ 1,809,395 $ 1,628,879 11 % License revenues 349,244 178,635 96 % Collaboration services revenues 10,062 22,694 -56 % Total revenues $ 2,168,701 $ 1,830,208 18 % Net Product Revenues Gross product revenues, discounts and allowances, and net product revenues were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Gross product revenues $ 2,518,246 $ 2,272,533 11 % Discounts and allowances (708,851) (643,654) 10 % Net product revenues $ 1,809,395 $ 1,628,879 11 % Net product revenues by product were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 CABOMETYX $ 1,798,237 $ 1,614,942 11 % COMETRIQ 11,158 13,937 -20 % Net product revenues $ 1,809,395 $ 1,628,879 11 % The increase in net product revenues for the year ended December 31, 2024, as compared to 2023, was primarily related to an 8.2% increase in the number of CABOMETYX units sold as a result of the FDA’s approval of CABOMETYX in combination with nivolumab as a first-line treatment of patients with advanced RCC and, to a lesser extent, a 2.9% increase in the average net selling price of CABOMETYX.
Biggest changeRevenues Revenues by category were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Net product revenues $ 2,122,804 $ 1,809,395 17 % License revenues 214,375 349,244 -39 % Collaboration services revenues (17,053) 10,062 -269 % Total collaboration revenues 197,322 359,306 -45 % Total revenues $ 2,320,126 $ 2,168,701 7 % Net Product Revenues Gross product revenues, discounts and allowances, and net product revenues were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Gross product revenues $ 3,011,807 $ 2,518,246 20 % Discounts and allowances (889,003) (708,851) 25 % Net product revenues $ 2,122,804 $ 1,809,395 17 % Net product revenues by product were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 CABOMETYX $ 2,113,369 $ 1,798,237 18 % COMETRIQ 9,435 11,158 -15 % Net product revenues $ 2,122,804 $ 1,809,395 17 % The increase in net product revenues for the year ended December 31, 2025, as compared to 2024, was primarily related to a 16% increase in the number of CABOMETYX units sold reflecting continuing demand for CABOMETYX in combination with nivolumab as a first-line treatment of patients with advanced RCC, and demand for previously treated advanced NET and, to a lesser extent, a 1% increase in the average net selling price of CABOMETYX.
In addition to RCC, in January 2019, the FDA approved CABOMETYX for the treatment of patients with HCC previously treated with sorafenib, and then in September 2021, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with locally advanced or metastatic DTC that has progressed following prior VEGF receptor-targeted therapy and who are RAI-refractory or ineligible.
In addition to RCC, in January 2019, the FDA approved CABOMETYX for the treatment of patients with HCC previously treated with sorafenib, and in September 2021, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with locally advanced or metastatic DTC that has progressed following prior VEGF receptor-targeted therapy and who are RAI-refractory or ineligible.
It is currently being evaluated in a phase 1 clinical trial as monotherapy and in combination with PARP1/2 inhibition in patients with advanced solid tumors; enrollment is ongoing. XL309 has potential in patients whose tumors are no longer responsive to PARPi, including ovarian, breast and prostate cancers.
XL309 is currently being evaluated in a phase 1 clinical trial as monotherapy and in combination with PARP1/2 inhibition in patients with advanced solid tumors and enrollment is ongoing. XL309 has potential in patients whose tumors are no longer responsive to PARPi, including ovarian, breast and prostate cancers.
The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech (a member of the Roche Group); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited.
The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech (a member of the Roche Group); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo.
Other Small Molecules The knowledge and experience gained through our efforts to discover cabozantinib, cobimetinib and esaxerenone, each of which were approved by regulatory authorities and are commercially distributed, informs our current strategy for discovering and developing additional small molecules with the potential to treat cancer: • XL309 is a potentially best-in-class small molecule inhibitor of USP1, a synthetic lethal target in the context of BRCA-mutated tumors.
Other Small Molecules The knowledge and experience gained through our efforts to discover cabozantinib, cobimetinib and esaxerenone, each of which were approved by regulatory authorities and are commercially distributed, informs our current strategy for discovering and developing additional small molecules with the potential to treat cancer, including XL309, a potentially best-in-class small molecule inhibitor of USP1, a synthetic lethal target in the context of BRCA-mutated tumors.
Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding our contractual obligations and contingencies. As of December 31, 2024, we did not have any material off-balance-sheet arrangements, as defined by applicable SEC regulations.
Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding our contractual obligations and contingencies. As of December 31, 2025, we did not have any material off-balance-sheet arrangements, as defined by applicable SEC regulations.
Our primary sources of operating cash are: cash collections from customers related to net product revenues, which we project may increase for fiscal year 2025, as compared to 2024; cash collections related to milestones achieved and royalties earned from our commercial collaboration arrangements with Ipsen, Takeda and others; and cash collections for cost reimbursements under certain of our development programs with Ipsen and Takeda which we project may decrease in 2025, as compared to 2024.
Our primary sources of operating cash are: cash collections from customers related to net product revenues, which we project may increase for fiscal year 2026, as compared to 2025; cash collections related to milestones achieved and royalties earned from our commercial collaboration arrangements with Ipsen, Takeda and others; and cash collections for cost reimbursements under certain of our development programs with Ipsen and Takeda which we project may decrease in 2026, as compared to 2025.
The increase in cost of goods sold for the year ended December 31, 2024, as compared to 2023, was primarily due to the increase in royalties as a result of increased U.S. CABOMETYX sales, partially offset by a decrease in certain period costs. We project our gross margin in 2025 will remain consistent with fiscal year 2024.
The increase in cost of goods sold for the year ended December 31, 2025, as compared to 2024, was primarily due to the increase in royalties as a result of increased U.S. CABOMETYX sales, partially offset by a decrease in certain period costs. We project our gross margin in 2026 will remain consistent with fiscal year 2025.
Our primary cash requirements for operating activities, which we project will increase in fiscal 2025 as compared to fiscal year 2024, are for: employee related expenditures; payments related to our collaboration and development programs; income tax payments; royalty payments on our net product sales; cash payments for inventory; rent payments for our leased facilities and contract manufacturing payments.
Our primary cash requirements for operating activities, which we project will increase in fiscal 2026 as compared to fiscal year 2025, are for: employee related expenditures; payments related to our collaboration and development programs; income tax payments; royalty payments on our net product sales; cash payments for inventory; rent payments for our leased facilities and contract manufacturing payments.
With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise, and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules, biotherapeutics and ADCs. Sales related to cabozantinib account for the majority of our revenues.
With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules and biotherapeutics, such as ADCs. Sales related to cabozantinib account for the majority of our revenues.
Actual rebates and chargebacks claimed for prior periods have varied from our estimates by less than 1% of the amount deducted from gross product revenues for the years ended December 31, 2024 and 2023. Our current estimates may differ significantly from actual results.
Actual rebates and chargebacks claimed for prior periods have varied from our estimates by less than 1% of the amount deducted from gross product revenues for the years ended December 31, 2025 and 2024. Our current estimates may differ significantly from actual results.
Biotherapeutics Much of our drug discovery activity focuses on discovering and advancing various biotherapeutics that have the potential to become anti-cancer therapies, such as bispecific antibodies, ADCs and other innovative treatments.
Biotherapeutics Part of our drug discovery activity focuses on discovering and advancing various biotherapeutics that have the potential to become anti-cancer therapies, such as bispecific antibodies, ADCs and other innovative treatments.
Contractual Obligations As of December 31, 2024, we anticipate the aggregate of our cash, cash equivalents and marketable securities and cash generated from operations to be sufficient to fund our contractual obligations, as well as cash requirements to support our ongoing operations and capital expenditures.
Contractual Obligations As of December 31, 2025, we anticipate the aggregate of our cash, cash equivalents and marketable securities and cash generated from operations to be sufficient to fund our contractual obligations, as well as cash requirements to support our ongoing operations and capital expenditures.
In addition to the option deal with Sairopa, some of our active research collaborations for biotherapeutics programs are with: • Adagene, which is focused on using Adagene’s SAFEbody TM technology to develop novel masked ADCs or other innovative biotherapeutics with potential for improved therapeutic index; • Catalent, which is focused on the discovery and development of multiple ADCs using Catalent’s proprietary SMARTag site-specific bioconjugation technology; and • Invenra, which is focused on the discovery and development of novel binders and multispecific antibodies for the treatment of cancer.
In addition to the option deal with Sairopa, some of our active collaborations for biotherapeutics programs are with: • Adagene, which is focused on using Adagene’s SAFEbody TM technology to develop novel masked ADCs or other innovative biotherapeutics with potential for improved therapeutic index; • Catalent, which is focused on the discovery and development of multiple ADCs using Catalent’s proprietary SMARTag® site-specific bioconjugation technology; and • Invenra, which is focused on the discovery and development of novel binders and multispecific a ntibodies for the treatment of cancer.
We project that we may continue to spend significant amounts of cash to fund the development of product candidates in our pipeline, including zanzalintinib, XL309, XL495, XB010, and XB628, and the development and commercialization of cabozantinib.
We project that we may continue to spend significant amounts of cash to fund the development of product candidates in our pipeline, including zanzalintinib, XB371, XB628, XL309 and XB010, and the development and commercialization of cabozantinib.
Discussions of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Item 7.
Discussions of 2023 items and year-over-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in “Item 7.
These factors include enrollment in clinical trials for our product candidates, preliminary data and final results from clinical trials, the potential market indications and overall clinical and commercial potential for our product candidates, and competitive dynamics. We also make our research and development decisions in the context of our overall business strategy.
These 69 Table of Contents factors include enrollment in clinical trials for our product candidates, preliminary data and final results from clinical trials, the potential market indications and overall clinical and commercial potential for our product candidates, and competitive dynamics. We also make our research and development decisions in the context of our overall business strategy.
As a result, we assessed the impacted asset groups for impairment and concluded that the related right-of-use assets and leasehold improvements were not fully recoverable and recognized a $51.7 million non-cash impairment charge. See “Note 12.
As a result, we assessed the impacted 70 Table of Contents asset groups for impairment and concluded that the related right-of-use assets and leasehold improvements were not fully recoverable and recognized a $51.7 million non-cash impairment charge. See “Note 12.
The timing of cash generated from commercial collaborations and cash payments required for in-licensing collaborations relative to upfront license fee payments, research funding commitments, cost reimbursements, exercise of option payments and other contingent payments such as development milestone payments may vary from period to period.
The timing of cash generated from commercial collaborations and cash payments required for in-licensing collaborations relative to upfront license fee payments, cost reimbursements, exercise of option payments and other contingent payments such as development milestone payments may vary from period to period.
We have made significant progress under our research collaborations and in-licensing arrangements and believe we will continue to do so in 2025 and in future years.
We have made significant progress under our research collaborations and in-licensing arrangements and believe we will continue to do so in 2026 and in future years.
The timing and amount of a ny stock repurchases under the stock repurchase program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of Exelixis’ common stock and general market conditions.
The timing and amount of a ny stock repurchases under the SRPs will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of Exelixis’ common stock and general market conditions.
We monitor patient enrollment levels and assess the related research and development activities progress, including the probability of achieving milestones payments associated to the respective terms and conditions of our in-licensing and collaboration arrangements to the extent possible through internal reviews and estimates of the operational progress of our discovery and early-stage clinical development programs, correspondence with contract research organizations and review of contractual terms.
We monitor patient enrollment levels and assess the related research and development activities progress, including the probability of achieving milestone payments 75 Table of Contents associated to the respective terms and conditions of our in-licensing and collaboration arrangements to the extent possible through internal reviews and estimates of the operational progress of our discovery and early-stage clinical development programs, correspondence with contract research organizations and review of contractual terms.
Small molecule clinical development for the reported periods was primarily composed of cabozantinib and zanzalintinib. Biotherapeutics clinical development for the reported periods was primarily composed of XB002 and XB010.
Small molecule clinical development for the reported periods was primarily composed of zanzalintinib and cabozantinib. Biotherapeutics clinical development for the reported periods was primarily composed of XB010, XB371, XB628 and XB002.
To continue growing our pipeline, we are prioritizing investment in new molecules that are clinically differentiated with the potential to improve the standard of care for our cancer patients, including current and planned clinical trial programs evaluating zanzalintinib, XL309, XL495, and XB010.
To continue growing our pipeline, we are prioritizing investment in new molecules that are clinically differentiated with the potential to improve the standard of care for our cancer patients, including current progressing and planned clinical trial programs evaluating zanzalintinib, XB628, XB371, XL309, and XB010.
Stock repurchases under this program may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods.
Stock repurchases under these SRPs may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods.
Results of Operations Impact of the Duration of Our Fiscal Year We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31st. Fiscal year 2024, which was a 53-week fiscal year, ended on January 3, 2025; and fiscal year 2023, which was a 52-week fiscal year, ended on December 29, 2023.
Results of Operations Impact of the Duration of Our Fiscal Year We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31st. Fiscal year 2025, which was a 52-week fiscal year, ended on January 2, 2026; and fiscal year 2024, which was a 53-week fiscal year, ended on January 3, 2025.
Impairment of Long-Lived Assets Impairment of long-lived assets for the year ended December 31, 2024, relates to certain leased facilities at our Alameda campus. During fiscal year 2024, we listed certain buildings for sublease.
Impairment of Long-Lived Assets Impairment of long-lived assets for the year ended December 31, 2024, was related to certain leased facilities at our Alameda campus. During fiscal year 2024, we listed certain buildings for sublease.
Discounts and allowances have generally increased over time as the number of patients participating in government programs has increased and as the discounts given and rebates paid to government payers have also increased.
Discounts and allowances have generally increased over time as the number of patients participating in government programs has increased and as the discounts given and rebates paid to government payers 66 Table of Contents have also increased.
Cost of Goods Sold The cost of goods sold and our gross margins were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Cost of goods sold $ 76,216 $ 72,547 5 % Gross margin % 96 % 96 % Cost of goods sold is related to our product revenues and consists of a 3% royalty payable on U.S. net sales of any product containing cabozantinib, as well as the cost of inventory sold, indirect labor costs, write-downs related to expiring, excess and obsolete inventory, and other third-party logistics costs.
Cost of Goods Sold The cost of goods sold and our gross margins were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Cost of goods sold $ 83,697 $ 76,216 10 % Gross margin % 96 % 96 % Cost of goods sold is related to our product revenues and consists of a 3% royalty payable on U.S. net sales of any product containing cabozantinib, as well as the cost of inventory sold, indirect labor costs, write-downs related to expiring, excess and obsolete inventory, and other third-party logistics costs.
The IRA introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program. The IRA contains the limited small biotech exception.
The IRA introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program.
Our contractual obligations as of December 31, 2024 primarily consist of: Operating leases: We have certain lease agreements related to our corporate campus facilities and laboratory facilities located in Alameda, California and Greater Philadelphia area, under which we are obligated to make lease payments.
Our contractual obligations as of December 31, 2025 primarily consist of: Operating leases: We have certain lease agreements related to our corporate campus facilities and laboratory facilities located in Alameda, California, under which we are obligated to make lease payments.
Both Ipsen and Takeda also contribute financially and operationally to the further global development and commercialization of the cabozantinib franchise in other potential indications, and we work closely with them on these activities.
Both Ipsen and Takeda also contribute financially and operationally to the further global development and commercialization of the cabozantinib franchise, and we work closely with them on these activities.
As royalty generating sales of cabozantinib by Ipsen and Takeda have increased as described above, our royalty payments have also increased.
As royalty generating sales of cabozantinib by Ipsen and Takeda have increased as described above, our royalty payments due to Royalty Pharma have also increased.
As of the date of this Annual Report on Form 10-K, we expect to progress up to three new development candidates into preclinical development in 2025.
As of the date of this Annual Report on Form 10-K, we expect to progress up to two new development candidates into preclinical development in 2026.
Milestone revenues by fiscal year included the following: • For the year ended December 31, 2024, milestone revenues included: (1) $150.0 million in license revenues recognized in connection with a commercial milestone from Ipsen upon its achievement of $600.0 million in cumulative net sales of cabozantinib over four consecutive quarters in its related Ipsen license territory; (2) $2.2 million in license revenues recognized in connection with a commercial milestone from Ipsen upon its achievement of CAD$30.0 million in cumulative net sales of cabozantinib over four consecutive quarters in Canada; and (3) $11.4 million in revenues related to a $12.5 million regulatory milestone from Ipsen upon submission of a variation application the EMA for evaluating cabozantinib versus placebo in patients with either advanced pNET or advanced epNET who experienced progression after prior systematic therapy. • For the year ended December 31, 2023, $10.0 million in revenues was recognized in connection with a commercial milestone of $11.0 million from Takeda upon their achievement of $150.0 million of cumulative net sales of cabozantinib in Japan.
Milestone revenues achieved in the respective fiscal year included the following: • For the year ended December 31, 2025, milestone revenues included $4.7 million in license revenues recognized in connection with a $5.0 million regulatory milestone payment from Ipsen, upon approval by the EC for the treatment of patients with either advanced pNET or advanced epNET. • For the year ended December 31, 2024, milestone revenues included: (1) $150.0 million in license revenues recognized in connection with a commercial milestone payment from Ipsen upon its achievement of $600.0 million in cumulative net sales of cabozantinib over four consecutive quarters in its related Ipsen license territory; (2) $2.2 million in license revenues recognized in connection with a commercial milestone payment from Ipsen upon its achievement of CAD$30.0 million in cumulative net sales of cabozantinib over four consecutive quarters in Canada; and (3) $11.4 million in revenues related to a $12.5 million regulatory milestone payment from Ipsen upon submission of a variation application the EMA for evaluating cabozantinib versus placebo in patients with either advanced pNET or advanced epNET who experienced progression after prior systematic therapy.
Collaboration services revenues were reduced by $21.3 million and $19.2 million for the years ended December 31, 2024 and 2023, respectively, to account for the 3% royalty we are required to pay on the net sales by Ipsen and Takeda of any product containing cabozantinib.
Collaboration services revenues were reduced by $22.8 million and $21.3 million for the years ended December 31, 2025 and 2024, respectively, to account for the 3% royalty we are required to pay Royalty Pharma on the net sales by Ipsen and Takeda of any product containing cabozantinib.
Milestone revenues, which are allocated between license revenues and collaboration services revenues, were $169.3 million for the year ended December 31, 2024, as compared to $15.0 million for 2023.
Milestone revenues, which are allocated between license revenues and collaboration services revenues, were $14.3 million for the year ended December 31, 2025, as compared to $169.3 million for 2024.
To facilitate the growth of our various biotherapeutics programs, we have established multiple research collaborations and in-licensing arrangements and have entered into other strategic transactions aimed at conserving capital and managing risks, collectively providing us access to antibodies, binders, payloads and conjugation technologies to generate next-generation ADCs or multispecific antibodies.
To facilitate the growth of our various biotherapeutics programs, we have established multiple research collaborations and in-licensing arrangements and entered into other strategic transactions, aimed at conserving capital and managing risks, that provide us with access to antibodies, binders, payloads and conjugation technologies, which are the components employed to generate next-generation ADCs or multispecific antibodies.
Separately, in November 2023, CMS released final guidance on another program, the Part D Discount Program, which will require manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
Separately, in December 2024, CMS released final guidance on another program, the Part D Discount Program, which requires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts.
In addition, healthcare policymakers in the U.S. continue to express concern over healthcare costs, and corresponding legislative and policy initiatives and activities have been launched aimed at increasing the 64 Table of C o n t e n t s healthcare cost burdens borne by pharmaceutical manufacturers, as well as expanding access to, and restricting the prices and growth in prices of, pharmaceuticals.
Further, healthcare policymakers in the U.S. continue to express concern over healthcare costs, and corresponding legislative and policy initiatives and activities have been launched aimed at increasing the healthcare cost burdens borne by pharmaceutical manufacturers, as well as expanding access to, and restricting the prices and growth in prices of, pharmaceuticals.
The 53-week fiscal year in 2024, as compared to the 52-week fiscal year in 2023, contributed to the year-over-year increases in certain revenues and expenses.
The 52-week fiscal year 2025, as compared to the 53-week fiscal year 2024, contributed to the year-over-year decreases in certain revenues and expenses.
The increase in cash, cash equivalents and marketable securities at December 31, 2024, as compared to December 31, 2023, was primarily due to cash inflows generated by our operations from sales of our products and our commercial collaboration arrangements, including $164.7 million in cash received from Ipsen for regulatory and commercial milestone payments earned, partially offset by cash payments to repurchase our common stock, cash payments to support our development and discovery programs, including acquisition of in-process research and development technology, tax payments and operating cash payments for employee-related expenditures and restructuring.
The decrease in cash, cash equivalents and marketable securities at December 31, 2025, as compared to December 31, 2024, was primarily due to cash payments to repurchase our common stock, cash payments to support our development and discovery programs, including acquisition of in-process research and development technology, tax payments and operating cash payments for employee-related expenditures and restructuring, partially offset by cash inflows generated by our operations from sales of our products and our commercial collaboration arrangements.
As of December 31, 2024, we had $26.5 million of lease payments due in one year and $259.2 million due over the remaining lease term. Purchase obligations: Purchase obligations include firm purchase commitments related to manufacturing of inventory, software services and other facilities and equipment.
As of December 31, 2025, we had $28.5 million of lease payments due in one year and $230.7 million due over the remaining lease term. Purchase obligations: Purchase obligations include firm purchase commitments related to manufacturing of inventory, software services and other facilities and equipment.
The approval of any of these ANDAs and subsequent launch of any generic version of CABOMETYX could significantly decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations.
The approval of any of these follow-on products and their subsequent launch could significantly decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations.
Drug discovery-related license and other collaboration costs decreased for the year ended December 31, 2024, as compared to 2023, primarily due to lower development milestone achievement in our preclinical development stage in-licensing collaboration programs, lower upfront fees and lower research funding.
Development-related license and other collaboration costs and Drug discovery-related license and other collaboration costs decreased for the year ended December 31, 2025, as compared to 2024, primarily due to lower development milestone achievement in our clinical-stage and discovery-stage in-licensing collaboration programs.
The increase in the amount of discounts and allowances for the year ended December 31, 2024, as compared to 2023, was primarily the result of an increase in the volume of units sold, and the increase in utilization and dollar amount of chargebacks under the Federal Supply Schedule program.
The increase in the amount of discounts and allowances for the year ended December 31, 2025, as compared to 2024, was primarily the result of an increase in the volume of units sold, and the increase in utilization and dollar amount of chargebacks under the 340B Drug Pricing program.
We have elected to record interest and penalties in the accompanying Consolidated Statements of Income as a component of income taxes. 76 Table of C o n t e n t s Recent Accounting Pronouncements For a description of the expected impact of recent accounting pronouncements, see “Note 1.
We have elected to record interest and penalties in the accompanying Consolidated Statements of Income as a component of income taxes. Recent Accounting Pronouncements For a description of the expected impact of recent accounting pronouncements, see “Note 1.
ADCs in particular present a unique opportunity for new cancer treatments, given their capabilities to target the delivery of anti-cancer drug payloads to specific cells expressing the target; this increased precision should minimize collateral impact on healthy tissues that do not express the target. This approach has been validated by multiple regulatory approvals of ADCs in the past several years.
ADCs in particular present a unique opportunity for new cancer treatments, given their capabilities to target the delivery of anti-cancer drug payloads to specific cells expressing the target; this increased precision should minimize collateral impact on healthy tissues that do not express the target.
We undertake no obligation to update any forward-looking statement to reflect events after the date of this report. 58 Table of C o n t e n t s Overview We are an oncology company innovating next-generation medicines and combination regimens at the forefront of cancer care.
We undertake no obligation to update any forward-looking statement to reflect events after the date of this report. 59 Table of Contents Overview We are an oncology company innovating next-generation medicines and regimens at the forefront of cancer care.
We have since received notice from CMS that we qualify for the "specified small manufacturer” designation and are thereby eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program, from 2025 to 2031.
We have since received notice from CMS that we qualify for the "specified small manufacturer” designation and are thereby eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program, from 2025 to 2031. In November 2025, CMS also issued a proposed rule on the Part D Discount Program that largely codifies the final guidance.
Cash flow activities were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Net cash provided by operating activities $ 699,971 $ 333,324 110 % Net cash used in investing activities $ (116,783) $ (26,955) 333 % Net cash used in financing activities $ (628,808) $ (546,052) 15 % Operating Activities Cash provided by operating activities is derived by adjusting our net income for non-cash operating items such as deferred taxes, stock-based compensation, depreciation and amortization, non-cash lease expense, impairment of long-lived assets, and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our Consolidated Statements of Income.
Cash flow activities were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Net cash provided by operating activities $ 884,267 $ 699,971 26 % Net cash provided by (used in) investing activities $ 350,441 $ (116,783) -400 % Net cash used in financing activities $ (969,594) $ (628,808) 54 % Operating Activities Cash provided by operating activities is derived by adjusting our net income for non-cash operating items such as deferred taxes, stock-based compensation, depreciation and amortization, non-cash lease expense, impairment of long-lived assets, acquired in-process research and development technology, and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our Consolidated Statements of Income.
We project that clinical trial costs may continue to increase with higher costs associated with various studies evaluating zanzalintinib, XL309, XL495, and XB628, partially offset by decreases in costs associated with cabozantinib and XB002.
We project that clinical trial costs may increase with higher costs associated with various studies evaluating zanzalintinib, XB628, XB371 and XB010, partially offset by decreases in costs associated with cabozantinib.
Net cash provided by operating activities increased for the year ended December 31, 2024, as compared to 2023, primarily due to an increase in cash received on sales of our products, an increase in cash received upon achievement of milestones from Ipsen, and lower cash paid for operating expenses, partially offset by cash payments related to the 2024 Restructuring Plan.
Net cash provided by operating activities increased for the year ended December 31, 2025, as compared to 2024, primarily due to an increase in cash received on sales of our products, lower cash paid for certain operating expenses, partially offset by cash payments related to the 2024 and 2025 Plans.
In October 2024, we announced the initiation of a phase 1 clinical trial evaluating XL495, both as a monotherapy and in combination with select cytotoxic agents, in patients with advanced solid tumors, following the FDA’s acceptance of our IND application.
In October 2024, we announced the initiation of a phase 1 clinical trial evaluating XL495, an inhibitor of PKMYT1, both as a monotherapy and in combination with select cytotoxic agents, in patients with advanced solid tumors.
In addition, we may continue to expand our oncology product pipeline through additional research collaborations, in-licensing arrangements and other strategic transactions that align with our oncology drug development, regulatory and commercial expertise. In January 2024, our Board of Directors authorized the repurchase of up to $450.0 million of our common stock before the end of 2024.
In addition, we may continue to expand our oncology product pipeline through additional research collaborations, in-licensing arrangements and other strategic transactions that align with our oncology drug development, regulatory and commercial expertise. In August 2024, our Board of Directors authorized a SRP to acquire up to $500.0 million of our outstanding common stock before December 31, 2025.
For a complete description of our significant accounting policies, see “Note 1. Organization and Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.
Organization and Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.
Cabozantinib is an inhibitor of multiple tyrosine kinases, including MET, AXL, VEGF receptors and RET and has been approved by the FDA and in 67 other countries: as CABOMETYX® (cabozantinib) tablets for advanced RCC (both alone and in combination with BMS’ nivolumab (OPDIVO®)), for previously treated HCC and for previously treated, RAI-refractory DTC; and as COMETRIQ® (cabozantinib) capsules for progressive, metastatic medullary thyroid cancer.
Cabozantinib is an inhibitor of multiple tyrosine kinases, including MET, AXL, VEGF receptors and RET and has been approved by the FDA, and in 68 other countries for all or a combination of, the following indications: as CABOMETYX® (cabozantinib) tablets for advanced RCC (both alone and in combination with BMS’ nivolumab (OPDIVO®)), previously treated HCC, previously treated, RAI-refractory DTC and previously treated, unresectable, locally advanced or metastatic, well-differentiated pNET and epNET; and as COMETRIQ® (cabozantinib) capsules for progressive MTC.
Ipsen royalties were $154.0 million for the year ended December 31, 2024, as compared to $135.8 million for 2023.
Ipsen royalties were $165.9 million for the year ended December 31, 2025, as compared to $154.0 million for 2024.
Net cash used in investing activities increased for the year ended December 31, 2024, as compared to 2023.
Net cash was provided by investing activities for the year ended December 31, 2025, as compared to net cash used in investing activities in 2024.
We have produced four marketed pharmaceutical products, two of which are formulations of our flagship molecule, cabozantinib, and we are steadily advancing and evolving our product pipeline portfolio, including our lead asset zanzalintinib, currently the focus of an extensive late-stage clinical development program.
We have produced four marketed pharmaceutical products, two of which are formulations of our flagship molecule, cabozantinib, and we are steadily advancing and evolving our product pipeline portfolio, including our lead clinical asset, zanzalintinib, currently under review by the FDA for the treatment of certain forms of CRC, as well as the focus of an extensive late-stage clinical development program in other indications.
In particular, for the foreseeable future, we expect our ability to generate sufficient cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the highly competitive indications for which it is approved, and possibly for other indications for which cabozantinib is currently being evaluated in potentially label-enabling clinical trials, if warranted by the data generated from these trials.
In particular, for the foreseeable future, we expect our ability to generate sufficient cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the highly competitive indications for which it is approved.
Our senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors.
Our senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual results could differ materially from those estimates.
Clinical trial costs, which include services performed by third-party contract research organizations and other vendors who support our clinical trials, increased for 69 Table of C o n t e n t s year ended December 31, 2024, as compared to 2023, primarily due to higher costs associated with studies evaluating zanzalintinib, XB010, XL309 and XL495, partially offset by lower costs associated with cabozantinib studies.
Clinical trial costs, which include services performed by third-party contract research organizations and other vendors who support our clinical trials, decreased for the year ended December 31, 2025, as compared to 2024, primarily due to lower costs associated with studies evaluating cabozantinib and XB002, partially offset by higher costs associated with zanzalintinib, XB628, XL309 and XB010 studies.
In the longer term, we may eventually face competition from potential manufacturers of generic versions of our marketed products, including the proposed generic versions of CABOMETYX tablets that are the subject of ANDAs submitted to the FDA by MSN, Teva, Cipla and Sun.
In the longer term, we may eventually face competition from potential manufacturers of generic or follow-on versions of our marketed products, including the proposed generic versions of CABOMETYX tablets that are the subject of ANDAs submitted to the FDA by MSN, Teva, Cipla, Biocon and Sun, as well as the 505(b)(2) for cabozantinib capsules submitted by Handa, or the 505(b)(2) for cabozantinib tablets submitted to the FDA by Azurity.
In December 2023, we initiated STELLAR-305, a phase 2/3 pivotal trial evaluating zanzalintinib in combination with pembrolizumab, an anti-PD-1 ICI developed by Merck & Co., versus monotherapy pembrolizumab in patients with previously untreated PD-L1-positive recurrent or metastatic SCCHN; enrollment into STELLAR-305 is ongoing.
In December 2023, we initiated STELLAR-305, a phase 2/3 pivotal trial evaluating zanzalintinib in combination with pembrolizumab, an anti-PD-1 ICI developed by Merck & Co., versus placebo in combination with pembrolizumab in patients with previously untreated PD-L1-positive recurrent or metastatic squamous cell carcinoma of the head and neck.
Achievement of our business objectives will also depend on our ability to maintain a competitive position in the shifting landscape of therapeutic strategies for the treatment of cancer, which we may not be able to do.
Furthermore, the current U.S. administration has suggested that it may impose tariffs on imported pharmaceuticals. Achievement of our business objectives will also depend on our ability to maintain a competitive position in the shifting landscape of therapeutic strategies for the treatment of cancer, which we may not be able to do.
The Tax Cuts and Jobs Act, signed into law on December 22, 2017, modified the tax treatment of research and development expenditures beginning in fiscal year 2022. Research and development expenditures are no longer currently deductible but instead must be amortized ratably over five years for domestic expenditures or 15 years for foreign expenditures.
The Tax Cuts and Jobs Act, signed into law on December 22, 2017, modified the tax treatment of research and experimental (R&E) expenditures beginning in fiscal year 2022, requiring that they must be capitalized and amortized ratably over five years for domestic R&E expenditures or 15 years for foreign R&E expenditures.
We project our research and development expenses may increase for fiscal year 2025, as compared to the prior year, primarily driven by increases in license and other collaboration costs and clinical trial costs, including the current and planned trials evaluating zanzalintinib, XL309, XL495, and XB010, partially offset by lower manufacturing costs.
We project our research and development expenses may increase for fiscal year 2026, as compared to 2025, primarily driven by increases in clinical trial costs, including the current and planned trials evaluating zanzalintinib, XB628, XB371 and XB010, and personnel expenses.
We plan to continue leveraging our operating cash flows to advance a broad array of diverse biotherapeutics and small molecule programs for the treatment of cancer, as well as to support ongoing company-sponsored and externally sponsored trials evaluating cabozantinib.
We plan to continue leveraging our operating cash flows to advance a broad array of diverse biotherapeutics and small molecule programs for the treatment of cancer, as well as to support company-sponsored and externally sponsored clinical trials evaluating cabozantinib and zanzalintinib, a novel oral inhibitor of kinases including the TAM kinases (TYRO3, AXL, MER), MET and VEGF receptors.
In addition, Merck will sponsor a phase 1/2 trial and two phase 3 pivotal trials in RCC; Merck will fund one of these phase 3 studies, and we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. We maintain all global commercial and marketing rights to zanzalintinib.
Merck will fund one of these phase 3 studies and we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. Under the collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib.
Selling, General and Administrative Expenses Selling, general and administrative expenses were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Selling, general and administrative expenses (1) $ 428,962 $ 470,680 -9 % Stock-based compensation 63,166 72,025 -12 % Total selling, general and administrative expenses $ 492,128 $ 542,705 -9 % ____________________ (1) Excludes stock-based compensation allocated to selling, general and administrative expenses.
Selling, General and Administrative Expenses Selling, general and administrative expenses were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Selling, general and administrative expenses (1) $ 446,536 $ 428,962 4 % Stock-based compensation 72,191 63,166 14 % Total selling, general and administrative expenses $ 518,727 $ 492,128 5 % ____________________ (1) Excludes stock-based compensation allocated to selling, general and administrative expenses.
Financial Highlights • Net product revenues for 2024 were $1,809.4 million, as compared to $1,628.9 million for 2023. • Total revenues for 2024 were $2,168.7 million, as compared to $1,830.2 million for 2023. • Research and development expenses for 2024 were $910.4 million, as compared to $1,044.1 million for 2023. • Selling, general and administrative expenses for 2024 were $492.1 million, as compared to $542.7 million for 2023. • Provision for income taxes for 2024 was $160.4 million, as compared to $49.8 million for 2023. • Net income for 2024 was $521.3 million, or $1.80 per share, basic and $1.76 per share, diluted, as compared to $207.8 million, or $0.65 per share, basic and diluted, for 2023.
Financial Highlights • Net product revenues for 2025 were $2,122.8 million, as compared to $1,809.4 million for 2024. • Total revenues for 2025 were $2,320.1 million, as compared to $2,168.7 million for 2024. • Research and development expenses for 2025 were $825.0 million, as compared to $910.4 million for 2024. • Selling, general and administrative expenses for 2025 were $518.7 million, as compared to $492.1 million for 2024. 64 Table of Contents • Provision for income taxes for 2025 was $158.6 million, as compared to $160.4 million for 2024. • Net income for 2025 was $782.6 million, or $2.88 per share, basic, and $2.78 per share, diluted, as compared to $521.3 million, or $1.80 per share, basic, and $1.76 per share, diluted, for 2024.
Restructuring expenses were as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Restructuring expenses $ 33,660 $ — n/a Non-Operating Income Non-operating income was as follows (dollars in thousands): Year Ended December 31, Percent Change 2024 2023 Interest income $ 77,156 $ 86,543 -11 % Other income (expense), net (133) 93 n/a Non-operating income $ 77,023 $ 86,636 -11 % The decrease in non-operating income for the year ended December 31, 2024, as compared to 2023, was primarily the result of a decrease in interest income due to lower average interest-bearing investment balances, partially offset by higher average interest rates.
Restructuring expenses were as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Restructuring expenses $ 20,510 $ 33,660 -39 % Non-Operating Income Non-operating income was as follows (dollars in thousands): Year Ended December 31, Percent Change 2025 2024 Interest income $ 69,213 $ 77,156 -10 % Other expenses, net (198) (133) 49 % Non-operating income $ 69,015 $ 77,023 -10 % The decrease in non-operating income for the year ended December 31, 2025, as compared to 2024, was primarily the result of a decrease in interest income due to lower average interest-bearing investment balances, and lower average interest rates.
XL309 also has potential in combination with PARPi agents to deepen and prolong the response seen to PARPi, as well as to broaden the activity beyond that observed in patients with tumors that harbor a BRCA1/2 mutation. • XL495 is an inhibitor of PKMYT1 with best-in-class potential to treat solid tumors due to its improved selectivity and pharmacokinetic profiles.
XL309 also has potential in combination with PARPi agents to deepen and prolong the response seen to PARPi, as well as to broaden the activity beyond that observed in patients with tumors that harbor a BRCA1/2 mutation.
As of the date of this Annual Report on Form 10-K, 62 Table of C o n t e n t s we expect to progress up to three new development candidates into preclinical development during 2025.
As of the date of this Annual Report on Form 10-K, we expect to progress up to two new development candidates into preclinical development during 2026.
Collaboration Services Revenues Collaboration services revenues include the recognition of deferred revenues for the portion of upfront and milestone payments that have been allocated to research and development services performance obligations, development cost reimbursements earned under our collaboration agreements and product supply revenues, which are net of product supply costs and the royalties we pay to Royalty Pharma on sales by Ipsen and Takeda of products containing cabozantinib. 67 Table of C o n t e n t s Development cost reimbursements were $25.8 million for the year ended December 31, 2024, as compared to $35.6 million for 2023.
Collaboration Services Revenues Collaboration services revenues include: (a) the development cost reimbursements earned under our collaboration agreements and product supply revenues, net of product supply costs; (b) the recognition of deferred revenues for the portion of upfront and milestone payments that have been allocated to research and development services performance obligations; offset by (c) the royalties we pay to Royalty Pharma on sales by Ipsen and Takeda of products containing cabozantinib.
Financing Activities The changes in cash flows from financing activities primarily relate to payments for repurchases of common stock, proceeds from employee stock programs and taxes paid related to net share settlement of equity awards. Net cash used in financing activities increased for the year ended December 31, 2024, as compared to 2023.
Net cash used in financing activities increased for the year ended December 31, 2025, as compared to 2024, primarily due to increases in payments for repurchases of common stock and withholding taxes remitted to the government related to net share settlements of equity awards.
Future Expansion of our Pipeline Increasing the number of novel anti-cancer agents in our pipeline is essential to our overall strategy and business goals. We are working to expand our oncology product pipeline through drug discovery efforts, which encompass our diverse biotherapeutics and small molecule programs exploring multiple modalities and mechanisms of action.
We are working to expand our oncology product pipeline through drug discovery efforts, which encompass our diverse biotherapeutics and small molecule programs exploring multiple modalities and mechanisms of action.
As is the case for all innovative pharmaceutical therapies, obtaining and maintaining coverage and reimbursement for CABOMETYX is becoming increasingly difficult, both within the U.S. and in foreign markets.
In addition, CABOMETYX will only continue to be commercially successful if private third-party and government payers continue to provide coverage and reimbursement. As is the case for all innovative pharmaceutical therapies, obtaining and maintaining coverage and reimbursement for CABOMETYX is becoming increasingly difficult, both within the U.S. and in foreign markets.
For convenience, references in this report as of and for the fiscal years ended January 3, 2025 and December 29, 2023, are indicated as being as of and for the years ended December 31, 2024 and 2023, respectively. In fiscal year 2025, the annual period will end on January 2, 2026, and will be a 52-week fiscal year.
For convenience, references in this report as of and for the fiscal years ended January 2, 2026 and January 3, 2025, are indicated as being as of and for the years ended 65 Table of Contents December 31, 2025 and 2024, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFair Value Measurements — Forward Foreign Currency Contracts” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K for additional information about our foreign currency forward contracts. 77 Table of C o n t e n t s
Biggest changeFair Value Measurements — Forward Foreign Currency Contracts” of the “Notes to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K for additional information about our foreign currency forward contracts.

Other EXEL 10-K year-over-year comparisons