All right. Welcome back to the 44th Annual J.P. Morgan Healthcare Conference. My name is Matt Bannon, and I'm a banker here at JPM. I am very pleased to be introducing our final presenting company of the day, Exelixis, and presenting on behalf of the company, we'll have President and CEO Michael Morrissey. Before I turn it over to Michael, I'll remind folks that this is a Q&A session, so please raise your hand if you have a question or ask it through the online portal, and I'll ask it on your behalf. So, without further ado, Michael.
All right. Fantastic. Thank you. And good evening, everybody. Thanks for hanging in there for one last session. I've been talking since 7:30 this morning. The meeting's been great. And I want to thank the J.P. Morgan team for the invitation and for the great, full, packed schedule of one-on-one meetings. Just a great day, great way to start the year. And we're excited to be able to tell you a little bit about Exelixis, where we've been in 2025 and where we're going in 2026. So, I'm going to follow my directions here with the pointer. Okay. So, before I begin, I'll be making forward-looking statements. So, please see our SEC filings for a description of the risks that we face in our business first. Second, we're going to be speaking to preliminary financial results and 2026 guidance today.
Please note that the preliminary financial results were generated as of January 11th of this year, and we will have and are unaudited, and we'll have a full review of the final results on our Q4 call in February. Okay. Thank you. So, let's get to business here. So, I'll talk for about 20 minutes and then have plenty of time for Q&A. To kind of set the stage, we, again, had a really strong 2025. We ended the year last year with, I think, a really strong enabling session, the virtual R&D Day that we had in the middle of December, to really talk about what we're doing strategically, much more than just tactical. Here's the latest data, or here's the data from 2025, blah, blah, blah.
We really want to get people thinking about how we're viewing the opportunity and the business coming off of the strength of cabozantinib in the past and where we're going with the pipeline going forward. And the main focus for our business and the main focus for what we're doing across R&D, across commercial, is really focused on building franchises, right? That's the learning from cabo over the last decade, maybe more, in terms of how you build a franchise within a molecule and how you can then maximize the value of that for patients and shareholders by improving standard of care at every opportunity and then being able to frame that for prescribers, for patients, for payers in a way that moves a needle for the system. So, we are focused myopically on building franchises. A single molecule for a single small indication is important.
That's just not our business, and we don't really focus on that, right? So, we have deep expertise in biology and pharmacology and chemistry and clinical sciences and regulatory sciences across the board. And everything we do is, at every level of the organization, is focused on improving standard of care for patients with cancer. That's the only way if you move a needle for patients, you have a chance of being successful commercially. If you don't, if you're making me-too drugs with me-too data, it's going to be hard to really have a win commercially. So, we do that in a way that is, I think, very efficient and very focused, very thoughtful. We're fortunate to be in a position where we generate a lot of revenue.
We use a portion of that to fund new discovery, new development, but not all of it, because we believe in running the business like a business, right? Where we can, if we can generate free cash, we do. We use that free cash to then, again, invest in the pipeline, but also give money back to shareholders. So, the goal here is to have a business that is focused on building multiple blockbuster franchises across solid tumor indications. Again, not in all of HemOnc, but really in solid tumors in a way that allows us to be focused and effective and successful for patients and for shareholders. So, let's look at where we were in 2025 and the momentum we've got there as we go forward into this year.
Obviously, top-line summary is the cabozantinib franchise continues to be the real driver of value for us in the near term, in the now, if you will. We had strong growth in 2025. I'll get to the numbers in a second. CABOMETYX was and continues to be the top TKI in the U.S. for RCC and a leader in the oral second-line class. We'll have updated numbers on the Q4 call for Q4, but certainly throughout the year, we maintain that position. We're very excited about the opportunity to build the magnitude and depth of our GI sales force to match what we have in GU and match that success. Obviously, with the NET launch last year that was very successful and with a potential for launching zanza in CRC, the GI team needs to be at full force.
And so, we're doing that build literally as we speak at the end of last year and this year, seeing a lot of progress there and really excited about having that in place ASAP in 2026 to accelerate growth in NET before the potential for CRC coming online later in the year. So, really having to make that work from the standpoint of that transition. So, we're all about cabo, cabo near-term growth. Obviously, this is the year for zanza to become, really take the next step forward in how it can be our next large oncology franchise. Again, we've submitted our first regulatory filing to the agency in the fourth quarter for previously treated metastatic colorectal cancer, CRC. We have, in the first wave, seven ongoing or soon-to-begin pivotal trials across RCC, CRC, and the NET indication, but also in meningiomas, which we're very excited about.
And again, our goal is to establish zanzalitinib as a backbone for future oncology franchises and combinations as we go forward. So, first wave of seven is in place, well thought through, being executed on right now. The next wave is being planned, and we have a lot of, I think, a lot of exciting possibilities there. So, cabo, zanza, and then our pipeline behind that is very exciting, a variety of both small molecules and biologics, ADCs and bispecifics across the board. We have four molecules currently in the clinic. I'll touch on those a little bit today. A couple of near-term INDs with XL557 and XB773, which kind of reinforces our approach to building franchises in a multidimensional way that we're really excited about. And again, I would refer you back.
I'm not going to have time today to go into all the details, but again, we had a two-and-a-half-hour R&D Day that's online, so take a listen to that, and you'll hear a lot of really, I think, insightful dialogue between our team, Dana Aftab, P.J. Haley, and some very well-renowned KOLs about these molecules and about cabo and zanza that really puts, I think, a lot of this work into perspective. Finally, we're very disciplined. We always have been, we always will be. I think we have a very appropriate balanced allocation strategy for our capital in a way that makes a lot of sense in terms of investing in the pipeline, having dry powder for the appropriate BD, and then returning cash back to shareholders through our share repurchase program.
That latter aspect, so to date, we've done about $2.16 billion in cash returned to shareholders through our share repurchase plans that we're beginning in early, I think, March of 2023, as on the slide, and we have an ongoing $750 million SRP that was authorized back in October of 2025 that is currently being operationalized, so excited about that. Again, we run the business like a business. We generate a lot of free cash. We use that to invest in the pipeline, focus it with BD, but also return it back to shareholders, and we think that's in a really important, appropriate way to run the business. All right, so top-line summary, this is a slide from R&D Day. It just gives you a sense on where we've come over the last couple of years. Great growth with cabo.
So, 30% growth cumulatively between full year 2023 and full year 2025. Two new indications for cabo in the NET space. Again, zanza's first success in a pivotal trial. Again, with that filing now in place and then five additional pivotal trials either initiated or planned. So, really deep progress and I would say potential in both the near and short-term, mid-term growth potential for the TKI franchise, which is then complemented with our early-stage pipeline, with the molecules we talked about before, both that are in the clinic and moving in that direction relative to what we've got for longer-term growth potential. So, here's a snapshot of our results from 2025. Again, these are unaudited. We'll have final, final numbers on the Q4 call. Total revenues in 2025 of $2.32 billion. Net product revenues were $2.123 billion. R&D expenses were in the $825 million range.
We've set ourselves with a ceiling of about a billion dollars a year for internal R&D, and we came under that because we're making the right investments at the right time for the right assets. We don't feel like we have to hit that ceiling every year, but we're going to do the right thing based upon what the data calls for. And we ended the year with $1.65 billion in cash. Key guidance numbers. I won't read them all here. In terms of net product revenue, it is in the $2.325 billion-$2.425 billion range, so midpoint of $2.375 billion for net product revenues. And then R&D expenses will be in the $875 million-$925 million range. And we don't give guidance on ending cash, but obviously, if we hit those numbers, we'll be in a really good spot there.
So, and again, this guidance does not include any contribution from any potential z anza approval and launch. So, this is pure cabo for now and certainly excited about the opportunity to move the needle further with a zanza approval and launch in CRC at some point in time this year. All right. So, let's take a few minutes and talk about our kind of, again, our view on franchises because I think it's really important to, excuse me, kind of hit this point pretty hard so people understand how we're thinking about it and how we're operationalizing it in terms of what we're doing within R&D. So, we think about what a franchise can be in three dimensions, right? You have a product franchise, kind of like cabo, multiple indications, multiple lines of therapy, multiple combinations within a single molecule. You can also build a franchise around modalities.
You can be a small molecule company. You can be an ADC company. You can be a bispecific company. Or you can build franchises that play together in that way from a modality point of view. Or you can be a tumor franchise company. You can build franchises in tumors. So, you want to be a leader in RCC. You want to be a leader in CRC. You want to be a leader, say, in lung cancer, right? And then focus your resources that way. Well, we view these all really as interacting together and being able to build a pipeline where you play across all those three different dimensions in a way that maximizes value for patients and for shareholders simultaneously.
I think a way to look at this, again, in a very simple pictorial view is this slide, which shows the idea of building a market in a pie chart format where your initial launch might contribute to the existing market basket. If it's an early, kind of an early study, late line, it might be a small piece of that, but it's important. That's really how we played here with cabo. If you go back to 2012 with MTC, it was a tiny little sliver. Second-line RCC at the time was small, but then really was a beachhead for us to build an RCC franchise.
But as you go over time, as that pie, as that market basket pie grows, if you have indications that you can add on, if you have molecules you can add into that indication in that three-dimensional sense, then the market basket gets bigger and ideally you'll own more of that space over time and over time. So, our goal with this approach is to simply build bigger market opportunities and own as much as we can as we go forward across these different modalities, right? And if you look at this from the standpoint of cabo, this is predominantly, this is all cabo with the majority being RCC-driven.
We think NET will play an important role here, but you can imagine, say, within CRC, within the NET space, bringing other modalities in, combining those modalities together, making that pie grow, helping that pie grow because you're constantly improving standard of care for patients in a way that allows prescribers to use your drugs, monotherapy combinations as well, but also then have the duration of action and the duration of treatment really play out well for patients and obviously in terms of revenue. So, we're looking to drive the growth of the overall market size, but also capture a greater share of that market size as time goes on. So, that's the goal. Simple on a slide like this, obviously it's a tough business and much harder to do, but I think we've done that with cabo and we're looking to do it with zanza.
Got a good start there. And then as we go forward with the other molecules in our pipeline. All right. So, here's a view of that kind of opportunity across the different dimensions as we currently stand today with cabo and zanza and the rest of the pipeline. And I won't go through this, again, slide point by point, but it really makes the point that we've got deep focus in terms of franchises across different tumor types, across different modalities, small molecules, TKIs, IOs, ADCs, bispecifics, and then certainly across different tumor types.
So, again, if we can work in this space effectively, find the right combinations, run the right trials, and then be successful in not all of them, because this is a high-attrition business, but in enough of them to move the needle for patients and ultimately for shareholders, then we will continue to be successful and build value as an organization. So, that's the goal. So, I'll just go through these one at a time relatively quickly. Again, these are slides that we had at our R&D Day. So, I would again encourage you, if you're interested, to go back. It's online. You can listen to the experts talk about this much better than I can. But with renal, say, for example, again, we were certainly a key, you see that? I guess you can't.
Key player in going from 2015 to 2024, taking a $1.5 billion market to what looks like a $7 billion market in 2024 with CABOMETYX, single molecule, the right studies, the right combinations across lines of therapy. We're able to really build that market, help build that market with everybody else in the field. And ultimately, not only benefit shareholders, but the patient experience and the survival metrics have improved dramatically for those patients, right? So, we're doing our job by improving standard of care, and we're able to then generate the appropriate level of financial success based upon that. And that we think can continue into the next decade as we move forward with a variety of different approaches. This snapshot covers the whole basis. I'm not going to go into it in great detail at all.
I just highlight what you can see where we're working potentially with zanza, the opportunities we have to combine with a variety of different agents and different modalities. We like to think about combination approaches in a real orthogonal sense where you can have MOAs that are related or overlapping, or you can have MOAs that are orthogonal, very different. And our experience has been the farther apart they can be, if you have the right tolerability and the right insight into the biology and how that might interplay, then your chance of really moving the needle for patients goes up dramatically. So, we're looking at that. Lots of ideas around combination with bispecifics and cell therapies and even looking at personalized neoantigen therapy, which is a kind of fancy way of saying vaccines, which is a little bit out of vogue right now, but nonetheless very important, ADCs.
Lots of options that we're looking at carefully from an internal point of view or within BD, but clearly one that we're a leader in RCC. We want to build upon that momentum going forward, and I think we've got the right team and the right molecule to do that, right? CRC, very similar sort of way. Really excited about, again, the opportunity here. Again, this has been historically a tumor that's been categorized as a cold tumor. Hasn't really responded to IO in the past to a large degree. The 303 trial, STELLAR-303, is the first example after four misses of a successful combination approach using an IO backbone as part of that regimen. So, we're super thrilled about that. The 316 study, which is on the books to start this year, looks earlier.
We moved up in line of therapy, post-adjuvant therapy opportunity by combining potentially zanza either by itself or with an IO therapy, looking at patients who are at high risk for progression after both surgery and adjuvant chemotherapy. Really important technologies there that come to play that really make the timing for that right. The opportunity here is to build, right? Again, have different pieces of that, right? XB371, our tissue factor targeting ADC plays well into this space as well. Again, in a very similar kind of analysis, you can see the opportunities we have ahead of us in terms of combinations, either zanza with IO, existing IO therapies, zanza with molecules like 628, zanza's in combination with XB371, our tissue factor targeting ADC that we think can certainly help move the needle there.
So, lots to do here, but we're really with a stake in the ground for STELLAR-303 and that success, we are moving forward this with great interest and great speed. And finally, in the NET space, similar idea. This is one that I think is long overdue for innovation. And certainly, the data we had with cabo in the CABINET study in collaboration with the Alliance Cooperative Group, I think really sets us up well there. So that, again, first stake in the ground with cabo, first new molecule approved in neuroendocrine tumors for the last decade at least. So, we're thrilled about that. We have a trial going with zanza in STELLAR-311, zanzalitinib versus everolimus head-to-head, which is a very, very important first, second-line study. XL557, our oral SSTR2 antagonist. We aspire to basically replace all of the parenteral agents with this molecule.
And that therapy class is really the backbone for NET therapy from first day on until basically the patients for literally forever. So, we're thrilled about that opportunity as well. It's a big opportunity, big market. And you can see the opportunity here from a market size point of view, based on our projections, is a 3x in terms of taking a $2.5 billion market up to a $7+ billion market. So, lots of room to grow there. But again, really reinforces the idea of this multidimensional franchise approach. Different molecules together, lines of therapy, giving you the maximal opportunity across the different dimensions, right? So, all right. And that's kind of highlighted here with what's happening. So, let me end here because I think this is a good place to basically transition to Q&A. So, everything we're trying to do is, again, build franchises.
We want to really establish what we have now with cabo and zanza. We want to be able to expand upon that in the near term with the next wave of trials, right, with those molecules, and then entrench in the mid to long term with the pipeline. But it's to build multiple franchise molecules across the board that allow us to have the maximum impact for patients and then basically reap those benefits financially for shareholders as we go forward. So, I'll stop there. There's more slides here. I'm happy to use those in the Q&A. Again, I'll refer you back to our R&D presentation, and thanks again for hanging around so late in the evening. I know it's probably cocktail time somewhere. Lots of receptions tonight, so, again, I'm very grateful for you guys coming and certainly back to J.P. Morgan for the great day today.
So, thank you.
Questions from the audience? Maybe I can kick things off, some housekeeping. So, for zanza, the NDA has been filed. I presume it's been accepted. Has the agency set an action date yet?
So, we announced it was filed back in December. So, if you will, the timing probably isn't appropriate for having all those details. So, we'll talk about that more once we have details to share.
Got it. And then when you think about the launch, obviously CRC is kind of a fragmented market. How do you plan to position the 303 regimen and what does an ideal patient profile look like?
So, in fact, I've got a slide here. I'm so glad you asked that question. Good job. Let me go to that slide. So, bear with me here. In fact, I went too far, so I'll go back.
This is, I think, a good slide which kind of summarizes kind of our current view of the market opportunity based on market research. It's a fairly large $1.5 billion market opportunity that's fragmented across basically three different classes. The largest is actually kind of generic chemo with targeted therapies for gene-driven tumors like RAF or EGFR, etc. The other two-thirds are basically one-third LONSURF, Bev, and one-third regorafenib. In the U.S., it's a fairly equally distributed market between those three classes. Our view is based upon the data winning in the ITT population against a standard of care like regorafenib. Any patient in that third, fourth line setting would be eligible. Obviously, we are looking at the non-liver met population. That data was not mature at the time of the final analysis for the ITT.
But if we were to win there, that would be a great place to actually focus our efforts along with everybody else within the ITT population. So, look, our job is to educate physicians and prescribers based upon whatever labeled data we have in the label and obviously very compliant there, but then help them understand the value we have for patients, and then they take it from there.
Got it. Thank you.
Yeah, please.
Did you have a pre-NDA meeting with the FDA, and was there any feedback in terms of filing for ITT or LM or NLM?
Yeah. So, don't want to talk about FDA discussions, obviously. That's all confidential. But the filing went in with the ITT population because that's where we had the overall survival win. Yep.
I believe there's a readout from the 304 trial this year in RCC.
Right.
Maybe you can just talk about the trial design. I know it's a heterogeneous population. So, Sutent, I believe, is the comparator arm. Maybe you can talk about what type of delta over sunitinib you would need to see in order to gain adoption and maybe clinical guideline adoption as well.
Yeah, sure. So, here's a slide with upcoming milestones for zanza over the next year. Some we've hit already, and some are in progress. 304 is, again, looking at frontline non-clear cell RCC. The trial is looking at experimental arm is zanza plus nivolumab. The control arm is sunitinib. Looking at overall objective response rates, PFS, and overall survival as the endpoints of interest. This is a first trial that's being run globally, first global pivotal trial that we're running that's ever been run in non-clear cell RCC.
All the other indications for existing clear cell RCC labels cover. They're not actually just for clear cell RCC, but it's for advanced RCC. So, we're very excited about the opportunity to be able to have the first potentially positive trial in non-clear cell RCC. And depending upon the kind of data we get from this trial would really define our ability to not only get approval, right, but also then get compendia listing that would put us near the top based upon having level one evidence.
Got it.
Okay.
Thank you.
Good. Okay.
One more?
One more. Okay.
Do you have a higher level question? So, at this point, Exelixis' pipeline. How do you approach go-no-go decisions with such a broad pipeline? You don't strike me as the type of company that does an NPV analysis and does it very well.
We do them all the time.
Come on. Chris is going to get mad at you, man. No, I think we do. Look, we do very stringent analysis, I'd say, clinical, commercial, and financial about where we invest, right? And we have to, right? So, I think some of our special sauce, if you will, is that we have this deep commercial perspective on what success looks like. And that helps guide us in terms of not only generating the right numbers to be able to understand the value proposition, but then what's the nuance in the marketplace to be able to make that work or not. And I think, to be frank, a lot of companies don't have that, and they might make the wrong or suboptimal decisions based upon where they invest. We go back to some of the earlier days where we doubled down, tripled down on cabo.
We stopped everything else. That was based on data, but that was based on a real sense of the, I'd say, the commercial opportunity in RCC that a lot of people either they didn't see and they either saw and they didn't believe we could do it, or they just didn't believe in it, right? Just another TKIs. How's it going to be different? What does it matter? Well, the reality was it was different. It was better, and it did matter, right? So, it's that nuance that really matters. And I think we've got the analytical horsepower to run, to get the data to feel good about what we're doing. But then it's the understanding of the nuance in that commercial market and the opportunity that really drives that too. So, it's a mix of both.
Awesome.
Okay. Cool. All right. Let's break there.
We all have places to go. Appreciate your time. Have a great meeting. Okay. Thank you.