What Does Truist’s New Analyst Think About Exelixis (EXEL) and Its Next-Generation Cancer Drug?

Exelixis, Inc. (NASDAQ:EXEL) is one of billionaire Cliff Asness’ top 10 healthcare stock picks. On June 25, Truist analyst Gregory Renza downgraded the stock to Hold from Buy with a price target of $54, up from $51, after assuming coverage of the name.

What Does Truist's New Analyst Think About Exelixis (EXEL) and Its Next-Generation Cancer Drug?

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Truist resumed the coverage because Renza is stepping in for Asthika Goonewardene. Incidentally, Goonewardene had been consistently bullish on the stock, and whose last action was holding a Buy and raising the price target to $51 from $44.55 on January 14.

Renza argued that the reason for the Hold rating was pipeline uncertainty, specifically around zanzalintinib. Zanzalintinib is the next-generation cancer drug that Exelixis is developing as a long-term successor to cabozantinib, its flagship product, and which currently drives the bulk of the company’s revenues.

The analyst noted that the FDA is currently reviewing Exelixis’s application for zanzalintinib in combination with atezolizumab as a treatment for previously treated metastatic colorectal cancer. This application is supported by positive data from the Phase 3 STELLAR-303 trial. However, regulatory approval alone does not guarantee commercial success, and the broader clinical program still has several major data readouts pending, Renza noted.

Exelixis, Inc. (NASDAQ:EXEL) is an oncology-focused biotechnology company. It discovers, develops, and commercializes small molecule therapies for cancer treatment. Its lead product is cabozantinib, which is sold as Cabometyx and is approved for renal cell carcinoma, hepatocellular carcinoma, and differentiated thyroid cancer.

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