Is EXEL a good stock to buy?We came across a bullish thesis on Exelixis, Inc. on TradersPro's Substack. In this article, we will summarize the bulls' thesis on EXEL. Exelixis, Inc.'s share was trading at $66.28 as of October 28th 2026. EXEL's trailing and forward P/E were 20.62 and 15.25 respectively according to Yahoo Finance.
This isn't the first time we see a drug development company pitched as a great investment. EXEL shares gained 70.21% over the last 12 months. Comparable stocks like Halozyme Therapeutics gained 101.19% during the same period. Why are drug development stocks rising so much and is it really a good time to buy them?
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In July, we published an article about the 10 Best Under-the-Radar Stocks to Invest In and EXEL ranked #4 in that article. EXEL returned 16.11% since then. So, hedge funds were right about EXEL. This article highlights EXEL among Billionaire Cliff Asness' Top 10 Healthcare Stock Picks. Before getting into our analysis, let's take a look at the business and why some investors like the stock so much.
Exelixis, Inc. (NASDAQ:EXEL) develops cancer treatments, and its biggest growth driver is CABOMETYX, a daily pill approved for kidney cancer, liver cancer, thyroid cancer and certain neuroendocrine tumors. Cancer treatment demand rarely gets deferred, which gives Exelixis, Inc. a stable, profitable oncology business. Growth is coming from wider use of CABOMETYX, especially in kidney and neuroendocrine tumor cases, while zanzalintinib, a newer drug candidate being tested for colorectal, kidney and other cancers, is seen as the company's next big opportunity.
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The bullish case is simple: Exelixis, Inc. earns steady money from CABOMETYX, and it uses that money to fund research into new drugs instead of depending on outside investors, unlike many smaller biotech companies. This approach has worked so far, and if zanzalintinib succeeds in its late-stage trials, it could add a second major growth driver alongside CABOMETYX.
Going forward, the key question is whether Exelixis, Inc. can turn its current strength into a bigger cancer treatment business. CABOMETYX keeps gaining from doctor adoption, especially in cancers with few other treatment options, while zanzalintinib is being tested across multiple tumor types. A success here would reduce the company's reliance on a single product, but investors still need proof that ongoing research will lead to more approved drugs.
Exelixis, Inc. benefits from being profitable enough to fund its own research rather than raising outside capital. That said, the usual biotech risks remain: trial results, regulatory approval delays ( see the FDA's three-month review extension for zanzalintinib ) and competition from newer cancer therapies. A setback for zanzalintinib could hurt growth expectations, and CABOMETYX still needs to keep expanding as rival treatments enter the market.
CABOMETYX remains the company's main revenue source today, but its long-term stock story depends more on whether the pipeline behind it succeeds, not just on how well the current product performs.
The stock has also caught the attention of chart-focused traders, with rising volume and price action pointing to renewed buying interest. That said, this kind of technical strength should be viewed alongside the company's actual business progress, since the real question for investors is still whether Exelixis, Inc. can build a second successful drug beyond CABOMETYX.
Still, this growth plan carries execution risk, since it depends on successfully developing and selling new therapies, not just steady cancer treatment demand. Some investors remain cautious about the company's valuation and its ability to deliver pipeline results, which is also reflected in its short interest, discussed further below.
Another risk for the stock is the eventual loss of patent protection supporting CABOMETYX's profitability. Its cash generation funds Exelixis's research, but that funding advantage depends partly on keeping lower-priced generic versions off the market. A recent appeals ruling preserved key patents, although MSN could potentially launch its proposed generic in January 2030, subject to further litigation and regulatory exclusivity. Generic entry could put pressure on CABOMETYX's pricing and sales even if cancer treatment demand remains strong. That would leave less cash to fund research and shareholder returns. New drugs would then need to replace declining profits rather than simply add growth. In our opinion, the valuation becomes harder to justify if replacement earnings arrive too slowly to offset generic competition.
Hedge fund positioning shows a mixed signal. As per our database, 47 hedge fund portfolios held Exelixis, Inc. at the end of the second quarter, up from 41 in the previous quarter. This increase suggests institutional investors are becoming more interested in the stock, even as questions remain about its pipeline. By comparison, BioMarin Pharmaceutical (NASDAQ:BMRN) was held by 54 hedge funds, down from 62, Neurocrine Biosciences (NASDAQ:NBIX) was held by 45 hedge funds, down from 53, and Halozyme Therapeutics was held by 38 hedge funds, up from 32. Halozyme Therapeutics (NASDAQ:HALO) recorded the strongest percentage increase in hedge fund interest, while Exelixis matched its gain of six funds, suggesting institutional enthusiasm strengthened for these two companies despite pullbacks elsewhere in the group.
Short interest data also paints a fairly cautious picture for Exelixis, Inc. relative to its peers. About 15.07% of Exelixis, Inc.'s float is sold short, well above BioMarin Pharmaceutical Inc. at 6.24% and Neurocrine Biosciences, Inc. at 8.24%, but slightly below Halozyme Therapeutics, Inc. at 15.77%. This suggests Exelixis, Inc. is drawing more skepticism than BioMarin Pharmaceutical Inc. and Neurocrine Biosciences, Inc., while bearish bets remain broadly in line with Halozyme Therapeutics, Inc., reflecting caution about its growth outlook despite its established cancer treatment business.
Valuation Analysis
EXEL's forward P/E is 15.25x. BioMarin Pharmaceutical Inc., Neurocrine Biosciences, Inc., and Halozyme Therapeutics, Inc. trade at forward P/Es of 8.40x, 14.88x, and 14.20x, respectively. EXEL's own forward P/E was 11.21x on December 31, 2025, making its current multiple approximately 36% higher. We believe the current valuation reflects expectations for continued CABOMETYX growth and the potential for zanzalintinib to become a second major revenue source. However, the premium appears modest relative to Neurocrine and Halozyme, although the larger gap with BioMarin means EXEL is not uniformly inexpensive against its peers. Exelixis's established CABOMETYX business generates profits that fund research, while zanzalintinib's development across multiple cancers offers a path toward a more diversified product portfolio. We believe EXEL can justify its current valuation if CABOMETYX sustains earnings while pipeline development delivers additional commercial opportunities. If Exelixis protects its existing franchise and successfully brings zanzalintinib to market, the current valuation could offer an attractive entry point despite the risks surrounding regulatory approval and reliance on its leading drug.
Previously, we covered a bullish thesis on CRISPR Therapeutics (CRSP) by MADD-Scientis in March 2025, which highlighted Casgevy's commercial potential, strong cash position, and pipeline opportunities in gene editing. CRSP's stock price has appreciated by approximately 32.07% since our coverage.We believe the current valuation could offer an attractive entry point if Exelixis sustains CABOMETYX growth and brings zanzalintinib to market, despite patent and regulatory risks.
Exelixis, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds . While EXEL could offer long-term upside if CABOMETYX sustains earnings and zanzalintinib becomes a second growth driver, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than EXEL that operates as a critical AI tollboothand stands as the most important company in the world, check out our report about this must-own AI stock .
Disclosure: None.
