Exelixis, Inc. (EXEL): Business Model Canvas [10-2024 Updated]

Exelixis, Inc. (EXEL) stands at the forefront of oncology innovation, harnessing a robust business model that integrates strategic partnerships, pioneering research, and a commitment to patient care. With a focus on developing effective cancer therapies, Exelixis not only addresses critical unmet medical needs but also optimizes its resources to deliver value across the healthcare ecosystem. Dive deeper into the intricacies of Exelixis' business model canvas and discover how it shapes their journey in the fight against cancer.

Exelixis, Inc. (EXEL) - Business Model: Key Partnerships

Collaborations with Bristol-Myers Squibb for cabozantinib combinations

Exelixis has established collaborations with Bristol-Myers Squibb focusing on the combination therapies involving cabozantinib. This partnership aims to leverage the strengths of both companies in oncology to enhance treatment options for patients. Specific financial details regarding milestone payments or revenue sharing from this collaboration were not disclosed in the latest reports.

Partnerships with Ipsen and Takeda for global commercialization

Exelixis has significant collaborations with Ipsen and Takeda for the global commercialization of cabozantinib. In the nine months ending September 30, 2024, Exelixis recognized:

• License revenues from Ipsen totaling $150.0 million due to cumulative net sales achievements related to cabozantinib.
• Royalty revenues from Ipsen of $113.0 million, reflecting an increase from $98.6 million in the prior year.
• Royalty revenues from Takeda amounting to $9.5 million during the same period, up from $9.2 million year-over-year.

These partnerships are crucial for expanding cabozantinib's reach, particularly in Europe and Japan, where both companies are responsible for its marketing and sales efforts.

Research collaborations with companies like Genentech and Royalty Pharma

Exelixis maintains research collaborations with Genentech and Royalty Pharma. For the three months ended September 30, 2024, Exelixis earned:

• $2.7 million from the U.S. commercialization of COTELLIC, a product under collaboration with Genentech.
• Royalties from Genentech's ex-U.S. net sales of COTELLIC totaling $0.7 million.

Additionally, Royalty Pharma's agreement includes a 3% royalty on worldwide net sales of cabozantinib, which contributed $19.7 million in royalties during the three months ended September 30, 2024, compared to $17.5 million in the same period of the previous year.

In-licensing agreements for novel oncology assets

Exelixis actively engages in in-licensing agreements to enhance its oncology pipeline. Notably, a significant upfront payment of $80.0 million was made to Insilico in September 2023 for an exclusive license agreement, indicating Exelixis' commitment to expanding its therapeutic offerings.

Partnership	Revenue/Payment Type	Amount (in millions)	Period
Ipsen	License Revenues	150.0	9 months ended September 30, 2024
Ipsen	Royalty Revenues	113.0	9 months ended September 30, 2024
Takeda	Royalty Revenues	9.5	9 months ended September 30, 2024
Genentech	Share of Profits	2.7	3 months ended September 30, 2024
Royalty Pharma	Royalty Revenues	19.7	3 months ended September 30, 2024
Insilico	Upfront Payment	80.0	September 2023

Exelixis, Inc. (EXEL) - Business Model: Key Activities

Conducting clinical trials for drug candidates

As of September 30, 2024, Exelixis reported total clinical trial costs amounting to $73.6 million for the third quarter, a decrease of 4% compared to $76.8 million for the same period in 2023. The nine-month total for clinical trial costs was $207.5 million, reflecting a 5% increase from $197.6 million in the previous year.

Clinical trial costs by scientific modalities are broken down as follows:

Product	Q3 2024 Costs (in thousands)	Q3 2023 Costs (in thousands)	9M 2024 Costs (in thousands)	9M 2023 Costs (in thousands)
Cabozantinib	$16,245	$25,179	$50,970	$82,368
Zanzalintinib	$33,107	$40,898	$104,208	$90,327
Other small molecules	$6,082	$2,281	$13,661	$7,574
Biotherapeutics	$18,165	$8,487	$38,693	$17,378

Research and development of innovative cancer therapies

Research and development (R&D) expenses for the third quarter of 2024 totaled $222.6 million, a significant decrease of 33% compared to $332.6 million for the same period in 2023. For the nine months ending September 30, 2024, R&D expenses were $661.4 million, down 17% from $799.4 million in the previous year.

The R&D expenses are categorized as follows:

Category	Q3 2024 Expenses (in thousands)	Q3 2023 Expenses (in thousands)	9M 2024 Expenses (in thousands)	9M 2023 Expenses (in thousands)
Clinical trial costs	$73,599	$76,845	$207,532	$197,647
Personnel expenses	$43,105	$43,786	$135,915	$127,846
License and other collaboration costs	$10,000	$80,013	$27,500	$80,022
Consulting and outside services	$10,621	$9,835	$34,654	$30,803
Other development costs	$21,040	$24,286	$71,885	$65,150

Regulatory submissions and interactions with health authorities

Exelixis continues to engage with regulatory bodies for its drug candidates. In October 2024, the company announced the initiation of a phase 1 clinical trial for XL495, which received FDA acceptance for its IND filing. This reflects Exelixis' ongoing commitment to regulatory engagement and compliance.

As of September 30, 2024, Exelixis has allocated $45.9 million of transaction prices from its collaborations to research and development services performance obligations that have not yet been satisfied.

Marketing and sales of approved products like CABOMETYX

Exelixis reported net product revenues of $478.1 million for the third quarter of 2024, up 12% from $426.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, net product revenues reached $1.29 billion, an 8% increase from $1.20 billion in the previous year.

Net product revenues specifically from CABOMETYX were as follows:

Period	Q3 2024 Revenues (in thousands)	Q3 2023 Revenues (in thousands)	9M 2024 Revenues (in thousands)	9M 2023 Revenues (in thousands)
CABOMETYX	$475,665	$422,155	$1,285,423	$1,187,220

As of September 30, 2024, CABOMETYX is approved and commercially available in 68 countries outside the U.S..

Exelixis, Inc. (EXEL) - Business Model: Key Resources

Proprietary drug candidates including cabozantinib and zanzalintinib

Exelixis, Inc. has developed several proprietary drug candidates, notably cabozantinib and zanzalintinib. Cabozantinib is marketed under the brand name CABOMETYX, which generated net product revenues of $1.285 billion for the nine months ended September 30, 2024. Zanzalintinib, currently in clinical trials, represents a significant part of Exelixis' ongoing research and development efforts.

Experienced research and development team

Exelixis boasts a skilled team of over 400 employees focused on research and development activities. The company has invested approximately $222.6 million in research and development expenses for the third quarter of 2024, down from $332.6 million in the same quarter of the previous year. This team is responsible for advancing clinical programs, including those for cabozantinib and zanzalintinib, which are crucial for sustaining the company's innovation pipeline.

Financial resources from product revenues and collaborations

As of September 30, 2024, Exelixis had $1.7 billion in cash, cash equivalents, and marketable securities. The company reported total revenues of $539.5 million for the third quarter of 2024, a 14% increase from $471.9 million in the prior year. This revenue comprises net product revenues, license revenues, and collaboration services, reflecting a robust financial foundation to support ongoing operations and development initiatives.

Intellectual property portfolio including patents for drug formulations

Exelixis maintains a comprehensive intellectual property portfolio that includes numerous patents covering drug formulations and methods of use. This portfolio is essential for protecting their proprietary drug candidates and ensuring competitive advantage in the market. The company is subject to potential future development milestone payments of up to $509.6 million, regulatory milestone payments of up to $365.3 million, and commercial milestone payments of up to $2.5 billion from collaborations.

Resource Type	Description	Financial Metrics
Proprietary Drug Candidates	Cabozantinib (CABOMETYX), Zanzalintinib	Net product revenues: $1.285 billion (9M 2024)
R&D Team	Over 400 employees	R&D expenses: $222.6 million (Q3 2024)
Financial Resources	Cash, cash equivalents, and marketable securities	$1.7 billion as of September 30, 2024; Total revenues: $539.5 million (Q3 2024)
Intellectual Property	Patents covering drug formulations	Potential milestone payments: $3.4 billion (aggregate)

Exelixis, Inc. (EXEL) - Business Model: Value Propositions

Innovative cancer treatments with proven efficacy

Exelixis, Inc. focuses on developing innovative cancer therapies, primarily centered around cabozantinib, which has been approved for multiple indications including advanced renal cell carcinoma (RCC), hepatocellular carcinoma (HCC), and radioactive iodine-refractory differentiated thyroid cancer (DTC). For the third quarter of 2024, net product revenues from cabozantinib reached $475.7 million, representing a 13% increase compared to $422.2 million in the same period of 2023. The overall net product revenues for the same quarter totaled $478.1 million, a 12% increase from $426.5 million year-over-year.

Unique combination therapies enhancing treatment outcomes

Exelixis has integrated cabozantinib with nivolumab as a first-line treatment for advanced RCC, which has significantly enhanced treatment outcomes. The FDA's approval of this combination has contributed to a 7% increase in the number of cabozantinib units sold in the third quarter of 2024. The overall market share for cabozantinib has expanded due to its effectiveness in various treatment landscapes, reflecting a growing acceptance among healthcare providers.

Commitment to addressing unmet medical needs in oncology

Exelixis is dedicated to addressing significant unmet medical needs in oncology through its extensive research and development efforts. The company reported research and development expenses of $222.6 million in the third quarter of 2024, down from $332.6 million in the same quarter of 2023, indicating a strategic focus on optimizing spending while continuing to advance its pipeline. The company's commitment is further demonstrated by their ongoing clinical trials, including a phase 1 trial for XL495, a small molecule inhibitor of PKMYT1.

Competitive pricing strategies to ensure accessibility

Exelixis employs competitive pricing strategies to maintain accessibility for patients requiring innovative cancer therapies. The gross margin for the third quarter of 2024 was stable at 96%, consistent with previous periods, indicating effective cost management despite increasing sales. The company also recognizes the impact of government programs and pricing pressures, which have led to increased discounts and allowances, reflecting a commitment to affordability.

Metric	Q3 2024	Q3 2023	Change (%)
Net Product Revenues	$478.1 million	$426.5 million	12%
Cabozantinib Revenues	$475.7 million	$422.2 million	13%
Research and Development Expenses	$222.6 million	$332.6 million	-33%
Gross Margin	96%	96%	0%

Exelixis, Inc. (EXEL) - Business Model: Customer Relationships

Direct sales teams engaging healthcare professionals

Exelixis employs a dedicated sales force to engage healthcare professionals, focusing on the promotion of its primary product, CABOMETYX. In the third quarter of 2024, Exelixis reported net product revenues of $478.1 million, marking a 12% increase from $426.5 million in the same period of 2023. The sales team is strategically positioned to reach oncologists and healthcare providers, ensuring that they are well-informed about the product's benefits and applications in cancer treatment.

Educational programs for physicians on product usage

Exelixis invests in educational initiatives aimed at healthcare professionals to enhance their understanding of CABOMETYX and its clinical applications. The company has implemented various continuing medical education (CME) programs and workshops. These programs have shown effectiveness in increasing physician knowledge and confidence in prescribing CABOMETYX, contributing to a steady increase in sales volume, which rose by 7% over the previous year.

Support services for patients and medical providers

Exelixis offers comprehensive support services designed to assist both patients and healthcare providers. This includes patient assistance programs that help eligible patients access CABOMETYX, as well as resources for healthcare providers to streamline the treatment process. The financial performance reflects this focus, with total revenues reaching $539.5 million in Q3 2024, compared to $471.9 million in Q3 2023. These services are critical in ensuring adherence to treatment protocols and improving patient outcomes.

Feedback mechanisms for continuous improvement in offerings

Exelixis actively seeks feedback from both healthcare professionals and patients to refine its product offerings and customer relationships. This is facilitated through surveys and direct communication channels. The company reported that it recognized $14.6 million in milestone revenues in Q3 2024, underscoring its commitment to continuous improvement and responsiveness to market needs.

Metric	Q3 2024	Q3 2023	Change (%)
Net Product Revenues	$478.1 million	$426.5 million	12%
Total Revenues	$539.5 million	$471.9 million	14%
Milestone Revenues	$14.6 million	$0.9 million	1,522%

Exelixis, Inc. (EXEL) - Business Model: Channels

Direct sales through specialty pharmacies and hospitals

Exelixis, Inc. generates a significant portion of its revenue through direct sales of its primary product, CABOMETYX, via specialty pharmacies and hospitals. For the third quarter of 2024, net product revenues reached $478.1 million, compared to $426.5 million in the same period in 2023, indicating a 12% increase year-over-year.

Collaboration with third-party distributors

Exelixis collaborates with third-party distributors, particularly Ipsen and Takeda, to expand its market reach. In the nine months ended September 30, 2024, Exelixis recognized $299.9 million in license revenues, a 125% increase from $133.4 million in the previous year. The collaboration with Ipsen alone contributed significantly to royalty revenues, amounting to $113.0 million for the nine months ended September 30, 2024.

Digital platforms for educational outreach and information dissemination

Exelixis utilizes digital platforms to enhance educational outreach. While specific financial metrics for digital channels are not disclosed, the company's emphasis on digital engagement is evident in its marketing strategy aimed at healthcare professionals and patients. This approach supports the dissemination of information about CABOMETYX and other products, thereby driving awareness and sales.

Participation in medical conferences and symposiums for visibility

Exelixis actively participates in medical conferences and symposiums to increase visibility and promote its products. These events serve as platforms for networking with healthcare professionals and discussing clinical data regarding CABOMETYX. For instance, the company reported a total revenue of $539.5 million for the third quarter of 2024, up from $471.9 million in the same quarter of 2023, reflecting the impact of such engagements on sales performance.

Channel Type	Revenue Contribution (2024 Q3)	Year-over-Year Growth
Direct sales (specialty pharmacies and hospitals)	$478.1 million	12%
License revenues from collaborations	$299.9 million	125%
Royalty revenues (Ipsen)	$113.0 million	14% (approx.)
Total revenues	$539.5 million	14%

Exelixis, Inc. (EXEL) - Business Model: Customer Segments

Oncologists and healthcare providers prescribing cancer therapies

Exelixis, Inc. primarily targets oncologists and healthcare providers who prescribe cancer therapies. In Q3 2024, the company reported net product revenues of $478.1 million, which reflects a 12% increase from $426.5 million in Q3 2023. A significant portion of these revenues is derived from the sales of CABOMETYX, which had net product revenues of $475.7 million in Q3 2024.

Patients with specific types of cancer needing treatment options

The customer segment of patients specifically includes those diagnosed with advanced renal cell carcinoma (RCC), hepatocellular carcinoma (HCC), and differentiated thyroid cancer (DTC). The FDA approved CABOMETYX in combination with nivolumab as a first-line treatment for advanced RCC, contributing to an increase in prescription volume. The number of units sold for CABOMETYX increased by 7% in Q3 2024 compared to Q3 2023, driven by the longer duration of therapy and increased market share.

Research institutions and clinical trial participants

Exelixis collaborates with various research institutions and clinical trial participants to further develop its oncology pipeline. In Q3 2024, the company reported research and development expenses of $222.6 million, a decrease from $332.6 million in Q3 2023, indicating a focus on efficient spending in clinical trials. The clinical trial costs specifically for CABOMETYX in Q3 2024 were $16.2 million, down from $25.2 million in Q3 2023.

Pharmaceutical partners in collaborative development efforts

Exelixis maintains partnerships with pharmaceutical companies like Ipsen and Takeda for the commercialization and development of cabozantinib. In Q3 2024, Exelixis recognized $60.2 million in license revenues, a 42% increase from $42.4 million in Q3 2023, primarily attributed to milestone payments from collaborations. Additionally, collaboration services revenues decreased by 59% to $1.2 million in Q3 2024, indicating fluctuating contributions from collaborative partners.

Customer Segment	Key Metrics	Comments
Oncologists and Healthcare Providers	Net product revenues: $478.1 million (Q3 2024)	12% increase from Q3 2023
Patients	Units sold: Increased by 7% (Q3 2024)	Driven by FDA approval for RCC treatment
Research Institutions	R&D expenses: $222.6 million (Q3 2024)	Focus on efficient spending
Pharmaceutical Partners	License revenues: $60.2 million (Q3 2024)	42% increase from Q3 2023

Exelixis, Inc. (EXEL) - Business Model: Cost Structure

Research and Development Expenses Including Clinical Trials

Research and development (R&D) expenses for Exelixis, Inc. in the third quarter of 2024 amounted to $222.6 million, a decrease from $332.6 million in the same period in 2023. For the nine months ended September 30, 2024, R&D expenses totaled $671.1 million, down from $944.9 million year-over-year.

Key components of R&D expenses include:

• Clinical trial costs: $73.6 million for Q3 2024, compared to $76.8 million in Q3 2023.
• Personnel expenses: $43.1 million for Q3 2024, down from $43.8 million in Q3 2023.
• License and other collaboration costs: $10.0 million for Q3 2024, significantly reduced from $80.0 million in Q3 2023.

Overall, R&D expenses are projected to remain a significant portion of Exelixis' cost structure as the company continues its focus on clinical trials and drug development.

Manufacturing Costs for Drug Production

The cost of goods sold (COGS) for Exelixis was $17.3 million for the three months ended September 30, 2024, a decrease of 8% compared to $18.8 million in the same quarter of 2023. For the nine months ended September 30, 2024, COGS totaled $56.3 million, an increase of 11% from $50.8 million in the previous year.

COGS primarily consists of:

• 3% royalty payable on U.S. net sales of any product containing cabozantinib.
• Costs of inventory sold, including indirect labor costs and logistics expenses.

The gross margin for Exelixis has remained stable at 96% for both the three and nine months ended September 30, 2024.

Marketing and Sales Expenditures to Promote Products

Selling, general, and administrative expenses (SG&A) for Exelixis for the third quarter of 2024 were $111.8 million, down from $138.1 million in Q3 2023. For the nine months ended September 30, 2024, SG&A expenses totaled $354.8 million, compared to $397.1 million in the same period in 2023.

Marketing and sales costs are essential for promoting products such as CABOMETYX, which contributed to net product revenues of $478.1 million in Q3 2024, up from $426.5 million in Q3 2023.

Royalties and Licensing Fees Associated with Partnerships

Exelixis incurs royalties primarily through its collaboration agreements. For the three months ended September 30, 2024, royalty revenues were $38.3 million, up from $34.8 million in Q3 2023. For the nine months ended September 30, 2024, royalty revenues reached $113.0 million, compared to $98.6 million in the same period of the previous year.

Additionally, milestone revenues recognized during the three and nine months ended September 30, 2024, were $14.6 million and $167.7 million, respectively, compared to $0.9 million and $13.1 million in the corresponding prior year periods.

Cost Category	Q3 2024 (in million $)	Q3 2023 (in million $)	9M 2024 (in million $)	9M 2023 (in million $)
Research and Development Expenses	222.6	332.6	671.1	944.9
Cost of Goods Sold	17.3	18.8	56.3	50.8
Selling, General and Administrative Expenses	111.8	138.1	354.8	397.1
Royalty Revenues	38.3	34.8	113.0	98.6
Milestone Revenues	14.6	0.9	167.7	13.1

Exelixis, Inc. (EXEL) - Business Model: Revenue Streams

Product sales primarily from CABOMETYX

Exelixis' primary revenue stream comes from the sale of CABOMETYX, a drug used in the treatment of various cancers. For the three months ended September 30, 2024, net product revenues for CABOMETYX were $475.7 million, reflecting a 13% increase from $422.2 million for the same period in 2023. For the nine months ended September 30, 2024, CABOMETYX generated net revenues of $1.285 billion, up from $1.187 billion in 2023, marking an 8% increase.

Period	Net Revenues (in millions)	Percentage Change
Q3 2024	$475.7	13%
Q3 2023	$422.2	-
9M 2024	$1,285.4	8%
9M 2023	$1,187.2	-

License revenues from collaboration agreements

License revenues for Exelixis have seen substantial growth, with total license revenues of $60.2 million for Q3 2024, a 42% increase from $42.4 million in Q3 2023. For the nine months ended September 30, 2024, license revenues reached $299.9 million, compared to $133.4 million for the same period in 2023, representing a 125% increase.

Period	License Revenues (in millions)	Percentage Change
Q3 2024	$60.2	42%
Q3 2023	$42.4	-
9M 2024	$299.9	125%
9M 2023	$133.4	-

Milestone payments from development partnerships

Exelixis has also benefited from milestone payments associated with its collaboration agreements. For the three months ended September 30, 2024, milestone revenues totaled $14.6 million, significantly up from $0.9 million in Q3 2023. For the nine months ended September 30, 2024, milestone revenues were $167.7 million, compared to $13.1 million in the prior year, highlighting the impact of successful milestones achieved in its partnerships.

Period	Milestone Payments (in millions)
Q3 2024	$14.6
Q3 2023	$0.9
9M 2024	$167.7
9M 2023	$13.1

Royalties on net product sales from collaborative arrangements

Royalty revenues have also been a significant source of income for Exelixis. For Q3 2024, royalty revenues amounted to $38.3 million, up from $34.8 million in Q3 2023. For the nine-month period, royalties reached $113.0 million in 2024, compared to $98.6 million in 2023. This growth is attributed to increased net sales of cabozantinib by collaboration partners like Ipsen and Takeda.

Period	Royalty Revenues (in millions)
Q3 2024	$38.3
Q3 2023	$34.8
9M 2024	$113.0
9M 2023	$98.6

Article updated on 8 Nov 2024

Resources:

1. Exelixis, Inc. (EXEL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Exelixis, Inc. (EXEL)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Exelixis, Inc. (EXEL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.