Exelixis (EXEL): the only profitable biotech in our screener
2026-06-23 · By Lubin Danilo, founder of Lubin Investment
Exelixis (EXEL) is a rare oncology biotech: it generates positive and growing FCF through Cabometyx, its drug approved for kidney, thyroid, and liver cancers. With a P/FCF of 17.1x and a price slightly below our target, EXEL is the only biotech in our screener that meets all our profitability criteria.
Why Exelixis is unique in the biotech universe
The vast majority of biotech companies are in research and development phase: they burn hundreds of millions of dollars per year without generating revenue, hoping that a Phase 3 drug will receive FDA approval. This reality makes biotechs incompatible with our methodology, which requires 10 positive FCF profitability criteria. Exelixis is the exception: the company generates real, recurring, and growing FCF.
Cabometyx: the flagship drug generating FCF
Cabometyx (cabozantinib) is a tyrosine kinase inhibitor FDA-approved for three major indications: renal cell carcinoma (first and second line), hepatocellular carcinoma (liver cancer), and differentiated thyroid cancer. These multiple approvals create indication diversification that reduces patent expiry risk concentrated on a single market. Exelixis also receives royalties on sales by Ipsen (Europe) and Takeda (Asia), adding a layer of geographically diversified revenue.
Valuation data: P/FCF 17.1x, slightly below target
| Indicator | Value |
|---|---|
| Current price | $51.35 |
| FCF per share | $3.00 |
| Current P/FCF | 17.1x |
| Entry target | $55.64 |
| Discount vs target | +8.4% |
| Lubin screener score | 10/10 |
A P/FCF of 17.1x may seem high compared to mature sectors, but for a biotech generating growing FCF with an active pipeline (several Cabometyx combinations in clinical trials), this premium is justified. The price is 8.4% below our entry target, placing it in the buy zone per our methodology.
Exelixis-specific risks
- Cabometyx concentration: most FCF depends on a single drug. Loss of a major indication or increased competition could affect revenues.
- Patent expiry: Cabometyx is protected in the USA until approximately 2030. Generic entry will significantly reduce revenues after that date.
- Pipeline in development: Exelixis is investing in new molecules (zanzalintinib, XL309). These trials may fail, losing the post-2030 growth story.
- Licensing agreement dependency: Ipsen and Takeda royalties are tied to contracts with their own renegotiation risks.
FAQ
Why are most biotechs excluded from your screener?
Our methodology requires 10 FCF profitability criteria: positive FCF over 3 and 5 years, FCF margin > 15%, FCF growth, etc. The vast majority of development-stage biotechs burn cash. They cannot satisfy these criteria. Exelixis is the exception: it successfully crossed the commercialization milestone and now generates real FCF.
What exactly is Cabometyx?
Cabometyx is the brand name for cabozantinib, a multi-kinase tyrosine kinase inhibitor that blocks several signaling pathways involved in tumor growth and vascularization (VEGFR, MET, AXL). It is FDA-approved for renal cell, hepatocellular carcinoma, and thyroid cancer. It is taken orally once daily, which facilitates adherence.
What happens when Cabometyx's patent expires?
Patent expiry (around 2030 in the USA) opens the door to generics, which will significantly reduce price and revenues. Exelixis is preparing for this transition with its new molecule pipeline (notably zanzalintinib). The key question: can the company replace Cabometyx revenues before expiry? This is the primary risk to monitor.
How does Exelixis earn money outside the USA?
Exelixis licensed Cabometyx rights to Ipsen for Europe and Takeda for Asia. In return, it receives royalties on their sales. This licensing model allows it to benefit from international markets without bearing the costs of a global sales force. These royalties represent a growing share of FCF.
Is EXEL in a buy zone per your methodology?
Yes. Our entry target is $55.64. The current price of $51.35 is 8.4% below this target. With the perfect screener score, EXEL is in the buy zone per our methodology. This does not constitute investment advice. Cabometyx concentration risk must be factored in.
Voir l'analyse EXEL sur Lubin Investment
About the author
Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I have analyzed stocks through their fundamentals for several years and invest my own money with this method. I codified it into a tool that judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).