EXEL 10-K & 10-Q changes, risk factors and insider trading

Risks Related to the Commercialization of Our Marketed Products

Our ability to grow our company is dependent upon the commercial success of CABOMETYX in its approved indications andand, to a lesser degree, the continued clinical development, regulatory approval, clinical acceptance and commercial success of the cabozantinib franchise in additional indications.franchise.

We anticipate that for the foreseeable future, our ability to maintain or meaningfully increase cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the highly competitive indications for which it is approved, and possibly for other indications for which cabozantinib is currently being or will be evaluated in potentially label-enabling clinical trials, if warranted by the data generated from these trials. In this regard, part of our strategy is to pursue additional indications for CABOMETYX and increase the number of cancer patients who could potentially benefit from this medicine. However, weWe cannot be certain that thethese clinical trials we and our collaboration partners are conducting will demonstrate adequate safety and efficacy in these additional indications to receive regulatory approvalapproval, inand the major commercial markets where CABOMETYX is approved. Eveneven if the required regulatory approvals to market CABOMETYX for additional indications are achieved, we and our collaboration partners may not be able to commercialize CABOMETYX effectively and successfully in these additionalsuch indications. If revenue from CABOMETYX decreases or remains flat, or if we are unable to expand the number of labeled indications for which CABOMETYX is approved, or if we or our collaboration partners fail to achieve anticipated product royalties and collaboration milestones, we may need to reduce our operating expenses, access other sources of cash or otherwise modify our business plans, which could have a material adverse impact on our business, financial condition and results of operations.

Our ability to increase or maintain revenues from sales of CABOMETYX for its approved indications is, and if approved for additional indications will be,is highly dependent upon the extent of market acceptance of CABOMETYX among physicians, patients, foreign and U.S. government healthcare payers such as Medicare and Medicaid, commercial healthcare plans and the medical community. Market acceptance for CABOMETYX could be impacted by numerous factors, including the effectiveness and safety profile, or the perceived effectiveness and safety profile, of CABOMETYX compared to competing products, the strength of CABOMETYX sales and marketing efforts and changes in pricing and reimbursement for CABOMETYX. If CABOMETYX does not continue to be prescribed broadly for the treatment of patients in its approved indications, our product revenues could flatten or decrease, which could have a material adverse impact on our business, financial condition and results of operations.

The biopharmaceutical industry is competitive and characterized by constant technological change and diverse offerings of products, particularly in the area of oncology therapies. ManySome of our competitors have greater capital resources, larger research and development staff and facilities, deeper organizational regulatory experience and more extensive product manufacturing and commercial capabilities than we do, which may afford them a competitive advantage. Further, our competitors may be more effective at in-licensingin-license and developingdevelop new commercial products that could render our products, and those of our collaboration partners, obsolete or noncompetitive. We face, and will continue to face, intense competition from biopharmaceutical companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing scientific and clinical research activities similar to ours.

Furthermore, theThe specific indications for which CABOMETYX is currently or may be approved,approved based onin the results from clinical trials currently evaluating cabozantinib,future are highly competitive. Several novel therapies and combinations of therapies have been approved, are in advanced stages of clinical development or are under expedited regulatory review in these indications, and these other therapies are currently competing or are expected to compete with CABOMETYX, or the FDA may update their labeling to add accepted indications that compete with CABOMETYX. Even if our current and future clinical trials produce positive results sufficient to obtain marketing approval by the FDA and other global regulatory authorities, it is uncertain whether physicians will choose to prescribe regimens containing our products instead of competing products and product combinations in approved indications.

Maintaining our sales, marketing, market access and product distribution capabilities requires significant resources, and there are numerous risks involved with maintaining and continuously improving our commercial organization, including our potential inability to successfully recruit, train, retain and incentivize adequate numbers of qualified and effective sales and marketing personnel. We are competing for talent with numerous commercial- and precommercial-stage, oncology-focused biopharmaceutical companies seeking to build out and maintain their commercial organizations, as well as larger biopharmaceutical organizations that have extensive, well-funded and more experienced sales and marketing operations, and we may be unable to maintain or adequately scale our commercial organization as a resultbecause of such competition. Also, to the extent that the commercial opportunities for CABOMETYX grow over time, we may not properly scale the size and experience of our commercialization teams to market and sell CABOMETYX successfully in an expanded number of indications. If we are unable to maintain or scale our commercial function appropriately, we may not be able to maximize product revenues, which could have a material adverse impact on our business, financial condition and results of operations.

Our ability to commercialize our products successfully is highly dependent on the extent to which health insurance coverage and reimbursement is, and will be, available from third-party payers, including foreign and U.S. governmental payers, such as Medicare and Medicaid, and private health insurers. Third-party payers continue to scrutinize and manage access to pharmaceutical products and services and may limit reimbursement for newly approved products and indications. Patients are generally not capable of paying for CABOMETYX or COMETRIQ themselves and rely on third-party payers to pay for, or subsidize, the costs of their medications, among other medical costs. Accordingly, market acceptance of CABOMETYX and COMETRIQ is dependent on the extent to which coverage and reimbursement is available from third-party payers. These payer entities could refuse, limit or condition coverage for our products, such as by using tiered reimbursement or pressing for new forms of contracting, or alternatively for patients who rely on our co-pay assistance program, implementing co-pay accumulators or maximizers that exempt such co-pay assistance from patient deductibles (or otherwise modify benefit designs in a manner that takes into account the availability of co-pay assistance), which actions have increased and could further increase the costs of our co-pay assistance program or cause patients to abandon CABOMETYX or COMETRIQ therapy due to higher out-of-pocket costs. In April 2024, the CMS finalized regulations that will mitigate maximizer programs by requiring individual and small group market health plans to consider as essential health benefits (EHB) all prescription drugs that are covered in excess of a state’s EHB benchmark plan. The Departments of Labor, Treasury, and Health and Human ServicesHHS stated their intent to address the application of this policy to large group market and self-insured plans in future rulemaking. CMS also plans to address in future rulemaking the application of manufacturer assistance to the annual cost-sharing limit; this follows a 2023 federal district court decision vacating a rule that provided health plans with discretion whether to include manufacturer assistance toward the annual cost-sharing limit. If third-party payers do not provide or increase limitations on coverage or reimbursement for CABOMETYX or COMETRIQ, our revenues and results of operations may suffer. In addition, even if third-party payers provide some coverage or reimbursement for CABOMETYX or COMETRIQ, the availability of such coverage or reimbursement for prescription drugs under private health insurance and managed care plans, which often varies based on the type of contract or plan purchased, may not be sufficient for patients to afford CABOMETYX or COMETRIQ.

Current healthcare laws, policies, and regulations in the U.S. and future legislative or regulatory reforms to the U.S. healthcare system, including those related to drug pricing, may affect our ability to commercialize our marketed products profitably. Pricing for pharmaceutical products in the U.S. has come under increasing attention and scrutiny by federal and state governments, legislative bodies and enforcement agencies. Initiatives arising from this scrutiny may result in changes that have the effect of reducing our revenue or harming our business or reputation.

•revisions to rules associated with the calculation of average manufacturer price and average sales price; best price and rebate liability (including broadening the circumstances under which products are subject to rebates and recent changes CMS made to the calculation of average sales price for the Medicare Part B program regarding the treatment of fees as “bona fide service fees” and for bundled sales, which CMS could seek to implement in the Medicaid Drug Rebate Program, and which in turn could impact our rebate liability) for the MDRP,Medicaid Drug Rebate Program, along with CMS’ stated objective to consider potential future rulemaking that if implemented, could significantly increase manufacturer rebate liability; and

•reevaluation of safe harbors under the AKS.federal Anti-Kickback Statute (AKS).

For instance, in August 2022, former President Biden signed theThe IRA, whichwhich, among other things: enables CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program; subjects drug manufacturers to potential civil monetary penalties and a significant excise tax for offering a price that is not equal to or less than the government-imposed “maximum fair price”MFP under the law; imposes Medicare rebates for certain Part B and Part D drugs where relevant pricing metrics associated with the products increase faster than inflation; and redesigns the funding and benefit structure of the Medicare Part D program, potentially increasing manufacturer liability while capping annual out-of-pocket drug expenses for Medicare beneficiaries. These provisions started taking effect incrementally in late 2022 and currently are subject to various legal challenges. As of the date of this report, for example, CMS has begun to implement aspects of the IRA and finalized regulations addressing the Medicare Part B and Medicare Part D inflation rebate provisions of the IRA. These provisions generally require manufacturers of Medicare Part B and Part D rebatable drugs to pay inflation rebates to the Medicare program if pricing metrics associated with their products increase faster than the rate of inflation. In addition, in OctoberSeptember 2024,2025, CMS releasedissued final guidance setting forth the requirements and procedures for implementing the Medicare Drug Price Negotiation Program for the secondthird round of drug pricing evaluations (for which commencesthe next 15 selected products were announced January 27, 2026, with negotiations to follow over the course of the year, resulting in 2025 and will result in maximum fair pricesMFPs that will become effective beginning in 20272028), as well as requirements for manufacturers in effectuating maximum fair pricesMFPs in 20262026, 2027, and 2027.2028. The IRA also contains the limited small biotech exception, which applies on a drug-specific basis. Qualifying drugs may be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential maximum fair priceMFP in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year. We have qualified for the small biotech exception with respect to our cabozantinib franchise products through 2027.Initial WePrice intendApplicability toYear apply(IPAY) to2027, CMSand towe maintainreapplied for the small biotech exception throughfor 2030.IPAY In2028. JanuaryAdditionally, in July 2025, CMSCongress announcedenacted legislation that expands the listorphan drug exclusion under the IRA. Starting with price evaluations for 2028, CMS cannot select a drug if all of 15its drugsapproved selectedindications are for rare diseases or conditions. Moreover, if a drug no longer qualifies for the secondorphan rounddrug exclusion because it is approved for a non-rare disease or condition, the 7-year or 9-year timeline before it may be selected will begin upon approval of the drug pricingfor evaluations.such non-rare disease or condition. Separately, in NovemberDecember 2023,2024, CMS released final guidance on the Part D Discount Program, which will requirerequires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts. As we received notice from CMS that we qualify for the "specified small manufacturer” designation, we are eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program from 2025 to 2031. BeginningIn inNovember 2025, weCMS will be required to payissued a 1%proposed discountrule inon the initial and catastrophic phases, and provided that we maintain the specified small manufacturer designation, we will be required to increase our rebates to Part D payersDiscount untilProgram wethat arelargely required to paycodifies the fullfinal 10%guidance. discountIn (initialApril phase) in 2029 and the 20% discount (catastrophic phase) in 2031.2025, CMS isfinalized also in the process ofregulations implementing the Medicare Prescription Payment Plan, under which Medicare Part D beneficiaries may opt to make their cost-sharing payments in capped monthly installments; CMS expects that this program will most likely benefit those beneficiaries with high cost-sharing early in their respective plan years.

AtIn theaddition to such drug pricing and transparency matters, other state level, legislatureslegislative and regulatory agenciesinitiatives haveinclude increasingly passed legislation and implemented regulationsproposals designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on pricing or reimbursement at the state government level, limitations on discounts to patients, advance notices of price increases, marketing cost disclosure and transparency measures, and, in some cases, policies to encourage importation from other countries (subject to federal approval) and bulk purchasing. Furthermore, adoption of these drug pricing transparency regulations, and our associated compliance obligations, may increase our general and administrative costs and/or diminish our revenues. Implementation of these federal and/or state cost-containment measures or other healthcare reforms may limit our ability to generate product revenue or commercialize our products, and in the case of drug pricing transparency regulations, may result in fluctuations in our results of operations.

Additionally, cost-control initiatives, increasingly based on affordability and accessibility, as well as post-marketing assessments of the added value of CABOMETYX and COMETRIQ as compared to existing treatments, could influence the prices paid for and net revenues we realize from CABOMETYX and COMETRIQ, or the indications for which we are able to obtain reimbursement, which would result in lower license revenues to us. Recent legislative changes and ongoing policy changes in the EU are aimed at increasing cooperation between the EU Member States.States of the EEA. Such initiatives, particularly the Regulation on Health Technology Assessment adopted in December 2021 and entered into application in January 2025, may further impact the price and reimbursement status of CABOMETYX and COMETRIQ.

Under the FDCA, the FDA can approve an ANDA for a generic version of a branded drug without the applicant undertaking the human clinical testing necessary to obtain approval to market a new drug. The FDA can also approve a 505(b)(2) NDA that relies in part on the agency’sFDA’s findings of safety and/or effectiveness for a previously approved drug, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use. Both the ANDA and 505(b)(2) NDA processes are discussed in more detail in “Item 1. Business—Government Regulation—FDA Review and Approval—Abbreviated FDA Approval Pathways and Generic Products” of this Annual Report on Form 10-K. In either case, if an ANDA or 505(b)(2) NDA applicant submits an application referencing one of our marketed products prior to the expiry of one or more of our Orange Book-listed patents for the applicable product and includes a paragraph IV certification asserting that the patents are invalid or not infringed, we may litigate with the potential generic competitor to protect our patent rights, which would result in substantial costs, divert the attention of management, and could have an adverse impact on our stock price. For example, other companies, including MSN Pharmaceuticals, Inc. (individually and Suncollectively with certain of its affiliates, including MSN Laboratories Private Limited, referred to as MSN) have separatelyapplied for or received tentative approval for an ANDA for generic versions of CABOMETYX tablets. Azurity Pharmaceuticals, Inc. (Azurity) has received tentative approval for a 505(b)(2) NDA for cabozantinib tablets and Handa Oncology, LLC (Handa) has submitted ANDAsa to505(b)(2) the FDANDA requesting approval to market theircabozantinib respectivecapsules generic(in versionsthe form of CABOMETYXcabozantinib tablets,lauryl sulfate). Both of these 505(b)(2) products are for different strengths of cabozantinib than CABOMETYX. Because of this, we believe that the FDA would not consider them to be therapeutically equivalent and they cannot be automatically substituted for CABOMETYX. With the exception of Handa (for which we continue to evaluate all legal and strategic options), we have subsequently filed patent infringement lawsuits against these companies. For a more detailed discussion of these litigation matters, see “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K. It is possible that MSNMSN, orAzurity, SunHanda, or other companies, followingwill obtain FDA approval of an ANDA or 505(b)(2) NDA, couldand introduce generic or otherwise competitor versions of our marketed productscabozantinib before our patents expire if they do not infringe our patents or if it is determined that our patents are invalid or unenforceable,unenforceable. and weWe expect that generic cabozantinib products would be offered at a significantly lower price compared to our marketed cabozantinib products. Regardless of the regulatory approach, the introduction of a generic version of cabozantinib would likely decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations. There are also equivalent procedures in the EUEEA permitting authorization of generic versions of medicinal products authorized in the EU once related data and market exclusivity periods have expired.

The U.S. federal government has also taken numerous legislative and regulatory actions to expedite the development and approval of generic drugs. Both Congress and the FDA are considering, and have enacted, various legislative and regulatory proposals focused on drug competition, including legislation focused on drug patenting and provision of drug to generic applicants for testing. For example, the Ensuring Innovation Act, enacted in April 2021, amended the FDA’s statutory authority for granting NCE exclusivity to reflect the agency’sFDA’s existing regulations and longstanding interpretation that award NCE exclusivity based on a drug’s active moiety, as opposed to its active ingredient, which is intended to limit the applicability of NCE exclusivity, thereby potentially facilitating generic competition. In addition, the Further Consolidated Appropriations Act, 2020, which incorporated the framework from the Creating and Restoring Equal Access To Equivalent Samples (CREATES) legislation, allows ANDA, 505(b)(2) NDA or biosimilar developers to obtain access to quantities of branded drug and biological product samples necessary to conduct research and development. Further, Section 3222 of the Consolidated Appropriations Act, 2023, enacted on December 29, 2022 (2023 Appropriations Act), requires the FDA to make therapeutic equivalence determinations for 505(b)(2) NDAs at the time of approval, or up to 180 days thereafter, if requested by the applicant. Additionally, Section 3224 of the 2023 Appropriations Act allows the FDA to approve an ANDA even if there are differences between the generic drug’s proposed labeling and that of the listed drug due to the FDA approving a change to the listed drug’s label (excluding warnings) within 90 days of when the ANDA is otherwise eligible for approval, provided that the ANDA applicant agrees to submit revised labeling for the generic drug within 60 days of approval. In addition, the policies introduced in the Generic Drug User Fee Amendments Commitment Letter give the FDA greater flexibility to approve ANDAs without adding additional review cycles when there are changes to the reference listed drug that may previously have delayed approval. While the full impact of these provisions is unclear at this time, they have the potential to facilitate the development and future approval and market success of generic versions of our products, introducing generic competition that could have a material adverse impact on our business, financial condition and results of operations. Moreover, in September 2023, the FTC issued a policy statement, supported by the FDA, warning brand pharmaceutical companies that they could face legal action under the FTC Act if they improperly list patents in the Orange Book, and it subsequently initiatedinitiated, and continues to initiate, challenges against patents held by brand pharmaceutical companies and listed in the Orange Book under the FDA’s patent listing dispute process. In December 2024, the Federal Circuit ruled that, to be listed in the Orange Book, a patent must claim the active ingredient of the drug product. If affirmed on appeal, thisThis decision may limit the number of patents brand pharmaceutical companies may list in the Orange Book. In April 2025, the U.S. administration issued an executive order that, among other things, directs the FDA to issue a report with recommendations to accelerate the approval of generics, biosimilars, combination products, and second-in-class brand name medications, and, in October 2025, the FDA announced a pilot prioritization program that makes generic drugs for which required bioequivalence testing is conducted in the U.S. and that are made in the U.S. using domestic sources for active pharmaceutical ingredient(s) eligible for priority review. It remains to be seen what effect these may have on potential generic competition for our products, if any.

Apart from our drug discovery efforts, our strategy to expand our development pipeline is also dependent on our ability to successfully identify and acquire or in-license relevant investigational oncology assets and technologies. However, the in-licensing and acquisition of investigational oncology assets and technologies is a highly competitive area, and many other companies are pursuing the same or similar investigational oncology assets and technologies to those that we may consider attractive. In particular, largerLarger companies with more capital resources and more extensive clinical development and commercialization capabilities may have a competitive advantage over us. Furthermore, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We may also be unable to in-license or acquire additional investigational oncology assets and technologies on acceptable terms that would allow us to realize an appropriate return on our investment. Even if we succeed in our efforts to obtain rights to suitable investigational oncology assets and technologies, the competitive business environment may result in higher acquisition or licensing costs, and our investment in these potential product candidates and technologies will remain subject to the inherent risks associated with the development and commercialization of new medicines. In certain circumstances, we may also be reliant on licensors for the continued development of any product candidates and/or technologies that we have in-licensed and such licensors’ efforts to safeguard their underlying intellectual property.

Clinical testing of cabozantinib for new indications, or of our other product candidates, such as zanzalintinib,candidates is a lengthy, costly, complex and uncertain process that may ultimately fail to demonstrate sufficiently differentiated safety and efficacy data for those products to compete in our highly competitive market environment.

Clinical trials are inherently risky and may reveal that cabozantinib, despite its approval for certain indications, or a new product candidate, such as zanzalintinib,candidate is ineffective or has an unacceptable safety profile with respect to an intended use. SuchThis also applies to the testing of new indications for cabozantinib, or the clinical development of zanzalintinib, or any of our other product candidates. Adverse clinical trial results may significantly decrease the likelihood of regulatory approval of a product candidate or of an approvednew product foror a new indication.indication Moreover,for an existing product. Furthermore, the results of preliminary studies do not necessarily predict clinical or commercial success, and late-stage or other potentially label-enabling clinical trials may fail to confirm the results observed in early-stage trials or preliminary studies. AlthoughFinally, although we have established timelines for manufacturing and clinical development as well as manufacturing of cabozantinib, zanzalintinib and our other product candidates based on existing knowledge of our compounds in development and industry metrics, we may not be able to meet those timelines.

•reduced staffing or shortages in laboratory supplies and other resources necessary to complete theclinical trials;

The ongoing Russia-Ukraineconflicts between Russia and Israel-HamasUkraine conflictsand in the Middle East and the political, economic and social instability in Venezuela have had modest impacts on our clinical development operations and may continue to have adverse impacts on the ability of clinical sites and enrolled patients to adhere to trial protocols for in-office clinical visits and other procedures, our ability to supply clinical sites with cabozantinib, zanzalintinib or other study drugs and to pay clinical sites and investigators for work performed, as well as our ability to collect data and conduct site monitoring visits, all of which could undermine the data quality for patients enrolled at these clinical sites. These issues could further impact our anticipated timelines for completing the trials and achieving clinical endpoints, as well as increase our clinical development expenses. If there are further delays in or termination of the clinical testing of cabozantinib, zanzalintinib or our other product candidates due to any of the events described above or otherwise, our expenses could increase and our ability to generate revenues could be impaired, either of which could adversely impact our financial results. Furthermore, we have relied and may in the future rely on collaboration partners to share a significant portion of the expenses associated with our clinical development programs. Should one or all of our collaboration partners decline to support future planned clinical trials, we will be entirely responsible for financing the further development of the cabozantinib franchise, zanzalintinib or our other product candidates and, as a result, the burden of clinical trial expenses we incur associated with our business plans may be materially greater than currently anticipated, which could have a material adverse impact on our business, financial condition and results of operations.

We may not be able to pursue the further development of the cabozantinib franchise, zanzalintinib or our other product candidates or meet current or future requirements of the FDA or regulatory authorities in other jurisdictions in accordance with our stated timelines or at all. Our planned clinical trials may not begin on time, or at all, may not be completed on schedule, or at all, may not be sufficient for registration of our product candidates or otherwise may not result in an approvable product. The duration and the cost of clinical trials vary significantly due to a number of factors, including, but not limited to: the characteristics of the product candidate under investigation; the number of patients who ultimately participate in the clinical trial; the duration of patient follow-up; the number of clinical sites included in the trial; and the length of time required to enroll eligible patients. Any delay could limit our ability to generate revenues, cause us to incur additional expenses and cause the market price of our common stock to decline significantly.

Any clinical trial may fail to produce results satisfactory to the FDA or regulatory authorities in other jurisdictions. The FDA has substantial discretion in the approval process and may refuse to approve any NDA or sNDA or require additional preclinical, clinical, safety or other non-clinical studies. In addition, policy-based activities could delay the approval of an application for cabozantinib, zanzalintinib, or our other product candidates. For example, the FDA’s OCE has many initiatives aimed at improving oncology drug development, some of which may lead to the need for additional studies, such as dose optimization. Many of these initiatives are based on guidance issued by OCE. If the FDA chooses to withdraw those guidance documents for any reason it may affect our ability to gain regulatory approval based on studies that relied on those guidance documents. The FDA also continues to develop and finalize guidance documents that further refine the development process for oncology drug products.products, although the FDA’s rate of issuing guidance has slowed significantly under the current U.S. administration. And, as this market expands, it becomes increasingly difficult to demonstrate benefit over the standard of care, which can be a hurdle for approval. Moreover, the development of our product candidates may be delayed by other events beyond our control. For example, action by the newcurrent TrumpU.S. Administrationadministration to further limit federal agency budgets or personnel, may result in reductions to the FDA’s budget, employees,workforce, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates. Pursuant to a February 2025 executive order on workforce optimization, on March 27, 2025, the HHS announced that it was initiating a restructuring of the department, including reducing the FDA’s workforce by approximately 3,500 full-time employees, which began on April 1, 2025. The termination of these employees has been preceded and accompanied by the resignation of senior and mid-level leaders within the FDA, which could result in the potential loss of certain institutional knowledge and experience. Terminations, and resignations at the FDA have continued and there has been notable turnover and instability in key leadership positions. Although the full impact of these events remains unclear, there could be an adverse effect on the FDA’s ability to efficiently carry out its functions, including conducting inspections and timely reviewing drug product applications, and a potential impact on how it interprets and enforces its authorities, which may be also exacerbated by other events, such as a U.S. federal government shutdown. Further, ongoing deregulation and transparency efforts at the FDA could create regulatory uncertainty for biopharmaceutical companies. Additionally, uncertainty remains as to how the FDA’s use of artificial intelligence (AI) and deployment of agentic AI capabilities, including for review of drug product applications, will impact the outcomes and timeliness of FDA reviews and other activities.

The FDA has also been tightening the requirements for confirmatory studies for drugs approved via accelerated approval under additional authorities the AgencyFDA received in Section 3210 of the FDORA (incorporated in Section 3222 of the 2023 Appropriations Act). While the standard for accelerated approval remains unchanged, the FDA may now require that confirmatory trials for drugs approved under the pathway be underway prior to approval, which was not previously a requirement. The changes to the law are intended to prevent accelerated approval of drugs without verified clinical benefit, which had previously resulted in withdrawal of approval for certain products and indications approved on an accelerated basis. While it is not clear at this time how these legislative and regulatory initiatives will affect our plans to pursue accelerated approval for one or more of our product candidates, these developments may have a material adverse impact on our business, financial condition, and results of operations.

Even if the FDA or a comparable authority in another jurisdiction grants accelerated approval for cabozantinib in one or more new indications or for zanzalintinib or one of our other product candidates, including zanzalintinib, such accelerated approval may be limited, imposing significant restrictions on the indicated uses, conditions for use, labeling, distribution, and/or production of the product and would impose requirements for post-marketing studies, including additional research and clinical trials, all of which may result in significant expense and limit our and our collaboration partners’ ability to commercialize cabozantinib, zanzalintinib or our other product candidates in any new indications. In addition, some products approved under accelerated approval have encountered challenges with CMS coverage determinations. Failure to complete post-marketing requirements could significantly increase costs or delay, limit or ultimately restrict the commercialization of cabozantinib, zanzalintinib or another product candidate in the approved indication, or result in product withdrawal. Further, current or any future laws or executive orders governing FDA or foreign regulatory approval processes that may be enacted or executed could have a material adverse impact on our business, financial condition, and results of operations.

Although we reported net income of $521.3$782.6 million and $207.8$521.3 million for the fiscal years ended December 31, 20242025 and 2023,2024, respectively, we may not be able to maintain or increase profitability on a quarterly or annual basis, and we are unable to predict the extent of future profits or losses. The amount of our net profits or losses will depend, in part, on: the level of sales of CABOMETYX and COMETRIQ in the U.S.; our achievement of development, regulatory and commercial milestones, if any, under our collaboration agreements; the amount of royalties from sales of CABOMETYX and COMETRIQ outside of the U.S. under our collaboration agreements; other collaboration revenues; and the level of our expenses associated with our extensive drug discovery, clinical development, business development and commercialization activities, as well as our general business expansion plans. Our expected future expenses may also be increased by inflationary pressures, which could increase the costs of outside services, labor, raw materials and finished drug product. The introduction of orSignificant changes in tariffs or other trade barriers, such as the enactment of tariffs on goods imported into the United States, including, but not limited to, the proposed tariffs on goods imported from China, Mexico and Canada (including raw materials and components used in our manufacturing processes), or the introduction of additional tariffs or other trade barriers, could also increase the costs of our finished drug product. We expect to continue to spend substantial amounts to fund the continued development of the cabozantinib franchise for additional indications and of zanzalintinib and our other product candidates, as well as the commercialization of our approved products. In addition, we intend to continue to expand our oncology product pipeline through our drug discovery efforts, including research collaborations, in-licensing arrangements and other strategic transactions that align with our oncology drug development, regulatory and commercial expertise, which efforts could involve substantial costs. To offset these costs in the future, we will need to generate substantial revenues. If these costs exceed our current expectations, or we fail to achieve anticipated revenue targets, our profitability and financial condition may be adversely affected and the market value of our common stock may decline.

•laws, regulations or practices imposed by countries or regions outside the U.S. that could impact or inhibit scientific research or the development of healthcare products by foreign competitors or otherwise disadvantage healthcare products made by foreign competitors, as well as general political or economic instability or downturn in those countries, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers, restrictions, or threats of such actions and the related uncertainty thereof, any of which could complicate, interfere with or impede our relationships with our ex-U.S. research, development and in-licensing partners; and

We work with scientific advisors at academic and other institutions, as well as third-party contractors in various locations throughout the world, who assist us in our research and development efforts, including in drug discovery and preclinical development strategy. These third parties are not our employees and may have other commitments or contractual obligations that limit their availability to us. Although these third-party scientific advisors and contractors generally agree not to do competing work, if a conflict of interest between their work for us and their work for another entity arises, we may lose their services. There has also been increased scrutiny surrounding the disclosures of payments made to medical researchers from companies in the pharmaceutical industry, and it is possible that the academic and other institutions that employ these medical researchers may prevent us from engaging them as scientific advisors and contractors or otherwise limit our access to these experts, or that the scientific advisors themselves may now be more reluctant to work with industry partners. Even if these scientific advisors and contractors with whom we have engaged intend to meet their contractual obligations, their ability to perform services may be impacted by increased demand for such services from other companies or by other external factors, such as reduced capacity to perform services. If we experience additional delays in the receipt of services, lose work performed by these scientific advisors and contractors or are unable to engage them in the first place, our discovery and development efforts with respect to the matters on which they were working or would work in the future may be significantly delayed or otherwise adversely affected.

We do not operate our own manufacturing or distribution facilities for CMC development activities, preclinical, clinical or commercial production and distribution for our current products and new product candidates. Instead, we mostly rely on various third-party contract manufacturing organizations to conduct these operations on our behalf in accordance with cGMP. As our operations continue to grow in these areas, we are expanding internal CMC development laboratories to include preclinical, and continue to augment our external network focusing on our product candidates. We expect this to enable us to maximize application of our internal expertise and scientific know-how and advance our product candidates more efficiently and with greater technical precision, speed, agility and quality, while working in close collaboration with our expanding external manufacturing and supply chain network through additional third-party contract manufacturers, distributors and suppliers. To establish and manage our manufacturing network and supply chain requires a significant financial commitment, the creation of numerous third-party contractual relationships and continued oversight of these third parties to fulfill compliance with applicable legal and regulatory requirements, including the FDA’s cGMP, the EC’s Guidelines on GDP, as well as other stringent regulatory requirements enforced by the FDA or foreign regulatory agencies, as applicable. These third parties are also subject to routine inspections by the FDA and foreign regulatory agencies. Although we maintain significant resources to directly and effectively oversee the activities and relationships with the third parties in our network, we do not have direct control over their operations.

Our third-party contract manufacturers may not be able to produce or deliver material on a timely basis or manufacture material with the required quality standards, or in the quantity required to meet our preclinical, clinical development and commercial needs and applicable regulatory requirements. Although we have not yet experienced significant production delays or seen significant impairment to our supply chain as a result of the ongoing hostilitiesconflicts between Russia and Ukraine and in Eastern Europe and the Middle EastEast, the political, economic and social instability in Venezuela or other global events, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers, restrictions, or threats of such actions and the related uncertainty thereof, our third-party contract manufacturers, distributors and suppliers could experience operational delays due to lack of capacity or resources, facility closures and other hardships as a result of these types of global events, which could impact our supply chain by potentially causing delays to or disruptions in the supply of our preclinical, clinical or commercial products. If our third-party contract manufacturers, distributors and suppliers do not continue to supply us with our products or product candidates in a timely fashion and in compliance with applicable quality and regulatory requirements, or if they otherwise fail or refuse to comply with their obligations to us under our manufacturing, distribution and supply arrangements, we may not have adequate remedies for any breach. Furthermore, their failure to supply us could impair or preclude meeting commercial or clinical product supply requirements for us or our partners, which could delay product development and future commercialization efforts and have a material adverse impact on our business, financial condition and results of operations. In addition, through our third-party contract manufacturers and data service providers, we continue to provide serialized commercial products as required to comply with the DSCSA and its foreign equivalents where applicable. If our third-party contract manufacturers or data service providers fail to support our efforts to continue to comply with DSCSA and its foreign equivalents, as well as any future electronic pedigree requirements, we may face legal penalties or be restricted from selling our products.

•state and federal pharmaceutical price and price reporting laws and regulationsregulations, including the provisions enacted through the IRA;

These federal and state healthcare laws and regulations govern prescription drug marketing practices, including off-label promotion,promotion and direct-to-consumer (DTC) advertisements. These laws and regulations may also impactaffect our current and future business arrangements with third parties, including various healthcare entities. If our operations are found, or even alleged, to be in violation of the laws described above or other governmental regulations that apply to us, we, or our officers or employees, may be subject to significant penalties, including administrative civil and criminal penalties, damages, fines, regulatory penalties, the curtailment or restructuring of our operations, exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, imprisonment, reputational harm, additional reporting requirements and oversight through a Corporate Integrity Agreement or other monitoring agreement, any of which would adversely affect our ability to sell our products and operate our business and also adversely affect our financial results. Furthermore, responding to any such allegation or investigation and/or defending against any such enforcement actions can be time-consuming and would require significant financial and personnel resources. Therefore, if any state or the federal government initiates an enforcement action against us, our business may be impaired, and even if we are ultimately successful in our defense, litigating these actions could result in substantial costs and divert the attention of management.

To help patients afford our products, we have a patient assistance program and also make periodic donations to independent charitable foundations that help financially needy patients. These types of programs are designed to provide financial assistance to patients who might otherwise be unable to afford pharmaceuticals that they have been prescribed by their physicians and have become the subject of Congressional interest and enhanced government scrutiny. The HHS Office of Inspector General established guidelines permitting pharmaceutical manufacturers to make donations to charitable organizations that provide co-pay assistance to Medicare patients, provided that manufacturers meet certain specified compliance requirements. In the event we are found not to have complied with these guidelines (including as interpreted by the HHS Office of Inspector General) and other laws or regulations respecting these arrangements, we could be subject to significant investigations or damages, fines, penalties or other criminal, civil or administrative sanctions or enforcement actions.

We are an oncology company innovating next-generation medicines and combination regimens at the forefront of cancer care. We have produced four marketed pharmaceutical products, two of which are formulations of our flagship molecule, cabozantinib, and we are steadily advancing and evolving our product pipeline portfolio, including our lead assetclinical asset, zanzalintinib, currently under review by the FDA for the treatment of certain forms of CRC, as well as the focus of an extensive late-stage clinical development program.program in other indications. With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise,expertise and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules, biotherapeuticsmolecules and biotherapeutics, such as ADCs.

Sales related to cabozantinib account for the majority of our revenues. Cabozantinib is an inhibitor of multiple tyrosine kinases, including MET, AXL, VEGF receptors and RET and has been approved by the FDAFDA, and in 6768 other countries for all or a combination of, the following indications: as CABOMETYX® (cabozantinib) tablets for advanced RCC (both alone and in combination with BMS’ nivolumab (OPDIVO®)), for previously treated HCC and forHCC, previously treated, RAI-refractory DTC and previously treated, unresectable, locally advanced or metastatic, well-differentiated pNET and epNET; and as COMETRIQ® (cabozantinib) capsules for progressive,progressive metastatic medullary thyroid cancer.MTC. For physicians treating these types of cancer, cabozantinib has become or is becoming an important medicine in their selection of effective therapies.

The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech (a member of the Roche Group); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited.Sankyo.

We plan to continue leveraging our operating cash flows to advance a broad array of diverse biotherapeutics and small molecule programs for the treatment of cancer, as well as to support ongoing company-sponsored and externally sponsored clinical trials evaluating cabozantinib.cabozantinib Furthest along in our pipeline isand zanzalintinib, a novel, potent, third-generationnovel oral TKIinhibitor thatof targetskinases VEGF receptors, MET andincluding the TAM kinases (TYRO3, AXLAXL, MER), MET and MER).VEGF receptors. Our zanzalintinib development program includes a series of ongoing and planned pivotal trials to explore its therapeutic potential in CRC, RCC, SCCHNccRCC and NET,nccRCC, NET and meningioma, as well as earlier-stage trials. Our other pipeline programs in phase 1 development each have best-in-class potential and include: XL309, a small molecule inhibitor of USP1, which has emerged as a synthetic lethal target in the context of BRCA-mutated tumors; XB010, an ADC consisting of a MMAE payload conjugated to a human mAb targeting the tumor antigen 5T4; and XL495,XB628, a smallfirst-in-class moleculebispecific antibody that simultaneously targets PD-L1 and NKG2A, identified as key regulators of adaptive and innate immune cell activity; and XB371, a next-generation TF-targeting ADC with a topoisomerase inhibitor of PKMYT1.payload. We complement our internal drug discovery and development efforts by in-licensing investigationalor oncology assetsacquiring, or obtaining options to acquirein-license otheror acquire, investigational oncology assets from third parties if those oncology assets demonstrate evidence ofof, or potential for, clinical success. Examples of this approach include XL309 and ADU-1805, a clinical-stage and potentially best-in-class human mAb that targets SIRPα.

The FDA first approved CABOMETYX in the U.S. as a monotherapy for previously treated patients with advanced RCC in April 2016, and then for previously untreated patients with advanced RCC in December 2017. In January 2021, the CABOMETYX label was expanded to include first-line advanced RCC in combination with nivolumab, which was the first CABOMETYX regimen approved for treatment in combination with an ICI. In addition to RCC, in January 2019, the FDA approved CABOMETYX for the treatment of patients with HCC previously treated with sorafenib, and then in September 2021, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with locally advanced or metastatic DTC that has progressed following prior VEGF receptor-targeted therapy and who are RAI-refractory or ineligible. In March 2025, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pNET and epNET.

The IRA introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the CMS to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under the Medicare Drug Price Negotiation Program. CMS has begun to announce rounds of drugs eligible for negotiation and establish so-called MFP under the Medicare Drug Price Negotiation Program. The IRA also contains the limited small biotech exception.exception, Aswhich applies on a drug-specific basis, and provides that qualifying drugs will be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential MFP in 2029 and 2030, if the manufacturers of thethose datedrugs ofcontinue thisto Annualqualify Reporteach onyear. Form 10-K, CMS has informed us that weWe have qualified for the small biotech exception with respect to our cabozantinib franchise products through IPAY 2027 and we reapplied for the small biotech exception for IPAY 2028. We also intend to apply to CMS to maintain theour small biotech exception and price floor each subsequent year through 2030. Separately, in NovemberDecember 2023,2024, CMS released final guidance on another program, the Part D Discount Program, which will requirerequires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts. We have since received notice from CMS that we qualify for the "specified small manufacturer” designation and are thereby eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program, from 2025 to 2031. WeIn expectNovember 2025, CMS also issued a proposed rule on the increasePart inD manufacturerDiscount discountProgram willthat belargely 1%codifies inthe 2025final guidance. The IRA also imposes additional rebates for certain Part B and willPart furtherD drugs where relevant pricing metrics associated with the products increase accordingfaster tothan a schedule set by CMS until we are required to pay the full 20% discount paid by other manufacturers in 2031.inflation.

To develop and commercialize cabozantinib outside the U.S., we have entered into license agreements with Ipsen and Takeda. To Ipsen, we granted the rights to develop and commercialize cabozantinib outside of the U.S. and Japan, and to Takeda we granted such rights in Japan. Both Ipsen and Takeda also contribute financially and operationally to the further global development and commercialization of the cabozantinib franchise in other potential indications,franchise, and we work closely with them on these activities. Utilizing its regulatory expertise and established international oncology marketing network, Ipsen has continued to execute on its commercialization plans for CABOMETYX, having received regulatory approvals and launched in multiple territories outside of the U.S., including in the EU,EEA, the UnitedU. KingdomK. and Canada, as a treatment for advanced RCC (both as a monotherapy and in combination with nivolumab) and for previously treated HCC and DTC indications. In July 2025, Ipsen received approval for CABOMETYX as a treatment for previously treated, well- differentiated/unresectable, locally advanced, or metastatic pNET or epNET (with local labeling variations) from the EC for the EEA and health regulatory authorities in Brazil and Australia, and from health regulatory authorities in Switzerland and Singapore in October 2025 and December 2025, respectively. With respect to the Japanese market, Takeda received Manufacturing and Marketing Approvals from the Japanese PMDA for monotherapy CABOMETYX as a treatment of patients with curatively unresectable or metastatic RCC and as a treatment of patients with unresectable HCC that has progressed after cancer chemotherapy, as well as for CABOMETYX in combination with nivolumab as a treatment for unresectable or metastatic RCC.

Zanzalintinib is a novel, potent, third-generationnovel oral TKIinhibitor thatof targetskinases VEGF receptors, MET andincluding the TAM kinases (TYRO3, AXLAXL, MER), MET and MER)VEGF receptors, which are implicated in cancer’s growth and spread, and is our first in-house compound to enter the clinic following our re-initiation of drug discovery activities in 2017.spread. We are evaluating zanzalintinib in a robust and growing development program that builds on our prior experience with cabozantinib and targets indications with high unmet need. We have established collaborations and will continue to explore additional opportunities for novel combinations with zanzalintinib. To date, we have initiated two large phase 1b/2 clinical trials studying zanzalintinib as a monotherapy and in combination with ICIs (STELLAR-001 and STELLAR-002). Patient enrollment into STELLAR-001 was completed in 2023 and preliminary results from a randomized expansion cohort of patients with metastatic CRC were presented at the ASCO GI 2025. WeIn anticipateMay initial2025, clinicalpreliminary dataresults readoutsfrom an expansion cohort of patients with previously untreated advanced ccRCC from STELLAR-002 inwere presented at the first2025 halfASCO ofAnnual 2025.Meeting, In addition, in December 2023, we initiated STELLAR-009 studying zanzalintinib in combinationalong with AB521,data anfrom inhibitormultiple ofdose-escalation HIF-2α developed by Arcus; however, enrollment into STELLAR-009 was halted as of September 2024 following the joint decision between us and Arcus to wind down the study and end our clinical collaboration given the two companies’ differing strategies with respect to potential TKI-HIF combination regimens to treat RCC.cohorts.

To further expand our exploration of the clinical potential of zanzalintinib, we entered into a clinical development collaboration with MerckMerck. Pursuant to evaluatethis collaboration, Merck is sponsoring KEYMAKER-U03 (a phase 1/2 trial evaluating zanzalintinib in combination with KEYTRUDA® (pembrolizumab) in SCCHN and in combination with WELIREG® (belzutifan), Merck's oral HIF-2α inhibitor, in RCC.RCC), UnderLITESPARK-033 the collaboration, Merck will supply KEYTRUDA for our ongoing(a phase 3 STELLAR-305trial trialevaluating zanzalintinib in SCCHN.combination Inwith addition,WELIREG Merckversus willcabozantinib sponsorin afirst-line phaseadvanced 1/2 trialRCC) and twoone additional phase 3 pivotal trialstrial in RCC;RCC. Merck will fund one of these phase 3 studies,studies and we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. WeUnder maintainthe collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib.

MuchPart of our drug discovery activity focuses on discovering and advancing various biotherapeutics that have the potential to become anti-cancer therapies, such as bispecific antibodies, ADCs and other innovative treatments. ADCs in particular present a unique opportunity for new cancer treatments, given their capabilities to target the delivery of anti-cancer drug payloads to specific cells expressing the target; this increased precision should minimize collateral impact on healthy tissues that do not express the target. This approach has been validated by multiple regulatory approvals of ADCs in the past several years. To facilitate the growth of our various biotherapeutics programs, we have established multiple research collaborations and in-licensing arrangements and have entered into other strategic transactionstransactions, aimed at conserving capital and managing risks, collectivelythat providingprovide us with access to antibodies, binders, payloads and conjugation technologiestechnologies, which are the components employed to generate next-generation ADCs or multispecific antibodies. We have also established laboratories for discovery of novel biologics with capabilities in antibody engineering, ADC chemistry, bioanalysis and preclinical testing.

As part of our strategy to access clinical- or near-clinical-stage assets, we executed an exclusive option and license agreement and clinical development collaboration with Sairopa to develop ADU-1805. ADU-1805 is currently being evaluated in a phase 1 clinical trial in patients with advanced or metastatic refractory solid tumors, as monotherapy and enrollment is ongoing. Plans for ADU-1805 include investigating the compound’s potential in combination with approvedpembrolizumab. ICIs,Enrollment includingis pembrolizumab.ongoing. In addition to the option deal with Sairopa, some of our active research collaborations for biotherapeutics programs are with:

•Catalent, which is focused on the discovery and development of multiple ADCs using Catalent’s proprietary SMARTag® site-specific bioconjugation technology; and

Beyond these biotherapeutics assets, we continue to make progress on multiple lead optimizationpreclinical programs for inhibitorsmolecules ofthat address a variety of targetstargets, and that we believe playhave significant rolespotential infor tumorclinical growth,differentiation. and weWe anticipate that some of these other programs could reach development candidate status in 20252026 and beyond.

Increasing the number of novel anti-cancer agents in our pipeline is essential to our overall strategy and business goals. We are working to expand our oncology product pipeline through drug discovery efforts, which encompass our diverse biotherapeutics and small molecule programs exploring multiple modalities and mechanisms of action. This approach provides a high degree of flexibility with respect to target selection and modality of treatment and allows us to prioritize those targets that we believe have the greatest chance of becoming impactful therapeutics. As part of our strategy, our drug discovery activities have and will continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively leverage a wide range of technology platforms and assets and increase our probability of success. As of the date of this Annual Report on Form 10-K, we expect to progress up to threetwo new development candidates into preclinical development during 2025.2026. We will continue to engage in pipeline expansion initiatives with the goal of discovering, acquiring and/or in-licensing promising investigational oncology assets and then further characterize and develop them utilizing our established preclinical and clinical development infrastructure.

•In January 2025, we presented preliminary results from a randomized expansion cohort of patients with metastatic CRC from STELLAR-001, and results from a subgroup analysis of patients in the epNET cohort with advanced gastrointestinal NET in CABINET, were presented at the ASCO GI 2025.

Zanzalintinib is a novel oral inhibitor of kinases including the TAM kinases (TYRO3, AXL, MER), MET and VEGF receptors, which are implicated in cancer’s growth and spread. We are evaluating zanzalintinib in a robust and growing development program that builds on our prior experience with cabozantinib and targets indications with high unmet need. We have established collaborations and will continue to explore additional opportunities for novel combinations with zanzalintinib. To date, we have initiated two large phase 1b/2 clinical trials and one phase 2 clinical trial studying zanzalintinib as a monotherapy and/or in combination with other therapies, including ICIs (STELLAR-001, STELLAR-002, and STELLAR-201). Patient enrollment into STELLAR-001 was completed in 2023 and preliminary results from a randomized expansion cohort of patients with metastatic CRC were presented at the American Society of Clinical Oncology (ASCO) Gastrointestinal Cancers Symposium in January 2025. In May 2025, preliminary results from an expansion cohort of patients with previously untreated advanced ccRCC from STELLAR-002 were presented at the 2025 ASCO Annual Meeting, along with data from multiple dose-escalation cohorts. In May 2026, we announced an additional expansion cohort for STELLAR-002 evaluating zanzalintinib in combination with docetaxel in metastatic castration-resistant prostate cancer (mCRPC) patients with measurable disease,disease. whichIn August 2026, we expectannounced toan openadditional expansion cohort for STELLAR-002 evaluating zanzalintinib monotherapy in patients with metastatic bladder cancer who have progressed following treatment with enfortumab vedotin and pembrolizumab. Both the secondbladder halfcancer ofand 2026.mCRPC expansion cohorts for STELLAR-002 have been initiated and enrollment is ongoing.

In April 2026, we initiated STELLAR-201, a phase 2 trial evaluating zanzalintinib in patients with recurrent Grade I/II/III meningioma with relapse or progression following radiation and/or surgery or those who are not candidates for these therapies. The primary endpoint of the trial is objective response rate (ORR), with secondary endpoints including progression-free survival (PFS), duration of response (DOR) and OS. Enrollment is currently ongoing.

We also have three ongoing pivotal trials, two evaluating zanzalintinib in combination with ICIs and one evaluating zanzalintinib as a monotherapy. Our first such trial, STELLAR-303, was initiated in June 2022 and is evaluating zanzalintinib in combination with atezolizumab versus regorafenib in patients with metastatic, refractory non- microsatellitenon-microsatellite instability high or non-mismatch repair-deficient CRC. In June 2025, we announced positive top-line results in the first dual primary endpoint demonstrating a statistically significant improvement in overall survival (OS) versus regorafenib in the intention-to-treat (ITT) population, and in October 2025, announced that the study demonstrated a 20% reduction in the risk of death versus regorafenib in the ITT population at the final analysis (stratified hazard ratio [HR]: 0.80; 95% confidence interval [CI]: 0.69-0.93; P=0.0045). At a prespecified interim analysis, data pertaining to the other dual primary endpoint, OS in patients without liver metastases, showed a trend in OS favoring the combination (15.9 months versus 12.8 months; stratified HR: 0.79; 95% CI: 0.61-1.03; P=0.0875) at a median follow-up of 16.8 months. Detailed findings from the study, including OS and PFS in the ITT population and in the subset of patients without active liver metastases (non-liver metastases, NLM), were presented at the 2025 European Society for Medical Oncology Congress in October 2025 and simultaneously published in The Lancet. The trial will proceed to the planned final analysis for the dual primary endpoint of OS in patients without liver metastases, expected in mid-2026, depending on event rates. In December 2025, we submitted a New Drug Application (NDA) to the FDA for zanzalintinib in combination with atezolizumab for the treatment of previously treated metastatic colorectal cancer. In February 2026, we announced that the FDA had accepted our NDA and assigned a standard review, with a Prescription Drug User Fee Act (PDUFA) target action date of December 3, 2026. In June 2026, we announced results from the final analysis of the other dual primary endpoint of OS in the NLM subpopulation showing a non-statistically significant trend in OS favoring the combination in the NLM subpopulation (stratified HR: 0.83; 95% CI:

Beyond STELLAR-001, STELLAR-002, STELLAR-201, STELLAR-303, STELLAR-304 and STELLAR-311, we intend to initiate additional early-stage and pivotal trials evaluating zanzalintinib across a broad array of potential future indications, including STELLAR-316, a planned phase 3 pivotal trial, in collaboration with Natera, Inc. (Natera) and Merck (known as MSD outside of the United States and Canada), which we anticipate will commence in mid-2026. STELLAR-316 will evaluate zanzalintinib, with and without anKEYTRUDA ICI,QLEX™ (pembrolizumab and berahyaluronidase alfa-pmph) (KEYTRUDA QLEX is marketed outside the U.S. as KEYTRUDA SC™), in patients with resected stage II/III CRC who, following completion of definitive therapy, have tested positive for molecular residual disease (MRD+) and have no radiographic evidence of disease. Merck will supply KEYTRUDA QLEX and Natera will provide its Signatera™ assay to identify MRD+ patients for trial enrollment. Also, in May 2026, we announced STELLAR-202, a planned phase 2 trial evaluating zanzalintinib in combination with pembrolizumab in the maintenance setting in squamous non-small cell lung cancer, which we expect to initiate in the second half of 2026.

To further expand our exploration of the clinical potential of zanzalintinib, wepursuant entered intoto a clinical development collaboration with Merck, known as MSD outside of the United States and Canada. Pursuant to this collaboration, Merck is sponsoring: KEYMAKER-U03 (a phase 1/2 trial evaluating zanzalintinib in combination with WELIREG® (belzutifan), Merck's oral HIF-2α inhibitor, in RCC),; LITESPARK-033 (a phase 3 trial, initiated in December 2025, evaluating zanzalintinib in combination with WELIREG versus cabozantinib in first-line advanced RCC following an immunotherapy administered in the adjuvant setting); and LITESPARK-034 (a phase 3 trial, initiated in April 2026, evaluating the combination of zanzalintinib and WELIREG versus WELIREG and placebo in second-line or later advanced RCC patients who have progressed on or after both programmed death-liganddeath-1/ligand 1 (PD-1/L1) and vascular endothelial growth factor receptor-tyrosine kinase inhibitor (VEGFR-TKI) therapies in sequence or in combination). Merck will fund one of these phase 3 studies and we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. Under the collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib.

As part of our strategy to access clinical- or near-clinical-stage assets, we executed an exclusive option and license agreement and clinical development collaboration with Sairopa B.V. (Sairopa) to develop ADU-1805. ADU-1805 is currently being evaluated in a phase 1 clinical trial in patients with advanced or metastatic refractory solid tumors, as monotherapy and in combination with pembrolizumab. Enrollment is ongoing. In addition to the option deal with Sairopa, some of our active collaborations for biotherapeutics programs are with:

We have made significant progress under our other research collaborations and in-licensing arrangements and believe we will continue to do so in 2026 and in future years. For example, in April 2025, we initiated the phase 1 study of XB628, a first-in-class bispecific antibody discovered, in part, in collaboration with Invenra,antibody, and in August 2025, we initiated a phase 1 study of XB371, a next-generation TF-targeting ADC with a topoisomerase inhibitor payload, which was discovered, in part, in collaboration with Catalent.payload. We also expect to progress XB773, an ADC targeting the tumor antigen DLL3 (toward a potential IND filing in 2026. Each of these biotherapeutics was discovered, in part, in connection with our research collaborations and in-licensing agreements) toward a potential IND filing in 2026.agreements.

Increasing the number of novel anti-cancer agents in our pipeline is essential to our overall strategy and business goals. We are working to expand our oncology product pipeline through drug discovery efforts, which encompass our diverse biotherapeutics and small molecule programs exploring multiple modalities and mechanisms of action. This approach provides a high degree of flexibility with respect to target selection and modality of treatment and allows us to prioritize those targetsprograms that we believe have the greatest chance of becomingproducing impactful therapeutics. As part of our strategy, our drug discovery activities have and will continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively leverage a wide range of technology platforms and assets and increase our probability of success. As of the date of this Quarterly Report on Form 10-Q, we expect to progress up to two new development candidates into preclinical development during 2026. We will continue to engage in pipeline expansion initiatives with the goal of discovering, acquiring and/or in-licensing promising investigational oncology assets and then further characterizing and developing them utilizing our established preclinical and clinical development infrastructure.

FirstSecond Quarter 2026 Business Updates and Financial Highlights

During the firstsecond quarter of 2026, we continued to execute on our business objectives, generating significant revenues from operations and enabling us to continue to seek to maximize the clinical and commercial potential of our products and expand our product pipeline. Significant business updates and financial highlights for the quarter and subsequent to quarter-end include:

•In May 2026, we announced two additional zanzalintinib studies: STELLAR-202, a planned phase 2 trial evaluating zanzalintinib in combination with pembrolizumab in the maintenance setting in squamous non-small cell lung cancer, and an additional expansion cohort in the ongoing phase 1b/2 STELLAR-002 study evaluating zanzalintinib in combination with docetaxel in metastatic castration-resistant prostate cancermCRPC patients with measurable disease. In August 2026, we announced an additional expansion cohort for STELLAR-002 evaluating zanzalintinib monotherapy in patients with metastatic bladder cancer who have progressed following treatment with enfortumab vedotin and pembrolizumab. Both the bladder cancer and mCRPC expansion cohorts for STELLAR-002 have been initiated and enrollment is ongoing. We expect to initiate STELLAR-202 and open the expansion cohort of STELLAR-002 in the second half of 2026.

•In October 2025, our Board of Directors authorized a stock repurchase program (SRP) for the repurchase of up to an additional $750 million of our outstanding common stock before December 31, 2026.2026 Under this SRP, as of March 31, 2026, we have repurchased $590.6 million of our common stock, at an average price of $43.14 per share. Exelixis expects to complete (the remainderOctober of this2025 SRP in May 2026.). In May 2026, our Board of Directors authorized the repurchase of up to an additional $750 million of our outstanding common stock bybefore December 31, 2027.2027 (the May 2026 SRP). Under these SRPs, as of June 30, 2026, we have repurchased $902.2 million of our common stock, at an average price of $44.66 per share and have completed the October 2025 SRP.

•Net product revenues for the firstsecond quarter of 2026 were $555.0$573.0 million, as compared to $513.3$520.0 million for the firstsecond quarter of 2025.

•Total revenues for the firstsecond quarter of 2026 were $610.8$628.7 million, as compared to $555.4$568.3 million for the firstsecond quarter of 2025.

•Research and development expenses for the firstsecond quarter of 2026 were $199.9$212.0 million, as compared to $212.2$200.4 million for the firstsecond quarter of 2025.

•Selling, general and administrative expenses for the firstsecond quarter of 2026 were $139.6$147.6 million, as compared to $137.2$134.9 million for the firstsecond quarter of 2025.

•Provision for income taxes for the firstsecond quarter of 2026 was $57.2$50.6 million, as compared to $46.1$45.6 million for the firstsecond quarter of 2025.

•Net income for the firstsecond quarter of 2026 was $210.5$212.1 million, or $0.81$0.85 per share, basic and $0.79$0.82 per share, diluted, as compared to net income of $159.6$184.8 million, or $0.57$0.68 per share, basic and $0.55$0.65 per share, diluted, for the firstsecond quarter of 2025.

In the longer term, we may eventually face competition from potential manufacturers of generic or follow-on versions of our marketed products, including the proposed generic versions of CABOMETYX tablets that are the subject of ANDAs submitted to the FDA by MSN, Teva, Cipla, BioconBiocon, Sun, and Sun,Accord, as well as the 505(b)(2) for cabozantinib capsulesNDAs submitted by Azurity, Handa, orand the 505(b)(2) for cabozantinib tablets submitted to the FDA by Azurity.Almatica. The approval of any of these follow-on products and their subsequent launch could significantly decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations.

We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31. Fiscal year 2026, which is a 52-week fiscal year, will end on January 1, 2027 and fiscal year 2025, which was a 52-week fiscal year, ended on January 2, 2026. For convenience, references in this report as of and for the fiscal periods ended AprilJuly 3, 2026 and AprilJuly 4, 2025, and as of and for the fiscal yearsyear ending January 1, 2027 and fiscal year ended January 2, 2026, are indicated as being as of and for the periods ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, and the yearsyear ending December 31, 2026 and the year ended December 31, 2025, respectively.

The increaseincreases in net product revenues for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period,periods, waswere primarily related to a 7%an increase of 6% in the number of CABOMETYX units soldsold, for each period, reflecting continuing demand for CABOMETYX in combination with nivolumab as a first-line treatment of patients with advanced RCC, and demand for previously treated advanced NET and, to a lesser extent, aincreases 1%of increase4% and 3%, respectively, in the average net selling price of CABOMETYX. The increaseincreases in sales volume waswere largely driven by refills, reflecting the longer duration of therapy for the combination of CABOMETYX with nivolumab, and an increaseincreases in related market share reflecting the continued evolution of the metastatic RCC and NET treatment landscapes.

We recognize product revenues net of discounts and allowances that are described in “Note 1. Organization and Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2025 Form 10-K. Discounts and allowances have generally increased over time as the number of patients participating in government programs has increased and as the discounts given and rebates paid to government payers have also increased. The increaseincreases in the amount of discounts and allowances for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period,periods, waswere primarily the result of increases in the volume of units sold, utilizationhigher utilization, and dollarhigher amountdiscounts ofassociated chargebackswith the Part D Discount Program, partially offset by lower utilization under the 340B Drug Pricing Program and higher discounts and rebates associated with the Medicare Part D Program.

Milestone revenues, which are allocated between license revenues and collaboration services revenues, were $8.8$0.7 million and $9.5 million, respectively, for the three and six months ended MarchJune 31,30, 2026, as compared to $0.9$1.6 million and $2.5 million for the corresponding prior year period.periods. During the threesix months ended MarchJune 31,30, 2026, we recognized $7.7$7.8 million in revenues in connection with an $8.0 million commercial milestone payment from Takeda, which was earned upon their achievement of $300.0 million of cumulative net sales of cabozantinib in Japan. Of the revenues recognized from this milestone, $5.3 million was allocated to license revenues and $2.4 million was allocated to collaboration services revenues. Upon the achievement of this commercial milestone, the tiered royalty rate on annual net sales reset to 20% and will reset each calendar year thereafter.

Royalty revenues for the three and six months ended MarchJune 31,30, 2026 increased, as compared to the corresponding prior year period,periods, primarily as a result of an increaseincreases in Ipsen’s net sales of cabozantinib outside of the U.S and Japan. Ipsen royalties were $43.5$50.5 million and $94.1 million, respectively, for the three and six months ended MarchJune 31,30, 2026, as compared to $34.0$39.5 million and $73.5 million for the corresponding prior year period.periods. Royalty revenues related to Takeda’s net sales of cabozantinib were $2.4$2.7 million and $5.1 million, respectively, for the three and six months ended MarchJune 31,30, 2026, as compared to $2.8$3.8 million and $6.6 million for the corresponding prior year period.periods. CABOMETYX is approved and is commercially available in 6869 countries outside the U.S.

Due to uncertainties surrounding the timing and achievement of development, regulatory and commercial milestones, it is difficult to predict the timing of future milestone revenues; consequently, milestonesmilestone revenues may vary significantly from period to period.

Development cost reimbursements for the three and six months ended MarchJune 31,30, 2026 decreased, as compared to the corresponding prior year period,periods, due to a decreasedecreases in spending on studies evaluating cabozantinib that are subject to reimbursement.

Recognition of deferred revenues for the portion of upfront and milestone payments that have been allocated to research and development services performance obligations were not material in each of the three and six months ended MarchJune 31,30, 2026 and 2025.

Collaboration services revenues are reduced by the 3% royalty we are required to pay to Royalty Pharma on the net sales by Ipsen and Takeda of any products containing cabozantinib. The royalty payments due to Royalty Pharma increased in the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period,periods, as a result of an increaseincreases in the royalty generating sales of cabozantinib by Ipsen.

Cost of goods sold is related to our product revenues and consists of a 3% royalty payable on U.S. net sales of any product containing cabozantinib, as well as the cost of inventory sold, indirect labor costs, write-downs related to expiring, excess and obsolete inventory, and other third-party logistics costs. The increaseincreases in cost of goods sold for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period,periods, waswere primarily due to an increaseincreases in royalties as a result of an increase inincreased U.S. CABOMETYX sales. We project our gross margin will not change significantly during the remainder of 2026.

We project that clinical trial costs may increase for the remainder of 2026, as compared to the corresponding prior year period, primarily driven by higher costs associated with various studies evaluating zanzalintinib, XB010, XB628, and XB371, partially offset by lower costs associated with studies evaluating cabozantinib and XL309.

We project our research and development expenses may increase for the remainder of 2026, as compared to the prior year period, primarily driven by increases in clinical trial costs, including the current and planned trials evaluating zanzalintinib, XB010, XB628, and XB371, personnel expenses, and consulting and outside services.services, partially offset by a decrease in license and other collaboration costs.

The increase in selling, general and administrative expenses for the three months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period, was primarily due to increases in marketing activities in support of the anticipatedpre-launch commercialactivities launchfor zanzalintinib and personnel expenses. The increase in selling, general and administrative expenses for the six months ended June 30, 2026, as compared to the corresponding prior year period, was primarily due to increases in marketing activities in support of the pre-launch activities for zanzalintinib, personnel expenses, and legal and advisory fees, and personnel expenses, partially offset by a decrease in corporate giving.

We project our selling, general and administrative expenses may increase for the remainder of 2026, as compared to the corresponding prior year period, primarily driven by increases in personnel expenses for the salesforce expansion in support of the commercial sale of CABOMETYX for the treatment of patients with previously treated advanced NET,expenses, marketing activities in support of the anticipated commercial launch of zanzalintinib, and legal and advisory fees.

The decreasedecreases in non-operating income for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period,periods, waswere primarily the result of a decrease in interest income due to lower average interest-bearing investment balances and lower average interest rates.

The effective tax raterates for the three and six months ended MarchJune 31,30, 2026,2026 differed from the U.S. federal statutory tax rate of 21%, primarily due to state taxes, partially offset by excess tax benefits related to certain stock grants and the Foreign-Derived Intangible Income deduction.deduction, partially offset by state taxes. The effective tax rate for the three months ended MarchJune 31,30, 2025, differed from the U.S. federal statutory tax rate of 21%, primarily due to excess tax benefits related to certain stock grants and the generation of federal tax credits, partially offset by state taxes. The effective tax rate for the six months ended June 30, 2025, differed from the U.S. federal statutory tax rate of 21%, primarily due to state taxes, partially offset by excess tax benefits related to certain stock grants and the generation of federal tax credits.

As of MarchJune 31,30, 2026, we had $1.4 billion in cash, cash equivalents and marketable securities, as compared to $1.7 billion as of December 31, 2025. We anticipate that the aggregate of our current cash, cash equivalents and marketable securities available for operations, net product revenues and collaboration revenues will enable us to maintain our operations for at least 12 months and thereafter for the foreseeable future.

Our primary sources of operating cash are: cash collections from customers related to net product revenues, which we project may increase for the remainder of 2026, as compared to the corresponding period in 2025; cash collections related to milestones achieved and royalties earned from our commercial collaboration arrangements with Ipsen, Takeda and others; and cash collections for cost reimbursements under certain of our development programs with Ipsen and Takeda which we project may decrease for the remainder of 2026, as compared to the corresponding period in 2025.Takeda. The timing of cash generated from commercial collaborations and cash payments required for in-licensing collaborations relative to upfront license fee payments, cost reimbursements, exercise of option payments and other contingent payments such as development milestone payments may vary from period to period.

We project that we may continue to spend significant amounts of cash to fund the development of certain product candidates in our pipeline, including zanzalintinib, XB010, XB628 and XB371, and the development and commercialization of cabozantinib.XB371. In addition, we may continue to expand our oncology product pipeline through additional research collaborations, in-licensing arrangements and other strategic transactions that align with our oncology drug development, regulatory and commercial expertise.

In October 2025, our Board of Directors authorized athe October 2025 SRP to acquire up to $750.0 million of our outstanding common stock before December 31, 2026. Under this SRP, as of March 31, 2026, we repurchased 13.7 million shares of common stock for an aggregate purchase price of $590.6 million. As of March 31, 2026, approximately $159.4 million remained available for future stock repurchases before December 31, 2026. Exelixis expects to complete the remainder of the October 2025 SRP in May 2026. In May 2026, our Board of Directors authorized the May 2026 SRP for repurchase of up to an additional $750.0 million of our outstanding common stock bybefore December 31, 2027. Under these SRPs, as of June 30, 2026, we have repurchased 20.2 million shares of common stock for an aggregate purchase price of $902.2 million and have completed the October 2025 SRP. As of June 30, 2026, approximately $597.8 million remained available under the May 2026 SRP for future stock repurchases before December 31, 2027. Stock repurchases under thesethe SRPsMay 2026 SRP may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods. The timing and amount of any stock repurchases under the SRPsSRP will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of our common stock and general market conditions. The SRPsSRP dodoes not obligate us to acquire any amount of our common stock, and the SRPsSRP may be modified, suspended or discontinued at any time without prior notice.

Working Capital: The decrease in working capital as of MarchJune 31,30, 2026, as compared to December 31, 2025, was primarily due to the payments for repurchases of our common stock, partially offset by the favorable impact to our net current assets resulting from an increase in net product revenues. In the future, our working capital may be impacted by one of these factors or other factors, the amounts and timing of which are variable.

Cash, Cash Equivalents and Marketable Securities: Cash and cash equivalents primarily consist of deposits at major banks, money market funds, commercial paper and other securities with original maturities 90 days or less. Marketable securities primarily consist of debt securities available-for-sale and certificates of deposit. For additional information regarding our cash, cash equivalents and marketable securities, see “Note 5. Cash and Marketable Securities” of the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q. The decrease in cash, cash equivalents and marketable securities as of MarchJune 31,30, 2026, as compared to December 31, 2025, was primarily due to cash payments to repurchase our common stock, cash payments to support our development and discovery programsprograms, and operating cash payments for employee-related expenditures, partially offset by cash inflows generated by our operations from sales of our products and our commercial collaboration arrangements.

Net cash provided by operating activities increased for the threesix months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period, primarily due to an increase in cash received on sales of our productsproducts, and a decrease in cash paid for certain operating expenses.expenses, primarily due to the federal cash tax benefit related to the One Big Beautiful Bill Act.

Net cash was used in investing activities for the three months ended March 31, 2026, as compared to net cash provided by investing activities decreased for the six months ended June 30, 2026, as compared to the corresponding prior year period. The increase in cash used in investing activities wasperiod, primarily due to an increase in purchases of marketable securities and a decrease in cash proceeds from maturities and sales of marketable securities and an increase in purchases of marketable securities, partially offset by a decrease in cash paid for acquired in-process research and development technology related to certain in-licensing collaboration arrangements and purchases of property and equipment.arrangements.

Net cash used in financing activities increased for the threesix months ended MarchJune 31,30, 2026, as compared to the corresponding prior year period, primarily due to an increase in payments for repurchases of common stock.

There were no material changes outside of the ordinary course of business in our contractual obligations as of MarchJune 31,30, 2026 from those disclosed in our Fiscal 2025 Form 10-K. For more information about our leases and our other contractual obligations, see “Note 12. Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2025 Form 10-K.