EXELIXIS, INC.

Previous wording

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 asset zanzalintinib, currently the focus of an extensive late-stage clinical development program. With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise, and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules, biotherapeutics and antibody-drug conjugates (ADCs).

Current wording

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 clinical asset zanzalintinib, currently the focus of an extensive late-stage development program. With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise, and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules, biotherapeutics and antibody-drug conjugates (ADCs).

Previous wording

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 trials evaluating cabozantinib. Furthest along in our pipeline is zanzalintinib, a novel, potent, third-generation oral tyrosine kinase inhibitor (TKI) that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER). Our zanzalintinib program includes a series of ongoing and planned pivotal trials to explore its therapeutic potential in colorectal cancer (CRC), RCC and NET, 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 XB628, a first-in-class bispecific antibody that simultaneously targets PD-L1 and natural killer cell receptor group 2A, identified as key regulators ofinnate and adaptive immune cell activity. We complement our internal drug discovery and development efforts by in-licensing or acquiring, or obtaining options to in-license or acquire, investigational oncology assets from third parties if those oncology assets demonstrate evidence or potential of clinical success. Examples of this approach include XL309 and ADU-1805, a clinical-stage and potentially best-in-class human mAb that targets SIRPα.

Current wording

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 trials evaluating cabozantinib. Furthest along in our pipeline is zanzalintinib, a novel oral kinase inhibitor that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER). Our zanzalintinib development program includes a series of ongoing and planned pivotal trials to explore its therapeutic potential in colorectal cancer (CRC), RCC and neuroendocrine tumors (NET), as well as earlier-stage trials. Our pipeline programs in phase 1 development, each having best-in-class potential, 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; XB628, a first-in-class bispecific antibody that simultaneously targets PD-L1 and natural killer cell receptor group 2A, identified as key regulators ofinnate and adaptive immune cell activity; and XB371, a next-generation tissue factor-targeting ADC with a topoisomerase inhibitor payload. We complement our internal drug discovery and development efforts by in-licensing or acquiring, or obtaining options to in-license or acquire, investigational oncology assets from third parties if those oncology assets demonstrate evidence or potential of clinical success. An example of this approach is ADU-1805, a clinical-stage and potentially best-in-class human mAb that targets SIRPα.

Previous wording

The Inflation Reduction Act of 2022 (IRA) introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the Centers for Medicare & Medicaid Services (CMS) to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D (the Medicare Drug Price Negotiation Program). The IRA contains a limited exception for small biotech drug manufacturers, which applies on a drug-specific basis, and provides that qualifying drugs will be exempt from selection for pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential maximum fair price in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year (small biotech exception). We have qualified for the small biotech exception with respect to our cabozantinib franchise products through 2027, and we intend to apply to CMS to maintain the small biotech exception each year through 2030. Separately, in December 2024, CMS released final guidance on another program, the Medicare Part D Manufacturer Discount Program (Part D Discount Program), which requires 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.

Current wording

The Inflation Reduction Act of 2022 (IRA) introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the Centers for Medicare & Medicaid Services (CMS) to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D (the Medicare Drug Price Negotiation Program). CMS has begun to announce rounds of drugs eligible for negotiation under the Medicare Drug Price Negotiation Program. The IRA contains a limited exception for small biotech drug manufacturers, which applies on a drug-specific basis, and provides that qualifying drugs will be exempt from selection for pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential maximum fair price in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year (small biotech exception). We have qualified for the small biotech exception with respect to our cabozantinib franchise products through 2027, and we intend to apply to CMS to maintain the small biotech exception each year through 2030. Separately, in December 2024, CMS released final guidance on another program, the Medicare Part D Manufacturer Discount Program (Part D Discount Program), which requires 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. There also have been proposals from the current U.S. administration that aim to lower prescription drug costs, both through formal regulatory action and by encouraging voluntary compliance from manufacturers. These proposals include efforts to equalize the prices of drugs in the U.S. with the prices of those drugs in other developed countries (also known as most favored nation or MFN pricing), as well as efforts to sell drugs directly to consumers, if appropriate. The administration has directed agencies to pursue MFN pricing through new models and potential regulatory actions, but the scope, timing, and impact of these initiatives remain uncertain.

Previous wording

Zanzalintinib is a novel, potent, third-generation oral TKI that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER) 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. We are evaluating zanzalintinib in a 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 Gastrointestinal Cancers Symposium in January 2025. In May 2025, preliminary results from an expansion cohort of patients with previously untreated advanced clear cell RCC from STELLAR-002 were presented at the 2025 American Society of Clinical Oncology Annual Meeting (ASCO 2025), along with data from multiple dose-escalation cohorts.

Current wording

Zanzalintinib is a novel oral kinase inhibitor that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER) 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. We are evaluating zanzalintinib in a 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 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 clear cell RCC from STELLAR-002 were presented at the 2025 ASCO Annual Meeting, along with data from multiple dose-escalation cohorts.

Previous wording

We have also initiated four pivotal trials, three 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-microsatellite instability-high or non-mismatch repair-deficient (non-MSI-H/dMMR) CRC. In June 2025, we announced positive top-line results demonstrating a statistically significant improvement in OS versus regorafenib in all patients (i.e., in the ITT population). This represents the final OS analysis in the ITT population. The trial will proceed to the planned final analysis for the other dual primary endpoint of OS in patients without liver metastases (non-liver metastases or NLM). We intend to discuss these positive results with regulators with the intention to file a New Drug Application in the U.S. Detailed results are expected to be presented at a future medical meeting.

Current wording

We have also initiated four pivotal trials, three 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-microsatellite instability-high or non-mismatch repair-deficient (non-MSI-H/dMMR) CRC. In June 2025, we announced positive top-line results demonstrating a statistically significant improvement in overall survival (OS) versus regorafenib in all patients (i.e., 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 progression-free survival (PFS) in the ITT population and in the subset of patients without liver metastases, were presented at the 2025 European Society for Medical Oncology Congress in October 2025 (ESMO 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. We intend to submit a New Drug Application for zanzalintinib in combination with atezolizumab for the treatment of previously treated metastatic colorectal cancer in the U.S. by the end of 2025, subject to limitations on the availability of government services, such as from the FDA, as a result of the ongoing U.S. federal government shutdown.

Previous wording

The second pivotal trial, STELLAR-304, was initiated in December 2022 and is evaluating zanzalintinib in combination with nivolumab versus sunitinib in previously untreated patients with advanced non-clear cell RCC. We expect top-line results in the first half of 2026, depending on event rates.

Current wording

The second pivotal trial, STELLAR-304, was initiated in December 2022 and is evaluating zanzalintinib in combination with nivolumab versus sunitinib in previously untreated patients with advanced non-clear cell RCC. We expect top-line results in the second half of 2026, depending on event rates.

Previous wording

In June 2025, we initiated STELLAR-311, a phase 3 pivotal trial evaluating zanzalintinib versus everolimus as a first oral therapy in patients with advanced NET, regardless of site of origin.

Current wording

In June 2025, we initiated STELLAR-311, a phase 3 pivotal trial evaluating zanzalintinib versus everolimus in patients with advanced NET, regardless of site of origin, who had received up to one prior line of therapy.

Previous wording

To further expand our exploration of the clinical potential of zanzalintinib, we entered into a clinical development collaboration with MSD International Business GmbH, known as Merck within the United States and Canada (Merck) to evaluate zanzalintinib in combination with WELIREG® (belzutifan), Merck's oral HIF-2α inhibitor, in RCC as well as in combination with KEYTRUDA® in SCCHN. Under the collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib. Merck will sponsor a phase 1/2 trial and two phase 3 pivotal trials in RCC and will fund one of these phase 3 studies; we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib.

Current wording

To further expand our exploration of the clinical potential of zanzalintinib, we entered into a clinical development collaboration with MSD International Business GmbH, known as Merck within the United States and Canada (Merck) to evaluate zanzalintinib in combination with WELIREG® (belzutifan), Merck's oral HIF-2α inhibitor, in RCC as well as in combination with KEYTRUDA® in squamous cell carcinoma of the head and neck. Under the collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib. Merck is sponsoring a phase 1/2 trial and two phase 3 pivotal trials in RCC and will fund one of these phase 3 studies; we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib.

Previous wording

We have made significant progress under our research collaborations and in-licensing arrangements and believe we will continue to do so in 2025 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, and in July 2025, the FDA accepted our Investigational New Drug (IND) application for XB371, a next-generation tissue factor-targeting ADC with a topoisomerase inhibitor payload, which was discovered, in part, in collaboration with Catalent. We are also advancing additional biotherapeutic candidates toward potential IND filings, each of which was discovered, in part, in connection with our research collaborations and in-licensing arrangements, including: XB064, a high-affinity mAb that targets ILT2; XB033, an ADC targeting the tumor antigen IL13Rα2; and XB773, an ADC targeting the tumor antigen DLL3.

Current wording

We have made significant progress under our research collaborations and in-licensing arrangements and believe we will continue to do so in 2025 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, and in August 2025, following the FDA’s acceptance of our Investigational New Drug (IND) Application in July 2025, we initiated a phase 1 study of XB371, a next-generation tissue factor-targeting ADC with a topoisomerase inhibitor payload, which was discovered, in part, in collaboration with Catalent. We are also advancing XB064, a high-affinity mAb that targets ILT2, and XB773, an ADC targeting the tumor antigen DLL3 (each discovered, in part, in connection with our research collaborations and in-licensing arrangements) toward potential IND filings. As part of our rational and disciplined approach to investment, we have decided to discontinue further development of the XB033 program.

Previous wording

Second Quarter 2025 Business Updates and Financial Highlights

Current wording

Third Quarter 2025 Business Updates and Financial Highlights

Previous wording

During the second quarter of 2025, 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:

Current wording

During the third quarter of 2025, 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:

Previous wording

•As of June 30, 2025, we have repurchased $796.3 million of our common stock at an average purchase price of $36.69 per share, under the two $500 million share repurchase authorizations announced in August 2024 and February 2025.

Current wording

•In October 2025, we announced that our Board of Directors had authorized the repurchase of up to $750 million of our common stock before December 31, 2026. This repurchase authorization is in addition to the two $500 million repurchase authorizations announced in August 2024 and February 2025. Under these programs, as of September 30, 2025, we have repurchased $895.3 million of our common stock, at an average price of $37.18 per share.

Previous wording

•Provision for income taxes for the second quarter of 2025 was $45.6 million, as compared to $66.7 million for the second quarter of 2024.

Current wording

•Provision for income taxes for the third quarter of 2025 was $58.8 million, as compared to $36.8 million for the third quarter of 2024.

Previous wording

•Net income for the second quarter of 2025 was $184.8 million, or $0.68 per share, basic and $0.65 per share, diluted, as compared to net income of $226.1 million, or $0.78 per share, basic and $0.77 per share, diluted, for the second quarter of 2024.

Current wording

•Net income for the third quarter of 2025 was $193.6 million, or $0.72 per share, basic and $0.69 per share, diluted, as compared to net income of $118.0 million, or $0.41 per share, basic and $0.40 per share, diluted, for the third quarter of 2024.

Previous wording

Even 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 additional indications. In addition, CABOMETYX will only continue to be commercially successful if private third-party and government payers continue to provide coverage and reimbursement. As is the case for all innovative pharmaceutical therapies, obtaining and maintaining coverage and reimbursement for CABOMETYX is becoming increasingly difficult, both within the U.S. and in foreign markets. In addition, healthcare policymakers in the U.S. continue to express concern over healthcare costs, and corresponding legislative and policy initiatives and activities have been launched aimed at increasing the healthcare cost burdens borne by pharmaceutical manufacturers, as well as expanding access to, and restricting the prices and growth in prices of, pharmaceuticals. Further, the U.S. Presidential administration has suggested that it may impose tariffs on imported pharmaceuticals.

Current wording

We will continue to face numerous challenges and risks that may impact our ability to execute on our business objectives. In particular, for the foreseeable future, we expect our ability to generate sufficient 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. In addition, CABOMETYX will only continue to be commercially successful if private third-party and government payers continue to provide coverage and reimbursement. As is the case for all innovative pharmaceutical therapies, obtaining and maintaining coverage and reimbursement for CABOMETYX is becoming increasingly difficult, both within the U.S. and in foreign markets. Further, healthcare policymakers in the U.S. continue to express concern over healthcare costs, and corresponding legislative and policy initiatives and activities have been launched aimed at increasing the healthcare cost burdens borne by pharmaceutical manufacturers, as well as expanding access to, and restricting the prices and growth in prices of, pharmaceuticals. Furthermore, the U.S. Presidential administration has suggested that it may impose tariffs on imported pharmaceuticals.

Previous wording

The increases in net product revenues for the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, were primarily related to increases of 20% and 22%, respectively, in the number of CABOMETYX units sold reflecting continuing demand for CABOMETYX in combination with nivolumab as a first-line treatment of patients with advanced RCC. The increases in sales volume were largely driven by refills, reflecting the longer duration of therapy for this combination, and increases in related market share reflecting the continued evolution of the metastatic RCC and NET treatment landscapes.

Current wording

The increases in net product revenues for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, were primarily related to increases of 17% and 21%, respectively, in the number of CABOMETYX units sold 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. The increases in sales volume were largely driven by refills, reflecting the longer duration of therapy for the combination of CABOMETYX with nivolumab, and increases in related market share reflecting the continued evolution of the metastatic RCC and NET treatment landscapes.

Previous wording

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 increases in the amount of discounts and allowances for thethree and six months ended June 30, 2025, as compared to the corresponding prior year periods, were primarily the result of increases in volume of units sold, and the increases in the dollar amount of chargebacks under the 340B Drug Pricing Program.

Current wording

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 increases in the amount of discounts and allowances for thethree and nine months ended September 30, 2025, as compared to the corresponding prior year periods, were primarily the result of increases in volume of units sold, and the increases in the utilization and the dollar amount of chargebacks under the 340B Drug Pricing Program.

Previous wording

During the three and six months ended June 30, 2024, $150.0 million in revenues was recognized and allocated to license revenues, in connection with a commercial milestone payment from Ipsen upon its achievement of $600.0 million in cumulative net sales of cabozantinib over four consecutive quarters in its related license territory. Milestone revenues, which are allocated between license revenues and collaboration services revenues, were $151.5 million and $153.0 million, respectively, for the three and six months ended June 30, 2024.

Current wording

•For the nine months ended September 30, 2024, $150.0 million in license revenues was recognized in connection with a commercial milestone payment from Ipsen upon its achievement of $600.0 million in cumulative net sales of cabozantinib over four consecutive quarters in its related Ipsen license territory.

Previous wording

Royalty revenues for the three months ended June 30, 2025 increased, as compared to the corresponding prior year period, primarily as a result of increases in Ipsen’s net sales of cabozantinib outside of the U.S and Japan. Royalty revenues for the six months ended June 30, 2025 were flat, as compared to the corresponding prior year period, as a result of a decrease in Ipsen’s net sales of cabozantinib outside of the U.S. and Japan, that was offset by an increase in other royalty revenues, primarily from Takeda. Ipsen royalties were $39.5 million and $73.5 million, respectively, for the three and six months ended June 30, 2025, as compared to $37.9 million and $74.8 million for the corresponding prior year periods. Royalty revenues for the three and six months ended June 30, 2025 related to Takeda’s net sales of cabozantinib were $3.8 million and $6.6 million, respectively, as compared to $3.3 million and $6.0 million, respectively, for the corresponding prior year periods. CABOMETYX is approved and is commercially available in 68 countries outside the U.S.

Current wording

Royalty revenues for the three and nine months ended September 30, 2025 increased, as compared to the corresponding prior year periods, primarily as a result of increases in Ipsen’s net sales of cabozantinib outside of the U.S and Japan. Ipsen royalties were $43.0 million and $116.5 million, respectively, for the three and nine months ended September 30, 2025, as compared to $38.3 million and $113.0 million for the corresponding prior year periods. Royalty revenues for the three and nine months ended September 30, 2025 related to Takeda’s net sales of cabozantinib were $3.3 million and $9.9 million, respectively, as compared to $3.5 million and $9.5 million, respectively, for the corresponding prior year periods. CABOMETYX is approved and is commercially available in 68 countries outside the U.S.

Previous wording

Development cost reimbursements decreased in the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, due to decreases in spending on studies evaluating cabozantinib that are subject to reimbursement.

Current wording

Development cost reimbursements decreased in the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, due to decreases in spending on studies evaluating cabozantinib that are subject to reimbursement.

Previous wording

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 the three and six months ended June 30, 2025 and 2024, respectively.

Current wording

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 the three and nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Collaboration services revenues are reduced by the 3% royalty we are required to pay 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 June 30, 2025, as compared to the corresponding prior year periods, as a result of an increase in the royalty generating sales of cabozantinib by Ipsen and Takeda.

Current wording

Collaboration services revenues are reduced by the 3% royalty we are required to pay 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 nine months ended September 30, 2025, as compared to the corresponding prior year periods, as a result of an increase in the royalty generating sales of cabozantinib by Ipsen.

Previous wording

We project our collaboration services revenues may decrease for the remainder of 2025, as compared to the corresponding prior year period, primarily as a result of a decrease in development cost reimbursements and an increase in royalty payments to Royalty Pharma on net sales by Ipsen and Takeda of any products containing cabozantinib.

Current wording

We project our collaboration services revenues may decrease for the remainder of 2025, as compared to the corresponding prior year period, primarily as a result of a decrease in development cost reimbursements and an increase in royalty payments to Royalty Pharma on net sales by Ipsen for any products containing cabozantinib.

Previous wording

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 increase in cost of goods sold for the three months ended June 30, 2025, as compared to the corresponding prior year period, was primarily due to an increase in royalties as a result of increased U.S. CABOMETYX sales, partially offset by a decrease in certain period costs. The decrease in cost of goods sold for the six months ended June 30, 2025, as compared to the corresponding prior year period, was primarily due to a decrease in certain period costs, including a decrease in write-downs for excess inventory, partially offset by an increase in royalties as a result of increased U.S. CABOMETYX sales. We project our gross margin will not change significantly during the remainder of 2025.

Current wording

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 increase in cost of goods sold for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, was primarily due to an increase in royalties as a result of increased U.S. CABOMETYX sales, partially offset by a decrease in certain period costs, including a decrease in write-downs for excess inventory. We project our gross margin will not change significantly during the remainder of 2025.

Previous wording

In addition, we track our external clinical trial costs by product and product candidate and by scientific modalities, which are categorized as small molecule and biotherapeutics programs. Small molecule clinical development for the reported periods were primarily composed of cabozantinib and zanzalintinib. Biotherapeutics clinical development for the reported periods were primarily composed of XB010, XB002 and XB628.

Current wording

In addition, we track our external clinical trial costs by product and product candidate and by scientific modalities, which are categorized as small molecule and biotherapeutics programs. Small molecule clinical development for the reported periods were primarily composed of cabozantinib and zanzalintinib. Biotherapeutics clinical development for the reported periods were primarily composed of XB010, XB628, and XB002.

Previous wording

The decreasesin research and development expenses for the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, were primarily related to decreases in manufacturing costs to support our development candidates (presented as part of other development costs), license and other collaboration costs, and clinical trial costs, partially offset by increases in stock-based compensation, personnel expenses, and consulting and outside services.

Current wording

The decreasesin research and development expenses for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, were primarily related to decreases in license and other collaboration costs, clinical trial costs and manufacturing costs to support our development candidates (presented as part of other development costs), partially offset by increases in stock-based compensation, and consulting and outside services.

Previous wording

Development-related license and other collaboration costs increased for three months ended June 30, 2025, as compared to the corresponding prior year period, primarily due to higher development milestone achievement in our clinical-stage in-licensing collaboration programs. Development-related license and other collaboration costs decreased for the six months ended June 30, 2025, as compared to the corresponding prior year period, primarily due to lower development milestones achievement in our clinical-stage in-licensing collaboration programs.

Current wording

Development-related license and other collaboration costs decreased for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, primarily due to lower development milestone achievement in our clinical-stage in-licensing collaboration programs. Drug discovery-related license and other collaboration costs decreased for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, primarily due to lower development milestone achievement in our discovery-stage in-licensing collaboration programs and lower research funding, partially offset by increases in upfront payments for in-process research and development technology.

Previous wording

Clinical trial costs decreased for the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, primarily due to lower costs associated with studies evaluating cabozantinib and XB002, partially offset by higher costs associated with zanzalintinib, XB010 and XL495 studies.

Current wording

Clinical trial costs decreased for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, primarily due to lower costs associated with XB002 and with studies evaluating cabozantinib, partially offset by higher costs associated with zanzalintinib, XL309, and XB628 studies.

Previous wording

We project that clinical trial costs may increase for the remainder of 2025, as compared to the corresponding prior year period, primarily driven by higher costs associated with various studies evaluating zanzalintinib, and the XL309, XB371, XB628 and XB010 studies, partially offset by lower costs associated with studies evaluating cabozantinib and XB002.

Current wording

We project that clinical trial costs may decrease for the remainder of 2025, as compared to the corresponding prior year period, primarily driven by lower costs associated with various studies evaluating cabozantinib, zanzalintinib, XL495 and XB002, partially offset by higher costs associated with the XB371, XB628 and XB010 studies.

Previous wording

To continue growing our pipeline, we are prioritizing investment in new molecules that are clinically differentiated with the potential to improve the standard of care for our cancer patients, including current and planned clinical trial programs evaluating zanzalintinib, XL309, XB010, XB371, and XB628. 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 allows us to prioritize those targets that we believe have the greatest chance of yielding impactful therapeutics. As part of our strategy, our drug discovery activities have included and continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively incorporate 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 later in 2025. We will continue to engage in pipeline expansion initiatives with the goal of acquiring and in-licensing promising investigational oncology assets and then further characterize and develop them utilizing our established preclinical and clinical development infrastructure.

Current wording

To continue growing our pipeline, we are prioritizing investment in new molecules that are clinically differentiated with the potential to improve the standard of care for our cancer patients, including current and planned clinical trial programs evaluating zanzalintinib, XL309, XB628, XB371 and XB010. 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 allows us to prioritize those targets that we believe have the greatest chance of yielding impactful therapeutics. As part of our strategy, our drug discovery activities have included and continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively incorporate 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 later in 2025. We will continue to engage in pipeline expansion initiatives with the goal of acquiring and in-licensing promising investigational oncology assets and then further characterize and develop them utilizing our established preclinical and clinical development infrastructure.

Previous wording

We project our research and development expenses may increase for the remainder of 2025, as compared to the prior year period, primarily driven by increases in consulting and outside services, clinical trial costs, including the current and planned trials evaluating zanzalintinib, XL309, XB371, XB628 and XB010, and stock-based compensation.

Current wording

We project our research and development expenses may decrease for the remainder of 2025, as compared to the prior year period, primarily driven by decreases in license and other collaboration costs, manufacturing costs to support our development candidates, personnel expenses and clinical trial costs, partially offset by increases in consulting and outside services.

Previous wording

The increases in selling, general and administrative expenses for the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, were primarily due to increases in personnel expenses, marketing activities in support of the commercial launch of CABOMETYX for the treatment of patients with previously treated advanced NET, and stock-based compensation, partially offset by a decrease in corporate giving.

Current wording

The increase in selling, general and administrative expenses for the three months ended September 30, 2025, as compared to the corresponding prior year period, was primarily due to increases in stock-based compensation and consulting and outside services. The increase in selling, general and administrative expenses for the nine months ended September 30, 2025, as compared to the corresponding prior year period, was primarily due to increases in stock-based compensation, marketing activities in support of the commercial launch of CABOMETYX for the treatment of patients with previously treated advanced NET, and personnel expenses, partially offset by a decrease in corporate giving.

Previous wording

We project our selling, general and administrative expenses may increase for the remainder of 2025, as compared to the corresponding prior year period, primarily driven by an increase in stock-based compensation and personnel expenses.

Current wording

We project our selling, general and administrative expenses may decrease for the remainder of 2025, as compared to the corresponding prior year period, primarily driven by a decrease in corporate giving and lower expenses as a result of the impact of the 2025 Plan.

Previous wording

There were no restructuring expenses for the three and six months ended June 30, 2025. Restructuring expenses for the three and six months ended June 30, 2024 were the result of a corporate restructuring plan announced and implemented in the first quarter of 2024 to reduce our workforce and rebalance our cost structure in alignment with our strategic priorities. Restructuring expenses consisted of severance and employee-related costs, asset impairment, and contract termination costs and were mostly incurred in the first quarter of 2024. The restructuring plan was substantially complete as of the end of the second quarter of 2024.

Current wording

Restructuring expenses, for the three and nine months ended September 30, 2024, resulted from the execution of the 2024 Plan to reduce our workforce and rebalance our cost structure in alignment with our strategic priorities. Restructuring expenses consisted of severance and employee-related costs, asset impairment, and contract termination costs.

Previous wording

The decreases in non-operating income for the three and six months ended June 30, 2025, as compared to the corresponding prior year periods, were primarily the result of a decrease in interest income due to lower average interest-bearing investment balances, and lower average interest rates.

Current wording

The decreases in non-operating income for the three and nine months ended September 30, 2025, as compared to the corresponding prior year periods, were primarily the result of a decrease in interest income due to lower average interest-bearing investment balances, and lower average interest rates.

Previous wording

The effective tax rate for the three months ended June 30, 2025, differed from the U.S. federal statutory 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 rate of 21%, primarily due to state taxes, offset by excess tax benefits related to certain stock grants and the generation of federal tax credits. The effective tax rate for the three and six months ended June 30, 2024, differed from the U.S. federal statutory tax rate of 21%, primarily due to state taxes, offset by the generation of federal tax credits.

Current wording

The effective tax rate for the three and nine months ended September 30, 2025, differed from the U.S. federal statutory rate of 21%, primarily due to state taxes, offset by excess tax benefits related to certain stock grants. The effective tax rate for the three and nine months ended September 30, 2024, differed from the U.S. federal statutory tax rate of 21%, primarily due to state taxes, offset by the generation of federal tax credits.

Previous wording

As of June 30, 2025, we had $1.4 billion in cash, cash equivalents and marketable securities, as compared to $1.7 billion as of December 31, 2024. 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.

Current wording

As of September 30, 2025, we had $1.6 billion in cash, cash equivalents and marketable securities, as compared to $1.7 billion as of December 31, 2024. 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.

Previous wording

We project that we may continue to spend significant amounts of cash to fund the development of product candidates in our pipeline, including zanzalintinib, XL309, XB371, XB628 and XB010, and the development and commercialization of cabozantinib. 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.

Current wording

We project that we may continue to spend significant amounts of cash to fund the development of product candidates in our pipeline, including zanzalintinib, XL309, XB628, XB371 and XB010, and the development and commercialization of cabozantinib. 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.

Previous wording

In August 2024, our Board of Directors authorized a stock repurchase program to acquire up to $500.0 million of our outstanding common stock before December 31, 2025. In February 2025, our Board of Directors authorized the repurchase of up to an additional $500.0 million of our outstanding common stock before December 31, 2025. Under these programs, as of June 30, 2025, we repurchased 21.7 million shares of common stock for an aggregate purchase price of $796.3 million. As of June 30, 2025, approximately $203.7 million remained available for future stock repurchases before December 31, 2025. Stock repurchases under these programs 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 stock repurchase programs 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.

Current wording

$750.0 million of our outstanding common stock before December 31, 2026. Stock repurchases under these programs 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 stock repurchase programs 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. These programs do not obligate us to acquire any amount of our common stock, and the stock repurchase programs may be modified, suspended or discontinued at any time without prior notice.

Previous wording

Net cash provided by operating activities increased for the six months ended June 30, 2025, as compared to the corresponding prior year period, primarily due to an increase in cash received on sales of our products and a decrease incash paid for certain operating expenses.

Current wording

Net cash provided by operating activities increased for the nine months ended September 30, 2025, as compared to the corresponding prior year period, primarily due to an increase in cash received on sales of our products and a decrease incash paid for certain operating expenses.