Exelixis downgraded to Market Perform from Outperform at BMO Capital

BMO Capital downgraded Exelixis (EXEL) to Market Perform from Outperform with a price target of $40, up from $36. The “main driver of our thesis has played out positively,” as a judge ruled in the MSN II litigation case for cabozantinib patents, ruling that Exelixis’ ‘349 patent is not invalid but that MSN’s ANDA is not infringing, notes the analyst, who now sees limited upside to the story in 2025 beyond zanzalintinib’s readout in colorectal cancer. The firm has raised its target on zanzalintinib’s probability of success in CRC, which it now pegs at 50%, but views the success of the trial as “a toss-up” given the history of cabometyx’s combination with Tecentriq in this indication, the analyst added.