11:29 AM EDT, 09/19/2024 (MT Newswires) -- Exelixis ( EXEL ) is expected to see "modest growth" in its cancer drug Cabometyx and the company's pipeline diversification will take time to materialize leaving little room for an upside as these factors are already reflected in the current stock price, UBS Securities said in a note on Thursday.

UBS, which initiated coverage of Exelixis ( EXEL ) with a neutral rating and a $40 price target, said the company faces a key near-term event with a decision on a litigation against MSN regarding Cabometyx's patent expected in H2.

Cabometyx sales will dwindle to mid-single-digit year-over-year growth in 2024 and 2025, and with potential intellectual property risks starting in 2026 there is added pressure on its future growth, according to the note.

The drug has limited growth opportunities in renal cell carcinoma as the market saturates but niche indications like neuroendocrine tumors and metastatic castration-resistant prostate cancer are expected to contribute $300 million each by 2030, UBS said.

The investment firm said that Exelixis' ( EXEL ) main pipeline asset Zanzalitinib is expected to reach $450 million in sales by 2028 but significant catalysts, including data from Stellar-303 trial, are not anticipated until 2025 and are unlikely to drive short-term stock performance.

Price: 26.83, Change: +0.01, Percent Change: +0.04