Exelixis, Inc. (“Exelixis,” “we,” “our”(Exelixis, we, our or “us”)us) is a biotechnologyan oncology company committed toinnovating next-generation medicines and combination regimens at the forefront of cancer care. Through the commitment of our drug discovery, development and commercialization resources, we have produced four marketed pharmaceutical products, including our flagship molecule, cabozantinib. We continue to evolve our product portfolio, leveraging our investments, expertise and strategic partnerships, to target an expanding range of new medicinestumor types and indications with our clinically differentiated pipeline of small molecules, antibody-drug conjugates (ADCs) and other biotherapeutics.

Sales related to improve care and outcomescabozantinib account for people with cancer. Sincethe majority of our founding in 1994, three products discovered at Exelixis have progressed through clinical development, received regulatory approval, and entered the marketplace. Two are derived from cabozantinib,revenues. Cabozantinib is an inhibitor of multiple tyrosine kinases including MET, AXL, VEGF receptors and RET:RET and has been approved by the U.S. Food and Drug Administration (FDA) and in 62 other countries as: CABOMETYX® (cabozantinib) tablets approved both alone and in combination with Bristol-Myers Squibb Company’s (BMS) OPDIVO® (nivolumab) for advanced renal cell carcinoma or RCC,(RCC), for previously treated hepatocellular carcinoma (HCC) and, currently by the FDA and European Commission (EC), for previously treated, radioactive iodine (RAI)-refractory differentiated thyroid cancer (DTC); and COMETRIQ® (cabozantinib) capsules approved for progressive, metastatic medullary thyroid cancer (MTC). For physicians treating these types of cancer, cabozantinib has become or MTC. is becoming an important medicine in their selection of effective therapies.

The third product,other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib) tablets, is a formulation of cobimetinib and is, 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, Inc. (a member of the Roche Group) (Genentech); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor (MR) approved for the treatment of hypertension in Japan and is approvedlicensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo). See “—Collaborations and Business Development Activities—Other Collaborations.”

As detailed below, CABOMETYX and COMETRIQ have been approved to treat patients with various forms of cancer by the FDA for the U.S. market, the EC for the European Union (EU) markets and are the subjectJapanese Ministry of broad clinical development programs for multiple potential oncology indications.

In 2022, in markets outside the U.S. and Japan in 2017,, we workedcontinued to work closely with our collaboration partner Ipsen in support of its regulatory strategy and commercialization efforts for CABOMETYX. Utilizing its established international oncology marketing expertise, Ipsen continuesCABOMETYX as a treatment for advanced RCC, both as a single agent and in combination with OPDIVO, as well as in preparation for submission of applications for approvals of CABOMETYX in combination with other therapies, and similarly with our collaboration partner Takeda with respect to execute its commercialization plans, most recently receiving regulatory approvalthe Japanese market. As a result of the approvals of CABOMETYX and/or the combination of CABOMETYX with OPDIVO for RCC indications in Australia, Switzerland

Liver cancer is a leading cause of cancer death worldwide, accounting for more than 800,000 deaths and reimbursement negotiations have been completed or are actively ongoing in900,000 new cases each year. In the majorityU.S., the incidence of EU member states.

Outside the U.S., the EC’s approval of CABOMETYX provided physicians in the EU with a second approved therapy for the second-line treatment of this aggressive and difficult-to-treat cancer, who are drug-eligible, withand approvals from Health Canada and the Japanese MHLW brought a much-needed therapy to HCC patients in those countries. In addition to the Member States of the EU, Japan, the U.K. and Canada, CABOMETYX is also approved for previously treated HCC indications in Brazil, Taiwan, South Korea, Australia and Hong Kong, among other countries.

We have extensive expertise in the first quarterclinical development of 2018, for CABOMETYX as a treatment for patients with previously treated advanced HCC. Ipsen has informed us that it intendsoncology products, which we continue to submit the regulatory application in the EU for CABOMETYX as a treatment for patients with previously treated advanced HCC in the first half of 2018.

evaluating cabozantinib in combination with nivolumab and in combination with both nivolumab and ipilimumab, and there is strong rationale to evaluate the combinationA summary of checkpoint inhibitors and cabozantinib in various other tumor types, including bladder cancer.

Cabozantinib inhibits the activity of tyrosine kinases, including MET, AXL, VEGF receptors and RET. These receptor tyrosine kinases are involved in both normal cellular function and in pathologic processes such as oncogenesis, metastasis, tumor angiogenesis, drug resistance and maintenance of the tumor microenvironment. Objective tumor responses have been observed in patients treated with cabozantinib in more than 20multiple individual tumor types investigated in phase 1, 2 and 23 clinical trials to date, reflecting the medicine’s broad clinical potential. We are currently evaluatingcontinuing to evaluate cabozantinib both as a single agent and in combination with immune checkpoint inhibitors,ICIs in a broad development program comprising over 70

We have entered into collaborations with F. Hoffmann-La Roche Ltd. (Roche) for the purpose of evaluating the combination of cabozantinib daily and 3 mg of nivolumab every two weeks or 40 mgRoche’s anti-PD-L1 ICI, atezolizumab, diversifying our exploration of cabozantinib daily, 3 mg of nivolumab every two weeks, and 1 mg ipilimumab every 3 weeks for a total of 4 administrations. The primary objectives for the cohorts are safety and tolerability, ORR and duration of response, or DOR, and the secondary objectives include time to progression, PFS and OS.combinations with ICIs.

In additionTo continue growing our pipeline, we are investing heavily in the identification, exploration and advancement of new approaches to treating cancer. Several product candidates have progressed into clinical trials, including both small molecules and an assortment of multi-modal biotherapeutics that we have discovered or in-licensed and believe have the advances made underpotential to treat a variety of cancers. The following table summarizes our cabozantinib development program, significant progress continues to be made with respect to thecurrent and planned clinical development regulatory status and commercial potential of cobimetinib. Cobimetinib is a reversible inhibitor of MEK, a kinase that is a componentactivities outside of the RAS/RAF/MEK/ERK pathway. This pathway mediates signaling downstream of growth factor receptors, and is prominently activated in a wide variety of human tumors.  Cobimetinib is being evaluated in a broad development program consisting of more than 50 clinical trials by Genentech or through Genentech’s investigator sponsored trial program.

Increasing our access to novel anti-cancer agents is essential to our pipeline strategy and activityoverall 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 XL888 in combinationaction. This approach provides a high degree of flexibility with vemurafenib in patients with unresectable stage III/IV BRAF V600 mutation-positive melanoma.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 research collaborations, in-licensing arrangements and other strategic transactions that increase our discovery bandwidth and allow us to access a wide range of technology platforms. In November 2014,2022, we announced positive preliminary results from this phase 1 trial. The primary endpoint ofexecuted an option agreement with Sairopa, B.V. (Sairopa) to develop ADU-1805, a potentially best-in-class mAb that targets SIRPα. For more information on the trial was to determine the safety and tolerability of the combination, including determination of a maximum tolerated dose, or MTD, for XL888. Secondary endpoints included ORR (RECIST-1 criteria), estimates of PFS and OS, and analysis of pharmacodynamic biomarkers. The trial had enrolled fifteen subjects, and at the time of data cut-off, objective tumor regression was observed in 11 of 12 response-evaluable patients (two CRs and nine PRs), for an ORR of 92%. Safety data for the combination identified tolerable dose levels of XL888 with full dose vemurafenib.

We are actively focused onhave also continued our efforts to increase our laboratory space during 2022, both by expanding our pipeline through internal drugleased space at our Alameda headquarters and as part of our planned new Exelixis East facilities in the Greater Philadelphia area, which are intended to further enhance the capacity and capability of our biotherapeutics and small molecule discovery efforts. As of the date of this Annual Report on Form 10-K, we are currently advancing more than 10 discovery programs and targetedexpect to progress up to five new development candidates into preclinical development during 2023. In addition, we will continue to engage in business development activities.

Since its formation in 2000, until 2012, we had an active Discoveryour drug discovery group thathas advanced 2225 compounds to the IND stage,IND-stage, either independently or with collaboration partners, including cabozantinib and cobimetinib. We built significant infrastructure, including a library of 4.6 million compounds, and gained extensive experience in the identification and optimization oftoday we deploy our drug discovery expertise to advance small molecule drug candidates against multiple target classes for oncology, inflammationtoward and metabolic diseases.through preclinical development. These efforts are led by our experienced scientists, including some of the same scientists who led the efforts to discover cabozantinib, cobimetinib and esaxerenone, each of which are now commercially distributed drug products. We augment our small molecule discovery activities through research collaborations and in-licensing arrangements with other companies engaged in small molecule discovery, including:

Amongst our establishedsmall molecule programs, furthest along are zanzalintinib, which was discovered at Exelixis, and validatedXL102 which was discovered at Aurigene. Zanzalintinib first entered the clinic in 2019, and we initiated the first two phase 3 pivotal studies evaluating zanzalintinib in 2022, and XL102 entered the clinic in 2021. For additional information on these clinical development infrastructure.trial programs, see “—Exelixis Development Programs—Pipeline Development Programs - Advancing Exelixis’ Future Cancer Therapy Candidates.” In addition, we are seeking external partnerships around assetscontinue to make progress on multiple, additional lead optimization programs for inhibitors of a variety of targets that we believe play significant roles in tumor growth, and new technologieswe anticipate that complementsome of these other programs could reach development candidate status in 2023.

We have established multiple collaborations with leading biopharmaceutical companies for the commercialization and further development of the cabozantinib franchise. Additionally, we have made considerable progress under our in house drug discovery efforts. These partnerships are aimed at expandingexisting research collaborations and in-licensing arrangements to further enhance our early-stage pipeline and expand our ability to discover, develop and commercialize novel therapies with the aimgoal of providing new treatment options for cancer patients and their physicians.

In February 2016, we entered into a collaboration and license agreement with Ipsen for the commercialization and further development of cabozantinib. Pursuant to the terms ofUnder the collaboration agreement, Ipsen received exclusive commercialization rights for current and potential future cabozantinib indications outside of the U.S., Canada and Japan. The collaboration agreement was subsequently amended on four occasions, including in December 2016 to include commercialization rights in Canada. We have also agreed to collaborate with Ipsen on the development of cabozantinib for current and potential future indications. The parties’ efforts are governed through a joint steering committee and appropriate subcommittees established to guide and oversee the collaboration’s operation and strategic direction; provided, however, that we retain final decision-making authority with respect to cabozantinib’s ongoing development.

In consideration for the exclusive license and other rights contained in the collaboration agreement, including commercialization rights in Canada, Ipsen paid us aggregate upfront payments of $210.0 million.million in 2016. As of December 31, 2017,2022, we achieved aggregate milestone payments of $125.0$489.5 million related to regulatory and commercial

We remain responsible for the manufacturemanufacturing and supply of cabozantinib for all development and commercialization activities under the collaboration agreement. In connection with the collaboration agreement,Relatedly, we entered into a supply agreement with Ipsen in February 2016, which, pursuant to its amended terms, effective October 2017, we will supply finished and labeled drug product to Ipsen for distribution in the territories outside of the U.S. and Japan indefinitely.for the term of the collaboration agreement as well as a quality agreement that provides respective quality responsibilities for the aforementioned supply. Furthermore, at the time we entered into the collaboration agreement, the parties also entered into a pharmacovigilance agreement, which defines each partner’s responsibilities for safety reporting. The pharmacovigilance agreement also requires us to maintain the global safety database for cabozantinib. To meet our obligations to regulatory authorities for the reporting of safety data from territories outside of the U.S. and Japan from sources other than our sponsored global clinical development trials, we rely on data collected and reported to us by Ipsen.

Unless earlier terminated, earlier, the collaboration agreement has a term that continues, on a product-by-product and country-by-country basis, until the latter of (i)(1) the expiration of patent claims related to cabozantinib, (ii)(2) the expiration of regulatory exclusivity covering cabozantinib or (iii)(3) ten years after the first commercial sale of cabozantinib, other than COMETRIQ. The supply agreement will continue in effect until expiration or termination of the collaboration agreement. The collaboration agreement may be terminated for cause by either party based on uncured material breach of either the collaboration agreement or the supply agreement by the other party, bankruptcy of the other party or for safety reasons. We may terminate the collaboration agreement if Ipsen challenges or opposes any patent covered by the collaboration agreement. Ipsen may terminate the collaboration agreement if the FDA or EMA orders or requires substantially all cabozantinib clinical trials to be terminated. Ipsen also has the right to terminate the collaboration agreement on a region-by-region basis after the first commercial sale of cabozantinib in advanced RCC in the given region. Upon termination by either party, all licenses granted by us to Ipsen will automatically terminate, and, except in the event of a termination by Ipsen for our material breach, the licenses granted by Ipsen to us shall survive such termination and shall automatically become worldwide, or, if Ipsen terminatedwere to terminate only for a particular region, then for the terminated region. Following termination by us for Ipsen’s material breach, or termination by Ipsen without cause or because we undergo a change of control by a party engaged in a competing program, Ipsen is prohibited from competing with us for a period of time.

In January 2017, we entered into a collaboration and license agreement with Takeda, which was subsequently amended on three occasions to, among other things, modify the amount of reimbursements we receive for the commercializationcosts associated with our required pharmacovigilance activities and further clinical development of cabozantinib in Japan. Pursuantmilestones we are eligible to receive, as well as modify certain cost sharing obligations related to the terms ofJapan-specific development costs associated with CONTACT-01 and CONTACT-02. Under the collaboration agreement, Takeda has exclusive commercialization rights for current and potential future cabozantinib indications in Japan. TheJapan, and the parties have also agreed to collaborate on the future clinical development of cabozantinib in Japan. The

In consideration for the exclusive license and other rights contained in the collaboration agreement, we received aan upfront payment of $50.0 million upfront nonrefundable payment from Takeda.Takeda in 2017. As of December 31, 2022, we have also achieved regulatory and development milestones in the aggregate of $127.0 million related to regulatory and commercial progress by Takeda since the inception of the collaboration agreement. We are eligible to receive development,additional regulatory and first-saledevelopment milestone payments, of up to $95.0 million related to second-line RCC, first-line RCC and second-line HCC, as well aswithout limit, for additional development, regulatory and first-sale milestones payments for potential future indications. The collaboration agreement also provides that we

We are further eligible to receive pre-specifiedcommercial milestones, including milestone payments earned for the first commercial sale of up to $83.0 million associated with potential sales milestones.a product, of $119.0 million. We will also receive royalties on the net sales of cabozantinib in Japan. We are entitled to receive a tiered royalty of 15% to 24% on the initial $300.0 million of net sales, and following this initial $300.0 million of net sales, we are then entitled to receive a tiered royalty of 20% to 30% on annual net sales. Thesesales thereafter; these 20% to 30% royalty tiers will reset each calendar year. As of December 31, 2022, we have earned royalties of $21.5 million on net sales of cabozantinib by Takeda since the inception of the collaboration agreement.

Except for CONTACT-01 and CONTACT-02, Takeda is responsible for 20% of the costs associated with the global cabozantinib development plan’s current and future trials, provided Takeda opts into such trials, and 100% of costs associated with the cabozantinib development activities that are exclusively for the benefit of Japan. Pursuant toIn accordance with the termscollaboration agreement, Takeda has opted into and is co-funding CheckMate-9ER, certain cohorts of COSMIC-021, CONTACT-01 and CONTACT-02.

Under the collaboration agreement, we are responsible for the manufacturemanufacturing and supply of cabozantinib for all development and commercialization activities under the collaboration and consequently,agreement. Relatedly, we entered into a clinical supply agreement covering the manufacture and supply of cabozantinib to Takeda for the term of the collaboration agreement, as well as a quality agreement that provides respective quality responsibilities for the aforementioned supply. Furthermore, at the time we entered into the collaboration agreement, the parties also entered into a safety data exchange agreement, which defines each partner’s responsibility for safety reporting. This agreement also requires us to maintain the global safety database for cabozantinib. To meet our obligations to regulatory authorities for the reporting of safety data from Japan from sources other than our sponsored global clinical development trials, we rely on data collected and reported to us by Takeda.

Unless earlier terminated, the collaboration agreement has a term that continues, on a product-by-product basis, until the earlier of (i)(1) two years after first generic entry with respect to such product in Japan or (ii)(2) the later of (A) the expiration of patent claims related to cabozantinib and (B) the expiration of regulatory exclusivity covering cabozantinib in Japan. The collaboration agreement may be terminated for cause by either party based on uncured material breach by the other party, bankruptcy of the other party or for safety reasons. For clarity, Takeda’s failure to achieve specified levels of commercial performance, based upon sales volume and/or promotional effort, during the first six years of the collaboration will constitute a material breach of the collaboration agreement. We may terminate the agreement if Takeda challenges or opposes any patent covered by the collaboration agreement. At any time prior to August 1, 2023, the parties may mutually agree to terminate the collaboration agreement if Japan’s Pharmaceuticals and Medical Devices Agency is unlikely to grant any approval of the marketing authorization application, or MAA, in any cancer indication in Japan. After the commercial launch of cabozantinib in Japan, Takeda may terminate the collaboration agreement upon twelve months’ prior written notice following the third anniversary of the first commercial sale of cabozantinib in Japan. Upon termination by either party, all licenses granted by us to Takeda will automatically terminate, and the licenses granted by Takeda to us shall survive such termination and shall automatically become worldwide.

In December 2006,February 2017, we out-licensedentered into a clinical trial collaboration agreement with BMS for the further development and commercializationpurpose of cobimetinibexploring the therapeutic potential of cabozantinib in combination with BMS’s ICIs, nivolumab and/or ipilimumab, to Genentech pursuant totreat a worldwide collaboration agreement. Under the termsvariety of types of cancer. As part of the collaboration, we are evaluating the triplet combination of cabozantinib, nivolumab and ipilimumab as a treatment option for RCC in the COSMIC-313 trial. For a description of the COSMIC-313 trial, see “—Exelixis Development Programs—Cabozantinib Development Program—Combination Studies with BMS.”

Under the collaboration agreement we werewith BMS, each party granted to the other a non-exclusive, worldwide (within the collaboration territory as defined in the collaboration agreement and its supplemental agreements), non-transferable, royalty-free license to use the other party’s compounds in the conduct of each clinical trial. The parties’ efforts are governed through a joint development committee established to guide and oversee the collaboration’s operation. Each trial is conducted under a combination IND application, unless otherwise required by a regulatory authority. Each party is responsible for developing cobimetinib throughsupplying finished drug product for the determination of the MTD in a phase 1applicable clinical trial, and Genentech hadresponsibility for the option to co-develop cobimetinib, which Genentech could exercise after receiptpayment of certain phase 1 data from us. In March 2008, Genentech exercised its option to co-develop cobimetinib, and in March 2009, we granted to Genentech an exclusive worldwide revenue-bearing license to cobimetinib, at which point Genentech became responsiblecosts for completing the phase 1 clinicaleach such trial and subsequent clinical development. We received aggregate upfront and milestone payments of $50.0 million under our collaboration agreement with Genentech and are not eligible for any additional milestone payments.

positiveIn February 2017, we entered into a master clinical supply agreement with Roche for the purpose of evaluating cabozantinib and Roche’s ICI, atezolizumab, in locally advanced melanomaor metastatic solid tumors. Under this agreement with Roche, in June 2017, we initiated COSMIC-021 and in December 2018, we initiated COSMIC-312. We were the sponsor of both trials, and Roche provided atezolizumab free of charge. Building upon encouraging clinical activity observed in COSMIC-021, in December 2019 we entered into a joint clinical research agreement with Roche for the purpose of further evaluating the combination of cabozantinib with atezolizumab in patients with locally advanced or metastatic solid tumors, including in the U.S. However, followingCONTACT-01, CONTACT-02 and CONTACT-03 studies. If a recent commercial review, commencing in January 2018, weparty to the joint clinical research agreement proposes any additional combined therapy trials beyond these three ongoing phase 3 pivotal trials, the joint clinical research agreement provides that such proposing party must notify the other party and Genentech scaled backthat if agreed to, any such additional combined therapy trial will become part of the personal promotion of COTELLIC in this indicationcollaboration, or if not agreed to, the proposing party may conduct such additional combined therapy trial independently, subject to specified restrictions set forth in the U.S. This decision is not indicative of any change in our intention to promote COTELLIC for other therapeutic indications for which it may be approved in the future.joint clinical research agreement.

Under the termsjoint clinical research agreement, each party granted to the other a non-exclusive, worldwide (excluding, in our case, territory already the subject of oura license by us to Takeda), non-transferable, royalty-free license, with a right to sublicense (subject to limitations), to use the other party’s intellectual property and compounds solely as necessary for the party to perform its obligations under the joint clinical research agreement. The parties’ efforts are governed through a joint steering committee established to guide and oversee the collaboration agreement, as amended in July 2017, we share inand the profitsconduct of the combined therapy trials. Each party is responsible for providing clinical supply for all combined therapy trials, and losses received or incurred in connection with COTELLIC’s commercialization in the U.S. This profit and loss share has multiple tiers: we receive 50%cost of profits and losses from the first $200.0 million of U.S. actual sales, decreasing to 30% of profits and losses from U.S. actual sales in excess of $400.0 million. These tierssupply will reset each calendar year.be borne by such party. The revenueclinical trial expenses for each sale of COTELLIC appliedcombined therapy trial agreed to the profit and loss statement for the collaboration agreement, or the Genentech Collaboration P&L, is calculated using the average of the quarterly net selling prices of COTELLIC and any additional branded Genentech product(s) prescribed with COTELLIC in such sale. U.S. commercialization costs for COTELLIC are then applied to the Genentech Collaboration P&L, subject to reduction based on the number of Genentech products in any given combination including COTELLIC. In addition to our profit share in the U.S.,be conducted jointly under the termsjoint clinical research agreement are shared equally between the parties, and the clinical trial expenses for each additional combined therapy trial not agreed to be conducted jointly under the joint clinical research agreement are borne by the proposing party, except that the cost of clinical supply for all combined therapy trials are borne by the collaboration agreement, we are entitled to low double-digit royalties on net sales of COTELLIC outsideparty that owns the U.S.applicable product.

Unless earlier terminated, the collaborationjoint clinical research agreement has a termprovides that continuesit will remain in effect until the expirationcompletion of the last payment obligation with respect to the licensed productsall combined therapy trials under the collaboration. Genentech hascollaboration, the rightdelivery of all related trial data to terminateboth parties, and the collaboration agreement without cause atcompletion of any time. If Genentech terminates the collaboration agreement without cause, all licenses that were granted to Genentech under the agreement terminate and revert to us. Additionally, if Genentech terminates the collaboration agreement without cause, or we terminate the collaboration agreement for cause, we would receive, subject to certain conditions, licenses from Genentech tothen agreed-upon additional analyses. The joint clinical research develop and commercialize reverted product candidates. The collaboration agreement may be terminated for cause by either party based on any uncured material breach by the other party.party, bankruptcy of the other party or for safety reasons. Upon termination by either party, the licenses granted to each party will terminate upon completion of any ongoing activities under the joint clinical research agreement.

Prior to the commercialization of our first product, COMETRIQ, our primary business strategy was focused on the development and out-license of compounds to pharmaceutical and biotechnology companies under collaboration agreements that allowed us to retain economic participation in compounds and support additional development of our proprietary products. Our collaboration agreements with Genentech and Daiichi Sankyo Merck, BMS and Sanofi described below are representative of this historical

We do not own or operate manufacturing or distribution facilities or resources for chemistry, manufacturing and control (CMC) development activities, preclinical, clinical or commercial production and distribution of CABOMETYXfor our current products and COMETRIQ.new product candidates. Instead, we have multiple contractual agreements in place withrely on various third-party contract manufacturing organizations who,to conduct these operations on our behalf, manufacture clinicalbehalf. As our operations continue to grow in these areas, we continue to expand our supply chain through additional third-party contract manufacturers, distributors and suppliers. Specifically with respect to CABOMETYX, we entered into agreements with secondary contract manufacturing organizations to produce additional commercial supplies of CABOMETYX tablets and COMETRIQ. This willcabozantinib drug substance, which bolsters our commercial supply chain and serves to mitigate the risk of supply chain interruptions or other failures. For our portfolio of biotherapeutics and small molecules, we continue in the foreseeable future for bothto expand our current and future commercial products. We have selectednetwork through well-established and reputable global third-party contract manufacturers for our drug substanceCMC development and drug product manufacturing that have good regulatory standing, largesuitable manufacturing capacities and multiplecapabilities. We anticipate that this network will meet our future commercial manufacturing sites within their business footprint.and supply needs for our product candidates currently in development, should such programs advance to regulatory approval and subsequent commercialization. These third parties must comply with applicable regulatory requirements, including the FDA’s Current Good Manufacturing PracticesPractice (GMP), the EC’s Guidelines on Good Distribution Practice (GDP), as well as other stringent regulatory requirements enforced by the FDA or foreign regulatory agencies, as applicable, and are subject to routine inspections by such regulatory agencies. 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 Drug Supply Chain Security Act (DSCSA) and its foreign equivalents where applicable.

We monitor and evaluate the performance of our third-party contract manufacturers on an ongoing basis to ensurefor compliance with these requirements and to affirm their continuing capabilities to meet both our commercial and clinical needs. We also have contracted with a third-party logistics provider, with multiple distribution locations, to provide shipping and warehousing services for our commercial supply of both

We source raw materials that are used to manufacture our drug substance from multiple third-party suppliers in Asia, Europe and Europe.North America. We stock sufficient quantities of these materials and provide them to our third-party drug substance contract manufacturers to ensureso they can manufacture adequate drug substance quantities per our requirements, for both clinical and commercial purposes. We then store drug substance at third-party facilities and provide appropriate amounts to our third-party drug product contract manufacturers, who then manufacture, package and label our specified quantities of finished goods for COMETRIQ and CABOMETYX, respectively. In addition, we rely on our third-party contract manufacturers to source materials such as excipients, components and reagents, which are required to manufacture our drug substance and finished drug product.

We have a fully integrated commercial team consisting of sales, marketing, market access, and commercial operations functions. Our sales team promotes CABOMETYX and COMETRIQ in the U.S. In addition, although we currently do not co-promote COTELLIC alongside Genentech, we have the right to do so and will do so if we, in consultation with Genentech, deem it useful and appropriate to realize COTELLIC’s commercial objectives. We use customary pharmaceutical company practices to market our products in the U.S. and concentrate our efforts on oncologists, oncology nurses, pharmacists and pharmacists. other healthcare professionals. In addition to using customary in-person pharmaceutical company practices, we also utilize digital marketing technologies to expand our engagement opportunities with customers. 

Our finishedcommercial products, of CABOMETYX and COMETRIQ, are sold initially through wholesale distribution and specialty pharmacy channels and then, if applicable, resold to hospitals and other organizations that provide CABOMETYX and COMETRIQ to end-user patients. To facilitate our commercial activities in the U.S., we also employ various third-party vendors,third parties, such as advertising agencies, market research firms and vendors providing other sales-support related services as needed.needed, including digital marketing and other non-personal promotion. We believe that our commercial team and distribution practices are sufficient to ensurefacilitate our marketing efforts reachin reaching our target audience and deliverour delivery of our products to patients in a timely and compliant fashion.

In addition, we rely on Ipsen and Takeda for theongoing and further commercialization and distribution of CABOMETYX in territories outside of the U.S., as well as for access and distribution activities for the approved products under named patient use programs or similar programs with the effect of introducing earlier patient access to CABOMETYX, and we also rely on Ipsen for these same activities with respect to the commercialization and distribution of COMETRIQ outside of the U.S. For COTELLIC, we rely on Genentech, as our collaboration partner, for all current and future commercialization and marketing activities, with the exception of the limited co-promotion activities highlighted above.

To help ensure that all eligible patients in the U.S. have appropriate access to CABOMETYX and COMETRIQ, we have established a comprehensive reimbursement and patient support program called Exelixis Access Services or EASE.(EASE). Through EASE, we provide co-pay assistance to qualified, commercially insured patients to help minimize out-of-pocket costs and provide free drug to uninsured or under-insured patients who meet certain clinical and financial criteria. In addition, EASE is designed to provideprovides comprehensive reimbursement support services, such as prior authorization support, benefits investigation and, if needed, appeals support. Beyond financial assistance, patients who participate in EASE also receive treatment coordination through a dedicated case manager, as well as clinical outreach and support from a network of oncology nurses or other healthcare professionals who help many of these patients better understand how to take their medication and mitigate side effects.

In support of the development and expansion of our product pipeline, we have resumed discovery activities. Our research and development processes involve the controlled use of certain hazardous materials and chemicals. We are subject toIn the U.S., at the federal, state and local levels, and in other foreign countries, we are subject to environmental, health and workplace safety laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials. While we have incurred, and maywill continue to incur, expenditures to ensure we are inmaintain compliance with these laws and regulations, we do not expect the cost of complying with these laws and regulations to be material.

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies and other federal, state and local entities regulate, among other things, research and development activities and the testing, marketing approval, manufacture, quality control, safety, effectiveness, labeling, storage, distribution, post-marketing safety reporting, export, import, record keeping, approval, advertising and promotion of our products.

The process required by the FDA before product candidates may be marketed in the U.S. generally involves the following:

For purposes of NDA approval, human clinical trials are typically conducted in three sequential phases that may overlap.overlap or be combined:

The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so-called phase 4post-marketing or “phase 4” studies may be madedeemed a condition to be satisfied after a drug receives approval. Failure to satisfy such post-marketing commitments can result in FDA enforcement action, up to and including withdrawal of NDA approval. The results of phase 4 studies can confirm the effectiveness

For approval of a product candidate and can provide important safety informationnew drug or changes to augment the FDA’s adverselabeling of an approved drug, reaction reporting system. Theincluding new indications, the results of product development, preclinical studies and clinical trials are submitted to the FDA as part of an NDA, or as part of an sNDA. The submission of an NDA or sNDA requires payment of a substantial user fee to the FDA. The FDA may convene an advisory committee to provide clinical insight on NDA review questions. Althoughquestions, although the FDA is not required to follow the recommendations of an advisory committee, the agency usually does so.committee. The FDA may initially issue a Refuse to File letter for an incomplete NDA or sNDA, or it may deny approval of an NDA or sNDA by way of a Complete Response letter if the applicable regulatory criteria are not satisfied, or it mayalternatively require additional clinical and/or nonclinical data and/or an additional phase 3 pivotal clinical trial. Even if such data are submitted, the FDA may ultimately decide that the NDA or sNDA does not satisfy the criteria for approval. An NDA may be approved with significant restrictions on its labeling, marketing and distribution under a Risk Evaluation and Mitigation Strategy. Once issued, the FDA may withdraw product approval if ongoing regulatory standards are not met or if safety problems occur after the product reaches the market. In addition, the FDA may require testing and surveillance programs to monitor the effect of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs.

Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including obtaining prior FDA approval of certain changes to the approved NDA, record-keeping requirements, and reporting of adverse experiences with, and interruptions in the manufacture of, the drug. Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies,agencies. Thus, we and our third-party contract manufacturing organizations are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMP, which impose certain manufacturing requirements (including procedural and documentation requirementsrequirements) upon us and our third-party manufacturers.

In the U.S., the Orphan Drug Act of 1983, as amended, is intended to incentivizeprovides incentives for the development of drugs and biologicalbiotherapeutic products for rare diseases or conditions that affect fewer than 200,000 people in the U.S. (or that affects more than 200,000 persons in the U.S. and for which there is no reasonable expectation that the cost of developing and making available the drug in the U.S. for such disease or condition will be recovered from sales of the drug in the U.S.). If aCertain of the incentives turn on the drug isfirst being developed for a rare disease of condition, todesignated as an orphan drug. To be eligible for designation as an orphan drug (Orphan Drug Designation), the drug must have the potential to treat such rare disease or condition as described above. In addition, the FDA must not have previously approved a drug considered the “same drug,” as defined in the FDA’s orphan drug regulations, for the same orphan-designated indication. If the FDA has previously approved another same drug for the same indication to obtain orphan drug designation,or the sponsor of the subsequent drug would be required tomust provide a plausible hypothesis of clinical superiority over the previously approved drug to obtain an orphan designation.same drug. Upon FDA receipt of Orphan Drug Designation, the sponsor is eligible for tax credits of up to 50%25% for qualified clinical trial expenses the ability to apply for grant funding, and waiver of the PDUFAPrescription Drug User Fee Act application fee. Following the passage of the Tax Cuts and Jobs Act of 2017, for clinical trial expenses incurred in tax years 2018 and going forward, the tax credit is reduced to 25%. In addition, upon marketing approval, an orphan-designated drug could be eligible for seven years of market exclusivity if no drug considered the same drug was previously approved for the same orphan condition (or if the subsequent drug is demonstrated to be clinically superior to any such previously approved orphan-designated indication.same drug). Such orphan drug exclusivity, if awarded, would only block the approval of any drug considered the same drug for the same orphan indication. Moreover, a subsequent same drug could break a previouslyan approved drug’s orphan exclusivity through a demonstration of clinical superiority over the previously approved drug.

The FDA has various programs including Fast Track, priority review and accelerated approval, whichthat are intended to expedite or simplify the process for developing and reviewing promising drugs, or to provide for the approval of a drug on the basis of a surrogate endpoint. Generally, drugs that are eligible for these programs are those for serious or life-threatening conditions, those with the potential to address unmet medical needs and those that offer meaningful benefits over existing treatments. For example, Examples of such programs included Fast Track designation, breakthrough therapy designation, priority review and accelerated approval, and the eligibility criteria of and benefits for each program vary:

The Drug Price Competition and Patent Term Restoration Act of 1984 or the(The Hatch-Waxman Act,Act) established two abbreviated approval pathways for drug products in which potential competitors may rely upon the FDA’s prior approval of the same or similar drug product.

Unlike a full NDA for which the sponsor has conducted or obtained a right of reference to all the data essential to approval, the filing of both an ANDA application andor a 505(b)(2) applicationNDA may be delayed due to patent or exclusivity protections covering an approved product. The Hatch-Waxman Act provides (a) up to five years of data exclusivity for the first approval of a new chemical entity (NCE) exclusivity and (b) three years of data exclusivity for supplemental applications containingapproval of an NDA or sNDA for a product that is not an NCE but rather where the application contains new clinical studies conducted or sponsored by the sponsor and considered essential to the approval of the sNDA.NDA or sNDA (three-year “changes” exclusivity). NCE exclusivity runs from the time of approval of the NDA and bars FDA from accepting for review of any ANDA or 505(b)(2) NDA for a drug containing the same active moiety for five years (or for four years if the application contains a Paragraph IV certification that a reference product patent is invalid or not infringed by the ANDA/505(b)(2) NDA product). The three-year “changes” exclusivity generally bars the FDA from approving any ANDA or 505(b)(2) NDA application that relies on the information supporting the approval of the drug or the change to the drug for which the information was submitted and the exclusivity granted.

In addition to regulations in the U.S., we are subject to regulations of other countries governing clinical trials and the manufacturing, commercial sales and distribution of our products outside of the U.S. Whether or not we obtain FDA

The way clinical trials are conducted in the EU will undergohas undergone a major change whenwith the application of Regulation (EU) 536/2014, governing clinical trials in the EU, repealing the existing Directive 2001/20/EC comes into application in 2019.EC. This new regulation harmonizes the assessment and supervision processes for clinical trials throughout the EU, via an EU portal and database. Thedatabase, which the EMA will set up and maintain the portal and database, in collaboration with the Member States and the EC. Following the EC’s confirmation of full functionality of the Clinical Trials Information System (CTIS) through an independent audit, which was published in the Official Journal of the European Union in August 2021, Regulation (EU) 536/2014 became applicable concurrent with the CTIS “go-live” date on January 31, 2022. While existing clinical trials could continue to be conducted under the rules of Directive 2001/20/EC until January 31, 2025, any clinical trial initiated on or after January 31, 2023 must comply with the rules of the new regulation.

Under EU regulatory systems, a company may submit MAAsa marketing authorization application (MAA) either under a centralized or decentralized procedure. Under the centralized procedure, MAAs are submitted to the EMA whosefor scientific review by the Committee for Medicinal Products for Human Use reviews the application and issues(CHMP) so that an opinion is issued on it.product approvability. The opinion is considered by the EC which is responsible for deciding applications.granting the centralized marketing authorization in the form of a binding EC decision. If the application is approved, the EC grants a single marketing authorization that is valid for all EU member statesMember States as well as Iceland, Liechtenstein and Norway, collectively the European Economic Area, or the EEA.Area. The national authorization procedures, the decentralized and mutual recognition procedures, as well as national applications,authorization procedure are available for products for which the centralized procedure is not compulsory. The mutual recognition procedure provides for the EU member statesMember States selected by the applicant to mutually recognize a national marketing authorization that has already been granted by the competent authority of another member state,Member State, referred to as the Reference Member State or RMS.(RMS). The decentralized procedure is used when the product in question has yet to be granted a marketing authorization in any member state.Member State. Under this procedure the applicant can select the member stateMember State that will act as the RMS. In both the mutual recognition and decentralized procedures, the RMS reviews the application and submits its assessment of the application to the member statesMember States where marketing authorizations are being sought, referred to as Concerned Member States or CMS.States. Within 90 days of receiving the application and assessment report, each CMSConcerned Member State must decide whether to recognize the RMS assessment.assessment or reject it on the basis of potential serious risk to public health. If a member state does not agree with the assessment, and the disputed points cannot be resolved, the matter is eventually referred to the Coordination Group on Mutual Recognition and Decentralised proceduresProcedures in the first instance to reach an agreement and failing to reach such an agreement, a referral to the EMA and the Committee for Medicinal Products for Human UseCHMP for arbitration that will result in an opinion to form the basis of a decision to be issued by the EC binding on all member states.Member States. If the application is successful during the decentralized or mutual recognition procedure, national marketing authorizations will be granted by the competent authorities in each of the member statesMember States chosen by the applicant.

Conditional marketing authorizations may be granted in the centralized procedure for a limited number of medicinal products for human use referenced in EU law applicable to conditional marketing authorizations where the clinical dataset is not comprehensive, if (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) unmet medical needs will be fulfilled and (4) the benefit to public health of the immediate availability on the market of the medicinal product outweighs the risk inherent in the fact that additional data are still required. Specific obligations, such as the completion of ongoing or new studies and obligations relating to the collection of pharmacovigilance data, may be amongst the conditions stipulated in the marketing authorization.

As in the U.S., we may apply for designation of a product as an Orphanorphan drug for the treatment of a specific indication in the EU before the application for marketing authorization is made. In the EU, orphan designation is available for products in development which are either: (a) intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in the EU,EU; or (b) intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the Community andaffecting a larger number of persons but when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the medicinal product. Additionally, the sponsor of an application for designation of a product as an orphan drug designationin the EU must establish that there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition or even if such treatment exists, the product will be of significant benefit to those affected by that condition.

Orphan drugs in the EU enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant for a similar medicinal product can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product. The period of market exclusivity may be reduced to six years if at the end of the fifth year it is established that the criteria for orphan designation are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

Federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, also apply togovern our business. If we fail to comply with those laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected. The laws that may affect our ability to operate include, but are not limited to: the federal Anti‑KickbackAnti-Kickback Statute (AKS), which prohibits.prohibits, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce or in returnreward for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;Medicaid; the FDCA and its implementing regulations, which prohibit, among other things, the introduction or delivery for introduction into interstate commerce of any drug that is adulterated or misbranded; and federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third‑partythird-party payers that are false or fraudulent. Additionally, we are subject to state law equivalents of each of the above federal laws, which may be broader in scope and apply regardless of whether the payer is a federalgovernmental healthcare program, and many of which differ from each other in significant ways and may not have the same effect, further complicate compliance efforts.

Numerous federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use and disclosure of personal information. Other countriesFor example, the California Consumer Privacy Act of 2018, as amended (CCPA), went into operation in January 2020 and broadly defines personal information, affords California residents expanded privacy rights and protections and provides for civil penalties for violations and a private right of action related to certain data security breaches. These protections were expanded by the California Privacy Rights Act (CPRA), which became effective in most key respects in January 2023 and will be enforceable in most key respects beginning on July 1, 2023. Privacy laws in other states may also have, or are developing, laws governing the collection, useimpact our operations, including both comprehensive and transmission of personal information.sector specific legislation, and Congress is considering additional federal privacy legislation. In addition, most healthcare providersprofessionals and facilities who are expected tomay prescribe our products and from whom we may obtain patient health information, are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology and Clinical Health Act or HIPAA.(HIPAA). Although we are not directly subjectconsidered to be a covered entity or business associate under HIPAA with respect to our clinical and commercial activities, we could be subject to criminal penalties if we obtain and/use or disclose individually identifiable health information from a HIPAA-covered entity, including healthcare providers, in a manner that is not authorized or permitted by HIPAA. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including recently enacted laws in a majority ofall 50 states requiring security breach notification. Thesenotification in some circumstances. The CCPA, as amended by the CPRA, HIPAA and these other laws could create liability for us or increase our cost of doing business. International laws, such as the EU Data Privacy Directive (95/46/EC) and Swiss Federal Act on Data Protection, regulate the processing of personal data within the EU and between countries in the EU and countries outside of the EU, including the U.S. On April 27, 2016, the EU legislature adopted Regulation (EU) 2016/679, the General Data Protection Regulation or GDPR. The GDPR will replace Directive 95/46/EC when it takes effect on May 25, 2018,2016/679 (GDPR), could also apply to our operations. Failure to provide adequate privacy protections and it will applymaintain compliance with applicable privacy laws could jeopardize business transactions across borders and result in all Member States without the need for implementing national legislation, as well as extra-territorially outside the EU. Furthermore, in October 2015, the Court of Justice of the EU declared the previous framework, the International Safe Harbor Privacy Principles, or Safe Harbor, invalid for data transfer between the U.S. and the EU. The Safe Harbor has now been replaced by the EU-U.S. Privacy Shield, a framework for transatlantic exchanges of personal data for commercial purposes between the EU and the U.S. in accordance with the principles of the GDPR.  Accordingly, there may be an immediate impact on companies located in the U.S. as they devote resources to comply with these new obligations.  The GDPR establishes a tiered approach to penalties for breach which enables the data protection authorities of the various Member States to impose fines for certain infringements, including the breach of requirements relating to international transfers or the basic principles for processing of personal data (such as conditions for obtaining consent from that individual whose data is being transferred). The severity of these fines may be up to the higher of 4% of annual worldwide revenue or €20 million.significant penalties.

In addition, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act, or the PPACA,(PPACA) created a federal requirement under the federal Open Payments program, that requires certain manufacturers to track and report to the Centers for Medicare and& Medicaid Services (CMS) annually certain payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, made inas well as ownership interests held by such physicians and their immediate family during the previous calendar year. In addition, there are also an increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information. These laws may affect

Because our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.

Sales of our approved products and any future products of ours will depend, in part, on the extent to which their costs will be covered by third-party payers, such as government health programs, commercial insurance and managed healthcare organizations. PatientsEach third-party payer may be less likely to use ourhave its own policy regarding what products if coverage is not providedit will cover, the conditions under which it will cover such products, and reimbursement is inadequate to cover a significant portion of the cost of our products. In addition, although to date qualified patients who would not otherwise be able to afford our products have been able to receive financial support from us in some cases, and from independent patient support foundations in other cases, these programs have recently been subject to significant government scrutiny, and in the future these patients may no longer be able to use ourhow much it will pay for such products. Third-party payers may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a third-party payer’s decision to provide coverage for a drug product does not imply that an adequateguarantee what reimbursement rate, if any, will be approved. Additionally, a third-party payer’s decisionPatients may be less likely to use our products if coverage is not provided and reimbursement may not cover a particular drug product does not ensure that other payers will also provide coverage forsignificant portion of the drug product, or will provide coverage at an adequate reimbursement rate.cost of our products.

The U.S. and some foreign jurisdictionscountries are considering proposals or have enacted legislative and regulatory changes to the healthcare system that could affect our ability to sell our products profitably. Among policy makers and payers in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

There has been particular and increasing legislative and enforcement interest in the U.S. with respect to drug pricing practices, particularly with respect to drugs that have been subject to relatively large price increases over relatively short time periods. At the federal level,practices. In particular, there have been several recent U.S. Congressional inquiries, hearings and proposed billsand enacted federal legislation and rules, as well as executive orders, designed to, among other things, bringthings: reduce or limit the prices of drugs and make them more affordable for patients (including, for example, by tying drug prices to the prices of drugs in other countries); reform the structure and financing of Medicare Part D pharmaceutical benefits; implement additional data collection and transparency toreporting regarding drug pricing, reviewrebates, fees and other remuneration provided by drug manufacturers; enable the relationship between pricinggovernment to negotiate prices under Medicare; revise rules associated with the calculation of average manufacturer price and best price under Medicaid; eliminate the AKS discount safe harbor protection for manufacturer patient programs,rebate arrangements with Medicare Part D plan sponsors; create new AKS safe harbors applicable to certain point-of-sale discounts to patients and reformfixed fee administrative fee payment arrangements with pharmacy benefit managers; and revise the rebate methodology under the Medicaid Drug Rebate Program. For instance, in August 2022, President Biden signed the Inflation Reduction Act, which among other things: allows for CMS to impose price controls for certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D; subjects drug manufacturers to civil monetary penalties and a potential excise tax for offering a price that is not equal to or less than the government-imposed “maximum fair price” under the law; imposes additional rebates for price increases that exceed 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 have started taking effect incrementally beginning in 2022 and may be subject to various legal challenges. As of the date of this Annual Report on Form 10-K, CMS has commenced public rulemaking and issued guidance addressing certain aspects of the Inflation Reduction Act, and overtime the Inflation Reduction Act could reduce the revenues we are able to collect from sales of our

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biologicalbiotherapeutic product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access andpricing or reimbursement at the state government level, limitations on discounts to patients, marketing cost disclosure and transparency measures, and, in some cases, policies to encourage importation from other countries (subject to federal approval) and bulk purchasing.purchasing, including the National Medicaid Pooling Initiative. These laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.

The U.S., the pharmaceutical industry has already been significantly affectedimpacted by major legislative initiatives including, for example,and related political contests. For instance, efforts to repeal, substantially modify or invalidate some or all of the PPACA. Since January 2017, President Trump has signed two Executive Orders designed to delay the implementation of certain provisions of the PPACA, or otherwise circumvent some of the requirements for health insurance mandated by the PPACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the PPACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the PPACA recentlywhich have been enacted. The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coveragesuccessful, create considerable uncertainties for all or part of a year that is commonly referred to as the “individual mandate”. Additionally, on January 23, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain PPACA-mandated fees,businesses involved in healthcare, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share,

As a result of these developments and trends, third-party payers are increasingly attempting to contain healthcare costs by limiting coverage and the level of reimbursement of new drugs. These 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, implement co-pay accumulators or maximizers that exempt such co-pay assistance from deductibles (or otherwise modify benefit designs in a manner that takes into account the availability of co-pay assistance), which has increased and could further limit coverageincrease the costs of our co-pay assistance program or cause patients to abandon CABOMETYX or COMETRIQ therapy due to higher out-of-pocket costs. Due to general uncertainty in the current regulatory and reimbursementhealthcare policy environment, and specifically regarding positions that the Biden Administration may take with respect to these issues, we are unable to predict the impact of drug products,any legislative, regulatory, third-party payer or policy actions, including our approved products and any future approved products. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payers. The implementation ofpotential cost containment measuresand healthcare reform measures. In addition, it is also possible that CMS could issue new rulemaking or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.guidance that would affect the amount of rebates owed under the Medicaid Drug Rebate Program.

In addition, in some non-U.S. jurisdictions,foreign countries, the proposed pricing for a drug must be approved before its cost may be funded within the respective national healthcare system. The requirements governing drug pricing vary widely from country to country. For example, EU member statesMember States may restrict the range of medicinal products for which their national healthcare systems provide reimbursement and may control the prices of medicinal products for human use. A member stateMember State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profits the medicinal product generates for the company placing it on the market. Pricing and reimbursement negotiations with governmental authorities or payers in EU Member States can take six to 12 months or longer after the initial marketing authorization is granted for a product, or after the marketing authorization for a new indication is granted. To obtain reimbursement and/or pricing approval in some countries, drug manufacturers and collaboration partners may also be required to conduct a study or otherwise provide data that seeks to establish the cost effectiveness of a new drug compared with other available established therapies. Other cost-control initiatives are similarly focused on affordability and accessibility, such as the Regulation on Health Technology Assessment (HTA Regulation) adopted in December 2021 and entering into application in 2025, as well as other upcoming legislative and policy changes aimed at increasing cooperation between EU Member States, and once enacted these initiatives may further impact the price and reimbursement status of many medicinal products. There can be no assurance that any country that has price controls, or reimbursement limitations or other requirements for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products on cost-effectiveness grounds. Historically, products launched in countries in the EU Member States and other non-U.S. jurisdictions do not follow the price structures of the U.S., and they generally tend to be priced significantly lower.

There are many companies focused on the development of small molecules, antibodies and antibodiesother treatments for cancer. Our competitors and potential competitors include major pharmaceutical and biotechnology companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing research activities similar to ours. Many of the organizations competing with us have greater capital resources, larger research and development staff and facilities, more experience in obtainingdeeper regulatory approvalsexpertise and more extensive product manufacturing and commercial capabilities than we do, which may allowafford them to have a competitive advantage.

We believe that our ability to successfully compete will depend on, among other things:

We believe that the quality and breadth of activity observed with cabozantinib, the skill of our employees and our ability to recruit and retain skilled employees, our patent portfolio and our capabilities for research and drug development are competitive strengths. However, many large pharmaceutical and biotechnology companies have significantly larger intellectual property estates than we do, more substantial capital resources than we have, and greater capabilities and experience than we do in preclinical and clinical development, sales, marketing, manufacturing and regulatory affairs.

The markets for which we intend to pursue regulatory approval of cabozantinib are highly competitive. We are aware of products in research or development by our competitors that are intended to treat all ofFurthermore, the tumor types we are targeting, and should they demonstrate suitable clinical evidence, any of these products may compete with cabozantinib. We believe our future success will depend upon our ability to maintain a competitive position with respect to technological advances and the shifting landscape of therapeutic strategy following the advent of immunotherapy. CABOMETYX in particular may become less marketable if we are unable to successfully adapt our development strategy to address the fact that this recent approach to treating cancer with immune checkpoint inhibitors has and will continue to become more prevalent inspecific indications for which CABOMETYX is currently or may be approved, most notablybased on the results from clinical trials currently evaluating cabozantinib, are highly competitive. Several novel therapies and combinations of therapies have been approved, are in advanced RCC,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. While we have had success in adapting our development strategy for the cabozantinib franchise to address the competitive landscape, including through evaluation of therapies that combine ICIs with other targeted agents, it is uncertain whether current and future clinical trials, including those evaluating cabozantinib in combination with an ICI in HCC, NSCLC and mCRPC, will lead to regulatory approvals, or whether physicians will prescribe regimens containing cabozantinib instead of competing product combinations in approved indications.

Below is a summary of the principal competition for cabozantinib in the indications for which it is approved or for which it has been or is currently being evaluated in potentially label-enabling trials, both as a single agent and in additionalcombination with other therapies. The information below does not include all competitor products, but rather those approved products that have or we believe may capture significant market share within their respective indications, where we intendor with respect to seek regulatory approval, such as previouslytherapies still in development, those that are likely to overlap with patient populations that are or may be treated advanced HCC. Furthermore, the complexitieswith cabozantinib or a combination therapy regimen that includes cabozantinib.

The competitive landscape for RCC is evolving rapidly, especially given the entrance and increased adoption of ICI and ICI-TKI combination therapies into the RCC treatment landscape, particularly in the first-line setting. This has led to changing trends in prescribing and sequencing of certain drugs and combinations across different lines of therapy. It is difficult to predict how these changes will affect sales of CABOMETYX during 2023 and going forward.

The competitive landscape for HCC has significantly changed with the increased adoption of ICI combination therapies in the first-line setting, which may lead to an increase in prescribing and sequencing of TKIs in subsequent lines of therapy. It is particularly significant. Nivolumab wasdifficult to predict how these changes will affect sales of CABOMETYX during 2023 and going forward.

Other than the approvals of RET inhibitors to face significant competition from BMS’s combination of nivolumab and ipilimumab, if approved bytreat certain DTC patients, there has been little change in the FDA. In September 2017, BMS announced that its phase 3 study evaluating nivolumab and ipilimumab in patients with previously untreated advanced or metastatic RCC (CheckMate-214) met its co-primary endpoint, demonstrating OS compared to sunitinib, the current standard of care, in intermediate-and poor-risk patients. The combination also met a secondary endpoint of improved OS versus sunitinib in all randomized patients. On the basis of this data, BMS filed a supplemental Biologics License Application, or sBLA,competitive landscape for use of the combination of nivolumab and ipilimumab as a first-line treatment for intermediate-and poor-risk patients with advanced RCC, and in December 2017, the FDA granted a priority review to the sBLA. The FDA is scheduled to make its final decision on the sBLA on or before April 16, 2018.RAI-refractory DTC treatments during recent years.

We believe that cobimetinib’s principalThere is competition amongst targeted agents includes Novartis’ trametinibfor both cobimetinib and dabrafenib,esaxerenone in the specific indications and Array’s encorafenibterritories where they are approved, and binimetinib;there are regular new entrants and developments in all aspects of these markets. However, given the relatively lesser degree of adoption of these therapies within the class of immunotherapies, BMS’s ipilimumab and nivolumab and Merck’s pembrolizumab. The second category, immunotherapies, are of particular competitive importance vis-a-vis cobimetinib in advanced melanoma as they are already FDA approved in melanoma patient populations that overlap with those that may be eligible for cobimetinib, they have been rapidly incorporated into the National Comprehensive Cancer Network treatment guidelines, and they are viewed with a high degree of enthusiasm by physicians and key opinion leaders. Ongoing and future trials incorporating immune checkpoint inhibitors, including combination trials, may further impact usage of cobimetinib in melanoma and potentially in additional tumor types in which cobimetinib may ultimately gain approval.

We actively seek patent protection in the U.S., EuropeEU and selected other foreign countriesjurisdictions to cover our drug candidates and related technologies. Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country. We have numerous patents and pending patent applications that relate to methods of screening drug targets, compounds that modulate drug targets, as well as methods of making and using such compounds.

While many patent applications have been filed relating to the drug candidates that we have developed, the majority of these are not yet issued or allowed. WeTo our knowledge, we own all global patents associated withnecessary for the continued sale and development of cabozantinib and cobimetinib, that are referencedand we either own or have in-licensed all global patents for our other drug candidates, as further described below.

Cabozantinib is covered by 10more than 15 issued patents in the U.S., includingbuilding from U.S. Pat.Patent No. 7,579,473, for the composition-of-mattercomposition of matter of cabozantinib and pharmaceutical compositions thereof. U.S. Pat. No. 7,579,473This composition of matter patent would normally expire in September 2024, but we have been granted a patent term extension to extend the term to August 2026. The following table describes the US patents that cover our marketed cabozantinib products, and which are listed in the Orange Book. Except as otherwise noted, the stated expiration dates include any patent term extensions already granted. In addition to the composition of matter patent referenced above, the table includes patents directed to, among other things, particular salts, polymorphs, formulations, or use of the compound in the treatment of specified diseases or conditions. We continue to pursue additional patents and patent term extensions in the U.S. and other territories covering various aspects of our cabozantinib products that may, if issued, extend exclusivity beyond the expiration of the patents listed in the table.

In the EU, cabozantinib is protected by issued patents will expire between 2024covering the composition of matter and 2033. Cabozantinib is also covered by anmethods of use. The issued patent in Europe (covering the composition-of-matter of cabozantinib and certain methods of use) and an issued patent in Japan (covering the composition-of-matter of cabozantinib). These issued patents would normally expire in September 2024, but we have applied for and are obtainingeither have obtained, or expect to obtain Supplementary Protection Certificates in Europethe EU to extend the term to 2029. We intendIn addition to applythe composition of matter patent, the table below includes certain later-expiring patents directed to the commercial product, including, particular salts, polymorphs, formulations, or use of the compound in the treatment of specified diseases or conditions.

We also have issued patents and pending patent applications, and will continue to file new patent applications, in the U.S., the EU and to Roche outside of theother selected countries covering our other drug candidates in clinical and/or preclinical development, including zanzalintinib, XB002 and XL102. Zanzalintinib in particular is covered by U.S.

We have obtained licenses from various parties that give us rights to technologies that we deem to be necessary or desirable for our research and development. These licenses (both exclusive and non-exclusive) may require us to pay royalties as well as upfront and milestone payments.

As of December 31, 2017,2022, we had 372 full-time equivalent1,223 employees, allrepresenting a 28% increase in our employee workforce as compared to December 31, 2021. Of these employees, 600 are members of whichour research and development teams and 623 are located in the U.S.members of our commercial, general and administrative teams. Of these employees, 215 hold Ph.D. degrees, 23 hold M.D. (or foreign equivalent) degrees, 32 hold PharmD degrees and 111 hold other professional degrees such as a J.D. or M.B.A. None of our employees are represented by a labor union, and we consider our employee relations to be good.

We were incorporated in Delaware in November 1994 as Exelixis Pharmaceuticals, Inc. and changed our name to Exelixis, Inc. in February 2000. Our principal executive offices are located at 210 East Grand Ave., South San Francisco,1851 Harbor Bay Parkway, Alameda, California 94080.94502. Our telephone number is (650) 837-7000. We maintain a site on the worldwide web at www.exelixis.com; however, information found on our website is not incorporated by reference into this report.

We make available free of charge on or through our website our Securities and Exchange Commission or SEC,(SEC) filings, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Further, copies of our filings with the SEC are available at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a site on the worldwide web that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov.

Our mission is to maximize the clinical and commercial potential of cabozantinib and cobimetinib, and to position us for future growth through our discovery efforts and expansion of our development pipeline. We anticipate that for the foreseeable future, our ability to generate meaningful unrestrictedmaintain or meaningfully increase cash flow to fund our commercialbusiness operations and our development and discovery programs is dependentgrowth will depend upon the successful commercializationcontinued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the treatment of advanced RCC in territories wherehighly competitive indications for which it has been or may soon beis approved, and in potentialpossibly for other indications for which we arecabozantinib is currently being evaluated in late-stage development or we otherwise intendpotentially label-enabling clinical trials, if warranted by the data generated from these trials. In this regard, part of our strategy is to seek regulatory review. The commercial opportunitypursue additional indications for CABOMETYX as a treatmentand increase the number of cancer patients who could potentially benefit from this medicine. However, we cannot be certain that the clinical trials we and our collaboration partners are conducting will demonstrate adequate safety and efficacy in these additional indications to receive regulatory approval in the major commercial markets where CABOMETYX is approved. Even if the required regulatory approvals to market CABOMETYX for advanced RCC remains subjectadditional indications are achieved, we and our collaboration partners may not be able to a variety of factors, most importantly, CABOMETYX’s perceived benefit/risk profile as compared to the benefit/risk profiles of other treatments available or currentlycommercialize CABOMETYX effectively and successfully in development for the treatment of advanced RCC.these additional 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 plan,plans, which maycould have a material adverse effectimpact on our business, and financial condition and results of operations and growth prospects. Furthermore, as a consequence of our collaboration agreements with Ipsen and Takeda, we rely heavily upon their regulatory, commercial, medical affairs, and other expertise and resources for commercialization of CABOMETYX in territories outside of the U.S. If our collaborators are unable to, or do not invest the resources necessary to successfully commercialize CABOMETYX in the EU and other international territories where it may be approved, this could reduce the amount of revenue we are due to receive under these collaboration agreements, thus resulting in harm to our business and operations.

Our ability to successfully commercializeincrease or maintain revenues from sales of CABOMETYX for its approved indications is, and if approved for additional indications will be, highly dependent upon the extent to which CABOMETYX gainsof market acceptance of CABOMETYX among physicians, patients, foreign and U.S. government health carehealthcare payers such as Medicare and Medicaid, commercial health carehealthcare plans and the medical community. IfMarket acceptance for CABOMETYX does not achieve an adequate level of acceptance, we may not generate significant future product revenues. The degree of market acceptancecould be impacted by numerous factors, including the effectiveness and safety profile, or the perceived effectiveness and safety profile, of CABOMETYX will depend upon a number of factors, including:

The pharmaceutical, biopharmaceutical and biotechnology industries areindustry is competitive highly diversified and are characterized by rapidconstant technological change and diverse offerings of products, particularly in the area of novel oncology therapies. Many of the organizations competing with usour competitors have greater capital resources, larger research and development staff and facilities, more experience in obtainingdeeper regulatory approvalsexpertise and more extensive product manufacturing and commercial capabilities than we do, which may allowafford them to have a competitive advantage. Further, our competitors may be more effective at using their technologies to developin-licensing and developing new commercial products. As a result, our competitors may be able to more easily develop technologies and products that wouldcould render our technologies and products, and those of our collaborators,collaboration partners, obsolete and noncompetitive. There may also be drug candidates that we are not aware of at an earlier stage of development that may compete with our marketed products and product candidates. We face, and will continue to face, intense competition from biotechnology, biopharmaceutical and pharmaceutical companies, as well as academic research institutions, clinical reference laboratories and government agencies that are pursuing scientific and clinical research activities similar to ours. Delays in

Furthermore, the development of cabozantinib or cobimetinib for the treatment of additional tumor types, for example, could allow our competitors to bring products to market before us.

Maintaining our sales, marketing, market access medical affairs and product distribution capabilities requires significant resources, and there are numerous risks involved with managing such amaintaining 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-stagecommercial- and precommercial-stage, oncology-focused biotechbiopharmaceutical companies seeking to build out and maintain their commercial organizations, as well as other large pharmaceuticallarger 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 result of such competition. If we cannot maintain effective sales, marketing, market access, medical affairs and product distribution capabilities, we may be unable to maximize the commercial potential of CABOMETYX and COMETRIQ in their approved indications. Also, to the extent that the commercial opportunities for CABOMETYX grow over time, we may not properly judgescale the requisite size and experience of theour commercialization teams

Our ability to commercialize CABOMETYX or COMETRIQour 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 mayare generally not be capable of paying for CABOMETYX or COMETRIQ

Federal and COMETRIQ profitably.

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 medicaland net revenues we realize from CABOMETYX and COMETRIQ, or the indications other than those 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 FDA has granted market approval. As a result, significant uncertainty exists asEU are aimed at increasing cooperation between the EU Member States. Such initiatives, particularly the HTA Regulation adopted in December 2021, may further impact the price and reimbursement status of CABOMETYX and COMETRIQ when it enters into application 2025.

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. In this regard, in February 2018, the FDA published draft guidance containing product-specific bioequivalence recommendations for drug products containing cabozantinib, the active ingredient in CABOMETYX and COMETRIQ. The FDA regularly issues product specific bioequivalence guidance for products following their approval. The February 2018 draft guidance for drug products containing cabozantinib could have been issued by the FDA as a matter of its own standard practice; it could also indicate that a generic drug manufacturer is investigating whether to submit an ANDA for cabozantinib. The FDA can also approve aan NDA under section 505(b)(2) NDAof the FDCA that relies in part on the agency’s findings of safety and/or effectiveness for a previously approved drug.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 above in “Item 1. Business—Government Regulation—FDA Review and Approval—Abbreviated FDA Approval Pathways and Generic Products” in 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 our Orange Book-listed patents for the applicable product, we will have to engage in litigationmay litigate with athe potential generic competitor to protect our patent rights, which would require us to incur significant expense and result in distraction for oursubstantial costs, divert the attention of management, team, and could also have an adverse impact on our stock price. Moreover, if any suchFor example, MSN, Teva and Cipla have separately submitted ANDAs to the FDA requesting approval to market their respective generic versions of CABOMETYX tablets, and we have subsequently filed patent enforcement lawsuits against both 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 MSN, Teva, Cipla or other companies, following FDA approval of an ANDA or 505(b)(2) NDAs were to be approved and theNDA, could introduce generic or otherwise competitor versions of our marketed products before our patents covering cabozantinib wereexpire if they do not upheld in litigation,infringe our patents or if it is determined that our patents are invalid or unenforceable, and we 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 competitor is found not to infringe these patents,version of cabozantinib would likely decrease our revenues derived from the resulting generic competition would negatively affectU.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations. There are also equivalent procedures in the EU permitting authorization of generic versions and biosimilars 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 and biosimilars. 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’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 this regard, generic equivalents,addition, the Further Consolidated Appropriations Act, 2020, which must meetincorporated the same quality standards asframework from the CREATES legislation, allowed ANDA, 505(b)(2) NDA or biosimilar developers to obtain access to branded drugs, would be significantly less costly than ours to bring to market. Companies that produce generic equivalents are generally able to offer their products at lower prices. Thus, regardlessdrug and biotherapeutic product samples. Further, Section 3222 of the regulatoryof the 2023 Appropriations Act requires the FDA to make therapeutic equivalence determinations for 505(b)(2) NDAs at the time of approval, pathway,or up to 180 days thereafter, if requested by the introductionapplicant. 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 versiondrug within 60 days of any of our marketed products could result in a significant decrease inapproval. While the salesfull impact of these marketed products and materially harm our business and financial condition.

Our business is focused on the discovery, development and commercialization of new medicines for difficult-to-treat cancers. In this regard, we are pursuing internalhave invested in substantial technical, financial and human resources toward drug discovery effortsactivities with the goal of identifying new product candidates to advance into clinical trials. Internal discovery efforts to identify new product candidates require substantial technical, financial and human resources. These internal discovery efforts mayNotwithstanding this investment, many programs that initially show promise in identifying potential product candidates, yetwill ultimately fail to yield product candidates for clinical development for a number of reasons, including where the research methodology used may not be successful in identifying potential product candidates, or where potentialmultiple reasons. For example, product candidates may, on further study, be shown to have inadequate efficacy, harmful side effects, suboptimal pharmaceutical profileprofiles or other characteristics suggesting that they are unlikely to be effectivecommercially viable products.

Apart from our internaldrug discovery efforts, our strategy to expand our development pipeline is also dependent on our ability to successfully identify and acquire or in-license relevant product candidates.candidates and technologies. However, the in-licensing and acquisition of product candidates and technologies is a highly competitive area, and many other companies are pursuing the same or similar product candidates and technologies to those that we may consider attractive. EstablishedIn particular, larger companies in particular, may have a competitive advantage over us due to their size, financialwith more capital resources and more extensive clinical development and commercialization capabilities.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 relevant product candidates and technologies on acceptable terms that would allow us to realize an appropriate return on our investment. If we are unable to develop suitable product candidates through internal discovery effort or if we are unable to successfully obtain rights to suitable product candidates, our business, financial condition and prospects for growth could suffer. Even if we succeed in our efforts to obtain rights to suitable

With respect to acquisitions, we may not be able to integrate the target company successfully into our existing business, maintain the key business relationships of the target company, or retain key personnel of anthe acquired business. Furthermore, we could assume unknown or contingent liabilities or otherwise incur unanticipated expenses. Any acquisitions or investments made by us also could result in our spending significant amounts, issuing dilutive securities, assuming or incurring significant debt obligations and contingent liabilities, incurring large one-time expenses and acquiring intangible assets that could result in significant future amortization expense and significant write-offs, any of which could harm our operating results.

We may experience numerous unforeseen events, during or as a result of clinical investigations, that could delay or prevent commercialization of cabozantinib in new indications or of zanzalintinib or other new product candidates. These events may include:

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 employees are increasingly utilizing social media toolsability to generate revenues could be impaired, either of which could adversely impact our financial results. Furthermore, we rely on our collaboration partners to fund a significant portion of our cabozantinib 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 or our other product candidates and, our website as a meansresult, we may be unable to execute our current business plans, which could have a material adverse impact on our business, financial condition and results of communication. Despite our effortsoperations.

We may not be able to monitor evolving social media communication guidelines and comply with applicable rules, there is risk thatpursue the unauthorized usefurther development of social media by usthe cabozantinib franchise, zanzalintinib or our employeesother 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 as a result of factors relating to communicate abouta particular clinical trial, including, among others: 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 products or business mayability to generate revenues, cause us to incur additional expense and cause the market price of our common stock to decline significantly.

The activities associated with the research, development and commercialization of the cabozantinib franchise, zanzalintinib and our other product candidates are subject to extensive regulation by the FDA and other regulatory agencies in the U.S., as well as by comparable regulatory authorities in other territories. The processes of obtaining regulatory approvals in the U.S. and other foreign jurisdictions is expensive and often takes many years, if approval is obtained at all, and they can vary substantially based upon the type, complexity and novelty of the product candidates involved. For example, before an NDA or sNDA can be foundsubmitted to the FDA, or a marketing authorization application to the EMA or any application or submission to comparable regulatory authorities in violationother jurisdictions, the product candidate must undergo extensive clinical trials, which can take many years and require substantial expenditures.

Although we reported net income of $154.2$182.3 million and $231.1 million for the yearfiscal years ended December 31, 2017,2022 and 2021, respectively, we may not be able to maintain or increase profitability on a quarterly or annual basis, and we are unable to accurately predict the extent of long-range 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 clinical,development, regulatory and commercial milestones, andif any, under our collaboration agreements; the amount of royalties if any, from sales of CABOMETYX and COMETRIQ outside of the U.S. under our collaboration agreements with Ipsen and Takeda; our share of the net profits and losses for the commercialization of COTELLIC in the U.S. under ouragreements; other collaboration with Genentech; the amount of royalties from COTELLIC sales outside the U.S. under our collaboration with Genentech; other license and contract revenues; and the level of our expenses, including those associated with our extensive drug discovery, clinical development and commercializationbusiness development activities, both for the cabozantinib franchise and any pipelineour other product candidates, as well as our general business expansion efforts.plans. Our expected future expenses in particular may also be increased by inflationary pressures, which could increase the costs of outside services, labor, raw materials and finished drug product. We have limited commercialization experience and expect to continue to spend significant additionalsubstantial amounts to fund the continued development of the cabozantinib franchise for additional indications and of our other product candidates, as well as the commercialization of cabozantinib.our approved products. In addition, we willintend to continue to expand our oncology product pipeline through our drug discovery efforts, including research collaborations, in-licensing arrangements and the evaluation of in-licensing and acquisition opportunitiesother 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 are unablefail to maintain or increase profitability,achieve anticipated revenue targets, the market value of our common stock may decline.

We rely upon the regulatory, commercial, medical affairs, market access and other expertise and resources of our collaboration partners, Ipsen and Takeda, for commercialization of CABOMETYX in their respective territories outside of the U.S. We cannot control the amount and timing of resources that our collaboration partners dedicate to the commercialization of CABOMETYX, or to its marketing and distribution, and our ability to generate revenues from the commercialization of CABOMETYX by our collaboration partners depends on their ability to obtain and maintain regulatory approvals for, achieve market acceptance of, and to otherwise effectively market, CABOMETYX in its approved indications in their respective territories. If our collaboration partners are unable or unwilling to invest the resources necessary to commercialize CABOMETYX successfully in the EU, Japan and other international territories where it has been approved, this could reduce the amount of revenue we are due to receive under these collaboration agreements, thus resulting in harm to our business and operations.

We have established clinical and commercial collaborations with leading pharmaceutical and biotechnologybiopharmaceutical companies including, Ipsen, Takeda, Genentech, Daiichi Sankyo, Merck (known as MSD outside of the U.S. and Canada), BMS and Sanofi for the development and ultimate commercialization of certain compounds generated from our research and development efforts. Our dependence on our relationships with collaborators for the development and commercialization of compoundsour products, and our dependence on these collaboration partners subjects us to a number of risks, including:including, but not limited to:

If any of these risks materialize, we may not receive collaboration revenues or otherwise realize anticipated benefits from such collaborations, and our product development efforts and prospects for growth could be delayed or disrupted, all of which could have a material adverse impact on our business, financial condition and results of operations.

If any of these risks materialize, we may not be able to expand our product pipeline or otherwise realize a return on the resources we will have invested to develop these early-stage assets, which could have a material adverse impact on our financial condition could be adversely affected.and prospects for growth.

We do not have the ability to conduct clinical trials for cabozantinib or for new potential product candidates independently, including our post-marketing commitments in connection with the approval of COMETRIQ in progressive, metastatic MTC, so we rely on independent third parties for the performance of these trials, such as the U.S. federal government, (including NCI-CTEP, a department of the National Institutes of Health, with whom we have our CRADA), third-party contract research organizations, medical institutions, clinical investigators and contract laboratories to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the third parties must be replaced or if the quality or accuracy of the data they generate or provide is compromised due to their failure to adhere to our clinical trial or data security protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for or commercialize cabozantinib beyond itscurrently approved indications.indications or obtain regulatory approval for zanzalintinib or our other product candidates. In addition, due to the complexity of our research initiatives, we may be unable to engage with third-party contract research organizations that have the necessary experience and sophistication to furtherhelp advance our drug discovery efforts, which would impede our ability to identify, develop and commercialize our potential product candidates.

We do not own or operate manufacturing or distribution facilities for CMC development activities, preclinical, clinical or commercial production and distribution of CABOMETYXfor our current products and COMETRIQ.new product candidates. Instead, we have multiple contractual agreements in place withrely on various third-party contract manufacturing organizations that,to conduct these operations on our behalf, manufacture clinicalbehalf. As our operations continue to grow in these areas, we continue to expand our supply chain through additional third-party contract manufacturers, distributors and commercial supplies of CABOMETYX and COMETRIQ. We expect that this will continue for the foreseeable future for both our current and future commercial products.suppliers. To establish and manage thisour supply chain requires a significant financial commitment, the creation of numerous third-party contractual relationships and continued oversight of these third parties to ensurefulfill compliance with applicable regulatory requirements. Although we maintain significant resources to directly and effectively oversee the activities and relationships with the companies in our supply chain, effectively, 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 COVID-19 pandemic or the ongoing Russo-Ukrainian War, 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 supplymanufacturing, distribution and manufacturingsupply arrangements, we may not have adequate remedies for any breach, andbreach. Furthermore, their failure to supply us could impair or preclude our ability to meet ourmeeting commercial or clinical product supply requirements or our supply needs for clinical trials, including those being conducted in collaboration withus or our partners, which could delay our product development and future commercialization efforts and have a material adverse impact on our business, operating results and financial condition couldand 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 adversely affected. Additionally, as partrestricted from selling our products.

We work with scientific and clinical advisors and collaborators at academic and other institutions, as well as third-party contractors in various locations throughout the world, that assist us in our research and development efforts.efforts, including in drug discovery and preclinical development strategy. These advisors and collaboratorsthird 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 collaboratorscontractors 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. InThere 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 a circumstance,services from other companies or by other external factors, such as reduced capacity to perform services. If we mayexperience 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 our 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.

In addition, althoughwe may be subject to the Foreign Corrupt Practices Act, a U.S. law which regulates certain financial relationships with foreign government officials (which could include, for example, medical professionals employed by national healthcare programs) and its foreign equivalents, as well as federal and state consumer protection and unfair competition laws.

To help patients afford our products, we have a patient assistance program and also occasionally make donations to independent charitable foundations that help financially needy patients. These types of programs designed to assist patients with affording pharmaceuticals 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 make such donations but are found not to disclose our confidential information,have complied with these guidelines and other laws or regulations respecting the operation of these programs, we could be subject to significant damages, fines, penalties or other criminal, civil or administrative sanctions or enforcement actions. Moreover, in December 2020, the CMS finalized changes to Medicaid Drug Rebate Program pricing calculations regarding the provision of co-payment assistance to patients that may be impacted by private insurer accumulator programs. The portion of this rule dealing with manufacturer co-payment assistance (and related support programs) was challenged and vacated by a federal court in May 2022 (and CMS did not appeal). However, it is possible that valuable proprietary knowledgeCMS could issue new rulemaking or guidance that would affect the amount of rebates owed under the Medicaid program or otherwise limit our ability to support our patient co-pay assistance program. We also rely on a third-party hub provider and exercise oversight to monitor patient assistance program activities. Hub providers are generally hired by manufacturers to assist patients with insurance coverage, financial assistance and treatment support after the patients receive a prescription from their healthcare professional. For manufacturers of specialty pharmaceuticals (including our marketed products), the ability to have a single point of contact for their therapies helps ensure efficient medication distribution to patients. Accordingly, our hub activities are also subject to scrutiny and may become publicly known through them.create risk for us if not conducted appropriately. A variety of entities, including independent charitable foundations and pharmaceutical manufacturers, but not including our company, have received subpoenas from the U.S. Department of Justice (DOJ) and other enforcement authorities seeking information related to their patient assistance programs and support, and certain of these entities have entered into costly civil settlement agreements with DOJ and other enforcement authorities that include requirements to maintain complex corporate integrity agreements that impose significant reporting and other requirements. Should we or our hub providers receive a subpoena or other process, regardless of whether we are ultimately found to have complied with the regulations governing patient assistance programs, this type of government investigation could negatively impact our business practices, harm our reputation, divert the attention of management and increase our expenses.

In the ordinary course of our business, we and our third-party service providers, such as contract research organizations, collect, maintain and transmit sensitive data on our networks and systems, including our intellectual property and proprietary or confidential business information (such as research data and personal information) and confidential information with respect to our customers, clinical trial patients and our businesscollaboration partners. We have also outsourced significant elements of our information technology infrastructure to third parties and, as a result, such third parties may or could have access to our confidential information. The secure maintenance of this information is critical to our business and reputation, and while we have enhanced and are continuing to enhance our cyber-securitycybersecurity efforts commensurate with the growth and complexity of our business, our systems and those of third-party service providers may be vulnerable to a cyber-attack. We believe that companies have been increasingly subjectIn addition, we are heavily dependent on the functioning of our information technology infrastructure to a wide variety of security incidents, cyber-attackscarry out our business processes, such as external and internal communications or access to clinical data and other attemptskey business information. Accordingly, both inadvertent disruptions to gain unauthorized access. In fact, althoughthis infrastructure and cyber-attacks could cause us to incur significant remediation or litigation costs, result in product development delays, disrupt critical business operations, expend key information technology resources and divert the attention of management.

Although the aggregate impact of cyber-attacks on our operations and financial condition has not been material to date, we and our third-party service providers have frequently been the target of threats of this nature and expect them to continue. These threats can come from a variety of sources, ranging in sophistication from an individual hacker to a state-sponsored attack and motive (including corporate espionage). Cyber threats may be generic, or they may be custom-crafted against our information systems. Cyber-attacks continue to become more prevalent and much harder to detect and defend against. Our network and storage applications and those of our vendors may be subject to unauthorized access by hackers or breached due to operator error, malfeasance or other system disruptions. It is often difficult to anticipate or immediately detect such incidents and the damage caused by such incidents. TheseAny future data breaches and anybreach and/or unauthorized access or disclosure of our information or intellectual property could compromise our intellectual property and expose our sensitive business information.information or sensitive business information of our collaboration partners, which may lead to significant liability for us. A data security breach could also lead to public exposure of personal information of our clinical trial patients, employees or others and others. Any such event that leadsresult in harm to unauthorized access, use or disclosure of personal information, including personal information regarding our patients or employees, could harm our reputation and business, compel us to comply with federal and/or state breach notification laws and foreign law equivalents including the GDPR, subject us to investigations and mandatory corrective action, require us to verify the correctness of database contents andor otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could disrupt our business, result in increased costs or loss of revenue, and/or result in significant legal and financial exposure. Cyber-attacks could cause usFurthermore, the costs of maintaining or upgrading our cybersecurity systems (including the recruitment and retention of experienced information technology professionals, who are in high demand) at the level necessary to incur significant remediation costs, result in product development delays, disrupt key businesskeep up with our expanding operations and divert attention of managementprevent against potential attacks are increasing, and key information technology resources. Ourdespite our best efforts, our network security and data recovery measures and those of our vendorsthird-party service providers may still not be adequate to protect against such security breaches and disruptions. These incidentsdisruptions, which could also subject us to liability, expose us to significant expense and cause significantmaterial harm to our reputationbusiness, financial condition and business.results of operations.

In addition, because patent applications can take many years to issue, third parties may have pending applications, unknown to us, which may later result in issued patents that cover the production, manufacture, commercialization or use of our product candidates. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. They may also be negatively impacted by the decisions of foreign courts, which could limit the protection contemplated by the original regulatory approval and our ability to thwart the development of competing products that might otherwise have been determined to infringe our intellectual property rights. Furthermore, others may independently develop similar or alternative technologies or design around our patents. In addition, our patents may be challenged or invalidated or may fail to provide us with any competitive advantages, if, for example, others were the first to invent or to file patent applications for closely related inventions.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the U.S., and many companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions. Many countries, including certain countries in Europe,the EU, have compulsory licensing laws based on related EU rules, under which a patent owner may be compelled to grant licenses to third parties (for example, the patent owner has failed to “work” the invention in that country or the third party has patented improvements). In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent. Initiatives seeking compulsory licensing of life-saving drugs are also becoming increasingly prevalent in developing countries either through direct legislation or international initiatives. Governments in those developing countries could require that we grant compulsory licenses to allow competitors to manufacture and sell their own versions of our products or product candidates, thereby reducing our product sales. Moreover, the Russian Federation has and may further limit protections on patents originating from “unfriendly countries” (including the U.S.) in response to sanctions relating to the ongoing Russo-Ukrainian War, and in general, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop infringement. We also rely on trade secret protection for some of our confidential and proprietary information. We have takeninformation, and we are taking security measures to protect our proprietary information and trade secrets, butparticularly in light of recent instances of data loss and misappropriation of intellectual property in the biopharmaceutical industry. However, these measures may not provide adequate protection. Whileprotection, and while we seek to protect our proprietary information by entering into confidentiality agreements with employees, collaboratorspartners and consultants, as well as maintain cybersecurity protocols within our information technology infrastructure, we cannot assure youprovide assurance that our proprietary information will not be disclosed, or that we can meaningfully protect our trade secrets. In addition, our competitors may independently develop substantially equivalent proprietary information or may otherwise gain access to our trade secrets.

Our commercial success depends in part upon our ability to avoid infringing patents and proprietary rights of third parties and not to breach any licenses that we have entered into with regard to our technologies and the technologies of third parties. Other parties have filed, and in the future are likely to file, patent applications covering products and technologies that we have developed or intend to develop. If patents covering technologies required by our operations are issued to others, we may have to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, and may require us to pay substantial royalties, grant a cross-license to some of our patents to another patent holder or redesign the formulation of a product candidate so that we do not infringe third-party patents, which may be impossible to accomplish or could require substantial time and expense.

To date, the COVID-19 pandemic has had a modest impact on our business operations, in particular with respect to our clinical trial, drug discovery and commercial activities. We anticipate that a further prolonged, or more severe, global public health crisis could limit our ability to identify and work with clinical investigators at clinical trial sites globally to enroll, initiate and maintain treatment per protocol of operations. In addition, relocationpatients for our ongoing clinical trials. Disruptions to medical and administrative operations at clinical trial sites, including staffing and materials shortages and the implementation of crisis management initiatives, have and may continue to reduce personnel and other resources necessary to conduct our clinical trials, which could further delay some of our corporate headquartersclinical trial plans or may make it more difficultrequire certain trials to retain certain employees,be temporarily suspended. We are also reliant on laboratory materials manufactured and any resulting lossdistributed from areas that continue to be impacted by both the COVID-19 pandemic and other natural disasters, for which supply has become limited. If we are unable to obtain the requisite materials to conduct our planned drug discovery activities, we may be required to redirect the focus of, talentor even suspend, such activities. Should the COVID-19 pandemic be further prolonged or grow in severity, we may ultimately be unable to achieve our drug discovery and need to recruit and train new employeespreclinical development objectives within the previously disclosed timelines, which could be disruptive tohave a material adverse impact on our business.prospects for growth.

We have experienced and expect to continue to experience growth in the number of our employees and in the scope of our operations.operations, in particular as we continue to grow our pipeline of product candidates. This growth places significant demands on our management operational and financial resources, and our current and planned personnel systems, procedures and controlsoperating practices may not be adequate to support our growth. To effectively manage our growth, we must continue to improve existing, and implement new, facilities, operational and financial systems, and procedures and controls, and mustas well as expand, train and manage our growing employee base, and there can be no assurance that we will effectively manage our growth without experiencing operating inefficiencies or control deficiencies. We expect that we may needcontinue to increase our management personnel to oversee our expanding operations, and recruiting and retaining qualified individuals is difficult. In addition, the physical expansion of our operations and change of location of our corporate headquarters may lead to significant costs and may divert our management and capital resources. If we are unable to manage our growth effectively, or we are unsuccessful in recruiting qualified management personnel, there could be a material adverse impact on our business, financial condition and results of operations and prospects may be adversely affected.operations.

We are highly dependent upon the principal members of our management, as well as clinical, commercial and scientific staff, the loss of whose services might adversely impact the achievement of our objectives. Also, we may not have sufficient personnel to execute our business plan.plans. Retaining and, where necessary, recruiting qualified clinical, commercial, scientific and scientificpharmaceutical operations personnel will be critical to support activities related to advancing the development programprograms for the cabozantinib franchise and our other compounds,product candidates, successfully executing upon our commercialization plan for the cabozantinib franchise and our internal proprietary research and development efforts. Competition is intense for experienced clinical, commercial, scientific and scientificpharmaceutical operations personnel, and we may be unable to retain or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products. Further, all of our employees are employed “at will” and, therefore, may leave our employment at any time.

Our research and development processes involve the controlled use of hazardous materials, including chemicals and biological materials. Ourmaterials, and our operations can produce hazardous waste products. We cannot eliminate the risk of

We may be held liable if any product we or our collaboratorscollaboration partners develop or commercialize causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing or sale. Regardless of merit or eventual outcome, product liability claims could result in decreased demand for our products and product candidates, injury to our reputation, withdrawal of patients from our clinical trials, product recall, substantial monetary awards to third parties and the inability to commercialize any products that we may develop in the future. These claims might be made directly by consumers, health care providers, pharmaceutical companies or others selling or testing our products. We have obtainedmaintain limited product liability insurance coverage for our clinical trials and commercial activities for cabozantinib in the amount of $20.0 million per occurrence and $20.0 million in the aggregate.cabozantinib. However, our insurance may not reimburse us or may not be sufficient to reimburse us for expenses or losses we may suffer. Moreover, if insurance coverage becomes more expensive, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. On occasion, juries have awarded large judgments in class action lawsuits for claims based on drugs that had unanticipated side effects. In addition, the pharmaceutical, biopharmaceutical and biotechnology industries, in general, have been subject to significant medical malpractice litigation. A successful product liability claim or series of claims brought against us could harm our reputation and business and would decrease our cash reserves.

The trading price of our common stock has been highly volatile, and we believe the trading price of our common stock willit may remain highly volatile and mayor fluctuate substantially due to factors such as the following, many of which we cannot control:

These and other factors as well as general economic, political and market conditions, may materially adversely affectcould have material adverse impact on the market price of our common stock. In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have historically experienced significant volatility that has often been unrelated or disproportionate to the operating performance of particular companies. For example, negative publicity regarding drug pricing and price increases by pharmaceutical companies has negatively impacted, and may continue to negatively impact, the markets for biotechnology and pharmaceutical stocks. Likewise, as a result of the United Kingdom’s pending withdrawal from the EU and/or significant changes in U.S. social,or global political regulatory and economicmacroeconomic conditions, or in laws andincluding historically high inflation, as well as policies governing foreign trade and health carehealthcare spending and delivery, includingor the repeal of the individual mandate and the potential repeal and/or replacement of other portions or all of the PPACA, or greater restrictions on free trade stemming from Trump Administration policies,ongoing Russo-Ukrainian War, the financial markets could continue to experience significant volatility that could also continue to negatively impact the markets for biotechnology and pharmaceutical stocks. These broad market fluctuations have adversely affected and may in the future adversely affect the trading price of our common stock. Excessive volatility may continue for an extended period of time following the date of this report.

Provisions in our corporate charter and bylaws may discourage, delay or prevent an acquisition of us, a change in control, or attempts by our stockholders to replace or remove members of our current Board of Directors. Because our Board of Directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. These provisions include:

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

None.

In May 2021, we received notice letters from Teva regarding an ANDA Teva submitted to the FDA, requesting approval to market a generic version of CABOMETYX tablets. Teva’s notice letters included a Paragraph IV certification with respect to our U.S. Patents No. 9,724,342 (formulations), 10,034,873 (methods of treatment) and 10,039,757 (methods of treatment), which are listed in the Orange Book. Teva’s notice letters did not provide a Paragraph IV certification against any additional CABOMETYX patents. On June 17, 2021, we filed a complaint in the Delaware District Court for patent infringement against Teva, asserting infringement of U.S. Patents No. 9,724,342, 10,034,873 and 10,039,757 arising from Teva’s ANDA filing with the FDA. On August 27, 2021, Teva filed its answer and counterclaims to the complaint, alleging that the asserted claims of U.S. Patents No. 9,724,342, 10,034,873 and 10,039,757 are invalid and not infringed. On September 17, 2021, we filed an answer to Teva’s counterclaims. On July 29, 2022, we received notice from Teva that it had amended its ANDA to assert an additional Paragraph IV certification. As amended, Teva’s ANDA now requests approval to market a generic version of CABOMETYX tablets prior to expiration of a previously-unasserted CABOMETYX patent that is now listed in the Orange Book: U.S. Patent No. 11,298,349 (pharmaceutical composition). On September 2, 2022, we filed a complaint in the Delaware District Court for patent infringement against Teva, asserting infringement of U.S. Patent No. 11,298,349 arising from Teva’s amended ANDA filing with the FDA. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA be a date no earlier than the expiration of all of U.S. Patents No. 9,724,342, 10,034,873, 10,039,757 and 11,298,349, the latest of which expires on July 9, 2033, and equitable relief enjoining Teva from infringing these patents. On September 30, 2022, the parties filed a stipulation to consolidate the two lawsuits, numbered Civil Action Nos. 21-00871 and 22-01168, and to stay all proceedings, which was granted by the Delaware District Court on October 3, 2022. Following a similar order granted by the Delaware District Court on February 9, 2022 to stay all proceedings with respect to Civil Action No. 21-00871, this case remained administratively closed, and Civil Action No. 22-01168 was administratively closed on October 3, 2022.

We may also from time to time become a party or subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Some of these proceedings have involved, and may involve in the future, claims that are subject to substantial uncertainties and unascertainable damages.

Not applicable.

Our common stock has traded on the Nasdaq Global Select Market under the symbol “EXEL” since April 11, 2000. The following table sets forth, for the periods indicated, the high and low intraday sales prices for our common stock as reported by the Nasdaq Global Select Market:

Since inception, we have not paid dividends on our common stock. We currently intend to retain all future earnings, if any, for use in our business and currently do not plan to pay any cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors.

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of ours under the Securities Act of 1933, as amended.

The following graph compares, for the five yearfive-year period ended December 31, 2017,2022, the cumulative total stockholder return for our common stock, the Nasdaq Stock Market (U.S. companies) Index, or the Nasdaq MarketComposite Index and the Nasdaq Biotechnology Index. The graph assumes that $100 was invested on December 31, 20122017 in each of our common stock, the Nasdaq MarketComposite Total Return Index and the Nasdaq Biotechnology Total Return Index and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.