Exelixis partners with Merck for colorectal cancer trial By Investing.com

Exelixis announced a collaboration with Merck to supply KEYTRUDA QLEX for the planned phase 3 STELLAR-316 trial in resected stage II/III colorectal cancer, with trial initiation expected in mid-2026. The company also reported Q1 2026 EPS of $0.87 versus $0.77 expected and revenue of $611 million versus $608.95 million forecast, while FDA acceptance of the zanzalintinib NDA adds another near-term catalyst. Shares are near their 52-week high, and the news is supportive for the stock and the pipeline.

Analysis

This is more important for the commercialization curve than for near-term EPS. By adding a subcutaneous PD-1 partner to the adjuvant CRC program, Exelixis is trying to make the regimen operationally easier for community oncology adoption, which matters because the biggest barrier in adjuvant immunotherapy is not biology alone but throughput, chair time, and patient friction. That creates a second-order benefit to any regimen that can expand addressable use beyond large academic centers, and it also makes the program more interesting as a platform readout for ctDNA-selected minimal residual disease populations.

The key market implication is that EXEL is increasingly de-risking as a pipeline-of-platform story rather than a single-asset story. If the MRD-selected strategy works, it can compress the decision cycle for future combination trials and strengthen the probability-weighted value of zanzalintinib across multiple GI settings. The flip side is that this also raises the bar on execution: any signal of weak ctDNA clearance or unconvincing DFS separation would likely hit the stock harder than a typical early-stage miss because expectations are being built around a high-conviction biomarker-enriched framework.

For NTRA, the upside is subtler but real: every additional MRD-enriched study reinforces Signatera as a trial-enrollment and endpoint-enabling standard, which compounds into long-duration assay adoption rather than one-off revenue. The contrarian risk is that the market may be overpricing near-term relevance for both names; the actual inflection is months to years away, while the stock reaction is happening now. In the meantime, rates/yield moves matter because biotech multiple expansion is still duration-sensitive, so any backup in yields can cap the valuation pop even if clinical momentum remains intact.

Key Decisions for Investors

• Long EXEL on pullbacks over the next 1-2 weeks; target a 6-9 month hold into the mid-2026 trial start, with upside tied to biomarker-enriched platform validation and downside limited if the market keeps assigning optionality to the CRC franchise.
• Use a call spread in EXEL for the next 3-6 months rather than common stock if implied vol remains reasonable; this captures rerating from collaboration momentum while defining risk ahead of data.
• Pair long EXEL / short a lower-quality GI biotech without late-stage MRD-enriched assets; the trade works if the market continues rewarding platform credibility and punishes single-asset execution risk.
• Add NTRA on weakness only if the market overreacts to the fact that revenue is still years from meaningful STELLAR-316 contribution; this is a multiple-support story, not an immediate earnings step-up.
• If 10Y yields continue rising, trim any biotech beta exposure after the initial momentum move; duration-sensitive multiples can mean-revert faster than clinical narratives improve.