This Quarterly Report on Form 10-Q contains forward-looking statements. These statements are based on Exelixis, Inc.’s (Exelixis, we, our or us) current expectations, assumptions, estimates and projections about our business and our industry and involve known and unknown risks, uncertainties and other factors that may cause our company’s or our industry’s results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in, or contemplated by, the forward-looking statements. Our actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (SEC) on February 10, 2026 (Fiscal 2025 Form 10-K), as supplemented by the information appearing in Part II, Item 1A of our subsequent Quarterly Reports on Form 10-Q as well as those discussed elsewhere in this report. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this report. This discussion and analysis should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in this report and the consolidated financial statements and accompanying notes thereto included in the Fiscal 2025 Form 10-K. Overview We are an oncology company innovating next-generation medicines and regimens at the forefront of cancer care. We have produced four marketed pharmaceutical products, two of which are formulations of our flagship molecule, cabozantinib, and we are steadily advancing and evolving our product pipeline portfolio, including our lead clinical asset, zanzalintinib, currently under review by the U.S. Food and Drug Administration (FDA) for the treatment of certain forms of colorectal cancer (CRC), as well as the focus of an extensive late-stage clinical development program in other indications. With a rational and disciplined approach to investment, we are leveraging our internal experience and expertise and the strength of strategic partnerships, to identify and pursue opportunities across the landscape of scientific modalities, including small molecules and biotherapeutics, such as antibody-drug conjugates (ADCs). Sales related to cabozantinib account for the majority of our revenues. Cabozantinib is an inhibitor of multiple tyrosine kinases, including MET, AXL, VEGF receptors and RET and has been approved by the FDA, and in 69 other countries, for all or a combination of, the following indications: as CABOMETYX® (cabozantinib) tablets for advanced renal cell carcinoma (RCC) (both alone and in combination with Bristol-Myers Squibb Company’s nivolumab (OPDIVO®)), previously treated hepatocellular carcinoma (HCC), previously treated, RAI-refractory differentiated thyroid cancer (DTC) and previously treated, unresectable, locally advanced or metastatic, well-differentiated pancreatic neuroendocrine tumors (pNET) and extra-pancreatic neuroendocrine tumors (epNET); and as COMETRIQ® (cabozantinib) capsules for progressive, metastatic medullary thyroid cancer. For physicians treating these types of cancer, cabozantinib has become or is becoming an important medicine in their selection of effective therapies. The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), 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 (a member of the Roche Group); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited. We plan to continue leveraging our operating cash flows to advance a broad array of diverse biotherapeutics and small molecule programs for the treatment of cancer, as well as to support company-sponsored and externally sponsored clinical trials evaluating cabozantinib and zanzalintinib, a novel oral inhibitor of kinases including the TAM kinases (TYRO3, AXL, MER), MET and VEGF receptors. Our zanzalintinib development program includes a series of ongoing and planned pivotal trials to explore its therapeutic potential in CRC, clear cell (cc) and non-clear cell (ncc) RCC, and neuroendocrine tumors (NET), as well as earlier-stage trials in meningioma, lung cancer and castration-resistant prostate cancer. Our pipeline programs in phase 1 development each have best-in-class potential and include: XL309, a small molecule inhibitor 23 Table of Contents of USP1, which has emerged as a synthetic lethal target in the context of BRCA-mutated tumors; XB010, an ADC consisting of a MMAE payload conjugated to a mAb targeting the tumor antigen 5T4; XB628, a first-in-class bispecific antibody that simultaneously targets PD-L1 and NKG2A, identified as key regulators of adaptive and innate immune cell activity; and XB371, a next-generation tissue factor (TF)-targeting ADC with a topoisomerase inhibitor payload. We complement our internal drug discovery and development efforts by in-licensing or acquiring, or obtaining options to in-license or acquire, investigational oncology assets from third parties if those oncology assets demonstrate evidence of, or potential for, clinical success. Cabozantinib Franchise The FDA first approved CABOMETYX in the U.S. as a monotherapy for previously treated patients with advanced RCC in April 2016, and then for previously untreated patients with advanced RCC in December 2017. In January 2021, the CABOMETYX label was expanded to include first-line advanced RCC in combination with nivolumab, which was the first CABOMETYX regimen approved for treatment in combination with an immune checkpoint inhibitor (ICI). In addition to RCC, in January 2019, the FDA approved CABOMETYX for the treatment of patients with HCC previously treated with sorafenib, and in September 2021, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with locally advanced or metastatic DTC that has progressed following prior VEGF receptor-targeted therapy and who are RAI-refractory or ineligible. In March 2025, the FDA approved CABOMETYX for the treatment of adult and pediatric patients 12 years of age and older with previously treated, unresectable, locally advanced or metastatic, well-differentiated pNET and epNET. The Inflation Reduction Act of 2022 (IRA) introduced numerous substantial changes to drug pricing, reimbursement and access support in the U.S., including enabling the Centers for Medicare & Medicaid Services (CMS) to assert control over the prices of certain single-source drugs and biotherapeutics reimbursed under Medicare Part B and Part D (the Medicare Drug Price Negotiation Program). CMS has begun to announce rounds of drugs eligible for negotiation and establish so-called “Maximum Fair Prices” (MFP) under the Medicare Drug Price Negotiation Program. The IRA also contains a limited exception for small biotech drug manufacturers, which applies on a drug-specific basis, and provides that qualifying drugs will be exempt from possible pricing negotiation through 2028 and eligible for a lower limit (i.e., a price floor) on the potential MFP in 2029 and 2030, if the manufacturers of those drugs continue to qualify each year (small biotech exception). We have qualified for the small biotech exception with respect to our cabozantinib franchise products through Initial Price Applicability Year (IPAY) 2028. We also intend to apply to CMS to maintain our small biotech exception and price floor each subsequent year through 2030. Separately, in December 2024, CMS released final guidance on another program, the Medicare Part D Manufacturer Discount Program (Part D Discount Program), which requires manufacturers to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased drug discounts. We have since received notice from CMS that we qualify for the "specified small manufacturer” designation and are thereby eligible for a phase-in of the increased manufacturer discounts under the Part D Discount Program, from 2025 to 2031. In April 2026, CMS also issued a final rule on the Part D Discount Program that largely codifies the final guidance. The IRA also imposes additional rebates for certain Part B and Part D drugs where relevant pricing metrics associated with the products increase faster than inflation. There have also been proposals from the current U.S. administration that aim to lower prescription drug costs. Central among these proposals is the most favored nation (“MFN”) drug pricing policy, which seeks to equalize the prices of drugs in the U.S. with the prices of those drugs in other developed countries. In 2025, an executive order directed the Department of Health and Human Services (HHS) and other federal agencies to implement MFN pricing through new models and potential regulatory actions. CMS has since announced pilot programs under both the Medicare and Medicaid Programs designed to apply MFN pricing principles to drug reimbursement. The pilot programs would tie reimbursement rates for certain covered drugs to lower prices observed in comparable international markets, though the full scope, timing and impact of these initiatives remain uncertain. Separately, on April 2, 2026, the administration issued a Proclamation under Section 232 of the Trade Expansion Act of 1962, imposing tariffs of up to 100% on certain imported patented pharmaceuticals and pharmaceutical ingredients, subject to exceptions for companies that have reached or are negotiating an MFN agreement, among other exceptions. Adoption of these programs and other measures could limit reimbursement of pharmaceuticals. As a result, the business case for any product that receives regulatory approval for commercial sale in the U.S. may be negatively impacted if the government and third-party payers fail to provide adequate coverage and reimbursement. To develop and commercialize cabozantinib outside the U.S., we have entered into license agreements with Ipsen Pharma SAS (Ipsen) and Takeda Pharmaceutical Company Limited (Takeda). To Ipsen, we granted the rights to develop and commercialize cabozantinib outside of the U.S. and Japan, and to Takeda we granted such rights in Japan. Both Ipsen and 24 Table of Contents Takeda also contribute financially and operationally to the further global development and commercialization of the cabozantinib franchise, and we work closely with them on these activities. Utilizing its regulatory expertise and established international oncology marketing network, Ipsen has continued to execute on its commercialization plans for CABOMETYX, having received regulatory approvals and launched in multiple territories outside of the U.S., including in the European Economic Area (EEA), which covers all 27 member states of the European Union and Norway, Liechtenstein and Iceland, the United Kingdom and Canada, as a treatment for advanced RCC (both as a monotherapy and in combination with nivolumab) and for previously treated HCC and DTC indications. In July 2025, Ipsen received approval for CABOMETYX as a treatment for previously treated, well-differentiated/unresectable, locally advanced, or metastatic pNET or epNET (with local labeling variations) from the European Commission (EC) for the EEA, and health regulatory authorities in Brazil and Australia, and from health regulatory authorities in Switzerland in October 2025 and Singapore in December 2025. With respect to the Japanese market, Takeda received Manufacturing and Marketing Approvals from the Japanese Pharmaceuticals and Medical Devices Agency for monotherapy CABOMETYX as a treatment of patients with curatively unresectable or metastatic RCC and as a treatment of patients with unresectable HCC that has progressed after cancer chemotherapy, as well as for CABOMETYX in combination with nivolumab as a treatment for unresectable or metastatic RCC. Pipeline Activities Small Molecule Programs Zanzalintinib Zanzalintinib is a novel oral inhibitor of kinases including the TAM kinases (TYRO3, AXL, MER), MET and VEGF receptors, which are implicated in cancer’s growth and spread. We are evaluating zanzalintinib in a robust and growing development program that builds on our prior experience with cabozantinib and targets indications with high unmet need. We have established collaborations and will continue to explore additional opportunities for novel combinations with zanzalintinib. To date, we have initiated two large phase 1b/2 clinical trials and one phase 2 clinical trial studying zanzalintinib as a monotherapy and/or in combination with other therapies, including ICIs (STELLAR-001, STELLAR-002, and STELLAR-201). Patient enrollment into STELLAR-001 was completed in 2023 and preliminary results from a randomized expansion cohort of patients with metastatic CRC were presented at the American Society of Clinical Oncology (ASCO) Gastrointestinal Cancers Symposium in January 2025. In May 2025, preliminary results from an expansion cohort of patients with previously untreated advanced ccRCC from STELLAR-002 were presented at the 2025 ASCO Annual Meeting, along with data from multiple dose-escalation cohorts. In May 2026, we announced an expansion cohort for STELLAR-002 evaluating zanzalintinib in combination with docetaxel in metastatic castration-resistant prostate cancer (mCRPC) patients with measurable disease. In August 2026, we announced an additional expansion cohort for STELLAR-002 evaluating zanzalintinib monotherapy in patients with metastatic bladder cancer who have progressed following treatment with enfortumab vedotin and pembrolizumab. Both the bladder cancer and mCRPC expansion cohorts for STELLAR-002 have been initiated and enrollment is ongoing. In April 2026, we initiated STELLAR-201, a phase 2 trial evaluating zanzalintinib in patients with recurrent Grade I/II/III meningioma with relapse or progression following radiation and/or surgery or those who are not candidates for these therapies. The primary endpoint of the trial is objective response rate (ORR), with secondary endpoints including progression-free survival (PFS), duration of response (DOR) and OS. Enrollment is currently ongoing. We also have three ongoing pivotal trials, two evaluating zanzalintinib in combination with ICIs and one evaluating zanzalintinib as a monotherapy. Our first such trial, STELLAR-303, was initiated in June 2022 and is evaluating zanzalintinib in combination with atezolizumab versus regorafenib in patients with metastatic, refractory non-microsatellite instability high or non-mismatch repair-deficient CRC. In June 2025, we announced positive top-line results in the first dual primary endpoint demonstrating a statistically significant improvement in overall survival (OS) versus regorafenib in the intention-to-treat (ITT) population, and in October 2025, announced that the study demonstrated a 20% reduction in the risk of death versus regorafenib in the ITT population at the final analysis (stratified hazard ratio [HR]: 0.80; 95% confidence interval [CI]: 0.69-0.93; P=0.0045). Detailed findings from the study, including OS and PFS in the ITT population and in the subset of patients without active liver metastases (non-liver metastases, NLM), were presented at the 2025 European Society for Medical Oncology Congress in October 2025 and simultaneously published in The Lancet. In December 2025, we submitted a New Drug Application (NDA) to the FDA for zanzalintinib in combination with atezolizumab for the treatment of previously treated metastatic colorectal cancer. In February 2026, we announced that the FDA had accepted our NDA and assigned a standard review, with a Prescription Drug User Fee Act (PDUFA) target action date of December 3, 2026. In June 2026, we announced results from the final analysis of the other dual primary endpoint of OS in the NLM subpopulation showing a non-statistically significant trend in OS favoring the combination in the NLM subpopulation (stratified HR: 0.83; 95% CI: 25 Table of Contents 0.66–1.05; P=0.1185), with median OS values of 15.9 months with zanzalintinib in combination with atezolizumab, and 12.7 months with regorafenib. We intend to present detailed findings at a future medical conference. The second pivotal trial, STELLAR-304, was initiated in December 2022 and is evaluating zanzalintinib in combination with nivolumab versus sunitinib in previously untreated patients with advanced nccRCC. The primary efficacy endpoints for STELLAR-304 are blinded independent radiology committee-assessed PFS and ORR per RECIST 1.1. The secondary efficacy endpoint is OS. We expect top-line results in the second half of 2026, depending on event rates. In June 2025, we initiated STELLAR-311, a phase 2/3 pivotal trial evaluating zanzalintinib versus everolimus in patients with advanced NET, regardless of site of origin, who had received up to one prior line of therapy. The primary endpoint of the trial is PFS per RECIST 1.1 as assessed by blinded independent central review. Enrollment is currently ongoing. Beyond STELLAR-001, STELLAR-002, STELLAR-201, STELLAR-303, STELLAR-304 and STELLAR-311, we intend to initiate additional early-stage and pivotal trials evaluating zanzalintinib across a broad array of potential future indications, including STELLAR-316, a planned phase 3 pivotal trial, in collaboration with Natera, Inc. (Natera) and Merck (known as MSD outside of the United States and Canada), which we anticipate will commence in mid-2026. STELLAR-316 will evaluate zanzalintinib, with and without KEYTRUDA QLEX™ (pembrolizumab and berahyaluronidase alfa-pmph) (KEYTRUDA QLEX is marketed outside the U.S. as KEYTRUDA SC™), in patients with resected stage II/III CRC who, following completion of definitive therapy, have tested positive for molecular residual disease (MRD+) and have no radiographic evidence of disease. Merck will supply KEYTRUDA QLEX and Natera will provide its Signatera™ assay to identify MRD+ patients for trial enrollment. Also, in May 2026, we announced STELLAR-202, a planned phase 2 trial evaluating zanzalintinib in combination with pembrolizumab in the maintenance setting in squamous non-small cell lung cancer, which we expect to initiate in the second half of 2026. To further expand our exploration of the clinical potential of zanzalintinib, pursuant to a clinical development collaboration, Merck is sponsoring: KEYMAKER-U03 (a phase 1/2 trial evaluating zanzalintinib in combination with WELIREG® (belzutifan), Merck's oral HIF-2α inhibitor, in RCC); LITESPARK-033 (a phase 3 trial, initiated in December 2025, evaluating zanzalintinib in combination with WELIREG versus cabozantinib in first-line advanced RCC following an immunotherapy administered in the adjuvant setting); and LITESPARK-034 (a phase 3 trial, initiated in April 2026, evaluating the combination of zanzalintinib and WELIREG versus WELIREG and placebo in second-line or later advanced RCC patients who have progressed on or after both programmed death-1/ligand 1 (PD-1/L1) and vascular endothelial growth factor receptor-tyrosine kinase inhibitor (VEGFR-TKI) therapies in sequence or in combination). Merck will fund one of these phase 3 studies and we will co-fund the phase 1/2 study and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. Under the collaboration, we continue to retain all global commercial and marketing rights to zanzalintinib. Other Small Molecules The knowledge and experience gained through our efforts to discover cabozantinib, cobimetinib and esaxerenone, each of which were approved by regulatory authorities and are commercially distributed, informs our current strategy for discovering and developing additional small molecules with the potential to treat cancer, including XL309, a potentially best-in-class small molecule inhibitor of USP1, a synthetic lethal target in the context of BRCA-mutated tumors. XL309 is currently being evaluated in a phase 1 clinical trial as monotherapy and in combination with PARP1/2 inhibition in patients with advanced solid tumors and enrollment is ongoing. XL309 has potential in patients whose tumors are no longer responsive to PARPi, including ovarian, breast and prostate cancers. XL309 also has potential in combination with PARPi agents to deepen and prolong the response seen to PARPi, as well as to broaden the activity beyond that observed in patients with tumors that harbor a BRCA1/2 mutation. We also expect to progress a development candidate from our somatostatin receptor subtype 2 agonist program toward a potential investigational new drug (IND) filing in 2026. Beyond these small molecule assets, we continue to make progress on multiple lead optimization programs for molecules that address a variety of targets, and that we believe have significant potential for clinical differentiation. We anticipate that some of these other programs could reach development candidate status in 2026 and beyond. Biotherapeutics Part of our drug discovery activity focuses on discovering and advancing various biotherapeutics that have the potential to become anti-cancer therapies, such as bispecific antibodies, ADCs and other innovative treatments. ADCs in particular present a unique opportunity for new cancer treatments, given their capabilities to target the delivery of anti-cancer drug payloads to specific cells expressing the target; this increased precision should minimize collateral impact on 26 Table of Contents healthy tissues that do not express the target. To facilitate the growth of our various biotherapeutics programs, we have established multiple research collaborations and in-licensing arrangements and entered into other strategic transactions, aimed at conserving capital and managing risks, that provide us with access to antibodies, binders, payloads and conjugation technologies, which are the components employed to generate next-generation ADCs or multispecific antibodies. We have also established laboratories for discovery of novel biologics with capabilities in antibody engineering, ADC chemistry, bioanalysis and preclinical testing. As part of our strategy to access clinical- or near-clinical-stage assets, we executed an exclusive option and license agreement and clinical development collaboration with Sairopa B.V. (Sairopa) to develop ADU-1805. ADU-1805 is currently being evaluated in a phase 1 clinical trial in patients with advanced or metastatic refractory solid tumors, as monotherapy and in combination with pembrolizumab. Enrollment is ongoing. We have made significant progress under our other research collaborations and in-licensing arrangements and believe we will continue to do so in 2026 and in future years. For example, in April 2025, we initiated the phase 1 study of XB628, a first-in-class bispecific antibody, and in August 2025, we initiated a phase 1 study of XB371, a next-generation TF-targeting ADC with a topoisomerase inhibitor payload. We also expect to progress XB773, an ADC targeting the tumor antigen DLL3 toward a potential IND filing in 2026. Each of these biotherapeutics was discovered, in part, in connection with our research collaborations and in-licensing agreements. Beyond these biotherapeutics assets, we continue to make progress on multiple preclinical programs for molecules that address a variety of targets, and that we believe have significant potential for clinical differentiation. We anticipate that some of these other programs could reach development candidate status in 2027 and beyond. Future Expansion of our Pipeline Increasing the number of novel anti-cancer agents in our pipeline is essential to our overall strategy and 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 action. This approach provides a high degree of flexibility with respect to target selection and modality of treatment and allows us to prioritize those programs that we believe have the greatest chance of producing impactful therapeutics. As part of our strategy, our drug discovery activities have and will continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively leverage a wide range of technology platforms and assets and increase our probability of success. As of the date of this Quarterly Report on Form 10-Q, we expect to progress up to two new development candidates into preclinical development during 2026. We will continue to engage in pipeline expansion initiatives with the goal of discovering, acquiring and/or in-licensing promising investigational oncology assets and then further characterizing and developing them utilizing our established preclinical and clinical development infrastructure. Second Quarter 2026 Business Updates and Financial Highlights During the second quarter of 2026, we continued to execute on our business objectives, generating significant revenues from operations and enabling us to continue to seek to maximize the clinical and commercial potential of our products and expand our product pipeline. Significant business updates and financial highlights for the quarter and subsequent to quarter-end include: Business Updates •In April 2026, we initiated STELLAR-201, a phase 2 trial evaluating zanzalintinib in patients with recurrent Grade I/II/III meningioma with relapse or progression following radiation and/or surgery or those who are not candidates for radiation and/or surgery. The primary endpoint of the trial is ORR, with secondary endpoints including PFS, DOR and OS. •In May 2026, we announced two additional zanzalintinib studies: STELLAR-202, a planned phase 2 trial evaluating zanzalintinib in combination with pembrolizumab in the maintenance setting in squamous non-small cell lung cancer, and an additional expansion cohort in the ongoing phase 1b/2 STELLAR-002 study evaluating zanzalintinib in combination with docetaxel in mCRPC patients with measurable disease. In August 2026, we announced an additional expansion cohort for STELLAR-002 evaluating zanzalintinib monotherapy in patients with metastatic bladder cancer who have progressed following treatment with enfortumab vedotin and pembrolizumab. Both the bladder cancer and mCRPC expansion cohorts for STELLAR-002 have been initiated and enrollment is ongoing. We expect to initiate STELLAR-202 in the second half of 2026. 27 Table of Contents •In May 2026, we announced a clinical development collaboration with Merck for the supply of KEYTRUDA QLEX for STELLAR-316, a planned phase 3 pivotal trial, which will evaluate zanzalintinib, with and without KEYTRUDA QLEX, in patients with resected stage II/III CRC who, following completion of definitive therapy, have tested positive for MRD+ and have no radiographic evidence of disease. •In May 2026, we presented results from a subgroup analysis of the phase 3 CABINET pivotal trial at the 2026 ASCO Annual Meeting. Several presentations highlighting ongoing studies evaluating CABOMETYX or zanzalintinib in diverse tumor types were also the subject of presentation at the meeting. •In June 2026, we announced results from the final analysis of the dual primary endpoint of OS in the NLM subpopulation in the phase 3 STELLAR-303 pivotal trial, showing a non-statistically significant trend in OS favoring the combination of zanzalintinib and atezolizumab in the NLM subpopulation. Detailed results are expected to be presented at a future medical conference. •In October 2025, our Board of Directors authorized a stock repurchase program (SRP) for the repurchase of up to $750 million of our outstanding common stock before December 31, 2026 (the October 2025 SRP). In May 2026, our Board of Directors authorized the repurchase of up to an additional $750 million of our outstanding common stock before December 31, 2027 (the May 2026 SRP). Under these SRPs, as of June 30, 2026, we have repurchased $902.2 million of our common stock, at an average price of $44.66 per share and have completed the October 2025 SRP. Financial Highlights •Net product revenues for the second quarter of 2026 were $573.0 million, as compared to $520.0 million for the second quarter of 2025. •Total revenues for the second quarter of 2026 were $628.7 million, as compared to $568.3 million for the second quarter of 2025. •Research and development expenses for the second quarter of 2026 were $212.0 million, as compared to $200.4 million for the second quarter of 2025. •Selling, general and administrative expenses for the second quarter of 2026 were $147.6 million, as compared to $134.9 million for the second quarter of 2025. •Provision for income taxes for the second quarter of 2026 was $50.6 million, as compared to $45.6 million for the second quarter of 2025. •Net income for the second quarter of 2026 was $212.1 million, or $0.85 per share, basic and $0.82 per share, diluted, as compared to net income of $184.8 million, or $0.68 per share, basic and $0.65 per share, diluted, for the second quarter of 2025. See “Results of Operations” below for a discussion of the detailed components and analysis of the amounts above. Outlook, Challenges and Risks We will continue to face numerous challenges and risks that may impact our ability to execute on our business objectives. In particular, for the foreseeable future, we expect our ability to generate sufficient cash flow to fund our business operations and growth will depend upon the continued commercial success of CABOMETYX, both alone and in combination with other therapies, as a treatment for the highly competitive indications for which it is approved. In addition, CABOMETYX will only continue to be commercially successful if private third-party and government payers continue to provide coverage and reimbursement. As is the case for all innovative pharmaceutical therapies, obtaining and maintaining coverage and reimbursement for CABOMETYX is becoming increasingly difficult, both within the U.S. and in foreign markets. Further, healthcare policymakers in the U.S. continue to express concern over healthcare costs, and corresponding legislative and policy initiatives and activities have been launched aimed at increasing the healthcare cost burdens borne by pharmaceutical manufacturers, as well as expanding access to, and restricting the prices and growth in prices of, pharmaceuticals. Furthermore, the current U.S. administration has proposed a scheme to impose tariffs on imported pharmaceuticals. Achievement of our business objectives will also depend on our ability to maintain a competitive position in the shifting landscape of therapeutic strategies for the treatment of cancer, which we may not be able to do. On an ongoing basis, we assess the constantly evolving landscape of other approved and investigational cancer therapies that could be competitive, or complementary in combination, with our products, and then we adapt our development strategies for the cabozantinib franchise and our pipeline product candidates accordingly, such as by modifying our clinical trials to include evaluation of our therapies with ICIs and other targeted agents. Even if our current and future clinical trials produce positive 28 Table of Contents results sufficient to obtain marketing approval by the FDA and other global regulatory authorities, it is uncertain whether physicians will choose to prescribe regimens containing our products instead of competing products and product combinations in approved indications. In the longer term, we may eventually face competition from potential manufacturers of generic or follow-on versions of our marketed products, including the proposed generic versions of CABOMETYX tablets that are the subject of ANDAs submitted to the FDA by MSN, Teva, Cipla, Biocon, Sun, and Accord, as well as 505(b)(2) NDAs submitted by Azurity, Handa, and Almatica. The approval of any of these follow-on products and their subsequent launch could significantly decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations. Separately, our research and development objectives may be impeded by the challenges of scaling our organization to meet the demands of expanded drug development, unanticipated delays in clinical testing and the inherent risks and uncertainties associated with drug discovery operations, especially on the global level. In connection with efforts to expand our product pipeline, we may be unsuccessful in discovering new potential cancer treatments or identifying appropriate candidates for in-licensing or acquisition. Some of these challenges and risks are specific to our business, others are common to companies in the biopharmaceutical industry with development and commercial operations, and an additional category are macroeconomic, affecting all companies. For a more detailed discussion of challenges and risks we face, see “Risk Factors” in Part I, Item 1A of our 2025 Form 10-K, as supplemented and, to the extent inconsistent or superseded in Part II, Item 1A of our Quarterly Reports on Form 10-Q. Fiscal Year Convention We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31. Fiscal year 2026, which is a 52-week fiscal year, will end on January 1, 2027 and fiscal year 2025, which was a 52-week fiscal year, ended on January 2, 2026. For convenience, references in this report as of and for the fiscal periods ended July 3, 2026 and July 4, 2025, and as of and for the fiscal year ending January 1, 2027 and fiscal year ended January 2, 2026, are indicated as being as of and for the periods ended June 30, 2026 and June 30, 2025, and the year ending December 31, 2026 and the year ended December 31, 2025, respectively. Results of Operations Revenues Revenues by category were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Net product revenues $ 573,025 $ 520,014 10 % $ 1,128,002 $ 1,033,297 9 % License revenues 59,810 49,301 21 % 116,758 91,781 27 % Collaboration services revenues (4,145) (1,054) 293 % (5,258) (1,370) 284 % Total collaboration revenues 55,665 48,247 15 % 111,500 90,411 23 % Total revenues $ 628,690 $ 568,261 11 % $ 1,239,502 $ 1,123,708 10 % Net Product Revenues Gross product revenues, discounts and allowances and net product revenues were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Gross product revenues $ 812,782 $ 745,280 9 % $ 1,608,136 $ 1,466,991 10 % Discounts and allowances (239,757) (225,266) 6 % (480,134) (433,694) 11 % Net product revenues $ 573,025 $ 520,014 10 % $ 1,128,002 $ 1,033,297 9 % 29 Table of Contents Net product revenues by product were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 CABOMETYX $ 570,648 $ 517,890 10 % $ 1,123,421 $ 1,028,762 9 % COMETRIQ 2,377 2,124 12 % 4,581 4,535 1 % Net product revenues $ 573,025 $ 520,014 10 % $ 1,128,002 $ 1,033,297 9 % The increases in net product revenues for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, were primarily related to an increase of 6% in the number of CABOMETYX units sold, for each period, reflecting continuing demand for CABOMETYX in combination with nivolumab as a first-line treatment of patients with advanced RCC, and demand for previously treated advanced NET and, to a lesser extent, increases of 4% and 3%, respectively, in the average net selling price of CABOMETYX. The increases in sales volume were largely driven by refills, reflecting the longer duration of therapy for the combination of CABOMETYX with nivolumab, and increases in related market share reflecting the continued evolution of the metastatic RCC and NET treatment landscapes. We project our net product revenues may increase for the remainder of 2026, as compared to the corresponding prior year period, for similar reasons noted above. We recognize product revenues net of discounts and allowances that are described in “Note 1. Organization and Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2025 Form 10-K. Discounts and allowances have generally increased over time as the number of patients participating in government programs has increased and as the discounts given and rebates paid to government payers have also increased. The increases in the amount of discounts and allowances for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, were primarily the result of increases in the volume of units sold, higher utilization, and higher discounts associated with the Part D Discount Program, partially offset by lower utilization under the 340B Drug Pricing Program. We project our discounts and allowances may increase for the remainder of 2026, as compared to the corresponding prior year period, for similar reasons noted above. License Revenues License revenues primarily include: (a) the recognition of the portion of milestone payments allocated to the transfer of intellectual property licenses for which it had become probable, in the related period, that a milestone would be achieved and a significant reversal of revenues would not occur in future periods; and (b) royalty revenues. Milestone revenues, which are allocated between license revenues and collaboration services revenues, were $0.7 million and $9.5 million, respectively, for the three and six months ended June 30, 2026, as compared to $1.6 million and $2.5 million for the corresponding prior year periods. During the six months ended June 30, 2026, we recognized $7.8 million in revenues in connection with an $8.0 million commercial milestone payment from Takeda, which was earned upon their achievement of $300.0 million of cumulative net sales of cabozantinib in Japan. Royalty revenues for the three and six months ended June 30, 2026 increased, as compared to the corresponding prior year periods, primarily as a result of increases in Ipsen’s net sales of cabozantinib outside of the U.S and Japan. Ipsen royalties were $50.5 million and $94.1 million, respectively, for the three and six months ended June 30, 2026, as compared to $39.5 million and $73.5 million for the corresponding prior year periods. Royalty revenues related to Takeda’s net sales of cabozantinib were $2.7 million and $5.1 million, respectively, for the three and six months ended June 30, 2026, as compared to $3.8 million and $6.6 million for the corresponding prior year periods. CABOMETYX is approved and is commercially available in 69 countries outside the U.S. Due to uncertainties surrounding the timing and achievement of development, regulatory and commercial milestones, it is difficult to predict the timing of future milestone revenues; consequently, milestone revenues may vary significantly from period to period. 30 Table of Contents Collaboration Services Revenues Collaboration services revenues include: (a) the development cost reimbursements earned under our collaboration agreements and product supply revenues, net of product supply costs; (b) the recognition of deferred revenues for the portion of upfront and milestone payments that have been allocated to research and development services performance obligations; offset by (c) the royalties we pay to Royalty Pharma plc (Royalty Pharma) on sales by Ipsen and Takeda of products containing cabozantinib. Development cost reimbursements for the three and six months ended June 30, 2026 decreased, as compared to the corresponding prior year periods, due to decreases in spending on studies evaluating cabozantinib that are subject to reimbursement. Recognition of deferred revenues for the portion of upfront and milestone payments that have been allocated to research and development services performance obligations were not material in each of the three and six months ended June 30, 2026 and 2025. Collaboration services revenues are reduced by the 3% royalty we are required to pay to Royalty Pharma on the net sales by Ipsen and Takeda of any products containing cabozantinib. The royalty payments due to Royalty Pharma increased in the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, as a result of increases in the royalty generating sales of cabozantinib by Ipsen. We project our collaboration services revenues may increase for the remainder of 2026, as compared to the corresponding prior year period, primarily as a result of an increase in development cost reimbursements, partially offset by an increase in royalty payments on the sales of cabozantinib by Ipsen and Takeda. Cost of Goods Sold The cost of goods sold and our gross margins were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Cost of goods sold $ 20,657 $ 19,470 6 % $ 40,610 $ 38,642 5 % Gross margin % 96 % 96 % 96 % 96 % Cost of goods sold is related to our product revenues and consists of a 3% royalty payable on U.S. net sales of any product containing cabozantinib, as well as the cost of inventory sold, indirect labor costs, write-downs related to expiring, excess and obsolete inventory, and other third-party logistics costs. The increases in cost of goods sold for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, were primarily due to increases in royalties as a result of increased U.S. CABOMETYX sales. We project our gross margin will not change significantly during the remainder of 2026. Research and Development Expenses We do not track fully burdened research and development expenses on a project-by-project basis. We group our research and development expenses into three categories: (a) development; (b) drug discovery; and (c) other research and development. Our development group leads the development and implementation of our clinical and regulatory strategies and prioritizes disease indications in which our compounds are being or may be studied in clinical trials. Development expenses include license and other collaboration costs, primarily composed of upfront license fees, development milestones and other payments associated with our clinical-stage in-licensing collaboration programs, clinical trial costs, personnel expenses, consulting and outside services and other development costs, including manufacturing costs of our drug development candidates. Our drug discovery group utilizes a variety of technologies, including in-licensed technologies, to enable the rapid discovery, optimization and extensive characterization of lead compounds and biotherapeutics such that we are able to select development candidates with the best potential for further evaluation and advancement into clinical development. Drug discovery expenses include license and other collaboration costs primarily composed of upfront license fees, research funding commitments, option exercise fees, development milestones and other payments associated with our in-licensing collaboration programs in preclinical development stage. Other drug discovery costs include personnel expenses, consulting and outside services and laboratory supplies. Other research and development 31 Table of Contents expenses include the allocation of general corporate costs to research and development services and development cost reimbursements in connection with certain of our collaboration arrangements. Research and development expenses by category were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Development: Clinical trial costs $ 63,605 $ 55,744 14 % $ 115,009 $ 118,485 -3 % Personnel expenses 46,617 49,461 -6 % 95,607 98,998 -3 % License and other collaboration costs 7,500 2,500 200 % 12,575 7,500 68 % Consulting and outside services 16,291 16,321 0 % 29,929 29,024 3 % Other development costs 16,509 10,133 63 % 33,117 33,369 -1 % Total development 150,522 134,159 12 % 286,237 287,376 0 % Drug discovery: License and other collaboration costs 1,764 3,154 -44 % 4,574 3,413 34 % Other drug discovery costs 16,488 18,203 -9 % 33,154 36,197 -8 % Total drug discovery 18,252 21,357 -15 % 37,728 39,610 -5 % Stock-based compensation 12,344 14,143 -13 % 24,662 23,665 4 % Other research and development 30,869 30,697 1 % 63,276 61,938 2 % Total research and development expenses $ 211,987 $ 200,356 6 % $ 411,903 $ 412,589 0 % In addition, we track our external clinical trial costs by product and product candidate and by scientific modalities, which are categorized as small molecule and biotherapeutics programs. Small molecule clinical development for the reported periods were primarily composed of cabozantinib and zanzalintinib. Biotherapeutics clinical development for the reported periods were primarily composed of XB010, XB628, and XB371. Clinical trial costs by scientific modalities, by product and by product candidate were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Small molecules: Zanzalintinib $ 46,853 $ 38,627 21 % $ 84,126 $ 79,747 5 % Cabozantinib 5,160 8,469 -39 % 9,484 18,452 -49 % Other small molecules 1,381 4,607 -70 % 2,970 10,123 -71 % Total small molecules 53,394 51,703 3 % 96,580 108,322 -11 % Biotherapeutics 10,211 4,041 153 % 18,429 10,163 81 % Total clinical trial costs $ 63,605 $ 55,744 14 % $ 115,009 $ 118,485 -3 % The increase in research and development expenses for the three months ended June 30, 2026, as compared to the corresponding prior year period, was primarily related to increases in clinical trial costs, manufacturing costs to support our development candidates (presented as part of other development costs) and development-related license and other collaboration costs, partially offset by a decrease in personnel expenses. The decrease in research and development expenses for the six months ended June 30, 2026, as compared to the corresponding prior year period, was primarily related to decreases in clinical trial costs and personnel expenses, partially offset by increases in license and other collaboration costs and manufacturing costs to support our development candidates (presented as part of other development costs). Clinical trial costs increased for the three months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to higher costs associated with studies evaluating zanzalintinib, XB371, and XB628, partially offset 32 Table of Contents by lower costs associated with cabozantinib, XL309, and XB002 studies. Clinical trial costs decreased for the six months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to lower costs associated with studies evaluating cabozantinib, XL309, and XL495, partially offset by higher costs associated with studies evaluating zanzalintinib, XB371, and XB628. Development-related license and other collaboration costs increased for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, primarily due to higher development milestone achievement in our clinical-stage in-licensing collaboration programs. Drug discovery-related license and other collaboration costs decreased for the three months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to lower option exercise fees in our discovery-stage in-licensing collaboration programs. Drug discovery-related license and other collaboration costs increased for the six months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to higher development milestone achievement in our discovery-stage in-licensing collaboration programs and higher research funding. In addition to reviewing the three categories of research and development expenses described above, we principally consider qualitative factors in making decisions regarding our research and development programs. These factors include enrollment in clinical trials for our product candidates, preliminary data and final results from clinical trials, the potential market indications and overall clinical and commercial potential for our product candidates, and competitive dynamics. We also make our research and development decisions in the context of our overall business strategy. We project that clinical trial costs may increase for the remainder of 2026, as compared to the corresponding prior year period, primarily driven by higher costs associated with various studies evaluating zanzalintinib, XB628, and XB371, partially offset by lower costs associated with studies evaluating cabozantinib and XL309. To continue growing our pipeline, we are prioritizing investment in new molecules that are clinically differentiated with the potential to improve the standard of care for our cancer patients, including current and planned clinical trial programs evaluating zanzalintinib, XB010, XB628, and XB371. We are working to expand our oncology product pipeline through drug discovery efforts, which encompass our diverse biotherapeutics and small molecule programs exploring multiple modalities and mechanisms of action. This approach provides a high degree of flexibility with respect to target selection and allows us to prioritize those targets that we believe have the greatest chance of yielding impactful therapeutics. As part of our strategy, our drug discovery activities have included and continue to include internal research, as well as external research collaborations, in-licensing arrangements and other strategic transactions that collectively incorporate a wide range of technology platforms and assets and increase our probability of success. As of the date of this Quarterly Report on Form 10-Q, we expect to progress up to two new development candidates into preclinical development during 2026. We will continue to engage in pipeline expansion initiatives with the goal of acquiring and in-licensing promising investigational oncology assets and then further characterize and develop them utilizing our established preclinical and clinical development infrastructure. We project our research and development expenses may increase for the remainder of 2026, as compared to the prior year period, primarily driven by increases in clinical trial costs, including the current and planned trials evaluating zanzalintinib, XB628, and XB371, personnel expenses, and consulting and outside services, partially offset by a decrease in license and other collaboration costs. Selling, General and Administrative Expenses Selling, general and administrative expenses were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Selling, general and administrative expenses(1) $ 127,413 $ 112,931 13 % $ 250,283 $ 233,706 7 % Stock-based compensation 20,219 21,928 -8 % 36,951 38,336 -4 % Total selling, general and administrative expenses $ 147,632 $ 134,859 9 % $ 287,234 $ 272,042 6 % __________________ (1) Excludes stock-based compensation allocated to selling, general and administrative expenses. 33 Table of Contents Selling, general and administrative expenses consist primarily of personnel expenses, stock-based compensation, marketing costs and certain other administrative costs. The increase in selling, general and administrative expenses for the three months ended June 30, 2026, as compared to the corresponding prior year period, was primarily due to increases in marketing activities in support of the pre-launch activities for zanzalintinib and personnel expenses. The increase in selling, general and administrative expenses for the six months ended June 30, 2026, as compared to the corresponding prior year period, was primarily due to increases in marketing activities in support of the pre-launch activities for zanzalintinib, personnel expenses, and legal and advisory fees, partially offset by a decrease in corporate giving. We project our selling, general and administrative expenses may increase for the remainder of 2026, as compared to the corresponding prior year period, primarily driven by increases in personnel expenses, marketing activities in support of the anticipated commercial launch of zanzalintinib, and legal and advisory fees. Non-Operating Income Non-operating income was as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Interest income $ 14,210 $ 16,789 -15 % $ 30,337 $ 35,865 -15 % Other income (expenses), net 54 50 8 % 273 (195) n/a Non-operating income $ 14,264 $ 16,839 -15 % $ 30,610 $ 35,670 -14 % The decreases in non-operating income for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, were primarily the result of a decrease in interest income due to lower average interest-bearing investment balances and lower average interest rates. Provision for Income Taxes The provision for income taxes and the effective tax rates were as follows (dollars in thousands): Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Provision for income taxes $ 50,628 $ 45,567 11 % $ 107,848 $ 91,641 18 % Effective tax rate 19.3 % 19.8 % 20.3 % 21.0 % The effective tax rates for the three and six months ended June 30, 2026 differed from the U.S. federal statutory tax rate of 21%, primarily due to excess tax benefits related to certain stock grants and the Foreign-Derived Intangible Income deduction, partially offset by state taxes. The effective tax rate for the three months ended June 30, 2025, differed from the U.S. federal statutory tax rate of 21%, primarily due to excess tax benefits related to certain stock grants and the generation of federal tax credits, partially offset by state taxes. The effective tax rate for the six months ended June 30, 2025, differed from the U.S. federal statutory tax rate of 21%, primarily due to state taxes, offset by excess tax benefits related to certain stock grants and the generation of federal tax credits. Liquidity and Capital Resources As of June 30, 2026, we had $1.4 billion in cash, cash equivalents and marketable securities, as compared to $1.7 billion as of December 31, 2025. We anticipate that the aggregate of our current cash, cash equivalents and marketable securities available for operations, net product revenues and collaboration revenues will enable us to maintain our operations for at least 12 months and thereafter for the foreseeable future. Our primary cash requirements for operating activities, which we project will increase for the remainder of 2026, as compared to the corresponding period in 2025, are employee-related expenditures; payments related to our collaboration and development programs; income tax payments; royalty payments on our net product sales; cash payments for inventory; rent payments for our leased facilities; and contract manufacturing payments. 34 Table of Contents Our primary sources of operating cash are: cash collections from customers related to net product revenues, which we project may increase for the remainder of 2026, as compared to the corresponding period in 2025; cash collections related to milestones achieved and royalties earned from our commercial collaboration arrangements with Ipsen, Takeda and others; and cash collections for cost reimbursements under certain of our development programs with Ipsen and Takeda. The timing of cash generated from commercial collaborations and cash payments required for in-licensing collaborations relative to upfront license fee payments, cost reimbursements, exercise of option payments and other contingent payments such as development milestone payments may vary from period to period. We project that we may continue to spend significant amounts of cash to fund the development of certain product candidates in our pipeline, including zanzalintinib, XB010, XB628 and XB371. In addition, we may continue to expand our oncology product pipeline through additional research collaborations, in-licensing arrangements and other strategic transactions that align with our oncology drug development, regulatory and commercial expertise. In October 2025, our Board of Directors authorized the October 2025 SRP to acquire up to $750.0 million of our outstanding common stock before December 31, 2026. In May 2026, our Board of Directors authorized the May 2026 SRP for repurchase of up to an additional $750.0 million of our outstanding common stock before December 31, 2027. Under these SRPs, as of June 30, 2026, we have repurchased 20.2 million shares of common stock for an aggregate purchase price of $902.2 million and have completed the October 2025 SRP. As of June 30, 2026, approximately $597.8 million remained available under the May 2026 SRP for future stock repurchases before December 31, 2027. Stock repurchases under the May 2026 SRP may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions, or any combination of such methods. The timing and amount of any stock repurchases under the SRP will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of our common stock and general market conditions. The SRP does not obligate us to acquire any amount of our common stock, and the SRP may be modified, suspended or discontinued at any time without prior notice. Financing these activities could materially impact our liquidity and capital resources and may require us to incur debt or raise additional funds through the issuance of equity. Furthermore, even though we believe we have sufficient funds for our current and future operating plans, we may choose to incur debt or raise additional funds through the issuance of equity based on market conditions or strategic considerations. Sources and Uses of Cash (dollars in thousands): June 30, 2026 December 31, 2025 Percent Change Working capital $ 888,895 $ 1,037,645 -14 % Cash, cash equivalents and marketable securities $ 1,384,315 $ 1,662,694 -17 % Working Capital: The decrease in working capital as of June 30, 2026, as compared to December 31, 2025, was primarily due to the payments for repurchases of our common stock, partially offset by the favorable impact to our net current assets resulting from an increase in net product revenues. In the future, our working capital may be impacted by one of these factors or other factors, the amounts and timing of which are variable. Cash, Cash Equivalents and Marketable Securities: Cash and cash equivalents primarily consist of deposits at major banks, money market funds, commercial paper and other securities with original maturities 90 days or less. Marketable securities primarily consist of debt securities available-for-sale and certificates of deposit. For additional information regarding our cash, cash equivalents and marketable securities, see “Note 5. Cash and Marketable Securities” of the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q. The decrease in cash, cash equivalents and marketable securities as of June 30, 2026, as compared to December 31, 2025, was primarily due to cash payments to repurchase our common stock, cash payments to support our development and discovery programs, and operating cash payments for employee-related expenditures, partially offset by cash inflows generated by our operations from sales of our products and our commercial collaboration arrangements. 35 Table of Contents Cash flow activities were as follows (dollars in thousands): Six Months Ended June 30, Percent Change 2026 2025 Net cash provided by operating activities $ 559,586 $ 260,430 115 % Net cash provided by investing activities $ 40,360 $ 297,795 -86 % Net cash used in financing activities $ (800,986) $ (611,166) 31 % Operating Activities Cash provided by operating activities is derived by adjusting our net income for non-cash operating items such as deferred taxes, stock-based compensation, depreciation and amortization, non-cash lease expense, impairment of long-lived assets, acquired in-process research and development technology, and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our Condensed Consolidated Statements of Income. Net cash provided by operating activities increased for the six months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to an increase in cash received on sales of our products, and a decrease in cash paid for certain operating expenses, primarily due to the federal cash tax benefit related to the One Big Beautiful Bill Act. Investing Activities The changes in cash flows from investing activities primarily relates to the timing of marketable securities investment activity, acquisition of in-process research and development technology and capital expenditures. Our capital expenditures primarily consist of investments to expand our operations and acquire assets that further support our research and development activities. Net cash provided by investing activities decreased for the six months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to a decrease in cash proceeds from maturities and sales of marketable securities and an increase in purchases of marketable securities, partially offset by a decrease in cash paid for acquired in-process research and development technology related to certain in-licensing collaboration arrangements. Financing Activities The changes in cash flows from financing activities primarily relate to payments for repurchases of common stock, proceeds from employee stock programs and taxes paid related to net share settlement of equity awards. Net cash used in financing activities increased for the six months ended June 30, 2026, as compared to the corresponding prior year period, primarily due to an increase in payments for repurchases of common stock. Contractual Obligations There were no material changes outside of the ordinary course of business in our contractual obligations as of June 30, 2026 from those disclosed in our Fiscal 2025 Form 10-K. For more information about our leases and our other contractual obligations, see “Note 12. Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2025 Form 10-K. Critical Accounting Policies and Estimates The preparation of our Condensed Consolidated Financial Statements conforms to accounting principles generally accepted in the U.S. which requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosures. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our Condensed Consolidated Financial Statements. On an ongoing basis, management evaluates its estimates, including, but not limited to: those related to revenue recognition, including determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price of performance obligations, and variable consideration such as rebates, 36 Table of Contents chargebacks, sales returns and sales allowances as well as milestones included in collaboration arrangements; the accrual for certain liabilities, including accrued clinical trial liabilities; and valuations of equity awards used to determine stock-based compensation, including certain awards with vesting subject to market or performance conditions; and the amounts of deferred tax assets and liabilities, including the related valuation allowance. We base our estimates on historical experience and on various other market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual results could differ materially from those estimates. We believe our critical accounting policies relating to revenue recognition, clinical trial and collaboration accruals, stock-based compensation and income taxes reflect the more significant estimates and assumptions used in the preparation of our Condensed Consolidated Financial Statements. There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026, as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of our Fiscal 2025 Form 10-K. Recent Accounting Pronouncements For a description of the expected impact of recent accounting pronouncements, see “Note 1. Organization and Summary of Significant Accounting Policies” of the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q.