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Commitments and Contingencies
 12 Months Ended
Jan. 02, 2026
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
Leases
We have operating leases for our corporate headquarters in Alameda, California and in Greater Philadelphia area which includes both office and laboratory space totaling approximately 639,000 square feet with lease terms ending in 2026 through 2037. Certain of our leases include options to renew the lease or to early terminate the lease. As of December 31, 2025, we considered whether these options to renew or early terminate were reasonably certain of exercise in determining the related lease terms.
Impairment of Long-Lived Assets
In connection with our 2024 Plan, as discussed in “Note 13. Restructuring”, we exited two leases in the Greater Philadelphia area pertaining to approximately 40,000 square feet of leased premises and performed an impairment analysis for these asset groups, primarily composed of right-of-use assets, leasehold improvements, and certain property and equipment. We reassessed the lease term for one of the leases in the Greater Philadelphia area and concluded we were reasonably certain to exercise our right to early terminate the lease and reduced our right-of-use asset and lease liability by $3.3 million. In connection with the 2024 Plan, we recognized $12.7 million of non-cash impairment charge during the year ended December 31, 2024, to reduce the carrying value of these long-lived assets at their fair value. The impairment charge is presented in restructuring in the accompanying Consolidated Statements of Income.
During fiscal 2024, we evaluated our plans for the Alameda leased facilities and listed certain buildings for sublease. As a result, we determined the related right-of-use assets and leasehold improvements should be evaluated for impairment as separate asset groups. We concluded that these asset groups were not recoverable and we recognized $51.7 million of non-cash impairment charge and reduced the carrying value of our right-of-use assets pertaining to approximately 215,000 square feet of leased premises, reduced the leasehold improvements and certain property and equipment, to their estimated fair value. The estimated fair value was determined using an income approach comprised of projected discounted cash flows that included certain Level 3 inputs, such as sublease income and discount rates. The assumptions associated with sublease income and discount rates are subject to risks and uncertainties and could materially differ from our estimates. The impairment charge is presented in impairment of long-lived assets in the accompanying Consolidated Statements of Income.
The balance sheet classification of our operating lease assets and liabilities were as follows (in thousands):
December 31,
 
20252024
Assets:
Right-of-use assets included in other non-current assets$159,036 $172,564 
Liabilities:
Current portion included in other current liabilities$27,882 $25,011 
Non-current portion of operating lease liabilities173,038 190,823 
Total operating lease liabilities$200,920 $215,834 
The components of operating lease costs were as follows (in thousands):
Year Ended December 31,
202520242023
Operating lease cost$23,885 $27,461 $28,976 
Variable lease cost8,016 9,276 7,068 
Total operating lease costs$31,901 $36,737 $36,044 
Lease costs for leases with initial terms less than 1 year were immaterial for the years ended December 31, 2025, 2024 and 2023, respectively.
Cash paid for operating leases which were included in net cash provided by operating activities in our Consolidated Statements of Cash Flows were as follows (in thousands):
Year Ended December 31,
202520242023
Cash paid for operating leases$25,615 $26,341 $19,559 
The lease term and discount rate for operating leases were as follows:
December 31,
 
20252024
Weighted-average remaining lease term (in years)
9.8 years10.6 years
Weighted-average discount rate5.3%5.3%
As of December 31, 2025, the maturities of our operating lease liabilities were as follows (in thousands):
Year Ended December 31,Amount
2026$28,520 
202724,301 
202825,029 
202925,777 
203026,555 
Thereafter129,030 
Total lease payments259,212 
Less:
Imputed interest(58,292)
Operating lease liabilities$200,920 
Legal Proceedings
MSN ANDA Litigation
In September 2019, we received a notice letter regarding an Abbreviated New Drug Application (ANDA) submitted to the FDA by MSN Pharmaceuticals, Inc. (individually and collectively with certain of its affiliates, including MSN Laboratories Private Limited, referred to as MSN), requesting approval to market a generic version of CABOMETYX tablets. MSN’s initial notice letter included a Paragraph IV certification with respect to our U.S. Patents No. 8,877,776, salt and polymorphic forms (the ’776 Patent), 9,724,342, formulations (the ’342 Patent), 10,034,873, methods of treatment (the ’873 Patent), and 10,039,757, methods of treatment (the ’757 Patent), which are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book, for CABOMETYX. MSN’s initial notice letter did not provide a Paragraph IV certification against U.S. Patents No. 7,579,473, composition of matter (the ’473 Patent) or 8,497,284, methods of treatment (the ’284 Patent), each of which is listed in the Orange Book. On October 29, 2019, we filed a complaint in the United States District Court for the District of Delaware (the Delaware District Court) for patent infringement against MSN asserting infringement of the ’776 Patent arising from MSN’s ANDA filing with the FDA. On November 20, 2019, MSN filed its response to the complaint, alleging that the asserted claims of the ’776 Patent are invalid and not infringed. On May 5, 2020, we received notice from MSN that it had amended its ANDA to include additional Paragraph IV certifications and to request approval to market a generic version of CABOMETYX tablets prior to expiration of the two previously unasserted ’473 and ’284 Patents. On May 11, 2020, we filed a complaint in the Delaware District Court for patent infringement against MSN asserting infringement of these patents, and on May 22, 2020, MSN filed its response, alleging that the asserted claims of these patents are invalid and not infringed. On March 23, 2021, MSN filed its First Amended Answer and Counterclaims (amending its prior filing from May 22, 2020), seeking, among other things, a declaratory judgment that U.S. Patent No. 9,809,549, salt and polymorphic forms (the ’549 Patent) is invalid and would not be infringed by MSN if its generic version of CABOMETYX tablets were approved by the FDA. This ’549 Patent is not listed in the Orange Book. On April 7, 2021, we filed our response to MSN’s First Amended Answer and Counterclaims, denying,
among other things, that the ’549 Patent is invalid or would not be infringed. The two lawsuits comprising this litigation (collectively referred to as MSN I), numbered Civil Action Nos. 19-02017 and 20-00633, were consolidated in April 2021.
A bench trial for MSN I occurred in May 2022, and on January 19, 2023, the Delaware District Court issued a ruling rejecting MSN’s invalidity challenge to the ’473 Patent. The Delaware District Court also ruled that MSN’s proposed ANDA product does not infringe the ’776 Patent. In accordance with these rulings, the Delaware District Court entered judgment that the effective date of any final FDA approval of MSN’s ANDA shall not be a date earlier than August 14, 2026, the expiration date of the ’473 Patent. Final judgment was entered on January 30, 2023. This ruling in MSN I did not impact our separate MSN II lawsuit (as defined below).
On January 11, 2022, we received notice from MSN that it had further amended its ANDA to assert additional Paragraph IV certifications. In particular, the January 11, 2022 amended ANDA requested approval to market a generic version of CABOMETYX tablets prior to expiration of three previously-unasserted CABOMETYX patents that are now listed in the Orange Book: U.S. Patents No. 11,091,439, crystalline salt forms (the ’439 Patent), 11,091,440, pharmaceutical composition (the ’440 Patent), and 11,098,015, methods of treatment (the ’015 Patent). On February 23, 2022, we filed a complaint in the Delaware District Court for patent infringement against MSN asserting infringement of the ’439, ’440, and ’015 Patents arising from MSN’s further amendment of its ANDA filing with the FDA. On February 25, 2022, MSN filed its response to the complaint, alleging that the asserted claims of the ’439, ’440, and ’015 Patents are invalid and not infringed. On June 7, 2022, we received notice from MSN that it had further amended its ANDA to assert an additional Paragraph IV certification. As currently amended, MSN’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 (the ’349 Patent). On July 18, 2022, we filed a complaint in the Delaware District Court for patent infringement against MSN asserting infringement of the ’349 Patent arising from MSN’s further amendment of its ANDA filing with the FDA. On August 9, 2022, MSN filed its response to the complaint, alleging that the asserted claims of the ’349 Patent are invalid and not infringed and amended its challenges to the ’439, ’440, and ’015 Patents to allege that these patents are not enforceable based on equitable grounds. The two lawsuits comprising this litigation (collectively referred to as MSN II), numbered Civil Action Nos. 22-00228 and 22-00945, were consolidated in October 2022 and involve Exelixis patents that are different from those asserted in the MSN I litigation described above.
On June 21, 2022, pursuant to a stipulation between us and MSN, the Delaware District Court entered an order that (i) MSN’s submission of its ANDA constitutes infringement of certain claims relating to the ’439, ’440, and ’015 Patents, if those claims are not found to be invalid, and (ii) upon approval, MSN’s commercial manufacture, use, sale or offer for sale within the U.S., and importation into the U.S., of MSN’s proposed ANDA product prior to the expiration of these patents would also infringe certain claims of each patent, if those claims are not found to be invalid. In our MSN II complaints, we sought, among other relief, an order that the effective date of any FDA approval of MSN’s ANDA would be a date no earlier than the expiration of the ’439, ’440, ’015, and ’349 Patents, the latest of which expires on February 10, 2032, and equitable relief enjoining MSN from infringing these patents. On September 28, 2023, the Delaware District Court granted the parties’ stipulation of dismissal of MSN’s equitable defenses and counterclaims. A bench trial occurred in October 2023, and on October 15, 2024, the Delaware District Court issued a ruling rejecting MSN’s invalidity challenge to each of the ’439, ’440, and ’015 Patents. The Delaware District Court also ruled that the ’349 Patent is not invalid and that MSN’s proposed ANDA product does not infringe this patent. In accordance with these rulings, the Delaware District Court entered final judgment on October 23, 2024, that, should the FDA ultimately approve MSN’s ANDA, the effective date of any such approval of MSN’s ANDA shall not be a date earlier than January 15, 2030, the expiration date of each of the ’439, ’440, and ’015 Patents, subject to our potential additional regulatory exclusivity.
On November 22, 2024, MSN noticed an appeal to the Court of Appeals for the Federal Circuit (CAFC) and we noticed a cross-appeal on November 26, 2024. On April 1, 2025, MSN filed its Opening Brief arguing that the asserted claims of the ’439, ’440, ’015, and ’349 Patents are invalid. On June 10, 2025, the CAFC granted our request to dismiss our cross-appeal. On June 11, 2025, we filed our Response Brief. On August 1, 2025, MSN filed its Reply Brief.
In February 2025, we received another notice letter from MSN regarding its ANDA, requesting FDA approval to market a generic version of CABOMETYX tablets. MSN’s notice letter included a Paragraph IV certification with respect to Orange Book-listed patent U.S. Patent No. 12,128,039, low impurity (the ’039 Patent), which expires in 2032. On March 19, 2025, we filed a complaint in the Delaware District Court for patent infringement against MSN asserting infringement of this patent arising from MSN’s further amendment of its ANDA filing with the FDA. On April 10, 2025, MSN filed its response to the complaint, alleging that the asserted claims of the ’039 Patent are invalid, unenforceable, and not infringed. On May 1, 2025, we filed our answer to MSN’s counterclaim. On August 18, 2025, pursuant to a stipulation between us and MSN, the Delaware District Court entered an order that (i) MSN’s submission of its ANDA constitutes infringement of certain claims
relating to the ’039 Patent, if those claims are not found to be invalid or unenforceable, and (ii) upon approval, MSN’s commercial manufacture, use, sale or offer for sale within the U.S., and importation into the U.S., of MSN’s proposed ANDA product prior to the expiration of the ’039 Patent would also infringe certain claims of the patent, if those claims are not found to be invalid or unenforceable. This litigation has been consolidated with the Sun and Azurity litigations for the trial scheduled for November 2, 2026 (Consolidated Litigation). For additional information on the Consolidated Litigation, see “– Legal Proceedings – Consolidated Litigation.”
Sun ANDA Litigation
On September 17, 2024, we received a notice letter regarding an ANDA submitted to the FDA by Sun Pharmaceutical Industries Ltd. (Sun), requesting approval to market a generic version of CABOMETYX tablets. Sun’s notice letter included a Paragraph IV certification with respect to the ’776 Patent, the ’342 Patent, the ’873 Patent, the ’757 Patent, the ’439 Patent, the ’440 Patent, the ’015 Patent, and the ’349 Patent, which are listed in the Orange Book, for CABOMETYX. On October 30, 2024, we filed a complaint in the Delaware District Court for patent infringement against Sun asserting infringement of the ’776, ’439, ’440, and ’015 Patents. On January 22, 2025, Sun filed its response to the complaint, alleging that the asserted claims of the patents at issue are invalid and not infringed. Sun also filed counterclaims that, inter alia, seek a declaratory judgment that Sun’s ANDA would not infringe any valid and enforceable claim of the ’776, ’439, ’440, ’015, ’342, ’873, ’757, and ’349 Patents. On March 14, 2025, we filed our answer to Sun’s counterclaims.
In February 2025, we received another notice letter from Sun regarding its ANDA, requesting FDA approval to market a generic version of CABOMETYX tablets. Sun’s notice letter included a Paragraph IV certification with respect to Orange Book-listed ’039 Patent, which expires in 2032. On April 4, 2025, we filed a complaint in the Delaware District Court for patent infringement against Sun asserting infringement of the ’039 Patent arising from Sun’s amendment of its ANDA filing with the FDA. On June 9, 2025, Sun filed its response to the complaint, alleging that the asserted claims of the ’039 Patent are invalid, unenforceable, and not infringed. On June 30, 2025, we filed our answer to Sun’s counterclaim.
These Sun litigations were consolidated in the Consolidated Litigation.
In December 2025, we entered into a settlement agreement (Sun Settlement Agreement) with Sun. In accordance with the Sun Settlement Agreement, the parties terminated all ongoing Hatch-Waxman litigation between Exelixis and Sun regarding CABOMETYX patents pending in the U.S. District Court for the District of Delaware. These Sun litigations were terminated on December 30, 2025. On December 30, 2025, in accordance with the Sun Settlement Agreement, Sun was dismissed from the Consolidated Litigation.
Azurity 505(b)(2) NDA Litigation
In March 2025, we received a notice letter regarding a 505(b)(2) New Drug Application (505(b)(2)) submitted to the FDA by Azurity Pharmaceuticals, Inc. (Azurity), requesting approval to market cabozantinib tablets. Azurity’s notice letter included a Paragraph IV certification with respect to the ’776 Patent, the ’342 Patent, the ’873 Patent, the ’757 Patent, the ’439 Patent, the ’440 Patent, the ’015 Patent, the ’349 Patent, and the ’039 Patent which are listed in the Orange Book, for CABOMETYX. On April 18, 2025, we filed a complaint in the Delaware District Court for patent infringement against Azurity asserting infringement of the ’776, ’439, ’440, ’015, ’349, and ’039 Patents. On April 24, 2025, we filed our First Amended Complaint alleging infringement of the same patents. On June 11, 2025, Azurity filed its response to the complaint, alleging that the asserted claims of the patents at issue are not infringed and/or invalid. On July 2, 2025, we filed our answer to Azurity’s counterclaims. On July 28, 2025 Azurity filed motions for judgment on the pleadings regarding the non-infringement of the ’776, ’439, ’440, ’015, ’349, and ’039 Patents. On August 25, 2025, we filed our answering briefs to Azurity’s motions for judgment on the pleadings. On September 15, 2025, Azurity filed its reply briefs. This Azurity litigation was consolidated in the Consolidated Litigation.
Consolidated Litigation
On August 8, 2025, the Delaware District Court ordered that the then-pending abovementioned MSN, Sun, and Azurity district court litigations be consolidated with the trial scheduled for November 2, 2026. On December 30, 2025, in accordance with the Sun Settlement Agreement, Sun was dismissed from the Consolidated Litigation.
Other
In November 2025, we received a notice letter regarding a 505(b)(2) New Drug Application submitted to the FDA by Handa Oncology, LLC (Handa), requesting approval to market cabozantinib capsules (in the form of cabozantinib lauryl sulfate). Handa’s notice letter included a Paragraph IV certification with respect to the ’776 Patent, the ’342 Patent, the ’873 Patent, the ’757 Patent, the ’439 Patent, the ’440 Patent, the ’015 Patent, the ’349 Patent, and the ’039 Patent which are listed in the Orange Book, for CABOMETYX. Handa’s notice letter also included a Paragraph III certification with respect to the ’473 patent. The company continues to evaluate all legal and strategic options with respect to Handa’s product.
The sale of any cabozantinib products, including tablets and/or capsules, besides CABOMETYX significantly earlier than CABOMETYX’s patent expiration could decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations. It is not possible at this time to determine the likelihood of an unfavorable outcome or estimate of the amount or range of any potential loss.
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