Welcome to the Fireside Chat with Exelixis. With us today, we have Mike Morrissey, CEO. Mike, welcome. Thanks for joining us. Michael, good to see you. Great glasses! Thank you. Very dapper there. Thank you. Appreciate it. So, yeah, for those who don't know, I'm Michael Schmidt, biotech analyst with Guggenheim, and we'll just jump right into Q&A, Mike. Perhaps starting just with a quick commercial question, you recently guided to 2024 revenue, $1.65 billion-$1.75 billion Cabo sales for this year, which implies a slowdown from the prior year. Just, you know, remind folks again, sort of how, you know, what are you seeing in the market for Cabo at this point in time, and talk about different dynamics as you generate that guidance? Yeah, for sure. Well, morning, morning, everybody. Great to be here. Thanks again for the invite, Michael. Always a, always an honor to, and fun to chat, right? Especially so close to earnings, where we gave you the first question this, this time, too, in, in the pole position. Thanks. Thanks. Yeah, yeah. Before I begin, I'll be making forward-looking statements today, so please see our SEC filings for a description of the risks that we face in our business. So let's talk about start of the year. Yeah, it's been a busy, busy year so far. We had guidance for J.P. Morgan. You know, certainly, you know, three, going into year four after the nine-year launch, you would expect to see a bit of a slowdown in growth. Not too surprising. We've doubled revenues since launching in 2021. So obviously, you know, Cabo's got the, its own pole position as the number one TKI for RCC, both number one in terms of the IO TKI segment and number one in second line monotherapy. So we're real proud of that. Obviously, it's a, it's an important drug for a lot of patients globally. We did about $2.3 billion in global sales in 2023 between us and our partners, ex-US. So, important franchise for VEGFR targeting TKIs, number one, number one in terms of global sales there. So, we think we have room to grow. Obviously, new indications coming online, end of this year, early next year, that we're really excited about with both, NET, which we think is a bit of a sleeper indication, but could have a pretty significant upside, doing a lot of market research there right now. And then the, prostate cancer space, which we had, had our data at, at ASCO GU. Talked about it a lot, on the call a couple days ago. We're really proud of that trial, proud of that data, and certainly spend some time talking about that today. But, yeah, 2024 is a transition year in terms of revenue growth, and we would expect to see growth pick up again in 2025 and beyond. Great. You know, I have to ask one question about the ANDA litigation. I understand that, you know, generally, I think post-trial settlements are less common, as I understand it, in the industry in general. Can you comment if, you know, if that is something that is still, you know, on the table at this point, or are we just waiting for the judge's decision at this point in time? Yeah, you know, I would say everything is always on the table until, you know, like a statement of the obvious, until it's not. You know, we've always taken a, you know, I would say a broad kind of corporate view that we like talking to people, and we have a lot of important dialogues across, literally every component of the business. And this is certainly one of them, where we would consider options that make sense for, you know, the patients that we serve, for shareholders, for the momentum we have in the business. You know, we had a very strong, I think, showing at the second ANDA trial in October. I'm not going to get into the details of that. It's just we're just too close to a ruling. We expect the briefing process to end in the next few weeks. Talked about that on the call a couple days ago. So, yeah, we'll see. Look, strong data, strong patents. I think the team, the combination of the, you know, kind of the full force of Exelixis, coupled with our, our, our outside law firm, did just a phenomenal job. The experts did a great job. I think we've got a real strong case, and, you know, it's, it's vectoring towards a ruling, in the first half of the year. As we talked about, on the call, this is a very, very important, single milestone for the company. It could, it could really mark an inflection point for the business and for the franchise, this year. So excited about that and the momentum it brings, for sure. Sounds good. Then maybe switching over to some of the, you know, pipeline, and you mentioned the CONTACT-02 study, the prostate cancer data that was at ASCO GU recently, which obviously hit the PFS endpoint, and it showed a trend, a positive trend in at the first interim analysis for OS. Yeah, maybe just remind us of what gives you confidence in both sort of regulatory alignment at this point, as well as the sort of market potential based on the data in prostate cancer? Yeah, you know, it's really great result for a patient with prostate cancer. I thought, I thought Amy, Amy Peterson, our new CMO, did a great job on the call a couple of days ago, really putting a stake in the ground and providing, I would say, our narrative, which is, maybe counter to all the, all the noise from ASCO GU around, you know, looking at cross-trial comparisons and, you know, comparator arms and all those kinds of things that, in some ways were somewhat, I won't say unequally biased, but or unequally discussed, but I think a lot of the nuances from the trial, were, drowned out by some of the, some of the drumbeats around, you know, some of the really simple concepts around, you know, using a second NHT as a control arm, you know, PFS, plus minus OS, those kinds of things. The population differences between CONTACT-02 and some of the recent trials, say, with radioligand therapy, some of the broader historical first- and second-line prostate cancer trials. So, we're really excited about the data. Again, I'll just reiterate some of the highlights. It's probably the poorest prognosis population that's been studied to date. Again, 100% of the patients had measurable disease by RECIST 1.1. That's a rarity, never, to our knowledge, been done before in a metastatic CRPC trial. So, 100% measurable disease, you would normally see, you know, 25%, 30%, 35%. Visceral disease incidence in our population was 40+%. You normally see that in the mid- to high teens. Liver mets, you know, we were close to 25% of the population. Some of the more contemporaneous studies, say, with PSMAfore, had about 5%. So, it's a very, very, you know, late line, poor prognosis population. And that's reflected not only in the, you know, PFS of the control arm, but really needs to be put into context with all the caveats of some of the other recent trials that come out. So, you know, I was really pleased and this completely missed, I think, by a lot of people. But if you look at the liver met population with CONTACT-02, right, in terms of PFS, a hazard ratio of 0.43, you look at that same population in PSMAfore, the hazard ratio is 0.42. So similar activity with all the caveats of cross trial comparisons, blah, blah, blah, but it really reinforces the idea that this is a very active combination, certainly active positive study. So very pleased with the outcome in terms of the PFS win. Again, the survival, the interim survival OS at an information fraction of above 50% was 0.79. And that, I think, is important to look at relative to... We saw a positive trend in a survival signal, early days, but hopeful on that, and we're going to push it forward. So, so we have a lot of confidence in the data. I think the, I think, Neeraj Agarwal, the, the PI for the study, did a great job talking about, you know, how other options are required, for this population. Most men with prostate cancer really don't want to get chemotherapy. There's, there's data, real-world data from literally thousands and thousands of patients to support that. That if you look at some of the, some of the, you know, quantitative data, only about 15% of men with prostate cancer actually choose to get chemotherapy. The vast majority, after progressing on a first NHT, will try a second NHT to delay the potential employment of chemotherapy. So we feel good about the data. We have a lot of support from KOLs and from advocacy groups, and our job is to push that filing forward as quickly as possible. Obviously, taking into account all the discussions we're having with regulators, and that coupled with the CABINET data, we're really excited about having two potential new filings this year that can drive commercial growth in 2025 and beyond. Right. Will you have another OS interim analysis before submission, or will you submit based on the data that is in hand? Yeah, I would say that's really TBD right now. Wouldn't want to commit to that either way. Obviously, we're looking at a lot of data, understand the different nuances there. So, we will make the best decision based upon how that data evolves and feedback from the regulators. So, as I said before, the question really isn't if, the question is when we file. Right. Yeah. Okay. And then, yeah, on CABINET, you mentioned the NET opportunity. Just, you know, could you frame the size of that opportunity and perhaps relative to the somatostatin analogs that are out there for NET? Yeah. So the opportunity, I mean, it's a very... In terms of its prevalence pool, it's a very, very large population. It's a relatively indolent disease. If you look at numbers vary in the US, I've seen numbers in terms of the prevalence pool as high as a couple hundred thousand patients who are currently living with met disease in the US. In terms of patients that need drugs because their disease is actively progressing, even slowly progressing, but still progressing, that's probably around 40,000-50,000 patients. If you look at the population that we studied in the CABINET with both pancreatic and extrapancreatic NETs, it's probably drug-eligible population is probably around, you know, 8,000-9,000 patients. So it's a sizable population. These patients live a long time. Their therapeutic options are basically frontline somatostatin analogs that are not radioactive. That's kind of standard course. Get those drugs first. Those are all agonists, which basically turn on the receptor in a superagonist sense, kind of slow things down. That way, those are very effective. Many of those are generic now relative to the U.S. market. Then beyond that, you've got a variety of targeted therapies, chemotherapies, and recently, some of the radioligand therapies that are coming out. As you saw at ASCO GI, the NETTER-2 study was published with Lutathera, showing very effective PFS gains in the frontline setting on top of the SSTR compounds. So the question really is, what happens in the second later lines if that gets traction, in the frontline setting, right?...So if you look at Lutathera, I think a good benchmark, and we're doing a lot of market research right now. If you look at Lutathera in the second-line setting, in the U.S., that's doing about $400 million a year. So I think that's a pretty good surrogate for what the market looks like. Again, four doses, only, in that regimen. So, so you can imagine a Cabo therapy, could, you know, play in that space pretty well. Yeah. Okay, great. Then, you know, switching over perhaps to zanzalintinib, your most advanced pipeline program at this point, where, you know, we've seen data recently from STELLAR-301. And, yeah, how did the clinical profile match up to your initial expectations relative to Cabo? Yeah. What do you think? Yeah, looks pretty good, right? Yeah. Yeah. So they talked about this at the IKCS presentation that Monty Pal made. Then he joined us for our R&D day in December and gave a similar presentation. Certainly, a very active molecule, late-line population. We're seeing about a 40% response rate across a third-line plus population. I think notably, we're seeing responses in Cabo refractory patients, which is actually pretty interesting. So we're able to salvage a handful of patients that had seen Cabo and progressed. In the patients that were both IO experienced as well as TKI experienced, we're seeing a very high response rate in the 50-60% range. So overall, I think it's very, very encouraging. The tolerability is a real, I think, encouraging part of the story as well. As we all know, you know, TKIs, in general, that target VEGFR and that spectrum of our TKIs can have longer-term chronic effects. And we've seen, as we played and modulated the half-life of the molecule, we, you know, are seeing some, I think, pretty encouraging signs of better tolerability, which I think Monty did a good job of really highlighting at both IKCS and then at our R&D day. So we're, you know, full steam ahead there. We've got three pivotal trials ongoing in third-line CRC, front-line non-clear cell RCC, and then we just started a first-line head and neck in combination with Pembro, based on some Cabo Pembro data that looks pretty encouraging. And it's, we're off to the races, but certainly very excited about what we're seeing in terms of the STELLAR early programs, in terms of single agent activity, combination activity with checkpoints, both as doublets and triplets as well. And as that, as that data matures, we'll be very excited to talk about that later in the you know, later this year or early next year, whatever, whenever that data's mature. Right. Yeah, that's my next question. Do we have a sense of when the first phase III trials will read out, and which of the three studies is most advanced at this point, or will read out first? Yeah, hard to say. We're still enrolling. We should have the third-line CRC trial fully enrolled this year. We're just really wrapping up the non-liver met population, and we'll be doing that over the next several months. We have great traction with the non-clear cell RCC as well. That's really picked up steam as well, and that's, you know, I would say that's probably the highest probability of success trial relative to what we've seen to date with Cabo and RCC, and we're just starting to, you know, activate countries and sites and enrolling in 305. Right. Then, and I asked about head and neck on an earnings call, but, understanding that there's been some other attempts with other TKIs, like the LEAP-010 study that did not succeed, and obviously, a very, interesting, data with Cabo and, and checkpoints in, in head and neck. But, you know, do we know whether these TKIs have single-agent activity in, in head and neck cancer as opposed to in the combination? Yeah, I'm not sure. I'm, it's a good question. I don't wanna, I don't wanna misspeak here. I don't know if what we've seen with Cabo per se, from a competitive point of view, hard to say what's been seen with Len, et cetera. Certainly, the activity that we've seen in that IST, 50+% response rates, I think, compares pretty well with what you see with single-agent Pembro alone, which is in the, you know, high teens. So, obviously, have some more work to do there. In this case, we're doing, you know, a very simple trial, you know, Zanza, Pem versus Pem. So contribution of components is pretty clear as that reads out relative to the, you know, primary analysis, right? I would say there's a lot of... It's, it's been really interesting to watch the, the attempted expansion around, you know, I would say TKI checkpoint combinations across what we've done, what has been done with, say, Lenvatinib, other, other TKIs in the space. I, I think what's, what's really interesting to watch the phase 2 to phase, phase 1B, if you will, to phase 3, progression, is really the importance of tolerability in driving, potentially a PFS benefit into a survival benefit, right? You can keep- if you keep patients on long enough to, you know, delay their progression, but they have adverse events in that timeframe or afterwards, which then complicates the longer-term follow-up for survival, you're often just comparing checkpoint to checkpoint, right? Right. So, it's a very, very, very important consideration for long-term chronic tolerability, which was the mindset in taking Cabo and making some very important chemical modifications to really make the half-life more user-friendly, which then turned out, at least based on early data, to giving us potentially better tolerability. So we're really excited about what we're, you know, opportunities for colon cancer, for head and neck. Obviously, renal is a, you know, in our sweet spot, and then a variety of other tumor types that we can pursue in combination with checkpoints and other therapies as we go forward. Right. Okay, then maybe switching gears over to XB002, your ADC. Yeah, can you just help us understand where you are at this point in sort of the clinical development trajectory, and you know, update us on perhaps the expectations for data updates this year? Yeah, sure. So, 002 is a tissue factor-targeting ADC. A very interesting molecule. We talked about it a lot in the past. Certainly, a very interesting target in terms of an address that is widely expressed in a variety of different tumor types and effectively masked in the, you know, in the normal tissue, based upon its, you know, kind of the role it plays in driving coagulation, based on, you know, real tissue injury per se. So, had the molecule for a couple of years now. We've defined some doses, and we're really in the signal searching phase now across our expansion cohorts, looking at, you know, 11 different tumor expansion cohorts. This is where the action is at, right? This is where we define the activity of the molecule, the potential of the molecule. Doing that in a heavily, heavily pretreated phase I population, kinda all comers, is really, really tough, especially in 2024 versus, say, 2014, where, you know, most patients are heavily, heavily, heavily pretreated with every molecule, every checkpoint imaginable. So, so you know, asking the question in a scientifically more rigorous fashion in terms of discrete tumor types, in this case, 10 plus a tissue-agnostic one, looking at tissue factor expression, coupled with what we think are, you know, the right tumor types with patients who are kind of fit into the early phase of their disease, makes a lot of sense. So, so we're, we're actively enrolling. We've got a global network of sites up. I'm really pleased with performance relative to screening and enrollment and generating data. So goal is to find a signal and talk about that when we have mature data. So hard to give you definitive guidance on that. Again, we're not, you know, we're not a typical biotech that, you know, looking to raise money next week, so we don't have the, I would say, the external pressure to, you know, put out, you know, pick a number, 10 patients worth of data, and then, you know, call the bankers. We're gonna do this right. We're gonna have a story to tell at the end of the day. I thought what we did with Zanza, with STELLAR, is the right way to go. You have a mature data set, you have a story to tell, you talk about the potential based upon that data, and we'll do the same thing here. So I know there's lots of interest in the molecule. We have that as well, you know. I see more data than you guys, and I'm excited about that. And, when we have a full story with activity across cohorts, we'll be very, very excited to share that with the community. Right. You know, cervical cancer is obviously, you know, clinically and commercially validated at this point for tissue factor ADCs. Which of the 10 other opportunities do you think are most exciting or most interesting, perhaps based on the mechanism? Well, they all have to have the potential to be very exciting. The question is, do we generate data that confirms that? So, I mean, they're in the mix for a reason, based upon all the obvious biological considerations that we look at very carefully in terms of target expression, sensitivity to the warhead that we've got, et cetera. But, I mean, that's all theoretical to a certain degree, right? The proof's in the pudding, and we need to generate data to be able to then prioritize what would then be the highest priorities. Cervical is very interesting. You're right with Tivdak, there's a high degree of validation. We're looking to go well beyond that, both in monotherapy and combination opportunities, and that's the goal. So which is why we're looking broad and deep across those 10, and we've got, you know, other, other combinations coming up as well, with XB002, which are, I think, pretty exciting. So, so look at it as a full program, and as we get mature data, we'll be happy to talk about it. Sounds good. And then how do you plan on positioning your second tissue factor ADC relative to XB002? Again, that's, it's a really, really interesting molecule. That's XB371, same binder, if you will, in terms of the non-competitive tissue factor binding antibody, so a different epitope than what is used by Tivdak completely, with a topotecan-based warhead. So the whole idea here is that you've got a broader opportunity therapeutically, hypothetically, because you've got the same binder, which is great if you believe in that target, and then you can tailor-make your warhead to fit the sensitivity of the tumor type that you want to go after. And there's some overlap, and there's some distinction between XB002. So that molecule is moving into GLP tox. Dana Aftab talked a lot about that at our R&D Day in December. We're really excited about moving that forward and having basically two shots on goal here relative to tumor types that are either outside of the sensitivity of a typical auristatin-type molecule, or where you might see, you know, either combinable activity or good sensitivities to both. Right. Again, data will drive that process forward, but to have two shots here, I think is a really important way to go. Right. Then I know you have a range of other molecules that are, you know, following behind in clinical development, small molecules and other product candidates. But perhaps just a high-level question now, in context, you know, of your balance sheet strength, obviously, and increased investment in R&D, but then you did do the restructuring as well. You know, how do you balance at this point, internal investment into R&D and business development activities? So yeah, I mean, that's certainly something that, you know, we, you know, Chris, Andrew, I, others, I think executive team talk about literally on an hourly basis. The opportunity to frame our success in December, right, at R&D Day, and then talk about the business, the enterprise, and how we're pulling different levers and kind of evolving the company based upon that success was a great-- It was just a great kinda one-two punch in terms of how we're, how we're moving forward in a very thoughtful, pragmatic sort of way. So bottom line from R&D Day, and for those of you that didn't get a chance to either join us or see it live, as you know, we have it online still, and if you have a couple of hours to spend, it's really, I think, a great introduction into how we do discovery and development at Exelixis, in a full court press and with the depth and scope of a big company, but with a small company mindset. You know, we really have a very full R&D pipeline right now, which is great. So we're able to move money down to later-stage development. We're certainly looking for external late-stage opportunities. Our BD has been focused primarily on, in the past few years, on platform plays as well as early-stage molecules. So that's changed now. We've got a very full pipeline, early stage and mid stage. If we can find late-stage assets, that makes sense, that we have conviction in, then we can certainly transact it because we have the balance sheet, and the depth funding, both commercially and financially, to do that. Well, thanks, Mike. I think with that, we'll wrap up. Okay. I really appreciate you being here. You bet. Thank you. Good to see you again. Thanks. Yeah.