Great. Thank you. Welcome back to the Citizens JMP Healthcare Conference. My name is Silvan T uerkcan, and I'm a senior analyst covering precision medicines. It's my pleasure to host Andrew Peters, Senior Vice President of Strategy of Exelixis. Thanks for being with us. Yeah, thanks for having me. Great. Obviously, I'll jump straight in, talking about the cabozantinib and zanzalintinib IP decision. You know, it's around the corner here. Can you please outline maybe the two principal scenarios that could come from the decision and, you know, the impact on exclusivity, sales, and maybe how you would think about asset allocation in one case versus another? Yeah, so happy to get into that and looking forward to the discussion of our business. Just as a reminder, before I get started, we're going to be making some forward-looking statements today, so please see the requisite filings for risks and uncertainties in our business. So, I guess as everyone or as most people are aware, we've guided towards a decision in the first half of the year, in the spring from what we call MSN2. So for those either on the webcast or in the audience, a little bit of background. So we've had an ongoing court case with, you know, an Indian generics company, MSN Pharma, you know, going on, I would say, four years now, split between MSN1, where the trial occurred in 2022, and MSN2, trial in 2023. So MSN2, kind of a different set of patents at issue. Trial was in October. Certainly happy with how that played out, a lot of the evidence and kind of discussion at trial that came out, and then we've guided for a decision first half of the year, you know, in the spring. And so we always get asked, you know, what does spring mean? Is it California spring? Is it East Coast spring? It's spring is spring. And so, you know, the important thing from our perspective, and one of the things that Mike talked about on the last earnings call, is we're really looking forward to clarity on this decision. So what clarity on the ANDA provides is really clarity and certainty to help us understand where we're going, and what we can do from a growing the business perspective, focusing on bringing more medicines to more patients to help them live longer, better lives. Ultimately, that's why we're here. So, you know, we're focused on execution every day, looking forward to, you know, bringing not only Cabo forward and NETs and prostate, but also, you know, continuing to develop things like Zanza and XB002 and the rest of our portfolio. So, I guess the kind of buzzword of the day, as we think about the ANDA, is really kind of that clarity and that certainty on the decision. Great. And maybe in terms of, like, maybe top line, when would exclusivity end in one case versus the other? Like, what do we know the dates or is that still nebulous? Yeah, so, I mean, there's obviously a lot of nuance to all of this. But, you know, from the most simplistic perspective, core composition of matter is in 2026. And then, on the other end of it, 2031 is when we've agreed on a settlement date with Teva. Great. So those are kind of the bookends of how we think about it. But, you know, obviously don't want to get into all of the different scenarios that can occur regardless of the outcome. But, you know, let's just say it's something that we spend a lot of time on, obviously. Yeah. And, in terms of asset allocation, if, let's say, again, simplistically, if one case were to come out versus another, what would that do to your, let's say, you know, the focus of asset allocation in the near term? Would you shift away from Cabo sales in the case of a loss and focus more on the pipeline? Or is that actually more or less static in either way? Yeah, again, don't want to get into specific scenarios on, you know, asset allocation or how we're thinking about, any of the outcomes. But I think really kind of the focus for us is it allows us to be much more certain about how we move forward from a strategic perspective. Capital allocation, certainly a component of that. You know, one of the things that Mike talked a lot about in, you know, I focus a pretty good chunk of my time is kind of that external innovation component, understanding what are the opportunities externally that we can look at to really complement our existing portfolio, really focus on that kind of mid to late stage asset that we can really use our, you know, clinical development capability, commercial capability to, you know, really bring value and supercharge an asset. Great. And obviously, Mike stated several times that he was very confident in the IP position. And as far as I understand, there was litigation once in Europe. Obviously, it's not the same patents, but, you know, it's so sort of a similar subject. What makes you very confident or confident in your patent? Yeah, I mean, certainly the European experience is one that we've pointed to in the past. But again, I'd point you back towards a lot of the evidence that came out at trial. You know, all of it's public. You can go to the docket and kind of read the briefs back and forth and really understand kind of our perspective on the, you know, on Cabo and all of the different aspects at issue. You know, I think we'll take up all of the time if I start checking through each one of those. But I think if you look at the kind of totality of data and evidence that came out at trial, you know, certainly I think we feel very confident about our intellectual property position. Again, what we're looking for is kind of more certainty than anything. Great. Would there be any follow-on proceeding, at least with MSN at this point, or this is the definite last decision that we'll get? Yeah, again, don't want to speculate on kind of future scenarios. You know, it's obviously I don't want to sound like a broken record, but it's a given the ongoing litigation, a little bit difficult to kind of get into a lot of that. Don't want to, don't want to speculate right now. Great. Maybe talking about where we are with the cabozantinib in the lifecycle. Q1 earnings were a bit lighter than consensus, but you obviously reaffirmed guidance. Can you please talk about, you know, where we are in the lifecycle with the franchise and with approved indications, you know, focusing maybe about the improved indications, and where do you think volume and price is moving with what we have today? Yeah, so a lot going on with those questions, I guess. So, you know, I think the first-quarter dynamics and the seasonality certainly weren't surprising. One of the things that Chris and P.J. talked about on the earnings call is it's really something that we've seen every year. And, you know, Exelixis, virtually every other small molecule oncology company sees that same kind of first-quarter seasonality as it relates to higher gross-to-net inventory build in fourth quarter that burns off. You know, kind of the key things for me, when we think about the business, is really underlying demand continues to stay strong. As you mentioned, we reiterated guidance. On that point, you know, when we first gave guidance at, at JP Morgan or, you know, in the beginning of this year, one of the things we talked about is on average, most oncology products, tend to hit steady state in an indication or after around 5-7 quarters or so. We're now, you know, 12+ quarters into Cabo/Nivo and the, the 9ER launch. And unsurprisingly, we're starting to see a maturation of the market. You know, obviously still the number one IO/TKI in RCC, still the number one TKI, monotherapy in RCC. But really kind of, you know, statement of the obvious in oncology, growth comes from new indications. And so our guidance reflects, you know, a maturation of the RCC market in 2024. But we're really excited about, and as P.J. talked about on our last earnings call, is the launch of a potential launch of Cabo in NETs and then in, post-NHT castrate-resistant prostate cancer. So that's really kind of where the growth comes forward. You know, as I mentioned, oncology is really about building and layering on those indications. And that's why we've invested in continue to invest in Cabo. And then importantly, as we think about Zanza, it's about that breadth of development. You know, when we talk about not just one trial, but two, three, four, and, and, and many others. And so from a Cabo dynamics perspective, obviously there's, you know, IRA implications around the, the price increases that we're able to take. Obviously, there's seasonality, coming into play in Q1, but, you know, we expect that to play out, and normalize in the rest of the year as we reiterate our guidance. Then, you know, demand from new indications is really why we're focused so much on execution, on the regulatory side in Amy's group and then, passing the baton, so to speak, onto P.J. and kind of, the commercial team. Great. Y ou already talked about it, the new indications that could be exciting. Prostate cancer, obviously very large, and NETs where you had very strong data. Could you maybe just put, you know, the potential for these indications in terms of, you know, in contrast to existing sales, like how big do you view them? Yeah, so we haven't given specific sales guidance on either of the indications. But again, on the last call, P.J. talked about really the unmet need in both populations. So I guess first starting with NETs, you know, kind of in that second-line plus opportunity, there's around 8,000 patients across all of the different subtypes of neuroendocrine tumors. And again, that's really kind of an unmet and underserved population. You know, existing standards of care, things like everolimus and Sutent. You know, certainly if you kind of look across other indications and our experience with RCC, you know, the ability for physicians who are kind of understanding, comfortable, knowing the profiles of those relative, you know, TKIs, certainly something that I think there's that inherent familiarity with. And then on the prostate side, you know, again, P.J. talked about, I think it's about 26,000 or so, post-NHT second-line plus, patients. And so again, you know, it's a real unmet need. I think, you know, one of the things that we talk a lot about and we get a lot of feedback from, you know, patient advocacy groups in particular is really around the differences between the CONTACT-02 population and some of the other contemporary trials, you know, PSMAfore, etc., looking at patients with baseline visceral mets, you know, a high unmet need, high tumor burden. These are patients who really are in need of a new option. And so, when we talk about kind of those particular high-risk subgroups, you know, patients with liver mets, patients on prior dose of Taxol, all of those things that we outlined at ASCO-GU, those are the things that really jump out, to a lot of KOLs, in patient groups, as I mentioned. And so that's really kind of, you know, our focus is CONTACT-02 versus other studies, I think really jumps out, when you look at kind of the key differences there. You know, we obviously get a lot of questions on second NHT as an endpoint or, you know, how do we compare to PSMAfore? You know, one of the things that kind of jumps out is the second NHT thing is more of an almost manufactured, quasi-manufactured debate because, again, virtually all contemporary studies in that space use second NHT as a comparator. You know, it jumped out to me that the discussant in ASCO-GU is actually an investigator on SPLASH, which uses second NHT as a comparator and yet, you know, had questions on CONTACT-02. And then, you know, PSMAfore radiotherapy versus an IO containing TKI, one of the things that's really jumped out to us is the CONTACT-02 combination really gives patients and physicians an opportunity to bring a checkpoint inhibitor into the prostate space, where they haven't had an opportunity before. And so that's certainly something that I think's differentiating and exciting as well. Yeah, great. No, no, I think there's from the patient base, there's, you know, high interest in IO, at least that's what we get on our channel checks here. But maybe have you done some work about thinking about, you know, obviously it's early days since pre-approval, but your trial, as you outlined, it was so broad, so many different types of patients and prostate that you have enrolled here. But would there be an angle of how would you imagine launching it in different kind of indications or settings, or was this too early at this point? Yeah, I guess a little bit of that obviously is going to be dependent on the label that we ultimately get as we start to have, and continue to have, discussions with regulators. You know, all of those questions around patient subgroups and, you know, who ultimately is going to lean towards, you know, radiotherapy versus IO TKI, all of that kind of still TBD. But one of the things that, you know, continues to jump out when we do, you know, market research and checks with patients and KOLs is really that difference in the patient population that we studied versus others. And it's something that, you know, when we set out to design CONTACT-02, we wanted to ask the most fundamental question is, can Cabo plus an IO checkpoint have real responses in patients? Obviously, our experience in prostate, going back to the COMET studies, you know, prostate's in a little bit of a different indication in that, you know, there are patients who just have bone-predominant disease and it's much more difficult to tease out really a true effect on tumor reduction and things like that. And so we designed CONTACT-02 to really be the most kind of straightforward experiment to run is, can Cabo have an effect in prostate cancer patients? And based on the robustness of the primary endpoint and the PFS data, and then a lot of the, you know, additional endpoints that we've seen on, you know, it I think the answer is certainly yes. You know, the question that we get a lot then is, you know, where do we go next? You know, are there other studies that we can run? And I think, you know, again, when I'm sure we'll talk about it in a bit, but we think about kind of the evolution of TKIs over time where the first-gen TKIs and then Cabo kind of built upon and improved upon some of the deficiencies with those. And then Zanza, again, as a third-gen TKI, improves upon, you know, the profile of Zanza. And so a question that, that we ask and, you know, we're continuing to work through is, you know, how does Zanza potentially play a role in prostate going forward and what are the areas of unmet need? And, you know, how does that new differentiated profile potentially fit in to additional combinations, things like that? Yeah, no, good, good point. And, and I'd like to move on, I think, to your pipeline because you've built a very large pipeline and a very large R&D organization for a company that, you know, for your market cap and what I find very intriguing. And you have critical mass across several indications as well as technologies that you brought in. It's just how what's the general strategy of Exelixis with respect to the pipeline and the modalities? Yeah, so I, I guess I'd point you towards kind of 2 things that, you know, when I when I think about our business, really frame it. Our bookended by 1, the R&D Day that we held in December, and then 2, a lot of the priorities that we announced at JP Morgan this year. So first, from an R&D Day perspective, I think it was the first one that we had had, since 2013 or so. It really allowed us to essentially frame, these are the areas of science that we care about. These are the indications that we care about and really kind of define what those sandboxes are that, that, that we're playing in. GI, GU, thoracic kind of lung oncology on the indication side. And then, between small molecules and biotherapeutics, an emphasis and focus on synthetic lethality on the small molecule side, obviously besides kind of the Zanza program. And then, on the biotherapeutic side, either monospecific or bispecific, antibodies as well as ADCs. And so those are kind of the big picture scientific strategy areas that we're focused on. The second part is at JP Morgan this year when we kind of outlined our business priorities, one of the things that I like to remind people is, you know, one of the things that's different about Exelixis is we run the company like a business and not really like a biotech. And so we're always kind of keeping in mind, you know, capital allocations, strategic priorities, cost efficiencies. And so we announced a RIF, a little bit of a rebalancing between kind of the discovery side into more of the clinical focus. And then a second buyback bringing kind of the two-year total to about $1 billion, in funding this year's buyback out of kind of free cash flow. You know, we think our profitability is a strategic and tactical asset. We want to continue that. So those are kind of the bookends to how we think about the world. And then the last thing I'll say is, you know, the phrasing that we use a lot internally and we use a lot externally when I talk to potential partners as well as what Mike talked about at the R&D Day is Exelixis really is a big small company. What we mean by that is we've now grown to the scale that we can execute in our particular verticals on par with big pharma. So we've run about 17 pivotal studies with Cabo, and shows kind of the scale and heft of our development organization. Our discovery organization has now grown to the spot where, you know, we've guided for around six or so INDs over the next couple of years. And so we're efficient from a kind of new differentiated molecule generation perspective. We're certainly capable from a discovery development and clinical execution perspective. And then commercially, obviously, we've been able to compete quite successfully with big pharma on that side. And so what all of that together means is that we've now grown the company to an organization where we have the ability to really create value through the development of things like Zanza, through the ability to launch in NETs and prostate with Cabo, and then bring those INDs into the development organization and kind of start to generate data, which again is going to drive value. And then the last thing I'd add is, you know, from the external innovation side, the BD side, we have the ability then to bring in assets externally that, one, we can, you know, move forward with as fast or faster than our pharma peers, but really do it in a way that, you know, frankly, matter a lot more to us because every program that we bring in is, you know, central and kind of front and center in our portfolio. And we don't really have that risk of programs getting lost in a big pharma bureaucracy sort of thing. And so all of those things together is really how we think about the business in general, how we think about portfolio strategy, all of that. So hopefully that answers your question. No, that's super helpful. Maybe talking about Zanza, and I don't want to go on. You know, you have a very comprehensive, late-stage program already ongoing, but maybe just the bigger picture here. Can you maybe outline the several indications that you have and in terms of like the risk, right? So a lot of it is built upon, obviously, data that you have seen, but also data that you've generated with Cabo. So how would you rank, you know, the risk and probability of success of these different Zanza programs and where do you see kind of Zanza being focused? Yeah, so I'll guess I'll lump Zanza just in the last few minutes here kind of in two buckets. So there's the what I'd call somewhat low-hanging fruit, 303, 304, 305. Those are the three studies that we've initiated already. And then kind of going forward, you know, what we're looking for to do additionally with Zanza. On the latter part, what Mike's talked about is one of the biggest lessons we learned from Cabo and, you know, the Cabo lens influences everything that we've done. And we do at Exelixis is understanding the power of finding clinical collaborators. And so if you look back and think about the 9ER study that we ran with Bristol, they paid half of that study and our partners Ipsen and Takeda paid half and half of our half. And so you think about it, we essentially paid $0.25 on the dollar for a study that more than doubled revenue in the frontline RCC launch. So the ability to have a more user-friendly, differentiated TKI with like Zanza, that plays well with IO agents, we're certainly enthusiastic and excited about those sorts of opportunities to find collaboration partners going forward. And, you know, some things Mike has talked about, so kind of stay tuned there. Around 303, 304, 305, certainly we let our experience with Cabo inform our excitement and, you know, design and, you know, PTRSs of those studies. But also, candidly, I think we look at the experiences of other IO TKIs as well. And so specifically, I can point to, say, the 303 study in third-line plus colorectal cancer. We announced an amendment to 303 after the data from LEAP-017 that the LEN-PEM study had read out. And what we were able to do is really tease out and understand kind of what went right with that trial and what didn't go right and apply that to kind of the zanzalintinib and say, okay, you know, how does the liver met versus non-liver met population specifically in colorectal cancer, differentiate? How does discontinuations, tolerability, tox AEs play into how that data ultimately looked? Those are the things that we can kind of compare and contrast, say, the lenvatinib profile versus the zanzalintinib profile and kind of generate our excitement where, if you kind of compare lenvatinib versus cabozantinib, cabozantinib versus zanzalintinib, you know, based on the, the RCC data and IKCS, certainly efficacy looks is as good, if not better. But on the tolerability side, both the frequency and severity of AEs is something that really jumps out to us as kind of validating of that mechanism of the shorter half-life of Zanza. And then the last thing I'll point to is, you know, we're continuing to generate data internally on, you know, why are we seeing that? And I know we're up on time here, but one of the things that Dana talked about on the last quarter is kind of the differential tissue distribution of Zanza versus Cabo and, you know, peripheral versus tissue tumor. Those are sorts of things that, that we're continuing to tease out but make us excited about Zanza going forward. Great. Well, thank you, Andrew. Thanks for all of your answers. It was very helpful and it was a pleasure to host you. Yep, thank you. Thanks.