Q3 2021 Exelixis Inc Earnings Call

Good day, ladies and gentlemen, and welcome to the X Alex's third quarter 2021 financial results conference call.

Operator: I would now like to turn the call over to your host for today, Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please proceed. Thank you, Jeff, and thank you all for joining us for the Ex-Elexis third quarter 2021 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our president,

My name is Jeff and I'll be your operator for today.

As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to your host for today Ms. Susan Hubbard Executive Vice President of Public Affairs and Investor Relations. Please proceed.

Susan T. Hubbard: President and CEO, Chris Center, our chief financial officer

Susan T. Hubbard: PJ Haley, our Executive Vice President of Commercial, and Peter Lamb, our chief scientific officer, who will together review our progress for the third quarter of 2021, ended September 30th, 2021. During the call, we will refer to financial measures not calculated according to generally accepted accounting principles. Please refer to today's press release, which is posted on our website, for an explanation of our reasons for using such non-gap measures, as well as tables deriving these measures from our gap results.

Thank you, Jeff and thank you all for joining us for the excellent third quarter 2021 financial results Conference call.

Joining me on today's call are Mike Morrissey, our president and CEO, Chris Senner, Our Chief Financial Officer P. J Haley, our executive Vice President of commercial and Peter Lamb, Our Chief Scientific Officer, who will together review our progress for the third quarter 2021 ended September 30th 2021 during the call we will refer.

Susan T. Hubbard: During the course of this presentation, we will be making forward-looking statements regarding future events and the future performance of the company. This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial, and strategic matters. Actual events or results could, of course, differ materially.

Third financial measures not calculated according to generally accepted accounting principles. Please refer to today's press release, which is posted on our website for an explanation of our reasons for using such non-GAAP measures as well as tables deriving these measures from our GAAP results.

During the course of this presentation, we will be making forward looking statements regarding the future events and the future performance of the company. This includes statements about possible developments regarding discovery product development regulatory commercial financial and strategic matters actual events or results could of course differ materially. We refer you to the documents we file from time to time with the SEC.

Susan T. Hubbard: We refer you to the documents we file from time to time with the SEC, which, under the heading risk factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including, without limitations, risk and uncertainties related to product commercial success, market companies, regulatory review and approval process, conducting clinical trials, compliance with applicable regulatory requirements, dependence on collaboration partners, and the level of costs associated with discovery, product development, All right, thank you, Susan, and thanks to everyone for joining us on the call today.

C C, which under the heading risk factors identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitations risks and uncertainties related to product commercial success market competition regulatory or for you and approval processes conducting clinical trial.

Compliance with applicable regulatory requirements, our dependence on collaboration partners and the level of costs associated with discovery product development business development and commercialization activities.

Susan T. Hubbard: X-Alex had a strong third quarter across all components of our business as Cabo Medics demand and market share grew in the face of increased competition, while at the same time, we advanced our pipeline of promising early stage programs with a new I&D and an additional collaboration for an exciting target in the RNA sensing pathway. On the commercial front, Cabometics maintained its status as the leading TKI for RCC and Q3. We saw strong demand for the Cobomedics-Nobab combination across all segments of the first-line RCC market, including continued NRX and TRX growth.

With that I will turn the call over to Mike Alright. Thank you Susan and thanks to everyone for joining us on the call. Today Excellence has had a strong third quarter across all components of our business as Cabo medics demand and market share grew in the face of increased competition at the same time, we advanced our pipeline of promising early stage programs with a new iron.

And then additional collaboration for an exciting targets in the RNA sensing pathway on.

On the commercial front Cabo medics maintained its status as the leading Teekay I for RCC in Q3, we saw strong demand for the Cabo <unk> combination across all segments of the first line RCC market, including continued in Rx and T Rx growth.

Susan T. Hubbard: Despite some quarter-to-quarter choppiness, we are pleased to see Cabo Medics net product revenue in the third quarter of 2021 maintains significant momentum with 63% year-over-year growth compared to the same period in 2020. To expand on this further, three factors converged to impact the second quarter of 2021 Codometics revenues. First, a significant growth in demand following the success of the 90-air launch. Second, an increase in inventory reflecting the growing demand seen throughout the first half of 2021. And third, clinical trial comparator sales. While third quarter Cobbometics demand continued to grow in the face of increased competition, the latter two factors did not occur to a significant extent in Q3.

Despite some quarter to quarter Choppiness, we are pleased to see Cabo <unk> net product revenue in the third quarter 2021 maintained significant momentum with 63% year over year growth compared to the same period of 2020.

To expand on this further three factors converged to impact the second quarter 2021, Cuddled medics revenues first is significant growth in demand. Following the success of the 90 or launch second an increase in inventory, reflecting the growing demand seen throughout the first half of 2021 and three.

Clinical trials comparator sales.

While third quarter Cabo medics demand could.

Continued to grow in the face with increased competition. The latter two factors did not occur to a significant extent in Q3.

Looking ahead, we expect Cabo to achieve well in excess of $1 billion in U S revenue in full year 2021, and our goal remains to exit 2022 with a $1 $5 billion annualized run rate for RCC in the U S.

Our progress in 2021 is putting us in a good position to achieve this goal.

Michael M. Morrissey: Looking ahead, we expect Cabo to achieve well in excess of $1 billion in U.S. revenue in full year 2021, and our goal remains to exit 2022 with a $1.5 billion annualized run rate for RCC in the U.S. We view our progress in 2021 is putting us in a good position to achieve this goal. Ex-X has also advanced key 2021 regulatory development and discovery activities in Q3. We were thrilled with the early approval of Cytobetics and second-line DTC and excited to bring this new treatment option to prescribing physicians and patients to treat this indication for which no standard of care previously existed.

Extra lectures also advanced key 2021 regulatory development and discovery activities. In Q3, we were thrilled with the early approval with Cabo medics in second line DTC and excited to bring this new treatment option to prescribing physicians and patients to treat this indication for which no standard of care previously.

Existed.

You have shrunk with the Cabo, which has a double it in first line HCC from Cosmic 312 was accepted for presentation at the ESMO Asia Who's still in college with Congress during the virtual plenary session on Saturday November 20th based.

Based on recent feedback from the FDA, we plan to file the cosmic 312 S. N V. A an early 2022 once the final OS data are available.

In regard to late stage development, the full portfolio of cosmic and contact trials with Cabozantinib ICI combinations continues to advance in particular the contact one in contact all three studies in forms of non small cell lung cancer and renal cell carcinoma, respectively are nearing full enrollment topline results for cosmic <unk>.

Michael M. Morrissey: The abstract for the Cabo-Atezo Doublet and first-line HCC from Cosmic 312 was accepted for presentation at the ESMO Asia Virtual Oncology Week Congress during the virtual plenary session on Saturday, November 20th. Based on recent feedback from the FDA, we plan to file the Cosmic 312 SMDA in early 2022 once the final OS beta is available. In regard to lake stage development, the full portfolio of Cosmic and Contact Trials with Kambosantib ICA combinations continues to advance. In particular, the Contact O1 and Contact O3 studies in forms of non-small cell lung cancer and renal cell carcinoma, respectively, are nearing full enrollment.

<unk>, which is evaluating the Cabo nebo it'd be triplet in previously untreated intermediate or poor risk RCC RCC are now expected in the first half of 2022 based on current event rates. Our early clinical pipeline is advancing as well with significant progress for excel Oh nine to excel one O two and.

002, and we expect to share initial clinical updates for each program over the course of 2022.

Since we initiated the build out of our early stage pipeline in 2017, the extra Lexus discovery business development and non clinical teams have seamlessly integrated the work streams to pursue compelling opportunities across small molecules and biologics.

With the aim of growing our clinical pipeline. Most recently exemplified by a new IND filing for <unk> 114, and the collaboration with storm Therapeutics.

So with that please see our press release issued an hour ago for a full Q3 financial results and an extensive list of our corporate milestones achieved in the quarter.

Now I'll turn the call over to Chris who will review our third quarter 2021 financial results, Chris. Thanks, Mike for the third quarter of 2021. The company reported total revenues of $328 $4 million total revenues for the quarter included Cabozantinib franchise net product revenue of $263 $1 million total revenues.

Michael M. Morrissey: Top-line results for Cosmic 313, which is evaluating the Cabo-Nevo Ippitriplet in previously untreated intermediate or poor risk RCCC, are now expected in the first half of 2022 based on current events. Our early clinical pipeline is advancing as well, with significant progress for XL 092, XL102, and XBOO2, and we expect to share initial clinical updates for each program over the course of 20 Since re-initiating the build-up of our early-stage pipeline in 2017, the X-Lexis discovery, business development, and non-clinical teams have seamlessly integrated their work streams to pursue compelling opportunities across small molecules and biologics, with the aim of growing our clinical pipeline, as most recently exemplified by our new I&D filing for XL-114 and the collaboration with Storm Therapeutics.

Also included $65 $3 million in collaboration revenues from Ipsen, Takeda and Genentech.

Our total operating expenses for the third quarter, 2021, or $276 $8 million compared to 202 hundred $62 $2 million in the second quarter 2021, R&D expense was the primary driver of the increase in total operating expenses, which was primarily related to higher licensing and clinical trial expenses.

Provision for income taxes for the third quarter, 2021 was $15 $1 million compared to $28 $8 million for the second quarter 2021. The company reported GAAP net income of $38 2 million or 12 cents per share on a fully diluted basis for the third quarter of 2021.

The company also reported non-GAAP net income of $64 $5 million or <unk> 20 per share on a fully diluted basis.

Non-GAAP net income excludes the impact of approximately $26 $3 million of stock based compensation expense net of the related income tax effect.

Cash and investments for the quarter ended September 32021 was approximately $1 8 billion and finally, turning to our financial guidance for the full year 2021.

Michael M. Morrissey: So with that, please see our press release issued an hour ago for our full Q3 financial results and an extensive list of our corporate milestones achieved in the quarter. I'll now turn the call over to Chris, who will review our third quarter 2021 financial results. Chris? Thanks, Mike, for the third quarter of 2020.

Given where we are in the year, we are tightening the financial guidance for total revenues net product revenues R&D and SG&A expenses provided earlier this year.

Total revenues are expected to be in the range of 1.3 and $135 billion net product revenues are expected to be in the range of 1.05 and $1 $1 billion.

Research and development development expenses are expected to be in the range of 650 and $675 million, which includes noncash expenses related to stock based compensation of approximately $50 million.

Chris Shibutani: In 2021, the company report is total revenues of $328.4 million. Total revenues for the quarter included Calo's Antitive, Franchise NEP Product revenues of $2202.

Selling general and administrative expenses are expected to be in the range of 400 and $425 million, which includes noncash expenses related to stock based compensation of approximately $70 million and finally, we are projecting cash and investments to be approximately $1 $8 billion at year end.

Chris Shibutani: $163.1 million. Total revenues also included $65.3 million in collaboration revenues from Ipsen, Takeda, and Genetics. Our total operating expenses for the third quarter of 2021 were $276.8 million compared to $262 million in the second quarter. R&E expense was the primary driver of the increase in total operating expenses, which was primarily related to higher

This guidance does not include the impact of any potential new business development activities, which remains a key priority for the company for the company.

With that I'll turn the call over to Peter Thank.

Thank you Chris today, I will discuss the Cabo <unk> business with regards to Q3 2021, particularly in the context of the continued prescription growth driven by the approval of Cabo medics in combination with immune checkpoint inhibitors.

As you know on January 20th Cabo <unk> received FDA approval for use in first line RCC in combination with the bold map.

Chris Shibutani: related to higher licensing and clinical trials

We are pleased that we continue to see broad adoption is cabo <unk> built on its position as the number one T chaos in RCC.

Chris Shibutani: Provision for the third quarter of 2021 with $15.1 million compared to $28.8 million for the second quarter. The company reported GAt net income of $38.2 million, or 12 cents per share on a fully diluted basis, for the third quarter of 2021.

Q3 saw continued growth of Cabo medics prescriptions, both in terms of new prescriptions at Rx and total prescriptions T Rx.

And our <unk> grew 8% in Q3 relative to Q2.

T Rx grew 7% in Q3 relative to Q2.

Chris Shibutani: The company also reported non-gap net income and stick

This growth is being driven by Cabo <unk> in combination with Napoleon up in first line RCC.

Chris Shibutani: $64.5 million, or 20 cents per share on a fully diluted basis. Non-Gap net income excludes the impact of approximately $26.3 million of stock-based compensation expense net of the related income tax, Cash, and Investments for the quarter ended September 30th, 2021.

As the launch progresses, the success of Cabo in combination with pneumonia is changing the mix of patients on Cabo medics and RCC.

First one combination usage has increased the proportion of the new Cabo prescriptions in this patient population.

Given the clinical data from the Checkmate <unk> 90, our study we anticipate these first line combination patients to receive therapy for approximately one five years.

Chris Shibutani: was approximately $1. Now, turning to our financial guidance for the full year 2021.

Or more.

Chris Shibutani: Given where we are in the year, we are tightening the financial guidance for total revenues, net product revenues, R&D, and SGNA expenses provided earlier this year.

Driving a longer treatment duration for Cabo medics.

We are encouraged by the fact that in our data we see more than a doubling of the amount of new patient starts at the 40 milligram dose year to date relative to the same period last year.

Chris Shibutani: Total revenues are expected to be in the range of $1.3 and $1.35 billion. Net product revenues are expected to be in the range of $1.05 and $1.1 billion. Research and development expenses are expected to be in the range of $650 and $675 million, which includes non-cash expenses related to stock-based compensation for approximately. Selling General Administrative expenses are expected to be in the range of $400 and $425 million, which includes non-cash expenses

This is further indication that the combination of uptake in the first line setting is robust.

Okay.

The launch of the combination has led to an inflection in the prescription growth with Cabo medics in 2020 one.

T Rx growth in 2021 year to date relative to 2020 year to date is 35%.

For the same year to date comparison of an Rx growth in 2020 relative.

<unk> 2021 relative to 2020 the growth rate is 37%.

Now looking at the same accuse me of prescription data for <unk>.

The broader market, including competitors, a couple of salient points stand out.

The 7% Q3 over Q2 T Rx growth affirms Cabo medics is the only <unk> in this market to have positive Trs sequential volume growth in Q3 relative to Q2.

Chris Shibutani: And finally, we're projecting cash investments to be approximately $1.8 billion that year. This guidance does not include the impact of any potential new business development activities, which remains a key priority for the company. With that, I'll turn the call over to P. Thank you, Chris.

Furthermore, Cabo medics is the only agent in this market basket to have positive market share growth is Cabo <unk> Trs share went from 38% in Q2 to 41% in Q3.

Patrick J. Haley: Today I will discuss the Cabo Medics business with regard to Q2 2021, particularly in the context of continued prescription growth driven by the approval of Kabometics in combination with immune checkpoint inhibitors. As you know, on January 22nd, Cabo Medics received FDA approval for use in first-line RCC in combination with Nevolve. We are pleased that we continue to see broad adoption as Cabometics builds on its position as the number one TKI in our. Q3 saw continued growth of Cabomedics prescriptions, both in terms of new prescriptions and total prescriptions, TRX. NRX grew 8% in Q3 relative to Q2, and TRX grew 7% in Q3 relative to.

As I mentioned previously the growth is being driven by first line combination utilization, while the second line RCC business for Cabo medics remained stable.

Turning to the next slide we looked at the same market basket and prescription data with the addition of what's happening to the graph.

Given the recent first line combination approval in RCC.

The key takeaways from the previous analysis and discussion remain the same.

<unk> was the only product in the market basket to grow Trs volume in this competitive marketplace and the only agent to increase market share going from 32% to 34% driven by the first line combination indication.

In addition to the strong momentum in the RCC business. We're pleased that Cabo <unk> was approved for previously treated differentiated thyroid cancer in September several months ahead of the Paducah date.

Patrick J. Haley: This growth is being driven by Cabometics in combination with Nvolumab and first-line R-S. As the launch progresses, the success of Kabomedics in combination with Nivolam is changing the mix of patients on CaboMedics in RCC. First-line combination usage has increased the proportion of the new Cabo prescriptions in this patient population. Given the clinical data from the Checkmate 90R study, we anticipate these first-combination patients to receive therapy for approximately 1, or more, driving a longer treatment duration for Cabo medic.

They were previously no therapies approved for this patient population with significant unmet medical need.

We are proud that this fifth indication for Cabo medics adds to the body of data in the label and enable tech select us to help more patients with severe cancer.

The strong Q3 performance and Cabo medics trajectory position the Cabozantinib franchise to continue significant revenue growth in 2021 and beyond we're thrilled with the opportunity that 90 or provides excellent just looking forward as we continue to build upon the foundation in RCC, where Cabo medics is the number one prescribed teekay.

Our team remains highly focused and motivated to compete every day to bring the benefit of Cabo vertex to all eligible patients as we continue to build the franchise and maximize potential.

And with that I'll turn the call over to Peter.

Patrick J. Haley: We are encouraged by the fact that, in our data, we see more than a doubling of the amount of new patient starts at the 40 milligram dose, year to date, relative to the same period last year. This is further indication that combination uptake in the first-line setting is robust.

Thanks P. J I'm pleased to provide an update on our preclinical development and pipeline expansion efforts.

Six months, we've enhanced our capacity and ability to prosecute a wide variety of targets and programs both from a small molecule and biologics point of view, while continuing to advance our preclinical pipeline.

We significantly expanded our interim discovery footprint with the opening of new laboratories on Illumina campus that will allow us to add capacity and new capabilities to our small molecule discovery efforts.

Patrick J. Haley: The launch of the combination has led to an inflection in the prescription growth of CaboMedics in 2020. TRX growth in 2021 year-to-date relative to 2020 year-to-date is 35%. For the same year-to-date comparison of NRX growth in 2020 relative to, or 2021 relative to, 2020, the growth rate is 37%, now looking at the same Acuvia prescription data. But for the broader market, including competitors, a couple of salient points stand out. 7% Q3 over Q2 TRX growth affirms Cabometics is the only TKI in this market to have positive TRX sequential volume growth in Q3 relative to Q2.

We work with our partners has also advanced in particular, we're pleased to have exercised our option for a second compound excel 114 from our collaboration with Oregon.

And then one for has a novel mechanism of action that resulted in inhibition of multiple and activation.

Multiple one as a pair of cap space, but it is a key part of the signaling pathway downstream of T cell receptors and is constitutively activated in a variety of B cell lymphomas.

<unk> is a potent inhibitor of b cell lymphoma cell growth and effective in a variety of lymphoma models in vivo.

Notably it seems like some of them unfold acts downstream of <unk> activity and PTK resistant lymphoma models and in certain subtypes of B cell lymphoma, where PTK inhibitors are not active.

The IMD effects of them on the floor is now active and we anticipate initiating the phase one trial in patients with non Hodgkin's lymphoma in the next few months.

Work on additional programs that are all gene is proceeding well and we might have the opportunity to move additional compounds from the collaboration into preclinical development in the first half of next year.

Patrick J. Haley: Furthermore, Cabometics is the only agent in this market basket to have positive market share growth, as CaboMedics TRX share went from 38% in Q2 to 41%. As I mentioned previously, the growth is being driven by first-line combination utilization, while the second-line RCC business for Cabometics remains stable. Turning to the next slide, we looked at the same market basket and prescription data with the addition of lymphatinid to the graph. Given the recent first-line combination approval in RCC, key takeaways from the previous analysis and discussion remain the same.

With respect to our biologics programs, we have greatly expanded our collaboration with <unk> to encompass an additional 20 targets over the next three years.

We've been impressed by in bandwidth the ability to produce high quality antibodies against the range of targets, including some very challenging ones.

Antibodies and find those generated by environment will be used to generate by specifics using <unk> bandwidth be multi platform I'm also flow into our ADC collaborations.

We have already provided injecting venn regenerated antibodies to our partners catalysts in MBE, who successfully moved them into their site specific conjugation platform and couple of them with their proprietary payloads.

This has led to the identification of multiple adcs with excellent activity in vitro and in vivo.

These are being further characterize to understand their therapeutic index before potentially advancing into preclinical development.

Patrick J. Haley: Cabometics was the only product in the market basket to grow TRX volume in this competitive marketplace and the only agent to increase market share going from 32% to 34% driven by the first line combination indication. In addition to the strong momentum in the RCC business, we are pleased that Cabometics was approved for previously treated differentiated thyroid cancer in September, several months ahead of Padufit H. There were previously no therapies approved for this patient population with significant unmet medical needs.

Yeah.

In Venlo generous generated antibodies are also advanced since our collaboration with LNG.

Aimed at using the <unk> technology to generate most antibodies that will preferentially bind in the tumor microenvironment.

Thereby improving the therapeutic index versus a conventional antibody.

Several months versions of these antibodies have been identified and are being further characterized.

We're excited to have recently announced a new partnership with storm therapeutics based on their RNA modifying enzyme platform.

Modifications to basically denominate tuned RNA epigenetics has emerged as a normal way to control gene expression and the activity of our RNA expensing pathways.

It seems that often deregulated in tumors.

The collaboration includes two targets eight Oman on identifying deaminase and a second target to be named later.

Patrick J. Haley: We are proud that this fifth indication for Kabometics adds to the body of data in the label and enables XOX to help more patients with severe cancer. The strong Q3 performance in Cabo Medics trajectory positioned the Cabo Zanthin franchise to continue significant revenue growth in 2021. We're thrilled with the opportunity that 9ER provides Xylexus and looking forward as we continue to build upon the foundation in RCC, where CaboMedics is the number one prescribed TKI.

801, and the names on the converts adenosine to iron Athene and double stranded RNA, thereby stabilizing the double stranded structure.

Cytoplasmic double stranded RNA is recognized by two sensors, MD 85 and <unk>.

Then activates the gene expression program that includes Upregulation of interferon production.

Tumor cells, which express into film in Texas than activate an interferon stimulated gene expression program that includes upregulation of inflammatory cytokines and often results in cell death.

Jean Michel can have elevated levels of double stranded RNA, probably as a result of deregulated transcription and this resulted in some chronic stimulation of MDA five regarding and consequent activation of an interferon gene signature, which was seen in about 30% of achievements.

Patrick J. Haley: Our team remains highly focused and motivated to compete every day to bring the benefit of CaboMedics to all eligible patients as we continue to build a franchise and maximize potential.

T cells and reliance on eight O one activity to maintain horrible levels of double stranded RNA and in these tumors a reduction in one levels can result in tumor cell death.

Consistent with this he don't want emerged as an interesting target in large unbiased crisp thoughtful ethylene rnase screens switching dependency in tumor cell lines.

Peter Lawson: Thanks, B. I'm pleased to provide an update on our pre-clinical development and pipeline expansion efforts.

In addition, production and 801 sensitize tumors to checkpoint inhibition.

Peter Lawson: Over the last six months, we've enhanced our capacity and ability.

Peter Lawson: to prosecute a wide variety of targets and programs, both from a small molecule and biologics point of view, while continuing to advance our preclinical pipeline. We have significantly expanded our internal discovery footprint with the opening of new laboratories on our Alameda campus.

Even in genetic backgrounds in refractories assemblies, and checkpoint inhibitors, such as most of the pay to Microsoft.

Storms and established a leading platform for discovery one inhibitors.

Sweet of biochemical and cellular assays to guide lead optimization.

We look forward to working with them to develop inhibitors against this novel class of targets.

We continue to assess a broad range of opportunities for additional business development, including partnerships that might further complements our ongoing small molecule by specific and the ADC programs as well as individual assets, particularly those that are in late preclinical or early clinical development.

Peter Lawson: Alameda campus that will allow us to add capacity and new capabilities to our small molecule discovery efforts.

Peter Lawson: Work with our partners has also advanced. In particular, we're pleased to have exercised our option for a second compound, XL114, from our collaboration with Origin. XL114 has a novel mechanism of action that results in inhibition of multiple-on activation.

We look forward to providing further updates as these discussions mature.

With that I will turn the call back to Mike Alright, Thanks, Peter as you heard on the call today, our team continued to execute across all facets of our business in Q3 with significant progress across our pipeline clinical development and commercial activities as we close out the remainder of this year and look to 2022, we're excited about the potential of the multiple growth.

Peter Lawson: Malt 1 is a para-base that is a key part of the signaling pathway.

Peter Lawson: of the signaling pathway downstream of B-cell receptors and is constitutively activated in a variety of B-cell lymphomers. XL114 is a potent inhibitor of B-cell lymphoma cell growth and is active in a variety of lymphoma models in B-1.

Just ahead of us to move the business forward and most importantly put <unk> in a position to help many more cancer patients.

I am pleased to share that the <unk> team is now greater than 99% vaccinated against COVID-19, and we are back in the office working together again side by side I want to thank everyone on the team for their individual and collective efforts to navigate the many significant challenges introduced by the pandemic and then ultimately see us through to a very productive third.

Peter Lawson: Notably, since Xcel 111-14 acts downstream of BTK, it has activity in BTK-resistant lymphoma models, and in certain subsets of B-cell infomer where BTK inhibitors are not act, The I&EFaxl-114 is now active and we anticipate initiating the phase one trial in patients with non-Hodkins and phoma in the next few, Work on additional programs at Orogen is proceeding well, and we may have the opportunity to move additional compounds from the collaboration into preclinical development in the first half of next year.

<unk>.

Before I close I want to touch on the recent passing of two of our colleagues tougher piece with Schwab the company's president of product development, and medical Affairs, and Chief Medical Officer, and John Burns Senior Vice President of sales.

Losing Gisela and John in the same week, both of whom were life science industry veterans incredible colleagues Dear friends is a reminder of our for agility and the cancer knows no bounds. So also a driving reminder of why we do what we do every single day at X Alexis there's only certain Steve.

Peter Lawson: With respect to our biologics programs, we have greatly expanded our collaboration with Invenra to encompass an additional 20 targets over the next three years. We've been impressed by Invenor's ability to produce high-quality antibodies against a range of targets, including some very challenging ones. Antibodies and Binders generated by Invenra will be used to generate by specifics using Invenra's B-Body platform and also slow into our ADC collaboration. We've already provided Invenra regenerated antibodies to our partners, Catalan and NBE, who successfully moved them into their site-specific conjugation platforms and coupled them with their proprietary payloads. This has led to the identification of multiple ADCs with excellent activity in vitro and in vivo. These are being further characterized to understand their therapeutic index before potentially advancing into preclinical development.

And our commitment to our mission to help cancer patients recover stronger and live longer.

So with that we look forward to updating you on our progress in the future. Thank you for your continued support and interest in <unk> and we're happy to now open the call for questions.

Okay.

At this time I would like to inform everyone in order to ask a question Press Star then the number one on your telephone keypad.

Again that power one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of <unk> <unk> from <unk> Securities. Please proceed.

Hi, guys. Thank you for taking my questions and I have to echo.

Kind of is that we do mesquite voice on this call.

Maybe I'll start.

Maybe a question to P J.

The excess inventory worked itself out and I will be more back at more normal levels and I guess when you think about going into Q4 should we expect your reported sales numbers, just tick up a little bit more with the volume growth that.

Peter Lawson: Invenor generated antibodies have also advanced in our collaboration with Ader Gene, aimed at using their safe body technology to generate mast antibodies that will preferentially bind to the tumor microenvironment, thereby improving the therapeutic index versus a conventional antibody. Several mass versions of these antibodies have been identified and are being further characterized. We're excited to have recently announced a new partnership with Storm Therapeutics based on their RNA-modifying enzyme platform. Modifications to bases in RNA, termed RNA epigenetics, have emerged as a novel way to control gene expression and the activity of RNA sensing paths, processes that are often deregulated in tumors. The collaboration includes two targets, Adon and Adonase, and a second target to be named later.

That we see on the <unk> data and then I have a follow up.

Yes, because it's Chris so.

So the inventory.

That was built during the during the second quarter was all demand related so it wasn't excess inventory as you said.

I would say that our weeks on hand inventory between Q2, and Q3 was relatively stable and even if you go back to Q1, it's been relatively stable throughout the year.

So its not excess inventory was just inventory built in association with the demand increase during Q2.

Got it.

Do you expect that going into Q4 that maybe the pritzker.

Friction data that we all look at but simply an IQ at that might more better reflect.

What the what you might report on your next sales.

As to go yes, its Chris again, so thanks for the question.

It's hard it's hard to say.

Both symphony and IMS or forecast the numbers, so it's hard to say how they.

Peter Lawson: AdR1 is an enzyme that converts adenocene to ionocene in double-stranded RNA, thereby destabilizing the double-stranded structure. Phytoplasmic double-stranded RNA is recognized by two sensors, MDA5 and RIGI, which then activate a gene expression program that includes upregulation of interferon production. Tuna cells which express interferon effects then activate an interferon-stimulated gene expression program that includes upregulation of inflammatory cytokines and often results in cell death. Tum cells can have elevated levels of double-stranded RNA, probably as a result of deregulated transcription, and this results in some chronic stimulation of MDA5 RIGI and consequent activation of an interferon gene signature, which is seen in about 30% of humans

Collate that data and projected but.

It's relatively in line with that.

Historically in line with them with reported numbers.

Got it okay.

And then.

It was very encouraging that the FDA gave you get feedback.

Feedback to file the NDA for frontline HCC, just want to make sure I haven't missed anything.

Hudson indicate that the FDA that the FDA is open to the possibility of granting approval for Cabo as a first line agent.

Just based on PFS.

Co primary endpoint and then.

Maybe some specific scenarios, where this is more relevant such as for example, where patients on the control arm crossing over.

And causing complications.

Complications.

Thanks, guys, Yeah, I have to get its Mike again, I don't want to get into the details of the discussions with the FDA I think the the information we share today was pretty clear.

We plan to file the NDA in early 'twenty two once we have the.

The final OS data available as we've talked about previously as other I think sell side research analysts have opined upon theirs.

Peter Lawson: These cells are reliant on 801 activity to maintain tolerable levels of double-stranded RNA, and in these tumors, a reduction in 801 levels can result in tumor cell death. Consistent with this, Adonemer emerges as an interesting target in large, unbiased CRISPR or S-HRNA screens for Gen

Sizable population of.

Patients with either gastric esophageal varices.

That can have complications in terms of bleeding with long lasting agents.

Antibodies to VEGF for example.

Want to be able to help with that population if thats, if that's feasible, but I don't want to get ahead of ourselves we will file as we plan to based upon the guidance. We just gave in early 2022 based upon once we have the final survival data so called the west stay tuned.

Peter Lawson: for gene dependency in tumor cell lines.

Peter Lawson: In addition, production in ADR1 sensitizes tumors to checkpoint inhibition, even in genetic backgrounds that are refractory to spindle agent checkpoint inhibitors, such as loss of beta 2. Storm has established a leading platform for discovery of ADR1 inhibitors and has a suite of biochemical and cellular assays to guide lead optimization. We look forward to working with them to develop inhibitors against this novel class of targets. We continue to assess the broad range of opportunities for additional business development, including partnerships that may further complement our ongoing small molecule, bispecific, and ABC programs, as well as individual assets, particularly those that are in late preclinical or early clinical development. We look forward to providing further updates as these discussions mature. And with that, I'll turn the call back to Mike. All right, thanks, Peter.

Great. Thanks, guys for taking my questions.

You bet. Thank you.

Yeah.

Your next question comes from the line of Mike King from H C. Wainwright. Please proceed.

Hi, guys can you hear me.

Yes.

Okay, great. So thanks for taking the question I had to jump on late and if.

If you guys don't want to go through the numbers again, that's fine I can always take it offline but.

Just on a sequential quarter basis.

You have a handle on what the.

The underlying demand increase was.

Quarter on quarter.

Yeah.

Yes, so again I don't want to repeat the whole the whole call sorry, you missed the early part P. J you want to just give the high level demand numbers and then maybe we can cover the rest offline.

Yeah. Thanks for the question.

We are pleased with the quarter we continued.

Demand growth.

Q over Q, we had 7% <unk> volume growth.

Michael M. Morrissey: All right, thanks, Peter. As you heard on the call today, our team continued to execute across all facets of our business in Q3, with significant progress across our pipeline, clinical development, and commercial activities. As we close out the remainder of this year and look to 2022, we're excited about the potential of the multiple growth drivers ahead of us to move the business forward and, most importantly, put Exilex in a position to help many more cancer patients.

8% and Rx volume growth, so continuing to see.

Strong uptake across all segments across all segments driven by a.

Combination first line use so we're very pleased with that.

Okay, Great. That's Super helpful. And then related to that can you talk about whether you saw any inroads or any.

Competitive pressure from.

Lindsay MA combinations with Keytruda at all and RCC and <unk>.

Would that have had any impact on the numbers in the quarter.

Yes, Mike It's Mike as we've said numerous times in the prepared remarks.

The demand growth that we saw was in the context of increased competition.

Michael M. Morrissey: I'm pleased to share that the Xlexis team is now greater than 99% vaccinated against COVID-19, and we are back in the office working together again side by side. I want to thank everyone on the team for their individual and collective efforts to navigate the many significant challenges introduced by the pandemic and then ultimately see us through a very productive third quarter. Before I close, I want to touch on the recent passing of two of our colleagues, Dr. Giesla Schwab, the company's president of product developments in medical affairs and chief medical officer, and John Burnt, our senior vice president of sales. Losing Giesla and John in the same week, both of whom were life science industry veterans, incredible colleagues, and dear friends, is a reminder of our fragility and that cancer knows no bounds.

Great. Thanks.

Yeah.

Your next question comes from the line of Jason <unk> from Bank of America.

Please proceed.

Hey, guys. Thanks for taking my questions.

Okay.

Two for me.

Just on the patent litigation Criterias are there any important milestone events between now and the scheduled may 2022.

File date be it either any more patents that you guys might be adding to the Orange book I know you guys have been active on that front any important pre trial proceedings that are worth mentioning and then secondly, just on <unk>. Two is the plan to still move all that interest in pivotal trials before year end 2021, just wondering if we might start to hear about.

Pivotal trials getting underway before the end of the year. Thank you.

Yeah, Jason it's Mike.

In terms of the patents.

Litigation.

Topic, nothing nothing that I would like to point out here between now and the beginning of the trial dates obviously I wouldn't want to front run any any news in that regard before it happens. So just stay tuned as things evolve we will keep you up to date on that in terms of <unk> 92.

Michael M. Morrissey: It's also a driving reminder of why we do what we do every single day at XLX and has only served to deepen our commitment to our mission to help cancer patients recover stronger and live longer. So with that, we look forward to updating you on our progress in the future. Thank you for your continued support and interest in Exilexas, and we're happy to now open the calls for questions. At this time, I would like to inform everyone in order to ask a question. Press the star, then the number one on your telephone keypad.

The first pivotal trial for <unk> for that compound in combination with an ICI will shift to 2022, and we will alert you. When we have the first site activated so stay tuned there as well.

Okay. Thank you.

Yes.

Your next question comes from the line of Michael Smith from Guggenheim. Please proceed.

Hey, guys. Thanks for taking my questions I just had another one for Chris or P. J, just trying to understand the sequential decline in product sales a little bit better given the 7% growth in volume and I know you mentioned a few factors, but could you perhaps quantify how much each of those.

Operator: Again, that's R1 on your telephone keypad. We'll pause for just a moment to compile the Q&A. Your first question comes from the line of Astika Gunewarty, from Truist Securities. Hi, thank you for taking my questions, and I have to echo my sentiment in my sentiment, we do miss Kesa's voice on this call. Maybe I'll start up on maybe a question to PJ. Has the excess inventory worked itself out, and are we more, you know, back to more normal levels?

Unit to that to the decline.

Yes, Michael Thanks, It's Chris.

<unk>.

We did see as Mike mentioned, we did see an inventory the demand related inventory build in Q2.

<unk> didn't take place in Q3, and we also saw some comparator sales.

Q2.

To a large degree it didn't take place in Q3. So those are the two drivers of the difference in.

Between the demand numbers that P. J referenced in the reported numbers that we're talking about today.

Got it and the gross to net was stable in the third.

Operator: And I guess when we think about going into Q4, should we expect your reported sales numbers to sync up a little bit more with the volume growth that we see on the same? and that I have a follow-up. Hey, Astica, it's Chris.

Gross debt was slightly down.

Well.

It's slightly up is between Q3 and Q2, but.

From where it was in Q1.

And there's still as I said earlier in the year, we were thinking 25%, 26% gross to net were still thinking in that 26%.

Chris Shibutani: So the inventory that was built during the second quarter was all demand-related, so it wasn't excess inventory, as you said. I would say that our weeks-on-hand inventory between Q-2 and Q-3 was relatively stable. And even if you go back to Q1, it's been relatively stable throughout the year.

Got it Okay interesting and then Peter mentioned some.

Some more details on the new product that's going into phase one X <unk> four.

Just if you add some additional color.

How this drug could potentially fit into the treatment landscape within non Hodgkin lymphoma.

Yes, thanks for the question Matt.

I think it was very interesting and differentiated profile in that setting.

Chris Shibutani: So it's not excess inventory; it was just inventory built in association with the demand. Got it. So Chris, would you expect then going to Q4 that maybe the prescription data that we all look at, like Cynthia and IQ, that might better reflect what you might report on your net sales? Asa, yes, Chris again, so thanks for the question. It's hard to say, I mean, both Symphony and IMS are forecasted numbers, so it's hard to say how they collate their data and project it, but it's relatively in line with, historically in line with, reported data. Got it, okay.

As I commented.

It's kind of point of intervention is downstream from BT K. It is active in.

PTK resistant lymphoma models. So that's certainly one place where it could go but also subtypes of B cell lymphoma.

Which activate <unk>.

One on that pathway without activating PTK. So those again are insensitive to PTK inhibitors lymphomas that have mutations in things like call. It 11 for example.

Molt lymphomas.

So that's another point of differentiation. So that's another another place that this compound could go as well.

Michael M. Morrissey: And then it was very encouraging that the FTA gave you guys feedback to file the SNDDA for Frontline HCC. Just want to make sure I haven't missed anything. This actually indicates that the FTA is open to the possibility of granting approval for Cabo-Jazzo for first-line ATC just based on PFS as the co-primary endpoint. And then there maybe some specific scenarios where this is more relevant, such as, for example, where patients under the control arm are crossing over and causing complications.

Two things I would highlight nationally.

Interesting and then I know you mentioned.

Initial data disclosures on the earlier stage pipeline drugs in 2022.

Just wondering if we're thinking more first half.

ACR or ask or perhaps or are we thinking more in the second half of the year at one of the conferences.

Yeah, Michael It's Mike, Yes, probably too early to opine upon that now but stay tuned.

Those plans evolve we'll be sure to keep you up to speed on what's happening.

Great. Thanks again.

Right.

Your next question comes from the line of Andy.

From William Blair. Please proceed.

Michael M. Morrissey: Thanks, guys. Yeah, I'll ask the guys, Mike. Again, I don't want to get into the details of our discussions with the FDA. I think the information we shared today was, I think, pretty clear. We plan to file the SNDDA in early 22 once we have the final OS data available. As we talked about previously, as other, I think, Southside research analysts have opined upon, there's a pretty sizable population of patients with either gastric or esophageal varicies that can have complications in terms of bleeding with long-lasting agents like antibodies to veg up, for example.

Thanks for taking my questions. So first and foremost the express my deepest condolences to the excellent team.

Diesel is in John's energy and enthusiasm sorry, I missed.

So.

In terms of questions.

Peter you have another question, maybe on the broader RCC TPI market.

Maybe your perspective on where it is versus prior to the COVID-19 pandemic. It seems like there is some.

Fluctuations between kind of growth and and shrinking.

Towards the middle part of last year and also some fluctuations.

Half of this year just curious about your.

Take on that.

Yeah, Andy Thanks for the question it's P J.

I think youre right I mean over the course of the pandemic I think the broader RCC marketing beyond <unk> saw certainly a little bit of Choppiness as we have discussed.

Michael M. Morrissey: So we want to be able to help with that population if that's feasible, but we don't want to get ahead of ourselves. We will file as we plan to based upon the guidance we just gave in early 2022 once we have the final survival data. So for all the rest, stay tuned. Great, thanks guys for taking my questions, that, Heska, thank you. Your next question comes from the line of Mike King from H.C. Weinwright. Please proceed. Hi guys, can you hear me?

Given.

The difficulties with with treating patients and hospitals.

In that pandemic, but I think over time, what we've seen in sort of that mark the market expand and I think it's part of it is recovery.

From Covid, but I think as you've seen.

Iot <unk> combinations become.

More and more standard of care in first line treatment and I think we've talked about the somewhat last quarter certainly with with.

With Cabo Nebo driving.

More of that utilization in the frontline setting, we're seeing the <unk> market expand and could potentially see that continue as we see more and more duration.

From the utilization of drugs like Cabo over time for these first line patients who would stay on therapy longer and that could continue to potentially drive.

Operator: Yes, a loud and clear mind. Okay, so thanks for asking the question. I had to jump on late and if you guys don't want to go through the numbers again, that's fine. I can always take it offline, just on a sequential quarter basis. Do you have a handle on what the underlying demand increase was, quarter on quarter? Yeah, so again, I don't want to repeat the whole call. Sorry, you missed the early part, PJ.

Expansion of the <unk> market within RCC.

Got it okay.

And in terms of the upcoming 303 study.

I have a question about the protocol for Checkmate 214, they have a very strict discontinuation protocol.

Michael M. Morrissey: You want to just give the high-level demand numbers, and then we can cover the rest offline? Yeah, thanks for the question. You know, we're really pleased with the quarter where we continued demand growth. Q over Q, we had 7% TRX volume growth and 8% NRX volume growth. So continuing to see... you know, strong uptake across all segments driven by combination first-line use, so we're very pleased with that. Okay, great, that's super helpful.

I'm just curious if that is also baked in to that.

So we went three study.

Or maybe there were some improvement just because people know how to use Io io combinations better overtime.

Yeah, Andy It's Mike, Yes, I think we've done a really good job of working with a variety of kols to optimize the protocol around managing through a variety of aes that are seen with either one or all of the all three of those molecules combined relative to what we've learned over the.

One five years since the <unk> to.

214 data read out so.

So, but that's why you run trials is to look at the data in a blinded fashion I'll, let the data speak for itself. So so we're excited about that opportunity. We're really pleased to be on the leading edge of driving potential advancement of standard of care with the first triplet in RCC and we're excited to have the data come out sometime hopefully in the first half of.

Michael M. Morrissey: And then related to that, can you talk about whether you saw any inroads or, Um, you know, competitive pressure from Lendima combinations with Ketud at all in RCC? And would, you know, would that have had any impact on the numbers in the quarter?

Michael M. Morrissey: Yeah, Mike, it's Mike. As we said numerous times in the prepared remarks, the demand growth that we saw was in the context of increased competition. Great. Your next question comes from the line of Jason Gerberry from Bank of America. Please proceed. Hey, guys, thanks for taking my questions. I guess I have two: on the patent litigation front, Kearse, are there any important milestone events between now and the scheduled May 2022 trial date, be it either any more patents that you guys might be adding to the Orange Book? I know you guys have been active on that front; any important pretrial proceedings that are worth mentioning?

2020, so stay tuned.

Great.

Maybe last question for Peter just curious on your take about one pathway.

At least in the.

<unk> space, especially with <unk>.

Yeah.

The CD 79 B.

Antibody drug conjugate potentially replacing the standard of care.

Would that drive higher dependency in the bolt one pathway.

It's kind of patients go through the frontline therapy.

Yes, I think yes.

There's a lot of activity.

B cell lymphoma space generally as you are aware.

I was commenting earlier of course, there's still a lot of activity around new <unk> inhibitors, <unk> inhibitors with a covalent.

People are starting to advanced degree those now as well against PTK. So I would say one and all of those cases.

Michael M. Morrissey: And then secondly, just on X-Lo-092, is the plan to still move that into some pivotal trials before year end, 2021? I was just wondering if we might start to hear about some pivotal trials getting underway before the end of the year. Thank you. Yeah, Jason, it's Mike.

Should resistance arise, which certainly will then there's certainly a strong opportunity for a compound like <unk> to be to be active as well interesting you raised the CD 79 side of things <unk> 79 activation overseeing something can drive b cell lymphomas as well, but that does not go through <unk>.

But again.

Lymphomas look active or sensitive to 211 forward as well so.

Michael M. Morrissey: In terms of the patent litigation topic, nothing that I'd like to point out here between now and the beginning of the trial dates; obviously, I wouldn't want to front-run any news in that regard before it happens, so just stay tuned. As things evolve, we will keep you up to date on that. In terms of 092, the first pivotal trial for that compound in combination with an ICI will be.

Suddenly be interesting to see where the downstream of <unk>.

Agents directed at <unk> 79, whether we have an opportunity to pick up those existing patients as well.

Great well. Thank you so much for taking all my questions.

Thank you.

Yeah.

Your next question comes from the line of Jay Olson from Oppenheimer.

Please proceed.

Hi.

As shown on the line for Jason Thanks for taking the question.

Can you tell him along with the launch of Cabo in DTC given that it's almost like three months ahead of the particular date and also if youre counting sales.

Michael M. Morrissey: shift to 2022, and we will alert you when we have the first site activated. So stay tuned there as well. Okay, thank you. Your next question comes from the line of Michael from Guggenheim. Hey, thanks for taking my questions. I just had another one, you know, for Chris or PJ, just trying to understand the sequential decline in product sales a little bit better given the 7% growth and volume. And I know you mentioned a few factors, but could you perhaps quantify how much each of those contributed to the decline?

<unk> into your full year revenue guidance. Thank you.

Okay.

Yeah. This is P. J happy to talk about the approval we are certainly.

Very pleased.

To have DTC approved I think about 79 days ahead of that.

Certainly great news for patients as.

As I mentioned in the setting of.

High unmet medical need for patients, who really needed a therapy.

So very happy with that.

Data are very strong and I think what we heard and we.

We continue to hear.

From physicians is that.

<unk>.

Progression free survival data is very compelling.

Chris Shibutani: Yeah, Michael. It's Chris.

Chris Shibutani: You know, we did see, as Mike mentioned, we did see an inventory, a demand-related inventory.

We think as we.

Promote and raise awareness, we will likely get very good utilization with that.

Chris Shibutani: that demand-related inventory bill in Q2, which didn't take place in Q3. And we also saw some comparator sales in Q2 that, to a large degree, didn't take place in Q3. So those are the two drivers of the difference between the demand numbers that PJ referenced and the reported numbers that were top. Got it, and was the growth to net that stable in the third quarter? Grossenet was slightly down.

Very happy that the team was ready to go.

Immediately and launch date, one even with the sort of <unk>.

<unk> accelerated timelines of approvals so very good news there thyroid cancer is a space we've been in since 2013, So we know it extremely well.

We know where those physicians are.

And who they are and are really excited to be working with them.

Okay.

Yes, Tim this is Chris so on the on the guidance question on the revenue guidance question.

Yes, I mean, it's.

It's in it's in the revenue guidance generally.

Chris Shibutani: It's slightly up between Q3 and Q2, but down from where it was in Q1. And it's still, as I said earlier in the year, we were thinking 25 to 26% gross on the net. We're still thinking in that 26% growth.

So for the year.

Okay. Thanks.

Okay.

Yeah.

Your next question comes from the line of Theater Lawson from Barclays. Please proceed.

Chris Shibutani: Got it. Okay, interesting. And then, you know, Peter mentioned some more details on the new product that's going into Phase 1, X0114. You know, just, you know, if you had some additional color on how this drug could potentially fit into the treatment landscape within non-had skin lymphoma.

Hey, Thanks for taking my questions just on the HCC finding waiting for further data for that filing.

Also.

Good.

<unk> also have a place in HCC.

Peter It's Mike I missed the first part of that question could you say it again.

Just on the HCC filing are you waiting for.

Other data before I see yeah, yeah, as we as we talked about in the prepared remarks.

Peter Lawson: Yeah, thanks for the question. We think it has a very interesting and differentiated profile in that setting, particularly, as I commented, because its kind of point of intervention is downstream from BTK. It is active in BTK-resistant lymphoma models, so that's certainly one place where it could go. There are also subtypes of B-cell lymphoma which activate Malt 1 and that pathway without activating BTK.

We've agreed with the agency to submit the NDA once we had the final overall survival data in hand, so that's what's driving it from a Q from a basically a Q4 2021 event to a 2022 event.

And do you need to see more than a trend and that OS.

Yes, as I as I addressed earlier.

Currently your questions I don't want to speculate on.

That whole topic.

We've agreed to file once we have certainty.

The final survival data enhanced so stay tuned.

And then excel overnight to find a place in HCC or is that.

Kind of white space.

Peter Lawson: insensitive to BTK inhibitors. These are lymphomers that have mutations and things like Card 11, for example.

Available fleet.

No. It's certainly available and we're talking a lot about various indications and combinations for one and two right now certainly some of the learnings that we've seen from 312.

Peter Lawson: I'm often called a mold infomer, so that's another point of differentiation. So that's another place that this compound could go as well. So those are the two things I'd highlight initially. It was very interesting.

If you look at the broader context of HCC say, even with some of the some of the emerging data from other I O combinations.

<unk> 902 could play a very I think a very interesting role and potential doublets or triplets for HCC, we have to sit down and think about priorities and think about how we wanted to do that but I would say in general we view developments.

Michael M. Morrissey: Could go as well. Those are two things I'd highlight in this. Very interesting. And then, you know, I know you mentioned initial data disclosures on the earlier stage pipeline drugs in 2022. I'm just wondering if we were thinking more, you know, first half, you know, ACR or ASCO, perhaps, or are we thinking more in the second half of the year at one of the conferences?

In a broad sense like we're doing with RCC, it's not just one shot.

Multiple shots on goal multiple trials covering a variety of lines of therapies combinations et cetera to give us the opportunity and.

That's the goal we have for all of our compounds all of our trials is to move the bar up.

<unk> a standard of care for patients. So certainly <unk> can play an important role in a number of different indications and deliver it could be one of them going forward for sure.

Michael M. Morrissey: Yeah, Michael, it's Mike. Yeah, probably too early to opine upon them now, but stay tuned. As those plans evolve, we'll be sure to keep you up to speed on what's happening. Great. Thanks again.

And just a final question on generic Sutent habitat.

Affect revenues in the quarter and then how do you think it kind of changes the way you're thinking about.

Positioning yourself.

Operator: Your next question comes from the line of Andy C, from William Blair. Please proceed. Thanks for taking my question. So, first and foremost, I would like to express my deepest condolences. Gisela and Johns.

Around generic suite.

Yeah again as I said numerous times in the prepared remarks.

<unk> grew in the face of increased competition and that includes <unk>.

That that issue as well so we're pleased with demand growth.

Obviously better data drives demand and we think we have that with 90 or in meteor in Cabo San et cetera. So so end of the day better.

Patrick J. Haley: So, questions. PJ, I have a question, maybe on the broader R-Sat. I think I think, your perspective on where it is versus prior to the COVID-19 pandemic, it seems like there's some, you know, fluctuation kind of growth and shrinking, uh, words, kind of the middle part of last year and also in the first half of this year. Just curious about Yeah, Andy, thanks for the question. It's PJ.

Better data wins, right and that's what we're seeing here.

Got you okay. Thanks, so much.

Your next question comes from the line of Kennan Mackay from RBC capital markets. Please proceed.

Alright, Thanks for taking my question.

Maybe for Mike P. J can you help us understand the magnitude of the commercial frontline RCC market that could be addressed by the triplet Cabo NEVA from your.

Patrick J. Haley: I think you're right. I mean, over the course of the pandemic, I think the broader RCC marketing beyond TKIs saw certainly a little bit of choppiness, as we've discussed, you know, given the difficulties with treating patients and hospitals during that pandemic. But I think over time, what we've seen is sort of like the market expanding, and I think part of it is recovery from COVID, but I think, as you've seen, IOT-QI combinations have become more and more standard of care and first-line treatment, and I think we talked about that somewhat last quarter, certainly with Cabo-Nivo driving more of that utilization in the frontline setting.

Conversations with both Kols and community physicians and your service. Thank you.

P. J I wanted to give that a shot and I'll provide color commentary as we go yes.

Honestly it will be important to see the data and thanks for the question Kevin.

The trial is being run in the intermediate and poor risk setting.

Where the control arm to one four is approved.

I think just generally what I'd say about it is certainly as Mike mentioned earlier, it's exciting.

To really be on the cutting edge here in terms of having the first triplet moving forward.

In a study in RCC and when you think about I guess just to contextualize the poor intermediate risk patient population is about 75% 80% roughly.

Of the of that first line patient population, which is about 14000.

Patients in the U S. So.

Patrick J. Haley: We're seeing the TKI market expand and could potentially see that continue as we see more and more duration from the utilization of drugs like, you know, Cabo over time for these first-line patients who would stay on therapy longer. And that could potentially continue to drive.

Excited to see the data when available.

Yeah.

Okay.

Okay next question please.

Your next question comes from the line of Jeff Hung from Morgan Stanley.

Please proceed.

Patrick J. Haley: expansion of the TKI market within our got it. Okay. And terms of the upcoming study I have a question about the protocol. So for Checkmate 214, they have a very strict continuation protocol. I'm just curious if that is also baked in or maybe there's like an improvement on how to use I. Yeah, Andy, Mike, I think we've done a really good job of working with a variety of KOLs to optimize the protocol around managing through a variety of AEs that are seen with, you know, either one or all three of those molecules combined relative to, you know, what we've learned over the last four or So, so, but that's why you run trials to, you know, look at the data in a blinded fashion and let the data speak for itself.

Hi, this is willing to santoro on for Jeff. Thanks for taking our question regarding Cabo in first line RCC with the continued growth in new patient care in the community setting what do you see as the remaining opportunity for.

Progress in that segment and maybe are there certain patient populations that would be easier to reach.

Yes, hi, Thanks for the question. This is P. J I would say.

We're very excited about the data and the feedback we're hearing from physicians is sort of.

Profile of overall survival.

It improved.

Tolerability and safety profile with the combination 40 milligram dose of Cabo, we're hearing great feedback on that as well as the quality of life. So I think broadly, we're seeing inroads and opportunity.

So kind of early days in our launch so we cannot.

We need to execute against that and I think.

Patients will have the opportunity to benefit from it.

Regardless of the setting we continue to have more data in terms of Pat met not unclear. So.

Michael M. Morrissey: So we're excited about that opportunity. We're really pleased to be, you know, on the leading edge of driving potential advancement of standard of care with the first triplet in RCC. And we're excited to have the data come out sometime in the first half of 2022. So stay tuned. Great. Maybe one last question for Peter. Just curious about your take about the Malt One pathway, just, the DLBCL space, especially with Poliv, the, uh, B antibody drug conjugate, standard of care, would that drive higher dependency on the Baltimore pathway as a kind of frontline therapy?

Other data being presented to continue to really round out the.

The clinical profile of Cabozantinib and RCC and we're really pleased with that if you look at the NCC guidelines I think is a good exercise to do you really see we're well positioned as a preferred agent across risk groups as well as lines of therapy.

Really.

Immunity positions in particular referenced that.

We're really pleased with our positioning there so I think we have.

Many more patients who can benefit from Cabo medics.

That's helpful. Thank you.

And then I have one more.

Do you continue to establish these collaborations with other.

Allergies recently with storm Therapeutics can you kind of talk about your strategy going forward.

Peter Lawson: Yeah, I think, you know, there's a lot of activity in the B. In the Thessile lymphoma space, generally, as you're aware, as I was commenting earlier, of course, there's still a lot of activity around new BTK inhibitors, novel BTK inhibitors, be they covalent. People are starting to advance degraders now as well against BTK. So, I would say in all of those cases, should resistance arise, which it certainly will, then there's certainly a strong opportunity for a compound like 114 to be

Is it can be more opportune opportunistic with the new platforms and technologies or are there certain capabilities and technologies that you want to remain more focused on it.

Okay, well thanks for the question I mean, I think going forward.

You're going to kind of stay consistent with what we've been doing.

Obviously, the commentary we have our own internal small molecule discovery capability, which is going through a pretty significant expansion right now, but we've always wanted to take the opportunity to complement what we can do internally we have expertise.

Folks have maybe have a different approach for moving a specific expertise in various areas that we didn't have a way of kind of managing to kind of increase.

Overall bandwidth throughput and Thats, what the stool therapeutics collaboration represents it's.

Peter Lawson: active as well. Interesting, you raise the CD-79 side of things. CD-79 activation, obviously, is somebody that can drive B-Sol informants as well, so that it does not go through BTK.

It's a hot new target new relatively new target in the oncology space.

Yes.

The M&A.

It's a little bit of a new target from that sense and they've built I think a very compelling platform around how to prosecute that targets as well as a broader batch of owning modifying enzyme. So you kind of made sense to us to do that as a collaboration with them rather than try and reinvent everything in house. So going forward again, we will continue to look at opportunities like that.

Peter Lawson: But again, those lymphomas look active or sensitive to 2114 as well. So, yeah, it'll certainly be interesting to see whether downstream of agents directed at CD-79, whether we have an opportunity to pick up those resistant patients as well. Time will tell. Great. Well, thank you so much for taking all my questions, Andy. Thank you. Your next question comes from the line of Jay Olsen from Oppenheimer.

One side, what we spoke to the App.

Interesting assets that might get us into the clinic sooner.

Great. Thanks for taking our questions.

Sure.

Okay.

Your next question comes from the line of Chris <unk> from Goldman Sachs. Please proceed.

Thank you could I just ask about some of the contact programs. These are phase III trials going across a number of very sizable indication I know these trials have been ongoing for a while I believe you mentioned that we are potentially reaching a point, where we're going to get some progress update can you be more specific about perhaps what it will see.

Operator: Please post: Hi, this is Tchona Live for Jay. Thanks for taking the question. Can you comment on the launch of Cabo in DTC, given that it's almost three months ahead of the Perdufer date? And also, if you're counting sales in DTC into your full-year revenue guidance, thank you. Yeah, this is PJ. Happy to talk about the approval. We're certainly very pleased to have DTC approved, I think, about 79 days ahead of Padupidae. That's certainly great news for patients, as I mentioned, in the setting of high unmet medical need, so patients who really need a therapy. I am so very happy with that.

Any data in 2022, I know you've been enrolling globally, but.

And when you get that data sort of how youre thinking about what kind of decision tree point, you could be with those opportunities at those trials are designed to answer.

Yes, Chris it's Mike Thanks for the question contact Sir again, all important trials in <unk>.

Non small cell lung cancer prostate cancer and second line RCC.

<unk> done in collaboration with Roche Genentech.

Patrick J. Haley: You know, the data are very strong, and I think what we heard and continue to hear from physicians is that, you know, the progression-free survival data is very compelling. So we think, as we promote and raise awareness, we will likely get very good utilization with that. Very happy that the team was ready to go immediately and launched day one, even with the sort of rapidly accelerating timelines for approval.

I think there are exciting opportunities for Cabo.

Certainly ones that we as part of that collaboration are very much focused on in terms of execution right now so.

Do we do we see our results in 2022, well those are all and then based trials so.

I'll have to see how those go from the standpoint of the actual event rates as they did readout, but theyre certainly very important part of the of the Cabo story.

One that we hope will be successful, but that's why we do the experiment to be able to get the data and move forward as appropriate so.

But there is certainly a very high priority for the team right now and one that we are.

Patrick J. Haley: So very good news there. Thyroid cancer is a space we've been in since 2013, so we know it extremely well. We know where those physicians are and who they are, and are really excited to be working with. Yeah, Chang. This is Chris. So on the guidance question, the revenue guidance question, yeah, it's in the revenue guidance generally.

Ones that were very focused on in terms of execution.

And then from a pipeline standpoint, or 92 remains the most advanced to the program.

Can you update us with any updated thinking that youll have about particular indications that you think directing further clinical development for <unk> might head. Thank you yes.

And again, we'll speak to that as I mentioned in the.

In a previous question, we'll speak to that in more detail as we launched the first pivotal trial and activate the first sites again, we're very I think we're very pleased and encouraged by what we're seeing right now clinically relative to cabo across a range of different components.

Chris Shibutani: Yeah, it's in the revenue guides, generally.

Chris Shibutani: Your next question comes from the line of Peter Lawson from Bartways. Please proceed.

Operator: Hey, thanks for taking my questions. Just on the HCC filing, are you waiting for further data for that filing? And also, could Excel 092 also have a place? Peter, Mike, I missed the first part of that question. Did you say it again?

Components of activity and its overall profile and looking forward to getting that moving in pivotal trials as quickly as possible as we advance.

XP owe to the tissue factor targeting ADC as well as XL, one or two and now one four that Peter talked about today. So pleased with the overall progress. The goal is to get really exciting compounds for both small molecules and biologics moving into the clinic as quickly as possible with a focus on quality.

Michael M. Morrissey: Oh, just on the HTC filing; are you waiting for other data before? Oh, I see. Yeah, yeah, as we talked about in the prepared remarks, we've agreed with the agency to submit the FNDA once we have the final overall survival data in hand. So that's what's driving it from a Q4, 2021 event to a 2022 event. And do you need to see more than a trend on that OS?

And novelty and <unk>.

The ability of success in helping patients with cancer.

Great well Unfortunately.

Thanks, Chris.

Your next question comes from the line of Mike King from H C. Wainwright. Please proceed.

Thanks, guys, Mike My follow up was answered thank you.

Michael M. Morrissey: Yeah, as I addressed them in one of the earlier questions, I don't want to speculate on that whole topic. We've agreed to file once we have the final survival data in hand, so stay tuned. Gotcha. And then Excel 092, could that find a place in HCC, or is that? kind of white space not available?

Okay. Thanks, Mike operator, do we have any more questions.

At this time there are no further questions and so I will turn the call over to today's host Susan Hubbard Ms Hubbard.

Okay. Thank you very much and thank you all for joining US today, we certainly welcome your follow up calls with any additional questions. You may have that we didn't get to during today's call. Thanks. So much.

Yeah.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

[music].

Yes.

Okay.

Yes.

Okay.

Okay.

Michael M. Morrissey: No, it's certainly available, and we're talking a lot about various indications and combinations for 092 right now. Certainly, some of the learnings that we've seen from 312, if you look at the broader context of HCC, say, even with some of the emerging data from other I.O combinations, 092 could play a very, I think, very interesting role as potential doublets or triplets for HCC. We have to sit down and think about priorities and think about how we want to do that. But I would say, in general, you know, we view development. in a broad sense, like we're doing with RCC. It's not just one shot.

[music].

Michael M. Morrissey: It's multiple shots on goal, multiple trials, covering a variety of lines of therapy, combinations, et cetera, to give us the opportunity. And that's the goal we have for all of our compounds, all of our trials, is to move the bar up in terms of standard of care for patients. So certainly, 092 could play an important role in a number of different indications, liver disease being one of them going forward.

Michael M. Morrissey: And just a final question. Generic Sutton, how did that affect revenues in the quarter, and then how do you think it kind of changes the way you're thinking about your position in yourself around generic suits? Yeah, again, as I said numerous times in the prepared remarks, demand grew in the face of increased competition, and that included that issue as well. So we're pleased with demand growth, you know. Obviously, better data drives demand, and we think we have that with 90R and Meteor and Kavostan, et cetera. So, at the end of the day, better data wins, right? And that's what we're seeing here.

Michael M. Morrissey: Okay, thank you so much. Thanks, thank you. Your next question comes from the line of Ken and McKay from RBC Capital Markets. Please, All right, thanks for taking the question. Maybe Mike or PJ, can you help us understand the magnitude of the commercial frontline RCC market that could be addressed by the triplet of Cabo Ipe Niva from your conversations with both KOLs and community positions in your service? Thank you. PJ, I want to give that a shot, and I'll provide color commentary as we go.

Patrick J. Haley: Yeah, you know, obviously it'll be important to see the data, and thanks for the question, Kenon. You know, the trial is being run in the intermediate and poor risk setting where the control arm 214 is approved. You know, I think just generally what I'd say about it is, as Mike mentioned earlier, it's exciting to really be on the cutting edge here in terms of having the first triplet moving forward.

Patrick J. Haley: in a study in RCC, and when you think about, I guess, just to contextualize the poor intermediate risk patient population is about 75, 80% roughly of that first line patient population, which is about 14,000 patients in the U. So, excited to see the data one available. Okay, next question. Your next question comes from the line of Jess Hung from Morgan Stanley. Please post

Operator: Hi, this is Melina Santoro on behalf of Jeff. Thanks for taking our question. Regarding Cabo and Nevo in first line RCC, with the continued growth in new patient share in the community setting, what do you see as the remaining opportunity for growth in that segment? And maybe there are certain patient populations that would be easier to reach?

Patrick J. Haley: Yeah, hi Molina, thanks for the question. This is PJ.

Patrick J. Haley: I'd say, you know, we're very excited about the data and the feedback we're hearing from physicians as sort of a profile of overall survival and improved tolerability and safety profile with the combination 40 milligram dose of Cabo. We're hearing great feedback on that, as well as quality of life. So I think broadly we're seeing inroads to an opportunity and, you know, still kind of early days in our launch, so we can execute against that, and I think, you know, patients will have the opportunity to benefit from it, regardless of the setting.

Patrick J. Haley: You know, we continue to have more data in terms of PAPMET and non-clear cell, and other data being presented that continue to really round out the clinical profile of Kabozantinib and in RCC, and we're really pleased with that. If you look at the NCC and guidelines, I think it is a good exercise to do.

Patrick J. Haley: You really see that we're well positioned as a preferred agent across risk groups as well as lines of therapy, and really community physicians, in particular, refer to that, and we're really pleased with our positioning there. So I think we have, you know, many more patients who can benefit from common medical

[music].

Patrick J. Haley: That's helpful, thank you. And then I have one more.

Peter Lawson: So you continue to establish these collaborations with other technologies, recently with Storm Therapeutics. Can you kind of talk about your strategy going forward? Is it to be more opportunistic with new platforms and technologies, or are there certain capabilities and technologies that you want to remain more focused on?

Peter Lawson: Thanks. Good. Thanks for the question. I mean, I think going forward, we're going to kind of stay consistent with what we've been doing.

Peter Lawson: Obviously, we have our own internal small molecule discovery capability, which is going through a pretty significant expansion right now. But, you know, we've always wanted to take the opportunity to complement what we can do internally with expertise that, you know, other folks have. Maybe we have a different approach, but maybe they have specific expertise in various areas that we don't have, as a way of kind of managing to increase our overall bandwidth and throughput. And that's what the storm did.

Peter Lawson: therapeutic collaboration represents. It's a very hot new target, or also a new target in the oncology space. It's a deaminase. It's a little bit of a newer target in that sense, and they've built a very compelling platform around how to prosecute that target as well as a broader batch of RNA modifying enzymes. So it kind of made sense to us to do that in collaboration with them rather than try and reinvent everything in-house.

Peter Lawson: So going forward, Again, we'll continue to look at opportunities like that, be that on the platform side, all with folks that have interesting assets that might get us into the clinic sooner. Great, thanks for taking our questions.

Operator: Your next question comes from the line of Chris Shibutani from Goldman Sachs. Please post. Thank you.

Chris Shibutani: Could I just ask about some of the contact programs? These are phase three trials going across a number of very sizable indications. I know these trials have been ongoing for a while, but I believe you mentioned that we're potentially reaching a point where we're going to get some progress updates. Can you be more specific about perhaps whether we'll see any data in 2022? I know you've been enrolling globally. And when you get that data, sort of how you're thinking about what kind of decision point you could be at with those opportunities that those trials are designed to answer. Yeah, Chris, it's Mike.

Michael M. Morrissey: Thanks for the question. Contacts are, again, all important trials in non-small cell lung cancer, prostate cancer, and second line RCC, all being done in collaboration with Roche and N-Tech. I think they're exciting opportunities for Cabo and certainly ones that we, as part of that collaboration, are very much focused on in terms of execution right now. So, you know, do we see it? Results in 2022, well, those are all event-based trials. So, you know, we have to see how those go from the standpoint of the actual event rates as they read out.

[music].

Michael M. Morrissey: But they're certainly a very important part of the Cabo story and one that we hope will be successful. But, you know, that's why we do the experiment to be able to get the data and move forward as appropriate. So, but there's certainly a very high priority for the team right now and one that we're, ones that we're very focused on in terms of execution. And then from a pipeline standpoint, 092 remains the most advanced of the programs.

Michael M. Morrissey: Can you update us with any updated thinking that you have about particular indications that you think directing further clinical development for 092 might lead to? Yeah, again, we'll speak to that, as I mentioned in a previous question. We'll speak to that in more detail as we launch the first pivotal trial and activate the first sites. Again, we're very, I think we're very pleased and encouraged by what we're seeing right now clinically relative to Cabo across a range of different components of activity and its overall profile, and looking forward to getting that moving in pivotal trials as quickly as possible. As we advance XBO. O2, the tissue factor targeting ADC, as well as XL 102 and now 114 that Peter talked about today,

Michael M. Morrissey: So pleased with the overall progress; the goal is to get really exciting compounds for both small molecules and biologics moving into the clinic as quickly as possible, with the focus on quality and novelty and, you know, a high probability of success in helping patients with cancer. Thank you, Chris. Your next question comes from the line of Mike King from H.C. Weinwright. Please post: Oh, thanks; my follow-up was answered. Thank you. Okay, thanks.

Operator: Operator, do we have any more questions? At this time, there are no further questions, and so I will turn the call over to today's host, Susan Hubbard.

Susan T. Hubbard: Okay, okay, Jeff, thank you very much, and thank you all for joining us today. We certainly welcome your follow-up calls with any additional questions you may have that we didn't get to during today's call. Thanks so much. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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