Q1 2022 Exelixis Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Exelixis Q1 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star 1 on your telephone.

Ladies and gentlemen, thank you for standing by and welcome to the XL XL Excel.

Q1, 2022 financial results conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require.

Operator: Please be advised that today's conference is being recorded. If you require any further assistance, please press Star 0. I would now like to hand the conference over to your speaker, Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please go ahead. Thank you, Cherie, and thank you all for joining us for the Exelixis First Quarter 2022 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO, Chris Senner, our Chief Financial Officer, PJ Haley, our Executive Vice President of Commercial, Vicky Goodman, our Chief Medical Officer, and Peter Lamb, our Chief Scientific Officer, who will together review our progress for the first quarter 2022 During the call today, we will refer to financial measures not calculated according to generally accepted accounting principles.

Any further assistance. Please press star Zero I would now like to hand, the conference over to your Speaker Ms. Susan Hubbard Executive Vice President of Public Affairs and Investor Relations. Please go ahead.

Susan Hubbard: 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 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. However, actual events or results could, of course, differ materially.

Thank you Shari and thank you all for joining us for the <unk> first quarter 2022 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 Dickie Goodman, our Chief Medical Officer, and Peter Lamb, Our Chief Scientific Officer, who will together review our progress for the first quarter 2022 ended March 31.

2020 to during the call today, 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-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 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, which under the heading risk factors identify important factors that could cause actual result.

Susan Hubbard: We refer you to the documents we file from time to time with the FEC, 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 limitation, risks and uncertainties related to product commercial success, market competition, regulatory review, and approval processes, conducting clinical trials, compliance with applicable regulatory requirements, our dependence on collaboration partners, and the level of cost associated with discovery, product And with that, I'll now turn the call over to Mike. All right. Thank you, Susan.

<unk> to differ materially from those expressed by the company verbally and in writing today, including without limitation risks and uncertainties related to product commercial success market competition regulatory review and approval processes conducting clinical trials 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 and with that I'll now 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 first quarter 2022 across all components of our business we can.

Michael Morrissey: And thanks to everyone for joining us on the call today. Exelixis had a strong first quarter of 2022 across all components of our business. We continue to grow the Cabo Antidote franchise and advance a diversified pipeline of clinical and discovery programs while focusing on important upcoming milestones, including top-line results for ongoing pivotal trials, ASCO preparation, and the Cabo ANDA trial starting on May 6th. We'll keep our prepared remarks short today so we can address your important questions.

Continued to grow the Cabozantinib franchise in advance a diversified pipeline of clinical and discovery programs, while focusing on important upcoming milestones, including topline results for ongoing pivotal trials asphalt preparation and the Cabo and the trial starting on May 16th.

We will keep our prepared remarks short today. So we can address your questions.

Michael Morrissey: Key highlights from Q1 include, first, the Cabo Zante business continues to grow and generate funds to advance our portfolio of next-generation therapies for oncology. Kyle Medics maintained its status as the leading TKI for RCC. The Cabo franchise grew 37% year-over-year compared to first quarter 2021, marking its sixth consecutive quarter of growth.

Highlights from Q1 include first the Cabozantinib business continues to grow and generate the funds to advance our portfolio of next generation therapies for oncology.

<unk> maintained its status as the leading Teekay I for RCC.

<unk> franchise grew 37% year over year compared to the first quarter 2021, marking its sixth consecutive quarter of growth.

Michael Morrissey: Second, our emerging bi-coastal development team is focused on expanding potential combo indications with numerous expected top-line results for important cosmic and contact pivotal trials and advancing our growing pipeline of clinical compounds, including XL092, XB002, XL102, and XL114, including the upcoming initiation of the pivotal trial program for XL092. Third, and finally, our drug discovery network of internal and collaborative efforts, along with extensive business development activities across both small molecule and biologic platforms, continues to advance at a rapid pace, with the selection of up to five new development candidates expected in 2020.

Second our Reemerging Bicoastal development team is focused on expanding potential Cabo indications.

Numerous expected topline results were important cosmic and contact pivotal trials and advancing our growing pipeline of clinical compounds, including <unk> XP <unk> XR, we have to sell 114.

<unk> the upcoming initiation of the pivotal trial program for excel over 92.

Third and finally, our drug discovery network of internal and collaborative efforts along with extensive business development activities across both small molecule and biologic platforms continues to advance at a rapid pace with the selection of up to five new development candidates expected in 2022.

Michael Morrissey: So with that, please see our press release issued an hour ago for our first quarter financial results and an extensive list of key corporate milestones achieved in the quarter. I'll now turn the call over to Chris. Thanks, Mike. For the first quarter of 2022, the company reported total revenues of approximately $356 million, which included Cabo Zante franchise net product revenues of $310.3 million.

So with that please see our press release issued an hour ago for our first quarter financial results and an extensive list of key corporate milestones achieved in the quarter I'll now turn the call over to Chris.

Chris Senner: Complementix Net Product Revenues for $302.8 million, which included approximately $9 million in clinical trials. Gross net for the composition franchise in the first quarter of 2022 was 30.8%, which is significantly higher than the gross net of 24.5% we experienced in Q4 2021. This increase in gross net deductions in the first quarter 2022 translates to an approximate $28 million impact when compared to the fourth quarter 2021.

Chris Senner: This increase in gross net was primarily driven by higher 340B utilization, higher Medicare Part D, and higher copay assistance, primarily associated with patients on high-deductible medical insurance. Historically, we have experienced higher Medicare Part D and copay assistance expenses in the first quarter of the year due to many, many Part D patients moving through the donor hole and commercial patients satisfying their deductibles during the start of the year. Our 340B utilization in the first quarter was at a historically high level.

Thanks, Mike for the first quarter 2022, the company reported total revenues of approximately $356 million, which included Cabozantinib franchise net product revenues of $310 $3 million Cabo.

<unk> net product revenues were $302 8 million, which included approximately $9 million in clinical trial sales.

Gross to net for the Cabozantinib franchise in the first quarter 2022 was 38%, which is significantly higher than the gross to net of 24, 5% we experienced in Q4 2021.

This increase in gross to net deductions in the first quarter 2022 translates to an approximate $28 million impact when compared to the fourth quarter of 2021.

This increase in gross to net was primarily driven by higher 340, B utilization higher Medicare part D and higher co pay assistance, primarily associated patients in high deductible medical insurance plans.

Historically, we have experienced higher Medicare part D and co pay assistance expenses in the first quarter of the year.

Due to many many part D patients moving through the donut hole and commercial patient satisfying their deductibles during the start of the year or $3 40, B utilization in the first quarter was at historically high level.

Chris Senner: Our trade inventory weeks on hand remain relatively flat when compared to the fourth quarter of 2021. Total revenues also included approximately $46 million in collaboration revenues earned primarily from Ipsen, Takeda, and Genente. Our total operating expenses for the first quarter of 2022 were approximately $273 million compared to $334 million in the fourth quarter of 2021. R&D expense was the primary driver of the decrease in total operating expenses, which was primarily related to lower licensing expenses.

Our trade trade inventory weeks on hand remained relatively flat when compared to the fourth quarter 2021. Total revenues also included approximately $46 million in collaboration revenues earned primarily from Ipsen Takeda and Genentech.

Our total operating expenses for the first quarter of 2022 or approximately $273 million compared to $334 million in the fourth quarter of 2021.

R&D expense was the primary driver of the decrease in total operating expenses, which was primarily related to lower licensing expenses provision for income taxes for the first quarter of 2022 was approximately $17 million compared to approximately $23 million in the fourth quarter of 2021.

Chris Senner: Provision for income taxes for the first quarter of 2022 was approximately $17 million, compared to approximately $23 million in the fourth quarter of 2021. The company reported net income of approximately $69 million or $0.21 per share on a fully diluted basis for the first quarter of 2022. The company also reported non-GAAP net income of approximately $84 million, or $0.26 per share on a fully diluted basis. Non-GAAP net income excludes the impact of approximately $15 million of stock-based compensation expense net of the related income tax effect.

The company reported GAAP net income of approximately $69 million or 21 cents per share on a fully diluted basis for the first quarter 2022.

We also reported non-GAAP net income of approximately 84 million or <unk> 26 per share on a fully diluted basis non.

non-GAAP net income excludes the impact of approximately $15 million of stock based compensation expense net of the related income tax effect.

Chris Senner: Cash-in investments for the quarter ended March 31, 2022 were approximately $2 billion. And finally, we are reiterating our full year 2022 financial guidance, which is detailed on slide 13 of our earnings presentation. And with that, I'll turn the call over to Peter. Thank you, Chris.

Cash and investments for the quarter ended March 31, 2022 was approximately $2 billion and finally, we are reiterating our full year 2022 financial guidance, which is detailed on slide 13 of our earnings presentation.

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

PJ Haley: The first quarter of 2022 was a strong quarter for the Cabo Zantanib franchise as we built on the significant momentum of 2021 and the milestone of surpassing $1 billion of US net product revenue. The team continues to execute at a high level, which has resulted in Cabo Medics continuing to be the number one prescribed TKI in RCC. Furthermore, KaboMedx Total Prescriptions for TRX have now grown for six consecutive quarters. Demand growth is being driven primarily by the long duration of therapy for patients on Cabo Medix in combination with Novolumab and the first line.

Thank you Chris the first quarter of 2022 was a strong quarter for the Cabozantinib franchise as we built on the significant momentum of 2021, and the milestone of surpassing $1 billion.

U S net product revenue.

The team continues to execute at a high level, which has resulted in cabo metrics continuing to be the number one prescribed <unk> in RCC.

Furthermore, <unk> total prescriptions.

T Rx have now grown for six consecutive quarters.

Demand growth is being driven primarily by the long duration of therapy for patients on Cabo in combination with Nolan map in the first line setting.

Yeah.

PJ Haley: Prescription trends remain strong; Q1 2022, year over year TRX growth in Q1 2022 was 37% relative to Q1 2021. Given the clinical data from the Checkmate 90-Hour Study, we anticipate... These first-line combination patients will receive therapy for approximately a year and a half, on average, thus driving a significantly longer treatment duration for carbomethics.

Prescription trends remained strong in Q1 2022.

Year over year T. Rx growth in Q1, 2022 was 37% relative to Q1 2021.

Given the clinical data from the Checkmate <unk> study we anticipate these.

These first line combination patients to receive therapy for approximately.

On average, thus driving a significantly longer treatment duration for Cabo mix.

PJ Haley: We are encouraged by the fact that, in our data, we see a near doubling of the amount of new patient starts at the 40 mg dose in Q1 2022 since the Checkmate 90-yard launch in January 2021. This is further indication that the combination uptake in the first line setting is robust. Turning to the TKI market basket of Cabo Medix and Lida, Sutan, Votriot, and Lenvima.

We are encouraged by the fact that in our data we see a near doubling of the amount of new patient starts at the <unk>.

40 milligram dose in Q1 2022.

Since the checkmate <unk> 90 or launch in January 2021.

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

Turning to the <unk> market basket of Cabo medics, and lighter Sutent bootery, it and when bema.

PJ Haley: Automedics TRX market share has increased every quarter since Q1 2021, and the share in Q1 2022 was 36%. As we've discussed previously, the first-line RCC market is very competitive, and we are pleased with the performance of Cabo Medix in combination with Nivolumab in this setting. Furthermore, we're still not seeing any significant competitive impact on our market share.

<unk> T Rx market share has increased every quarter since Q1 2021 and the share in Q1 2022 was 36%.

As we've discussed previously the first line RCC market is very competitive and we are pleased with the performance of Cabo <unk> in combination with Napoleon map in this setting.

Furthermore, we are still not seeing any significant competitive impact on our market share.

PJ Haley: Uptake in the first line is broad across clinical risk groups and practice settings, and prescriber experience to date has been very positive. We believe that all of this, taken together with the momentum in the business, positions Cabo Medics for continued growth throughout 2022. Turning to other settings, we are pleased that the Cabo Medics second line RCC business remains strong and was stable in Q1, while growth continued in the first line settings.

Uptake in the first line is broad across clinical risk groups and practice settings and prescriber experience to date has been very positive.

We believe that all of this taken together with the momentum in the business positions Cabo medics for continued growth throughout 2022.

Turning to other settings, we're pleased that the Cabo second line RCC business remained strong and was stable in Q1, while growth continued in the first line setting.

Vicky Goodman: In HCC, our business was stable in Q1, and Cabo Medics continues to be the most prescribed TKI in the second-line setting for patients treated with immunotherapy-containing regimens in the first, with regard to second-line DPs. We are pleased with the launch, and at Q1, we continue to see strength in new patient starts and demand in this indication. Looking beyond the six current U.S. indications for Kapos Antenib, we are planning for numerous lifecycle expansion opportunities as they begin to have top-line data readouts in 2022.

In HCC, our business was stable in Q1, and Cabo <unk> continues to be the most prescribed <unk> in the second line setting for patients treated with immunotherapy containing regimens in the first line.

With regards to second line DTC, we're pleased with the launch and in Q1, we continued to see strength in new patient starts and demand in this indication.

Looking beyond the six current U S indications for Cabozantinib, we're planning for numerous lifecycle expansion opportunities as they begin to have top line data readouts in 2022.

Vicky Goodman: We look forward to having the opportunity, pending data and approval, to bring Cabo Medix to many more patients in need of additional treatment options. Our team remains highly focused and motivated to compete every day to bring the benefit of Cabo Medix to all eligible patients as we continue to build the franchise and serve patients. With that, I'll turn the call over to PJ. Thank you, PJ. Good afternoon.

We look forward to having the opportunity pending data and approval to bring Cabo medics to many more patients in need of additional treatment options.

Our team remains highly focused and motivated to compete every day to bring the benefit of Cabo medics to all eligible patients as we continue to build the franchise and serve patients and with that I'll turn the call over to Vicki.

Vicky Goodman: Today, I will cover our progress towards our organizational expansion to the East Coast, Exelixis East, as well as progress on our pipeline and highlights of cabozantinib data to be presented at the upcoming ASCO meeting in June. As we announced earlier this year, we are developing a presence in greater Philadelphia as we seek to access talent on both coasts to support our expanding development organization. We have made progress since the last quarterly update, including signing a lease for intermediate-term space in King of Prussia, Pennsylvania, which we expect to occupy by July of this year and which can hold approximately 140 office-based employees.

Thank you P J good afternoon.

I will cover our progress towards our organizational expansion to the east coast excellence disease as well as progress on our pipeline and highlights of Cabozantinib data to be presented at the upcoming Astro meeting in June .

Vicky Goodman: We have also identified a potential long-term build-to-suit site of approximately 200,000 square feet in close proximity to our intermediate term space in King of Prussia, and we have begun hiring to open roles within the development organization in King of Prussia, supported by an ongoing recruitment campaign to raise awareness of our presence in the Philadelphia area.

As we announced early this year, we are developing our presence in greater Philadelphia as we seek to access talent on both coasts to support our expanding development organization.

We have made progress since the last quarterly update including signing a lease for intermediate term space in King of Prussia, Pennsylvania, which we expect to occupy by July of this year and which can hold approximately 140 office based employees we.

We have also identified a potential long term build to suit site of approximately 200000 square feet in close proximity to our intermediate term space in King of Prussia, and we've begun hiring to open roles within the development organization in King of Prussia supported by an ongoing recruitment campaign to raise awareness of our <unk>.

Presence in the Philadelphia area I'm excited by the opportunity to create a bicoastal presence across two biotechnology hubs operating as one team focused on the singular mission of developing medicines to improve the lives of patients with cancer.

Vicky Goodman: I'm excited by the opportunity to create a bi-coastal presence across two biotechnology hubs operating as one team focused on the singular mission of developing medicines to improve the lives of patients with cancer. Turning now to an update on our pipeline, beginning with our cabozantinib registrational trials. We remain on track for three phase three readouts this year. For COSMIC 313, evaluating cabozantinib in combination with nivolumab and ipilimumab in intermediate and poor risk renal cell carcinoma, we expect to release top-line results in July.

Vicky Goodman: An interim readout for the primary endpoint of overall survival for contact O1 and readout of the progression-free survival endpoint for contact O3, in combination with tezolizumab in PD-1 experienced non-small cell lung cancer and renal cell carcinoma, respectively, is expected in the second half of 2022.

Turning now to an update on our pipeline beginning with our Cabozantinib Registrational trials, we remain on track for three phase III Readouts. This year for cosmic 313 evaluate evaluating cabozantinib in combination with Napoleon Madden Epilemma mab in intermediate and poor risk renal cell carcinoma.

We expect to release top line results in July .

An interim readout for the primary endpoint of overall survival for contact at one and readout of the progression free survival endpoint for contact with three in combination with the Tesla lithium mab in PD, one experienced non small cell lung cancer and renal cell carcinoma, respectively are expected in the second half of 2022.

Vicky Goodman: Contact 02, our phase 3 study in combination with tezolizumab and metastatic castrate resistant prostate cancer, is expected to complete enrollment this year. We continue to make progress on our pipeline molecules. XL092, our next generation MET, AXL, MIR, and VEGFR tyrosine kinase inhibitor, is being explored in combination with several checkpoint inhibitors and IO combinations and is progressing towards registrational studies.

Contact out to our phase III study in combination with the schedule. There's a map in metastatic castrate resistant prostate cancer is expected to complete enrollment this year.

We continue to make progress on our pipeline molecules X L. O 92, our next generation met exon Merck and Veg F. Our tyrosine kinase inhibitor is being explored in combination with several checkpoint inhibitors and Io combinations and its progressing towards Registrational studies.

Vicky Goodman: We recently initiated dosing in a nivolumab-based immuno-oncology combination study in genitourinary malignancies, and we are amending that protocol to remove the triplet combination of BEMPEG with XL092 and nivolumab and replace it with an alternative triplet combination. We also continue to explore additional potential combination approaches with novel agents and have made progress with several partners to bring novel combinations Our first planned Phase 3 for XL092, Stellar 303, and third-line, non-MSI high colorectal cancer will be initiated in the second quarter of this year.

We recently initiated dosing on a Nolan mab based immuno oncology combination study in genital urinary malignancies, and we are amending that protocol to remove the triplet combination of been pegged with X L. O 92 interval of Mab and replace it with an alternative triplet combination.

We also continue to explore additional potential combination approaches with novel agents and have made progress with several partners to bring novel combinations into the clinic.

Our first planned phase III for <unk>, Hello, nine two stellar three O three and third line non MSI high colorectal cancer will be initiated in the second quarter of this year.

Vicky Goodman: As a reminder, data supporting this study come from two studies of cabozantinib and colorectal cancer, which were presented at ASCO GI in January and demonstrated promising activity in comparison to historical controls of regorafenib, the current standard of care. XB002, our first antibody drug conjugate, which targets tissue factor without interfering with the coagulation pathway in preclinical models, continues in dose esc Thus far, it has been well tolerated, with no bleeding events observed.

As a reminder, data supporting this study comes from two studies of Cabozantinib in colorectal cancer, which were presented at ESMO Gi in January and demonstrated promising activity in comparison to historical controls of <unk>. The current standard of care.

X D O two our first antibody drug conjugate, which targets tissue factor without interfering with the coagulation pathway in preclinical models continues in dose escalation. Thus far it has been well tolerated with no bleeding events observed.

Vicky Goodman: We are now also initiating a dose finding for combinations, beginning with an XB002 dose level that has cleared safety evaluation in the monotherapy cohort. A Phase I study of XL102, our oral CDK7 inhibitor, is expected to move into both single-agent and combination expansion cohorts after completion of ongoing dose escalation and determination of a Phase II dose. Finally, the Excel 114 Phase 1 trial is now open for enrollment.

We are now also initiating dose finding for combinations beginning with an X P. O O two dose level, which has cleared the safety evaluation in the monotherapy cohort.

Our phase one study of <unk>, one O two our oral CDK <unk> inhibitor is expected to move into both single agent and combination expansion cohorts. After completion of ongoing dose escalation and determination of a phase two dose.

Finally, the XL 114 phase one trial is now open for enrollment.

Vicky Goodman: We expect to provide Phase 1 clinical updates for XL092, XB002, and XL102 in the second half of this year. Finally, we are pleased that five cabozantinib abstracts have been accepted for oral presentations at the upcoming ASCO meeting, and I'd like to highlight three of these. These include two presentations based on COSMIC-021, our multi-tumor signal finding study, the first in three distinct populations of bladder cancer patients, and the other from two cohorts of non-small cell lung cancer patients previously treated with immune checkpoint inhibitors and platinum-based chemotherapy who received either cabozantinib plus atezolizumab or cabozantinib alone. Additionally, an investigator-sponsored phase two study evaluating the addition of cabozantinib to pembrolizumab in PD-L1 positive squamous cell carcinoma of the head and neck will be presented.

We expect to provide phase one clinical updates for <unk> nine two X P O two and X L. One O two in the second half of this year.

Finally, we are pleased that five cabozantinib abstracts have been accepted for oral presentation at the upcoming Astro meeting and I'd like to highlight three of these these.

These include two presentation based on cosmic <unk> 'twenty, one our multi tumor signal finding study the first in three distinct populations of bladder cancer patients and the other from two cohorts of non small cell lung cancer patients previously treated with immune checkpoint inhibitors and platinum based chemotherapy Hoover's.

<unk>, either cabozantinib, plus a tesla lithium mab or Cabozantinib alone. Additionally, an investigator sponsored phase II study evaluating the addition of Cabozantinib <unk> Mab and PDL, one positive squamous cell carcinoma of the head neck will be presented and with that I'll turn it over to Peter.

Peter Lamb: And with that, I'll turn it over to Peter. Thank you, Vicky. I am pleased to provide a quick overview of the Exelixis preclinical pipeline. We have a broadening pipeline derived from both internal and collaboration efforts with over 10 programs in progress, giving us the possibility of advancing up to five compounds into preclinical development in 2022. As you can see in the pipeline slide, the preclinical pipeline is a balanced mix of small molecules and biotherapeutics, which is reflective of how we see the clinical pipeline evolving in the future.

Thank you Vicky I am pleased to provide a quick overview of the <unk> preclinical pipeline.

We have a broadening pipeline derived from both internal and collaboration efforts within the 10 programs in progress given the possibility of advancing up to five compounds into preclinical development in 2022.

As you can see in the pipeline slide the preclinical pipeline has a balanced mix of small molecules and bio therapeutics, which is reflective of how we see the clinical pipeline building in the future.

Peter Lamb: We're continuing to accelerate the expansion of the pipeline both through internal growth and through business development activities. Last year, our internal small molecule discovery group occupied new laboratories on our Alameda campus, and we have further embarked on an expansion of our lab space in Alameda to accommodate future growth. In addition, we've located a site in Pennsylvania for an East Coast Laboratory expansion, which will allow us to tap into the locally available talent pool and will complement our newly opened development offices in the same area.

We're continuing to accelerate the expansion little pipeline, both through internal growth and some business development activities.

Last year, our internal small molecule discovery group occupied new laboratory use on our Alameda campus and we have further embarked on expansion of our lab space in Alameda to accommodate future growth in.

In addition, we have located a site in Pennsylvania for an East Coast Laboratory expansion, which will allow us to tap into the locally available talent pool and will complement our newly opened development offices in the same area.

Peter Lamb: We also have significant ongoing efforts on the business development front aimed at providing us access to novel targets, capabilities, and technologies that would complement and accelerate our ongoing biotherapeutics and small molecule strategy. In addition, we're assessing late pre-clinical and early clinical assets with the aim of identifying multiple opportunities to invest in. We're looking broadly at both small molecule and biotherapeutic opportunities that have the potential to address significant solid tumor populations where we have conviction in the science and visibility into a development strategy. We look forward to providing additional updates on these BD discussions as they come to fruition. I'll now turn the call back over to you.

We also have significant ongoing efforts on the business development front aimed at providing us access to novel targets capabilities and technologies that will complement and accelerate our ongoing biotherapeutics and small molecule strategies.

In addition, we're assessing late preclinical and early clinical assets with the aim of identifying multiple opportunities to invest and we're looking broadly at both small molecule and biotherapeutics opportunities that have the potential to address significant solid tumor populations, where we have conviction in the science and visibility into a development strategy we look.

Forward to providing additional updates on these BD discussions as they come to fruition I'll now turn the call back over.

Michael Morrissey: All right, thanks, Peter. As you heard on the call today, the Excel team executed across all components of our business in Q1, with significant progress across our pipeline, digital development, and commercial activities. We're excited about the potential of the multiple growth drivers ahead of us to move the business forward and, most importantly, put Exelixis in a position to help many more cancer patients. I'll close here by thanking the Exelixis team for their individual and collective efforts to support our many drug discovery, development, and commercial activities.

Alright, Thanks, Peter as you heard on the call today. The excel team has executed across all components of our business in Q1 with significant progress across our pipeline.

And commercial activities.

It is about the potential multiple growth drivers ahead of us to move the business forward and most importantly put <unk> in a position to help many more cancer patients.

I'll close here by thanking the <unk> team for their individual and collective efforts to support our many drug discovery development and commercial activities, we have the vision determination and resources to becoming multi product enterprise and expand our reach to serve cancer patients across the globe.

Michael Morrissey: We have the vision, determination, and resources to become a multiproduct enterprise and expand our reach to serve cancer patients across the globe. We look forward to updating you on our progress in the future. Thank you for your continued support and interest in Exelixis.

We look forward to updating you on our progress in the future. Thank you for your continued support and interest in <unk> where he.

Operator: And we're happy to now open the call for questions. Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key.

Happy to now open the call for questions.

Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster. Our first question will come from Asthika Goonewardene with Truist. Please go ahead. Hey guys, thanks for taking my questions. The Grosse Denette is a little higher than what I was used to at Cabo. I just wanted to check if there was anything unusual about this quarter and if this is the right season or inflection to assume going forward for future first quarters. Hi Asthika, it's Chris.

Our first question will come from S. Chica <unk> with <unk>. Please go ahead.

Hey, guys. Thanks for taking my questions.

Got it.

Just check on the gross to net a little bit here for Q1, it's a little higher than what I was used to at Cabo I just want to check if he was there anything unusual about this quarter and our system ease of mind.

Inflection to assume going forward for future first quarters.

I have a follow up for Vicki please.

Okay.

Chris Senner: So I guess just starting off, I mean, as PJ talked about, we had strong growth, and we've had growth over the last six quarters, so that's an important element. There were seasonal aspects of it around Medicare Part D, where you have patients going through the donor hole and also the copay assistance for commercial patients and those patients, you know, going through their deductibles and usually in the beginning part of a year.

That's correct. So I guess starting off I mean, that's P. J talked about we had strong growth and we've had we've had growth over the last six quarters. So that's an important element to this there was the seasonality aspects of it around Medicare part D, where you have patients going through the donut hole and also the co pay assistance for commercial patients and those patients going through their deductibles.

And usually in the beginning part of the year.

Chris Senner: And then on top of that, the 340B was at a higher level, or, as I said, the highest level we've seen. And we've seen that segment of our Gross Donets grow over the last several years. And I think it's growing from an industry perspective, also. So those are the three primary drivers of what we saw in Gross Donets. Okay, so would it be right to kind of assume a similar kind of rate for Q1 2023 as well? Yeah, I wouldn't, I wouldn't project that out for the next year.

And then on top of that the 340 B.

Was at a higher level of as I said, the highest level, we've seen and we've seen that segment of the <unk>.

Our gross to net grow over the last several years.

I think it's growing from an industry perspective also so those are those are the three primary drivers of what we saw in gross to net in Q1.

Okay. So would it be right to kind of assume this and what kind of rate for Q1 2023 as well.

Chris Senner: But you know, those seasonality items are those items that we've mentioned that are seasonal in nature have a seasonality effect will be there next year just based on what we've seen over the last several Okay, and then basically, I think I heard you say that there'll be data for 092 in the second half. Can you give us any sort of details of which studies will be presented and what we are looking for, what we'll be looking for in the data? Yes, so it will be the first in humans for 0.9.2, so that's Stellar 0.0.1, and what you can expect to see is data from expansion cohorts this year. It was wonderful. Thanks so much.

Yes, I wouldn't I wouldn't project that out.

For next year, but you know the seasonality items are those items that I've mentioned that our season season have a seasonality effect will be there next year or two.

Based on what we've seen over the last several years.

Got it Okay, and then Vicky.

Think I heard you say that there'll be data for <unk> two in the second half.

Can you give us any sort of details as to which studies will be presented and what we are looking at what we will be looking for on the data.

Yes, so it will be the first in humans four O nine two so that's a stellar 001 and what you can expect to see is data from expansion cohorts. This year.

Wonderful. Thank you so much.

Vicky Goodman: Thank you, Asthika. Thank you. Our next question will come from Michael Schmidt with Guggenheim. Please go ahead.

Thank you Africa.

Thank you. Our next question will come from Michael Schmidt with Guggenheim. Please go ahead.

Michael Morrissey: Hey guys, thanks for taking my questions. Obviously, there's a lot of focus on the ANDA trial next week with MSN, as you mentioned. But there's obviously also a second set of patents that have been asserted with a trial that's been scheduled for next year. Mike, without speculating on the outcome of the near-term trial, how should investors think about the relationship between those two sets of patents? And how should we think about reading through from a potential ruling in this first trial with respect to the second next year?

Hey, guys. Thanks for taking my questions. Obviously, there is a lot of focus on the <unk> and that trial next week with Amazon as you mentioned.

But.

Obviously also a second set of patents that have been asserted with a trial that's been scheduled for next year.

Mike without speculating on the outcome of the near term trial, how should investors think about the relationship between those two sets of patterns and how should we think about read through.

From a potential ruling in this first trial with respect to the second next year and then I had a follow up.

Michael Morrissey: And then I had a follow-up question. Yeah, Michael, thanks for the question. Yeah, look, I think we've been pretty careful not to get ahead of ourselves in the context of this whole topic, so I'm certainly not going to do that today.

Yes, Michael Thanks for the question, Yeah look I think we've been pretty careful to not get ahead of ourselves in the context of this.

This whole topic, so I'm, certainly not going to do that today.

You are correct, we have been very.

I think an appropriately aggressive in protecting our IP, that's what we do here relative to making the investments in the discovery and development and broad development of Cabo and compounds in the future. So.

Michael Morrissey: You're correct. We've been very, I think, inappropriately aggressive in protecting our IP. That's what we do here relative to, you know, making the investments in the discovery and development and broad development of Cabo and compounds in the future. So, it shouldn't be surprising that the IP estate is growing over time. But in terms of the actual details and the nuances there, I just don't want to get into that right now for all the obvious reasons. So, fair question. Stay tuned for what happens next week!

So it's not shouldn't be surprising that the the Ips state is growing over time, but in terms of the actual details of the nuances. There I just don't want to get into that right now for all the obvious reasons. So great question Steve.

Stay tuned for what happens next week and we'll go from there.

Vicky Goodman: And we'll go from there. Alright, great. And then a question on the ASCO presentation about COSMIC-021 in lung cancer, in particular. I guess, will this be just a longer follow-up from the data that we've seen before, or will there be additional patients that have been treated in the study? And could you remind us how the lung cancer patient characteristics from 021 compare with those in the Phase 3 Contact-01 study? Yeah

Alright, Great and then a question on the <unk> presentation.

From cosmic <unk> to widen in lung cancer in particular I.

I guess will this be just a longer follow up from the data that we've seen before or will there be additional patients that have been treated in the study and could you remind us how the lung cancer patient characteristics from <unk> to one comparable with those in the phase III contact go one study.

Vicky Goodman: So the data that are going to be presented are from two cohorts, as I mentioned, of COSMIC-021, Cohort 7, and Cohort 20. And so one is cabozantinib in combination with tezolizumab, and the other is cabozantinib alone. The patients had previously been treated with immune checkpoint inhibitors, as well as platinum-based chemotherapy, and so the population is similar to contact-01, and we'll be presenting roughly two years of follow-up for these patients, presenting response, other efficacy outcomes, as well as safety data for those patients. Okay, great. Thank you. Thank you. Our next question will come from Andy Hsieh with William Blair. Please go ahead.

Yeah sure. So the data that are going to be presented are from two cohorts as I mentioned of.

Cosmic <unk> 'twenty, one cohort seven and cohort 'twenty and so one is cabozantinib in combination with the Tesla lithium mab and the other is cabozantinib alone.

Yeah. The patients have previously been treated with immune checkpoint inhibitors as well as platinum based chemotherapy and said the population is similar to to contact at one and will be presenting.

Roughly two years of follow up for these patients.

Presenting response.

Other efficacy outcomes as well as safety data for those patients.

Okay, great. Thank you.

Thank you. Our next question will come from Andy Shay with William Blair. Please go ahead.

PJ Haley: Oh, great. Thanks for taking my questions and congratulations on the very robust quarter-over-quarter growth. So, I just want to follow up on Michael's question, actually, the last one. But I think, you know, I don't want to put words in his mouth.

Oh, great. Thanks for taking my questions and congratulations on the very robust quarter over quarter growth.

So I just wanted to follow up on Michael's question actually.

Just the last one so I think.

I don't want to put it or is it just smells I think he was just asking whether we're getting 80 patients I remember that cohort seven actually expanded from 30 patients to 50 patients.

PJ Haley: I think he was asking whether we're going to see the 80 patients. I remember that Cohort 7 actually expanded from 30 patients to 50 patients. So, I'm also curious whether we're going to see the totality of data from the entirety of that cohort. And I have a question for PJ. In terms of Slide 18, one of the interesting dynamics that we observed from the five quarters that you illustrated is that if you add up the market share of Lenvina and Leida, they actually stayed pretty constant. So, is it fair to say that, you know, Lenvina's introduction kind of took away shares exclusively from Leida?

I am also curious whether we're going to see the totality of data from the entirety of that cohort.

I have a question for P J.

In terms of.

Right.

What are the interesting dynamic that we observed from the five quarters.

<unk> illustrated.

The market share of Levine.

Light actually stayed pretty constant so is it fair to say.

Led bemis introduction kind of took way shares exclusively from freemium lighter.

PJ Haley: So why don't we start with the PJ question first, and then I'll loop back and just give a quick kind of high-level summary of ASCO. Great. Yeah, thanks, Andy.

So why don't we why don't we start with the P. J question first and then I'll loop back and just give a quick kind of high level summary on <unk>.

Great Yes, thanks, Andy.

PJ Haley: With regard to market share, you know, as I mentioned, we're certainly pleased with the progress. You know, as you pointed out, we've been growing, and, you know, when one does look at the prescription data for Enlita and Pembro, it does seem to be, relatively speaking, a zero-sum game. You know, they both have the Pembrolizumab backbone, so I think it's not entirely surprising that one is cannibalizing the other. The other point I would make with regard to the Limbatinib data is that these data do include other tumor types. And if you look at a different data source from Brand Impact, it would point out, for example, that approximately 40% of the Limbatinib data, or prescriptions, or usage, I should say, is from endometrial cells.

With regards to the market share you know as I mentioned, we're certainly pleased with the progress.

As you pointed out we've been growing.

As one does look at the prescription data for in light of <unk> that does seem to be relatively speaking a zero sum game.

They both have the Pembroke <unk> backbone. So I think it's not entirely surprising that one is cannibalizing the other the.

The other point I would make with regards to the baton of data.

These data do include other tumor types and if you look at it.

A different data source from brand impact it would pointed out for example.

Approximately 40% of the baton of data.

Scripture.

Or usage I should say is from endometrial. So that's another sort of piece of context there.

PJ Haley: So that's another sort of piece of context there, as that indication was launched approximately a year ago. So I think the, you know, to sum it up, I think you're right. What we see generally across data sources is, as I mentioned, we're not seeing an impact on our share. We're seeing strength both in share and demand growth. We're very pleased with that, and it does seem to be that, you know, the competitors are sort of potentially cannibalizing each other.

Is that indication launched approximately a year ago, So I think the.

Sum it up I think youre right, what we see generally.

Across data sources is.

As I mentioned, we're not seeing impact on our share we're seeing strength both in share and demand growth, we're very pleased with that.

It does seem to be that the competitors are sort of home potentially cannibalizing each other.

PJ Haley: Great. Thanks, PJ. Andy, in terms of ASCO, again, don't want to get into the, you know, the weeds on the abstract before it's published. I think you can expect a pretty fulsome update. Okay. Okay. So one more scientific question, if you don't mind.

Thanks P J Andy in terms of Vasco again don't want to get into the.

The weeds on the abstract before it's published I think you can expect a pretty fulsome update.

Peter Lamb: So, if you look at the oncophenol protein 5P4, it's been a known cancer target for a while, pretty popular as a vaccine, cancer vaccine, target back in the day. So, you know, recently, there's been some business development activity going on. So I'm just curious if there's any sort of paper or study that catalyzed the recent interest.

Got it okay. So one more scientific question.

Like so.

So if you look at the <unk>.

No.

While.

Pre populate the vaccines vaccine target back in the day so.

Recently, there has been one business development activity going on so I'm. Just curious if there is any sort of people are studying that catalyze recent interest obviously you guys are NPS.

Peter Lamb: Obviously, you know, you guys are at Bay NCXP010 going forward. So any sort of pitfalls or learnings that you wish to kind of incorporate as you advance that path going forward? Thank you, Peter.

010 going forward, so any sort of pitfalls or learnings that you wished you can incorporate.

Fantastic.

Peter Lamb: Yeah, thanks for that. Thanks for the question, Andy. Yes, you are.

Thank you Peter take that one.

Peter Lamb: You are obviously correct. 5G forwards has been a target of interest for various biotherapeutic and vaccine approaches, as you indicate, for some time, so it's a known public domain target, I think, and that's for good reason.

Yes, thanks for the thanks for the question Andy Yes, you're obviously correct.

Towards.

The target of interest for various bio therapeutic and vaccine approaches as you indicate because sometimes it is.

Public the main target.

Thank you.

And that's a good reason I think it's <unk>.

Express and patent is compelling whereby seats over expressed in a variety of solid tumors pretty decent levels has minimal exploration in most normal tissues.

Peter Lamb: I think its expression pattern is compelling, whereby it's overexpressed in a variety of solid tumors at pretty decent levels and has minimal expression in most normal tissues. So, you know, obviously that still stands. I think for us, it really falls into the category of targets that I sort of spoke to before, which are good targets, which I think would really benefit from the kind of next-generation approaches to HIV that we're taking. So, in a way, it falls into the same bucket as XB002. So our aim here is to develop a next-gen ADC. As we discussed, we have antibodies from Invenra that we've characterized extensively.

Obviously, that's still that's still stands I think for us it really falls into the category of targets that I sort of spoke to before which are good targets, which I think will really benefit from a kind of a next generation approaches to aid these that way.

So in a way it goes into the same bucket is ex <unk>.

So our aim here is to develop a next gen <unk>.

As we discussed.

Antibodies in general.

Which we've characterized extensively.

Peter Lamb: Transferred to our partners at Catalan to use their, you know, very contemporary site-specific conjugation technology to make a, you know, a well-constructed ADC with a highly defined DAR that has, at this point, compelling preclinical efficacy and safety data. So, you know, we're excited to be moving XB010 forward. As you say, we're not alone in finding this to be a good target for a variety of approaches, so we'll see how each one plays out. Thanks for answering all my questions.

Slowed to a partner with catlin to be using there.

We're a contemporary site specific conjugation technology to make a yeah.

Well constructed ADC with a highly defined Dol.

That has at this point compelling preclinical efficacy and safety data. So we're excited to be moving at speed 010 cohort.

Peter Lamb: Thank you. Thank you. Thank you. Our next question will come from Yaron Werber with Cowan. Please go ahead.

As you say, we're not alone in finding this to be a good target.

The two approaches so we'll see how each one plays out.

Great. Thanks for answering all my questions.

Thank you.

Thank you. Our next question will come from Yaron Werber with Cowen. Please go ahead.

Michael Morrissey: Great. Thanks for taking my question. I have a couple of questions. Maybe the first one, Mike, the CONTACT-03 data that the CABO-2-centric, right, versus CABO and second line RCC internal data that can have, do you expect we'll have more, it's a PFS-OS endpoint, do you expect to have more PFS data or do we have a little bit of OS? And also, can you put it in context for us just a little bit? You're already dominating the second line.

Great. Thanks.

Thanks for taking my question.

A question.

Maybe the first one Mike the contact.

The data that the Cabo essentially quite versus Cabo in second line RCC interim data second half do you expect we will have more.

It's a PFS.

Endpoint do you expect to have more PFS data or do we have a little bit.

And also can you put it in context for us just a little bit you already dominating second line.

Michael Morrissey: So commercially, what does contact O3 mean for you? And then I have a quick follow-up. Yeah, I'll let Vicky comment on the first part of your question. Second part of your question, commercially, you know, obviously, any, any, any good data we can generate any line that raises the bar for the standard of care we want to pursue, and we have pursued with the first line with triplet 313 and second line with contact 03.

So commercially water contact remains for you and then I have a quick follow up.

Yes, I'll, let I'll, let Vicki opine on the first part of your question.

Second part of your question commercially.

Obviously any.

Any any good data we can generate in any line that raises the bar for standard of care, we want to pursue and we have pursued with first line with the triplet 313 in second line with contact of the three so.

Michael Morrissey: So, you know, we're in the business of improving outcomes for patients, and that's just a matter of getting the data in the appropriate trial with the appropriate population. So, I think, again, if that looks good, we can potentially move the needle even further for those patients. Vicki, why don't we focus on the first part of the question?

We're in the business of <unk>.

Improving outcomes for patients and that's just a matter of getting the data and the appropriate trial with the appropriate population. So so I think again if that looks good we can potentially move the needle even further for those patients.

He went to opine on the first part of the question sure. So for contact with three right. It is a.

Vicky Goodman: Sure, so for Contact 03, right, it is a primary readout for the progression-free survival endpoint, and obviously PFS matures at an earlier time than overall survival, so it's expected to be primarily a readout of PFS at this point. Okay, great. And then secondly, and I apologize if I'm reading too much into it, but Contact 03 is obviously called out fairly prominently in the press release under the Cabo highlights. Contact 01, which also has data on the second half, is not discussed quite as much.

Primary readout for the progression free survival endpoint, and obviously PFS matures at an earlier time than overall survival. So it will it is expected to be primarily a readout of PFS at this point.

Vicky Goodman: Maybe just give us a little bit of a sense, or Cosmic 313 for that matter, just give us maybe a little bit of a sense of how you thought about what to include in the press release? Thank you. Yeah, everyone, it's Mike.

Great and then secondly.

I apologize if I'm reading too much into it but contact three is obviously called out fairly prominently in the press release under the Cabo highlights.

Contact or one which also those data in the second half not discussed quite as much maybe just give us a little bit of a sense or cosmic 313 for that matter just give us maybe a little bit of a some kind of how did you think about what to include in the press release. Thank you.

Michael Morrissey: Yeah, I think you're probably over-interpreting that. So I wouldn't read into that in any shape, manner, or form. They're all important trials for us. We're pushing those all really hard. If successful, they could all move the needle. So stay tuned for data. All right, thank you. Thank you. Our next question will come from Jay Olson with Oppenheimer. Please go ahead.

Yeah, It's Mike, Yes, I think youre probably over.

Over interpreting that so I wouldn't read into that in any shape manner or form they're all important trials for us we're pushing those all really hard.

If successful they can all move the needle so stay tuned for data.

Thank you.

Thank you. Our next question will come from Jay Olson with Oppenheimer. Please go ahead.

PJ Haley: Well, hi, thank you for the update. And thank you for taking the questions. Can you comment on how you expect the HCC competitive landscape to evolve over time? And maybe some of the key learnings from COSMIC 312 and First Line HCC that you plan to apply to your next study? And also, maybe if you could comment on the unmet needs in First Line HCC with the potential for VEGF3 regimens on the horizon? Yeah, Jay. This is PJ.

Oh, hi, Thank you for the update and thank you for taking the questions can you comment on how you expect the HCC competitive landscape to evolve overtime and maybe some of the key learnings from cosmic 312 in first line HCC that you plan to apply to your next.

Study and also maybe if you could comment on the unmet needs in first line HCC with it.

Potential for VEGF free regimens on the horizon.

PJ Haley: I'll just maybe briefly comment, you know, certainly HCC was for a long time an area of significant unmet need for patients really across all lines. There's been a rapid sort of evolution of the field with, you know, doublets in the first line and many therapies in the second line. As I mentioned, with regard to Cabo Medix and our current second-line indication, we're very pleased with the business there, and we're the leading TKI at this point in patients who have received an immunotherapy or checkpoint containing regimen in the first line.

Yeah, Hi, Jamie This is P. J I'll, just maybe briefly comment certainly.

HCC was for a long time, an area of significant unmet need.

For patients really across all lines there has been.

Rapid sort of evolution of the field with.

Doublets and the first line in many therapies in second line as I mentioned.

With regards to to Cabo <unk> in our current second line indication, we're very pleased with the business there and we're the leading Teekay I at this point in patients who received.

And immunotherapy are.

Checkpoint.

Containing regimen in the first line. So we're pleased with that and certainly looking to build upon that and I think you know.

PJ Haley: So we're pleased with that and certainly looking to build upon that. And I think, you know, beyond that, you know, while there have been a lot of great developments for patients in HCC, there's certainly much more that can be done for them. And we're certainly excited, you know, at a high level to continue to do that, particularly as we look forward to XL092 and, you know, others. Okay, great.

Beyond that.

While there has been a lot of great developments for patients in HCC. There is certainly much more that can be done for them and we're certainly excited at a high level to continue to do that.

Particularly as we look forward to excel at nine two in other programs.

Michael Morrissey: Thank you. And maybe if I could sneak in one more, you have a very strong cash position and an increasingly broad clinical and preclinical portfolio. How are you prioritizing the various development options you have in front of you? Yeah, J.S. Mike, I would say we are...

Okay, great. Thank you and maybe if I could sneak in one more you have a very strong cash position and an increasingly broad clinical and preclinical portfolio. How are you prioritizing the various development options you have in front of you.

Yes, Jay its Mike I would say we are.

Michael Morrissey: Very, very focused on generating data, using that data to help us understand where we can differentiate and how that can then, again, raise the bar for patients from the standpoint of standard of care. So we have a very strong conduit between development and commercial and discovery that helps us take data and move compounds forward aggressively based upon that data. Once we have conviction, as we generate conviction, where can we take that in terms of novel combinations across multiple different indications?

Very very focused on generating data using that data to help us understand.

Where we can differentiate and how that can then again raised the bar for patients from the standpoint of standard of care. So we have a very.

Very strong conduit between development and commercial and discovery that helps us take data and move that and move compounds forward aggressively based upon that data. Once we have conviction as we generate conviction, where we can take that in terms of novel combinations across multiple different indications, so so but you're right.

Michael Morrissey: So you're right, we're in a very good position, especially in today's somewhat tenuous market, you know, at a macro level, to be able to have the cash flows that we've got and certainly the balance sheet that we've got to be able to make those investments both internally as well as consider external options. So we're all about building the team, building the portfolio, driving top-line growth, and helping more patients Super helpful.

And a very good position, especially in today's.

Somewhat tenuous market.

On a macro level to be able to have the cash flows that we've got and the and the certainly the balance sheet that we've got to be able to make those investments both internally as well as considering external options. So.

So we're all about building the team building the portfolio driving top line growth, helping more patients.

Super helpful. Thank you for taking the question.

Okay.

Michael Morrissey: Thank you for taking the question. Thank you. Our next question will come from Akash Tewari with Jeffries. Please go ahead.

Thank you. Our next question will come from a cost to worry with Jefferies. Please go ahead.

Michael Morrissey: Hey guys, a few if I may, and I just want to hit on the gross net point again. It looks like you had a 5% jump sequentially in Q1 2021 as well, but we are seeing gross net kind of go from the 23% range to now over 30. Could we see long-term gross net levels approach something at a kind of 35 to 40% run rate?

Hey, guys a few if I may I just wanted to get the gross net point again, it looks like you had a 5% jump sequentially in Q1, 'twenty, one as well, but we are seeing growth in that kind of go from the 23% range to now over 30.

Could we see long term growth can at levels approach something at a kind of 35% to 40% blend rate that'd be very helpful.

On the IP Kate are there any circumstances, where you would agree to a settlement of around 2028 or 2009 with MSN and then finally.

Michael Morrissey: That would be very helpful. On the IP case, are there any circumstances where you would agree to a settlement of around 2028 or 2029 with MSN? And then, finally, do you have any additional color on the average duration of treatment that you've seen with Cabo and first-line RCC in the real world setting? Is it tracking roughly to what we've seen in your clinical trial? Thank you. Yeah, Akash. It's Mike.

I guess any additional color on what the average duration on drug that you've seen with Cabo in first line RCC in the real world setting is it tracking roughly to what we have seen in your clinical trial. Thank you.

Michael Morrissey: I'll attempt to answer all three in rapid succession. On the growth to net issue, I certainly don't want to speculate what's going to happen in the future. The numbers that we saw, Q1 versus Q4, that's the data. So take it for what it's worth.

Yes conscious Mike I'll attempt to answer all three and rapid succession.

On the on the gross to net issue certainly don't want to speculate what's going to happen in the future. The numbers that we saw Q1 versus Q4, that's the data so take it for what it's worth I think this is a trend if you've been tracking other either biotech and pharma earnings calls over the last few weeks Youll see this is not.

<unk>.

Actually this is a very general trend across oral oncology excel.

Michael Morrissey: I think this is a trend. If you've been tracking other biotech and pharma earnings calls over the last few weeks, you'll see this is not that actually this is a very general trend across oral oncolytics. So we're not overly surprised to see that others are being impacted as we were in Q1 versus Q4. So that's the data. But what will happen in the future, I'm not going to speculate or predict. That's just not proper here or anywhere.

We're not overly surprised to see that others are being impacted as we were in Q1 versus Q4. So that's the data, but what happens in the future I'm not going to speculate or predict.

Not proper here are anymore in terms of IP like I said with Michael's question don't want to get into the details. There. So thanks for the question, but I really can't answer that and then finally on duration.

Michael Morrissey: In terms of IP, like I said with Michael's question, I don't want to get into the details there. So thanks for the question, but I really can't answer that. And then finally, on duration, you know, it's been a year plus relative to the launch of 9ER, so it's still early in the context of duration of treatment commercially versus what we've seen in terms of PFS and duration of treatment in 9ER. So as time goes on, we'll be able to get a better picture of that by using a variety of different methods, and we'll be happy to report that when Thanks so much.

It's been a year plus relative to the launch of 90 or so it's still early in the context of duration of treatment commercially versus what we've seen in terms of <unk> PFS and duration of treatment and 90 or so as time goes on we'll be able to get a better picture of that by using a variety of different message then we'll be happy to report that one thats.

More mature.

Thanks, so much.

You bet.

Peter Lamb: Thank you. Our next question will come from Doe Kim with Piper Sandler. Please go ahead. Good afternoon, everyone, and thanks for taking my question. This is E.K. on for DOE. Just a couple.

Thank you. Our next question will come from Joe Kim with Piper Sandler. Please go ahead.

Good afternoon, everyone and thanks for taking my question. This is DJ on for dough. Just a couple first is pipeline related or so one four.

Peter Lamb: The first is pipeline-related for XL114. Given that there's going to be some competitor data with J&J's multi-member in the second half, I'm curious to understand your thoughts around molecule differentiation, given that, if I'm not mistaken, you have a covalent inhibitor versus their allosteric inhibitor. In addition to that, what type of plans do you have in terms of potentially combining your Malt-1 inhibitor with, you know, like an Enaclax or B2K? I did not see that in the clinicaltrials.gov post. That's my first question. Okay, Peter, want to take a shot at that one?

Given that theres going to be some competitor data with J&J multi number.

In the second half.

I'm curious to understand how you guys.

Guys thoughts around molecule differentiation given that I'm not mistaken you have a covalent inhibitor versus their allosteric inhibitor.

In addition to that.

What type of plans you have in terms of potentially combining your.

One inhibitor with <unk> and then a class B K.

Did not see that in the clinical trials.

Gov post.

So that's my first question.

Okay, Peter want to take a shot at that one.

Peter Lamb: Yeah, absolutely. Yeah, kind of looking forward to seeing what the J&J data show. I just would point out that the J&J compound is a direct inhibitor of the Malt-1 pericaspase activity, so it binds directly to the proteins.

Yes, absolutely yes.

What would be the same.

The J&J data show.

Just would point out that the J&J compound is a direct inhibitor one para caspase activity. So binds directly to the protein excel wound full actually has a different mechanism of action.

Peter Lamb: Exo-114 actually has a different mechanism of action. It does not bind directly to Malt-1. It does, however, inhibit activation of the Malt-1 complex.

It does not bind directly it's a multiple on.

It does however, inhibit activation of the <unk> complex.

Peter Lamb: So mechanistically, it's somewhat differentiated from the J&J approach. Speaking more broadly about the potential for the compound, certainly, it has potential in a variety of B and T cell lymphomas, particularly one area of interest is in patients who failed on BTK inhibitors since the point of action for XL114 is downstream of BTK. You know, there's always...there's also some data that MOLT1 activation and inhibition of it may also have a role in combination with immune checkpoint inhibitors.

So mechanistically, it's somewhat differentiated from the.

The J&J approach.

Speaking more broadly about the potential for the contact.

Lee.

Has potential in a variety of B and T cell lymphoma.

Particularly obviously one area of interest.

Patients who failed on PTK inhibitors since with the point of action facts of them moving forward is downstream of PTK.

Yes.

Always there's also some data that moat one activation.

Inhibition of it.

They also have a role in.

In combination with immune checkpoint inhibitors is that something that were exploring pre clinically right now so we.

We will see how they those those data play out, but maybe I'll just leave it there to say look we're moving.

Peter Lamb: That's something that we're exploring pre-clinically right now, so we'll see how those data play out. But maybe I'll just leave it there. I can tell you that XL114 has a differentiated mechanism of action, so you know, ultimately, how the clinical data compare will obviously be of great interest. Thank you, Peter. Appreciate the call. Just last two questions. One quick one.

<unk> has a differentiated mechanism of action so ultimately how the clinical data.

We'll obviously be of great interest.

Peter Lamb: If you can talk about any type of impact COVID may have had on cowboy sales this past quarter, despite the obvious increased demand and strength that was seen. And lastly, with the COSMIC 313 data expected in July, if you can briefly just discuss how you guys are envisioning physicians utilizing it in practice and how it might, you know, have a higher standard given the potential safety profile that might be borne out. Just some color around that will also be helpful for us.

Thanks Peter.

Appreciate the color just last two questions. One quick one if you can talk about any type of impact Covid may have had on Cabo sales. This past quarter. Despite the obvious increase the managed screens that were seeing.

Lastly, with the cosmic 313 data expected in July if you can briefly discuss how you guys are.

Envisioning.

Physicians utilizing it in practice.

And how it might.

Have a higher standard given the potential safety profile that might be borne out.

Just some color around that would also be up for us. Thank you for taking the questions.

PJ Haley: Thank you for taking the question. Great, PJ, go ahead. Yeah, thanks for the question, EK. With regard to, you know, the COVID impact, I would say, broadly, we're largely beyond a significant impact on the business, as you pointed out, with demand growth, not only for Cabo Medics but also the TKI market. Itself grew 7% quarter over quarter, so I think largely that's in the rear view mirror, but I will say there's certainly still limited access in many accounts, and that's varied across the country versus community or academia, et cetera, and we view that as we're excited about the opportunities these accounts are starting to open up so we can have just a greater chance to share our data with them and hopefully continue to do so Cabo Medix and Novolinab for appropriate patients.

Great P. J go ahead, yeah. Thanks for the question.

With regards to.

The Covid impact I would say broadly.

Largely beyond a significant impact to the business that you pointed out.

With demand growth not only for.

For Cabo medics, but also the TGI market.

<unk> grew 7% quarter over quarter. So I think largely that's in the rearview mirror, but I will say there is certainly still limited access in many accounts and that's varied across the country versus community.

Our academia et cetera.

We view that as were excited about the opportunities. These accounts are starting to open up so we can have.

Greater chance to share.

Our data with them and hopefully continue to drive.

<unk> in the mobile map for appropriate patients.

PJ Haley: And with regard to 313 and the triplet, at a very high level, I think we're certainly excited to see the data. I know the KOLs are broadly excited to see the readout there as well because it is the first triplet in space.

And you know with regards to 2013 and the triplet at a very high level I think we're certainly excited to see the data I know.

The kols.

Broadly are certainly excited to see the REIT out there as well because it is the first.

PJ Haley: So I think that in and of itself is great. It is looking at comparing to Novolumab and Ipi in the poor and intermediate risk groups. And I just point out that Nevo-Ipi, you know, has a 20 to 25% market share in the first line setting.

Triplet in this space, so I think that.

In and of itself is great.

It is looking at comparing to Novo mab in AP.

In the poor and intermediate risk groups and I'd just point out that Nemo.

You look across data sources has a 20% to 25% market share.

PJ Haley: So I think, you know, that could potentially be some low-hanging fruit given positive data and approval, etc., that that might be a good opportunity for the addition of Cabo in that setting. Also, I think one possibility there is that they do have, I think about a 20%, if I'm recalling correctly, primary progression rate in the 2.1.4 trial. So, you know, given the totality of the data with CABA, we think that's certainly an opportunity to improve upon that as well.

In the first line setting so I think that could potentially be some low hanging fruit given positive data and approval et cetera that that might be a good opportunity for the addition.

Cabo in that setting.

Also I think one possibility there is they do have.

I think about 20% if I'm recalling correctly primary progression rate in the 204 trials so given.

The totality of the data with Cabo, we think that certainly.

You know an opportunity to improve upon that as well so I think it's going to be.

PJ Haley: So, you know, I think it's going to be important to really look at the totality of the data in this data readout, whether it's all the radiographic data, obviously the primary endpoint of PFS. But I think it's going to be important to look at the totality of the data, as well as, you know, what we see in survival at that point, as well as safety.

Important to really look at the totality of the data and this data readout whether it's.

All the radiographic data, obviously, the primary endpoint of PFS.

As well as what we see in survival at that point as well the safety. So I think it'll be it'll be really exciting to see and sort of dive into the data. So we're looking forward to that.

PJ Haley: So I think it'll be really exciting to see and sort of dive into the data. So we're looking forward to it. All right.

Great. Thank you.

Thank you.

PJ Haley: Thank you. Thank you. Our next question will come from Peter Lawson with Barclays. Please go ahead.

Thank you. Our next question will come from Peter Lawson with Barclays. Please go ahead.

Chris Senner: Thank you. Thanks for taking the questions. A question for Mike or PG, just on the gross to net, kind of, if there's anything you can point to that drives the gross to net, if there's one element or multiple drivers, and then any kind of guidance you can provide around the gross to net going forward. Thanks, Peter. Yeah, so again, we won't comment on gross to net going forward. In terms of future years, Chris can provide some updates again at a high level on what he said previously about what drove gross to net. Thanks, Mike.

Thank you thanks for taking the questions a question for Michael P. J.

With of course, the net kind of if there's anything you can point to what what drove the gross to net is one element of the multiple drivers and then any kind of guidance you can provide around kors connect going forwards.

Yeah.

Thanks, Peter Yeah. So again, we won't comment on gross to net going forward.

In terms of future years, Chris can provide some updates again at a high level one.

You said previously about what drove the gross to net.

Chris Senner: So, Peter, I mean, what we talked about earlier was, you know, there's the seasonality effect of Medicare Part D, patients going through the donor hole, those on co-pay assistance, the commercial patients using our co-pay assistance programs, and programs, if they go through their deductibles at the beginning of the calendar year, is another driver, and that happened in prior years also. This year we saw higher 340B utilization in Q1 when compared to the second half of last year, where it was relatively flat.

Thanks, Mike So so Peter I mean, what we talked about earlier was.

There is the seasonality effect of Medicare part D patients going through the donut hole.

Those are co pay assistance the commercial patients using our co pay assistance.

Programs and they go through their deductibles at the beginning of the calendar year is another driver of those those have happened in prior years also this year, we saw higher 340 b.

Utilization in Q1, when we compare it to the second half of last year.

When we bought it was relatively flat.

Chris Senner: And then for this year, I think we're looking right now at a 29% gross to net percentage, and obviously, that's an estimate right now, and that can change based on different utilization patterns of 340B or copay assistance or Medicare or Medicaid and so on. But that's our current estimate as we think about it. Thank you. That's captured in the guidance, and then I guess a kind of a follow-up question really about the demand trend. What was it like during the quarter, and was it in any way different from last year that we should be thinking about? You broke up there.

For this year.

I think we're looking right now at a 29% gross to net percentage and obviously, that's an estimate right now and that can change based on different utilization patterns of 340, B a copay assistance for.

Medicare Medicaid and so on so but that's our current estimate as we're thinking about it.

Thank you.

Captured in the guidance and then I guess kind of a.

Follow up question really about demand trend what was that.

During the quarter and was that in any way.

Last year that we should be thinking about.

PJ Haley: Can you say that again slowly, please? Yeah, so on the demand trends and month by month, was there anything different there from last quarter? You know, Peter, it's PJ.

You broke up there could you say that against slowly please.

Yes, so around the demand trends on a month by month was there anything different there from last quarter.

Up.

PJ Haley: I would just say, you know, we continue to see, as I mentioned, six quarters of growth and strength in the demand trend. So I, you know, I think nothing out of the ordinary in terms of what we see, generally speaking. It's just, you know, we're pleased it's being driven by, as I mentioned in my prepared remarks, primarily longer duration of therapy on the first line patients benefiting from the combination of carbomedics and Ebola. I know a number of companies mentioned January and February being weak. Did you see that kind of trend?

Peter It's P. J I would just say we continue to see.

As I mentioned six quarters of growth and strength.

In the demand trends, so I think nothing out of the ordinary.

In terms of what we see generally speaking it's just.

We're pleased it's being driven by as I mentioned in my prepared remarks.

Primarily longer duration of therapy on the first line patients.

Benefiting from the combination of Cabo medics and evolve.

Okay.

A number of companies mentioned January and February being weak did you see that kind of trend.

PJ Haley: You know, as I mentioned, I think overall, we're just seeing, you know, steady progression of the business and strength. Yeah, maybe you can reiterate for Peter what the TRX growth was for the quarter. Yeah, thanks. Happy to, Mike. The TRX growth, Q over Q, was 11%, which is, you know, as I mentioned, also for the market. That growth was 7%. So we also grew above the market.

As I mentioned I think overall, we're just seeing.

Steady progression.

Of the business and strength.

Maybe you can reiterate for Peter with the Trs growth was for the quarter, yes, Thanks happy to Mike the Trs growth Q over Q was 11%, which is as I mentioned also the for the market that growth was 7%. So we also grew above the market.

PJ Haley: And like I said, you know, no significant differences between months. We've just seen steady growth, as I mentioned, which is really being driven by the combination. Thanks, PJ. Great, thank you so much. Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone. Our next question comes from Chris Shibutani with Goldman Sachs. Please go ahead. Good afternoon, thanks for the question.

And like I said no no significant differences between months, we've just seen steady state growth.

As I mentioned with really being driven by the combination patients.

Thanks P J.

Great excellent.

Thank you as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone. Our next question comes from Chris <unk> with Goldman Sachs. Please go ahead.

PJ Haley: Just to make sure that I understand, with COSMIC-313, the 10-Q has the timing from July. I think this is a slight revision versus the first half of 2022, if any color in terms of what caused the readout to shift the timeline. The second would be STELLAR-002, a study involving XL-092. I believe there were some treatment arms, including Vempeg. Can you just maybe provide any additional insight into any recent updates given that NECTAR's been picked up? Uh, Vicky, go ahead.

Good afternoon, and thanks for the questions just two making sure that I understand with.

With cosmic three went through the 10-Q has the timing from July I think this is a slight revision versus the first half of 2022, if any color in terms of what caused the readout to shift the timeline there.

The second would be on stellar Oh, two study involving <unk> too.

I believe there were some treatment arms, including Bev peg.

Could you just maybe provide any additional insight into any recent update given the nektar has been pegged program.

Vicky go ahead, yes.

Vicky Goodman: Yes, so I'll cover 313 first. Just to be clear on that, we've reached the number of events that we need for our primary analysis of PFS. Data cleaning in advance of the top-line results is ongoing, and based on our assessment of where that stands currently, we now expect to deliver it into July. So you're correct, that timeline has moved a little bit, but we have a pretty clear picture of when that data will be coming in.

Yes, so I'll cover 313 first.

Just to be clear on that we have reached the number of events that we need for our primary analysis of PFS data.

Data cleaning in advance of the topline results is ongoing and based on our assessment of where that stands currently we now expect to deliver it into July so you're correct that timeline has moved a little bit, but we have a pretty clear picture when that data will be now coming in.

Vicky Goodman: With respect to 092, I want to make sure I understood your question correctly. Stellar-002 had three arms, a combination with nivolumab, a combination with NEVO and IPI, and then a combination of NEVO and BEMPEG all with O9-2 in genitourinary tumors.

With respect to <unk>, two I'm going to make sure I understood your question correctly.

Stellar O two had three arms.

A combination with Nikola Mab, a combination with a needle in EP and then a combination of.

Of meso and been pegged all with 192 in genital urinary tumors and as I mentioned in my prepared remarks, we are removing the <unk> arm.

Vicky Goodman: And as I mentioned in my prepared remarks, we are removing the BEMPEG arm, you know, following the recent phase three readouts for that molecule and the discontinuation of the program. We are looking at what I believe to be a promising replacement with another triplet, and, you know, stay tuned for further details on that. Great, thank you for calling, and I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Ms. Susan Hubbard for any closing remarks.

Following the recent phase III readouts for that molecule and the discontinuation of the program.

Our looking at what I believe to be a promising.

<unk> met with another triplet.

And stay.

Stay tuned for further details on that.

Great. Thank you for that.

Yeah.

And im showing no further questions in the queue. At this time I would now like to turn the call back over to MS. Susan Hubbard for any closing remarks. Thank you Shari and thank you all for joining US today, we certainly welcome your follow up questions and anything you can give I also would like to answer. So please feel free to give either myself or <unk> com.

Vicky Goodman: Thank you, Cherie, and thank you all for joining us today. We certainly welcome your follow-up questions and anything that you all would like to answer, so please feel free to give either myself or Varant a call. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. [music]

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

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