Q1 2023 Exelixis Inc Earnings Call
Good day, ladies and gentlemen, and welcome to the extra like his first quarter 2000 twenty-three financial results conference call.
My name is to want it and I'll be you operate it for today.
As a reminder, this call is being recorded for replay purposes.
Now like to turn the call over to your house for today, Miss Susan Hubbard Executive Vice President of Public Affairs, and Investor Relations you might proceed.
And each one up and thank you all for joining us for the.
First quarter of 2023 financial results conference call.
Anything on today's call or like Morrissey.
<unk>, Chris Center, our Chief Financial Officer P. J, Hayley R Executive Vice President of commercial <unk>.
Typical officer, and Nikki goodness, our Chief Medical Officer, who will review our progress for the first quarter of 2023 March 31st 2023.
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 posted on our website for an explanation of our reasons for using such non-GAAP measures as well as tables deriving measures from her account for adults.
During the course of this presentation, we will be making forward looking statements regarding future events in the future performance at the company. That's included statements about possible developments regarding discovery product development regulatory commercial financial and strategic matters.
Venture results could of course differ materially we refer you to the documents we file from time to time with the SEC, what's under the heading risk factors identified important features and factors that could cause actual results to differ materially from those expressed by the company verbally and handwriting today, including without limitation risks and uncertainties related.
Two product commercials success market competition regulatory review and approval processes conducting clinical trial compliant with like a regular regulatory requirements are.
Our dependence on collaboration partners at the level of costs associated associated with discovery product development business development and commercialization activity and with that I will turn the call over night alright. Thank you and thanks to everyone for joining us on the call today.
Extra once you've had a strong first quarter across all components of our business.
<unk> maintained its status as believing T K I R. C C.
The first one I O T K, a market and a second line therapy segments.
Dancing or discovery and development priorities.
Extra work on a portfolio any disappointment and thoughtful manner.
I know what the statement of the obvious but I want to repeat it here, we're going to be R&D business.
The only way we drive growth for shareholders is to improve standard of care for patients with cancer.
It's impossible to disconnect the two more.
More patience, we hope for more value we create.
A singular focus and rmb's to advance a pipeline clinically and commercial we differentiated medicines for large populations populations with cancer patients with high unmet medical needs.
We estimate Cabometyx is used by tens of thousands of pages annually do we seek to help many multiples of that number with the pipeline we're building today.
Our success with combo isn't the M game, it's just the beginning.
We are biology centric and modality agnostic for biologics from small molecules within a narrow therapeutic frameworks and I'm in college.
Discipline in our integrated strategy spanning discovery development and commercial and focused on advancing drugs that will move the needle for cancer patients and meaningful indications to build value for shareholders.
Molecules W.
Modestly interesting for aren't compelling from a commercial perspective never make it onto the cage.
Our our new strategy includes targets and compounds we advance.
And as important though to exclude overtly choose not to pursue prescientific clinical competitive and commercial reasons.
The success of our integrated strategy bridging R&D with commercial relative to our mid sized biotech peers is highlighted by the historical data.
Oh check oncology launches since 2016.
Approximately 35 launches in this time frame with drugs addressing many of the hottest targets in oncology. The mean and median 2022 global net product revenues, where approximately $200 million and approximately $150 million, respectively compared with the 2022.
Global Nipped product revenue number for Cabometyx of $1.9 billion.
Pick the winner.
Doing less productive avenues in the past and have the insides and discipline to do so repeatedly in the future.
With that please see our press release issued an hour ago for our first quarter financial results.
An extensive list of key corporate milestones achieved in the corner.
And I'll now turn the call over to Chris things like for the first quarter of 2023. The company reported total revenues from approximately $409 million.
Which included Cabozantinib franchises or product revenues of $363 $4 million Cabometyx that product revenues for $361.8 million and include approximately $90 million in clinical trials.
Goes to that for the Cabozantinib franchises in the first quarter of 2023 was 33 per cent, which is higher than the grocery that we experience in the fourth quarter of 2022, but overall in line with our expectations. This increase in gross and net deductions in the first quarter of 2023, primarily related to hire Medicare parties and Phs expenses.
Historically, we have experienced higher Medicare part D expenses in the first quarter of the year due to many parts of the patients moving through the durable at the start of the calendar year.
Our cabometyx trade inventory decreased by approximately 900 units when compared to the fourth quarter of 2022 to approximately 2.1 weeks on hand, as I mentioned on our fourth quarter earnings Conference call. We experienced the trade inventory build in the fourth quarter of 2022, approximately 750 units as well as we observe most of that Q portrayed inventory bill.
Drawn down the first two weeks of 2023.
Total revenues also included approximately $45 million in collaboration revenues, including approximately $33 billion in royalties benefit indicated on their sales of public sensitive.
As a reminder, clinical trial sales have historically been choppy between quarters and we expect this to continue in future borders.
A total operating expenses for the first quarter of 2023, where approximately $380 million compared to $472 million in the fourth quarter of 2022.
The decrease in total operating expenses sequentially was primarily driven by lower R&D expense in the first quarter of 2023.
Provision for income taxes for the first quarter of 2023 was approximately eight $3 million compared to a benefit for income taxes and approximately $1.3 million for the fourth quarter of 2022.
Somebody reported GAAP net income of approximately $40 million.12 per share unemployed with a basis for the first quarter of 2023. The company also reported non-GAAP net income of approximately $52.8 million or 16 cents per share on a fully diluted basis.
non-GAAP net income excludes the impact of approximately $13 million of stock based compensation expense net of the related income tax effect.
That's an investment for the quarter ended March 31, 2023 was approximately $2.1 billion. This level of cash and investments supported by our ongoing cash flow from operations.
Excellent this with the flexibility to invest in internal discovery activities to pursue external business development opportunities to expand our pipeline and allows us to return capital to our shareholders through the $550 million share repurchase program, we announced in March of this year.
And finally, we have reiterating our full year 2023 financial guidance, which is detailed on slide 14th of our earnings presentation.
Now turn the call over to pizza.
Thank you Chris the first quarter of 2023, it was a strong quarter for Cabozantinib.
Theme continues to execute at a high level, which has resulted in cabometyx continuing to be the number one prescribed PKI, an RCC and second line HCC.
Importantly, cabometyx in combination with Nicole about is the number one T K I plus I owe combination and first line renal cell carcinoma.
Furthermore, the check made 90 or 44 months long term follow up data presented as <unk> as.
Is resonating with prescribers and strengthening the position of Cabometyx plus level now and first line RCC.
Physician spy and the 49 five month median overall survival cabometyx possible amount to be compelling.
In terms of the business Cabometyx Trs volume grew 12% year over year in Q1 2023 relative to Q1 2022.
Looking at the T K I market basket of Cabometyx, and lighter Suton road trips and limp Lima.
CRX volume in Q1, 2023 was stable relative to Q4 2022.
CRX volume for Cabometyx was also stable in this time period.
Additionally, new patient starts and demand remains strong in the first quarter.
Cabometyx continued to perform well in Q1 from both a marketplace and competitive perspective.
Cabometyx again led the TK I market basket in Trs Cher at 39%.
As we have discussed previously the first line RCC market is extremely competitive and we're pleased with the performance of Cabometyx in combination with Nivolumab in this setting.
Q1, with the second full quarter, and which Cabometyx plus level map was the number one prescribed PKI plus Iowa combination and first line RCC.
Uptake in the first line RCC setting as broad across clinical risk groups and practice settings.
Importantly, prescriber experience to date continues to be positive and physicians report that it is consistent with the balance of efficacy safety and quality of life scene and the check made 90 our data.
Longterm 44 months follow up data from the 90, our study was presented at <unk> in February .
The median overall survival for the Cabometyx possible Mab arm is 40 49 five months representing.
A representative and improvement of 14 months over the comparator arm significant.
These data are compelling to prescribers.
That are viewed as clinically meaningful and the feedback on the data has been extremely positive.
Furthermore, physicians believed that the data support their experience of using the combination in terms of efficacy safety tolerability and quality of life.
Prescribers believes that the balance of data and low discontinuation rate of Cabometyx plus of all of that enable patients to stay on therapy longer to achieve these results.
We are pleased with the positive prescriber feedback on the 44 months 90, our data. These data reinforce the leadership position that Cabometyx has in the marketplace is the number one prescribed TK.
Plus I O.
First slide RCC.
We believe these data position Cabometyx for continued momentum and grow as our entire team works every day to ensure appropriate patients have the opportunity to benefit from Kabul.
And with that I'll turn the call over to data.
Alright, Thanks PJ.
Okay. So Peter Lammons discuss the pipeline in depth a number of times previously.
Not going to reiterate that today, but instead I'll touch on some of the key features that underlie the pipeline.
Our overall strategy is designed to reduce target biology risks and a number of ways.
First we're not dependent on one mechanism of action or limiting our approach to a single aspect of tumor biology for pipeline's success.
Instead, we're prioritising targets based on the strength of the science and their ability to address the complexity of tumor biology.
Second we are not limiting our modality to small molecules. We've now fully enabled both small molecule antibody therapeutics capabilities for our internal discovery efforts.
Our small molecule discovery programs are focused primarily on synthetic lethal targets with clear patient selection strategies.
Our biotherapeutics programs are focused on antibody drug conjugates four by specifics and monoclonal focused primarily on innate immunity.
Our clinical and preclinical pipeline takes a best in class approach, that's informed by prior clinical data or proof of concept from earlier programs.
This in our view greatly reduces target risk.
So here's the pipeline beyond comment.
The two most advanced programs are <unk> and <unk> in there too.
Thank you we'll be discussing these programs in much greater detail. So I'll only summarize the underlying strategies for them here.
Both of these programs are built on prior clinical experience with molecules that have the same target profile.
Obviously bills and are experiencing other than the <unk>.
Target profile of essentially the same but the pharmacokinetics had been optimized.
The aim here is to have an easier to manage and potentially more combinable drug to allow us to explore the clinical white space, where we have evidence that combo is active but where we have not pursued registrational trials and to also explore novel combinations in areas, where combo has already approved.
X P 002 is our tissue factor targeting ADC that built on the non profiling is automatic widowed or two deck, which is approved for cervical cancer.
X P 002, combined the novel monoclonal antibody against tissue factor with a next generation linker payload technology that together result in a molecule with reduced risk of bleeding and increase the ability of the impact ADC.
The next programs I would like to highlight are two option agreements with with our programs with <unk> robust. These.
These option type arrangements are capital efficient way to access clinical stage assets with a back end loaded structure, where we pay for success.
The cyber exit agreement gives us an option on a novel peptide drug conjugate currently in phase one.
PBX 12 is a ph sensitive peptide conjugated to execute a total price on race one inhibitor.
This novel mechanism of action.
This is a novel mechanism of action designed to enhance the delivery of equity ended tumors, but unlike adc's. This occurs in a tumor antigen independent fashion.
Does that rope agreement gives us an option on a novel monoclonal antibody Avi you 18 zero, five which targets to serve alpha Ligon for C. D 47.
<unk> 47 is a major myeloid checkpoint and targeting serve alpha directly overcome some of the known issues with targeting C. D 47.
These include the large pk's sink and potential for anemia due to expression of C. D 47 on Red blood cell.
<unk> zero five was carefully designed to target all human Leones serve alpha to give it best in class potential.
Finally in preclinical development, we have several biotherapeutics in the pipeline, both adc's and by specifics.
<unk> seven one follows on from XP 002 is also a tissue factor targeting ADC, but with a total isomerase, one inhibitor payload instead of the microtubules targeting payload on XP 002.
<unk> factors expressed on a broad range of solid tumors, so having two different tissue factor targeting adc's with different payloads allows us to match the tumor type with the mechanism of action of the payload tuitions tumors, most likely to respond.
X P. 010 is also a next generation ADC, but this one targets <unk> for another broadly express tumor antigen.
<unk> 010 uses Catlin site specific conservation and proprietary linker payload technology.
You too bye bye specifics XP 014, NXP six to eight combine the known pharmacology of PDL one inefficient.
With inhibition of a complimentary and aimed immune checkpoint either the myeloid CD 47 checkpoint or the natural killer cell checkpoint MTG two way.
In addition to these programs we have multiple programs and discovery at earlier stages of maturity, both small molecules and biotherapeutics that will provide a source of development compound and imd's going forward having.
Having multiple programs enables us to make decisions based on real time data to only prioritize those are the best potential for advancing successfully through clinical development.
In fact, we're on track to deliver several new development compounds this year.
Which will come from both are small molecules and biotherapeutics program.
Small molecule team reached critical mass last year, when we were able to complete the introduction of several key capabilities, one of which is structural biology to help guide the optimization lead compounds.
Structural biology was one of the final components needed to get our small molecule discovery organization fully built out and I'm very pleased to say this group has been highly prolific.
Despite being on the job for less than a year, they've already stones over 100 structures and as you can see in this line they've delivered a steady stream of high resolution structures using both X ray crystallography in cryogenic electron microscopy.
These structures have been very helpful. In guiding our medicinal chemistry efforts in our recent discovery program and in some cases have resulted in a significant evolution of leads series for driving potency and selectivity.
Using this approach we've also been able to optimize known liabilities leave molecules as a way toward achieving best in class status for programs with advanced competition.
Those you may remember that in our original discovery platform. We also had a strong structural balance sheet group that solves over 1000 structures of Chinese inhibitor complex, which helped drive dozens of discovery program.
That group had only X ray crystallography to generate their structures, but with the introduction of trial <unk> in this field, we're now able to get these structures faster than ever.
So that's it for my remarks, and I'll now turn the call over to Vickie.
Thanks Dana.
Today, I will provide updates on the progress of our clinical stage pipeline focusing on our most advanced programs <unk> and XP yellow too as well as the Cabozantinib Registrational trials.
X L 102 continues in dose escalation and we are focused on reaching a goin' yoga decision later this year.
As we continue to refine the strategic approach for each of our pipeline assets, we retain a strong focus on clinical trial execution to rapidly advanced our pipeline molecules with the ultimate goal of improving outcomes for cancer patients.
I'll begin with sample at net our next generations hiring kind of ace inhibitor, which enter extol development last year.
And my last September we presented data from our Joseph relation cohorts stellar O O Y which demonstrated that Santa has a manageable safety profile with no unexpected toxicity.
Additionally, we presented preliminary evidence of activity in renal cell carcinoma, including activity in patients who had previously been exposed to cabozantinib.
We have since completed enrollment of an expansion cohort and clear sell our safety patients with 32 patients enrolled at the starting dose of 100 milligrams and now have preliminary efficacy data for the full cohort.
These patients had received multiple prior therapies, including checkpoint combinations with roughly half having received prior cabozantinib.
With a median follow up of seven months. The overall response rate and the full cohort is 34%.
Responses were seen in patients previously treated with cabozantinib as well as Cabo naive patients.
Where the overall response rate was 50%.
Additionally, there is one unconfirmed P R and the Cabo naive population for whom we are awaiting the results of a confirmatory scan.
We also continue to be encouraged by the emerging safety profile.
To complete dataset, including both efficacy and safety is plan for submission to an upcoming medical conference likely later this year.
These data provide evidence for the activity of sample at net and a cabo sensitive tumor tight and provide additional support so leveraging cabo data to inform this answered development program.
We are continuing to enroll additional expansion cohorts in multiple solid tumors across both stellar O. One <unk> two.
As well as on Dos escalation cohorts for the combination of Santa with up to a lag.
<unk> <unk> combination.
Data from these studies will inform future Registrational plans for Zander, and we look forward to sharing these data as they mature.
Turning towards the end of the phase three studies, we initiated the first study stellar three or three comparing the combination of dancing with a tesla lit the map versus regular wrapping it in patients with non MSI.
Mismatch repair proficient late line metastatic colorectal cancer with a primary at point of overall survival in the rasp Wild type population.
The hypothesis for this trial was based on promising Cabozantinib data from two studies and similar settings.
<unk>, Oh 21, an extra links to sponsor signal detection trial in combination with a Tesla listen map.
Camilla and investigators sponsor trial with Cabo combined with your volume App.
Response rates and the RAF Wild type metastatic CRC population in these studies were 25, and 50% respectively, suggesting robust activity relative to the current standard of care.
Additionally, we announced the opening a stellar 304 late last year, a phase three trial comparing the combination of <unk> <unk> in patients with certain non clear cell RCC histologic sub types, who have not previously been treated for metastatic disease.
Data to support this trial came from two Catholic study, one as mono therapy and the other in combination with Nicole on that.
And an NCI sponsored Randomised phase two trial Cabozantinib showed a longer PSS compared to some <unk> in patients with the papillary subtype of not clear sell our city state and response rates for 23 per cent for capo and 4% for C. Net net.
Promising activity <unk> in combination with Nicole a map with scene in an investigator sponsored phase two study where the response rate in patients with non clear cell or C. C was 47.5%.
With these two phase three is now under way. We are also on track for the initiation of additional phase three trials this year.
We have selected the indications for the next two phase three studies and will share details with the trial designs later this year.
Moving onto XP able to our first antibody drug conjugate, which targets tissue factor.
We believe that this ADC has important areas of potential differentiation versus competitor molecules.
First the antibody was designed to avoid interfering with the coagulation Cascade with result with potential for lower bleeding risk.
Second the stability of the linker leads to reduction in circulating free payload, which may result in fewer off target or Staten related toxicities, including neurotoxicity we.
We continue to be encouraged by both the P K, which demonstrates low levels of circulating free payload as well as the emerging safety profile.
We are nearing declaration of a recommended dose for mono therapy, and look forward to expeditiously enrolling multiple solid tumor expansion cohorts as well as presenting additional data as they mature.
The signal detection cohorts will inform the drug safety and efficacy profile and allow us to pivot quickly into registration directed trial.
Additionally, we continue to enroll on the Joseph installation cohorts for the <unk> combination to determine our recommended dose for each combination to carry forward into expansion and we will continue to seek out other promising combination approaches insensitive tumor types.
For Cabozantinib, we look forward to the read out at the progression free survival primary endpoint for contact O. Two hour phase III study in combination with the test Elisa map and metastatic cash straight resistant prostate cancer in the second half of this year.
We announced in March the contact O three the phase three trial evaluating cabozantinib in combination with the test Iliza map versus Cabozantinib alone and patience with previously treated advanced renal cell carcinoma did not meet the primary endpoint of progression free survival and along with our partner and study sponsor.
Roche, we look forward to presenting the data at Asda.
Importantly, the contact with three study provides the largest datasets a date on the performance of single agent Cabozantinib and RCC patients who have previously received checkpoint inhibitor based therapy.
In summary, we continue to make progress advancing our pipeline molecules and believe that the emerging data for both <unk> and <unk> two are encouraging.
We look forward to sharing the emerging data at upcoming medical conferences as they mature and continuing to expedite the development of these promising assets for the benefit of patients with cancer.
And with that I'll turn the call back over to Mike.
Alright, Thanks, Vicky and as you heard on the call today excellent team is off to a great start in 2023.
Excited to have the momentum from our combos answered in franchise translate into the critical growth progress across all components of business as we <unk> work to help me more cancer patients in the future.
We expect continued progress across our pipeline of 2023 and look forward to sharing our latest results and plans and R&D day later in the year.
So I'll close by taking the entire excellent as team for their individual and collective efforts to support our range of discovery development and commercial activities.
The team is highly motivated to achieve our mission to help cancer patients recover stronger you live longer.
Drive for results every single day, if we remain nimble and innovative across occupants of the business and build in a culture of engagement and collaboration.
We look forward to updating you on our progress in the future. Thank you for your continued support and interest in X boxes, and we're now happy to open the call for questions.
Thank you, ladies and gentlemen to ask a question. Please press start one one on your telephone you would then hear automated message advising your hands been race and then wait for your name to be announced.
To withdraw your question. Please press star one one again.
To allow for everyone to get their questions answered we will take a maximum of one question per person once you've extra questions. You are welcome to get back in the queue to ask a follow up.
Please stay on back while we <unk>.
Our first question comes from our line up.
<unk> with Trust your line is open.
Oh, Yes, I was just wondering about <unk> Lastly, you presented the first clinical data for that as well this year. It seems like the submission deadline for abstracts for asthma coin coin serious tomorrow. So can you tell us if you submitted an abstract for an update.
To those vans combos things one dose expansion to Roswell or do you plan to do so before the deadline tomorrow.
And this has been a an odd Shawn for Oscar.
Alright, Thank you Vicki wanted to take that one.
Sure. So as I mentioned, we've now enrolled the full cohort we have adequate follow up in that clear cell RCC cohort.
In order to report at response rates and we do look forward to presenting these data at an upcoming medical conference. Hopefully later this year I'm not going to comment further at this point on which conference that is but we you know again I think have a narrow robust dataset to be able to <unk>.
<unk> and look forward to sharing these results in more detail in the future.
Thank you.
Please stand by for our next question.
Our next question comes from the line of Michael Smith, Let's go <unk>. Your line is open.
Hey, this is Paul on for Michael and Thanks for taking my question or questions on the Phase one study for X P 002, so, especially on the particularly on the cohort expansions Uhm are you planning to prioritize any tumor types, what you've seen early clinical activity from that initial read out and does moving that program into pulled them.
And sort of suggested essentially one or more.
<unk> two initiations in the near term and then just on that as well you can also add a tumor agnostic cohort trial. So I'm wondering if you could talk about the enrollment criteria for that and sort of plans for a tumor agnostic Pat Thank you.
Going on.
So in terms of.
C O two as I mentioned, we are nearing a you know a dose to carry forward into expansion cohorts. We're looking forward to very quickly pivoting uhm into those expansion cohorts rapidly enrolling them looking for signals right.
You know I think when we determine a signal that we are able to move forward with that will be at the pivot into into full development.
In terms of.
Tumor types, obviously, we enrolled uhm, a very broad variety of tumor types in dose escalation and so expansion is really going to be focused on determining signals in discrete populations of course, it will be informed.
<unk> by a competitor molecule and the the the profile that they've seen but we are very encouraged by the data in the competitive profile and so we think that.
We have a great opportunity here to be a best in class molecule I.
I would say with respect to the the tumor agnostic. This is really an opportunity for us to look for evidence of activity, perhaps in less common tumor types that you express tissue factor and get a better understanding of the potential impact of tissue factor expression on response rates.
Thank you.
Please stand by for our next question.
Our next question comes from our lineup Andy Shay with when Blair. Your line is open.
Great. Thanks for taking my question. So you've highlighted the in the prepared remarks and N P. R about contact <unk>.
And I'm just wondering about the.
Potential readthrough, especially the non clear cell.
Populations to stellar 304, and maybe if you don't mind.
I can squeeze a quick one about crile E M M X Ray crystallography these capabilities.
From <unk>.
Safko perspective, or do you feel is southwell perspective does that allow you to expand beyond tried to find.
Binding packages like PKI into something that is more.
Unique like an allosteric inhibitor.
Thanks for taking my questions [noise].
<unk> thanks for your questions.
Why don't we start with that last one was data and then we'll go back to <unk> for a contact <unk> data go ahead sure. Yeah that was a great question and in fact, yes, indeed, getting those structures, especially getting them so quickly.
Gives us an opportunity to go for non ortho steric finding approaches.
So we are actually doing that with some programs right now.
So the data coming in from those structural studies and coming in so quickly with such high resolution is really enabled some fantastic progress in drug discovery honestly that we haven't been able to see.
In a long time, so we're really excited about it.
Ricky.
Yeah, so with respect to contact O. Three I think it's important to keep in mind. This study looked at patients with previously treated RCC across both clear cell and non clear sell these patients had already with all received you know prior I O. In addition.
Potentially to you know to T. K I's so that's been proven to thus far to be a very difficult area for drug development.
I will point out that again I think the the Cabo control arm will be interesting to look at in terms of the performance there versus what we've seen historically and if we go back and think about Cabo development.
Later line of therapy going back to media or where we saw response rate you know of about 20% in PFS of about seven and a half months to Dan cantata, where again Cabo with the control arm in a phase three in that case that second case.
Some but not all patients had received prior checkpoint inhibitors and you know the medium PFS was about 9.3 months, so compared to a a checkpoint naive population. It does seem that you know there has been some improvement in Cabo performance in that second line. So I would recommend taking a look at the contact with three data you know close.
Lee in terms of <unk> performance in terms of the stellar you know three or four this is the first line population I outlined in my prepared remarks, you know the basis. The reason to believe here in terms of the prior Cabo data, which has shown activity and non clear cell or C. C. So we do have.
Confidence that the the activity, we're seeing <unk> in terms of our C. C <unk>.
In a sensitive tumor types similar to Cabo gives us confidence in the design of stellar 304.
Thank you.
Please stand by for our next question.
Our next question comes from the line of <unk> with Bank of America. Your line is open.
Oh, Hey, this is cheap for for Jason Cranberry from Bank of America. Thanks for taking our questions may be just one from me on early pipeline interesting you have highlights small molecule preconcert synthetic lethality I think in the past by we have you know.
Broke up our pipeline company small focus on antibody biologics therapies and less so on small molecule.
Arthur lesser on Tarpit oncology. So I'm curious if you know if I misunderstand synthetic lethality inappropriate currently that you're not looking at anything in terms of target oncology and what if there's a change in Mexican how the company think about early <unk>. Thank you.
Okay. So that's a that's a great question. So synthetic lethal approaches are really a way to understand more completely.
How tractable a target as in a specific population of mutations we'd like the approach as do many others because it essentially comes along with an automatic patient selection strategy.
So.
You can like in this to <unk> and BHL protective tumors BHL defects create a form of synthetic reality to these types types of kind of inhibitors that we're developing would cover that.
There's really no change in our in our in.
And our strategy, we just have tools that enable us to get a better handle on patient populations.
So in his mind you mentioned earlier, we really are pursuing a biology centric modality agnostic approach. So we choose our small molecules versus biotherapeutics based on the target and the biology.
To allow us to really explore.
Targets that we think will bring the most benefit to patients.
Thank you.
Please stand by for our next question.
And next question comes from the lineup J Olson with Oppenheimer. Your line is open.
Okay. Congrats on your progress and thanks for taking my questions.
<unk> can you talk about the timeline and two per types that you're prioritizing for the next wave.
She's three programs and how do you.
Tend to trade off the balance between indications, where you've already seen activity for combo versus.
After new combinations. Thank you.
Thanks, Jay <unk> balance.
Yeah. So.
As I mentioned, we are on track for initiating additional phase three trials. This year, we have picked out.
After a process of thinking about areas of unmet need where we have data where we believe we can differentiate and also considering you know bringing in a novel combinations.
And really the size of the market opportunity. We we've decided on two indications we will make some give you some updates as far as those indications later this year at the appropriate time, but where I'm working through protocol developments in advance of initiating those trials this year.
Thank you.
Please stand by for our next question.
Our next question comes from a line of Gregory <unk> with RBC capital markets. Your line is open.
Hi, This is hang on for Greg. Thanks for taking a question maybe you just one on that share repurchase program. Just wondering if that's currently active in our Wednesday's first quarter or April or do you plan to start utilizing it now after first quarter earnings. Thank you.
Yeah. So thanks for the question Yeah, when we when we announced the program we were in a closed trading windows. So we haven't been able to purchase shares.
But we are we are.
We continue to be committed to the $550 million repurchase program.
Announced in March.
Thank you.
Stand by for our next question.
Our next question comes from a line of Sylvan checking with J M. P security <unk>.
No. Thank you very much for taking my question and congrats on the quarter. Just one question that one after you haven't talked about this to see two seven inhibitor X L. 102, Uhm do we still expect data up at the end of the year and could you kind of outline what what would lead to go no go decision here, what's what's the bar that you're looking for thank you.
Yeah, Yeah, Vicki one SEC.
Sure Yeah. So so as I mentioned, we are focused on dose escalation and making a go no go decision later this year that will be based on the data at the end of the day. So both the safety profile evidence of activity as well as P K and P D data and.
In terms of data presentation again, when we have a robust data set to present, we'll certainly do so S. S data are mature.
Thank you.
Please stand by for our next question.
Our next question comes from a line up a cost to worry with Jeffrey Your line is open.
Hi, This is <unk>. Thanks for taking our questions. So our question is on the beach and I guess do you have a sense of what level up R&D spend as percentage off revenues. They activist shareholders wants you to call me too versus what the management team Walsh and Additionally, what in general.
<unk> S for your R&D spend that here, that's for our trials for cable and <unk> and teachers like to ATC and everything else. Thanks.
[laughter].
So the question is is a lot there really don't want to get into the details about the R&D spend we give guidance on that at the beginning of the year Mmm reaffirm that guidance. This year as you heard in our in our prepared remarks, we have a very deep and a robust.
R&D pipeline, that's focused on improving standard of care for patients.
That budget and all aspects of the.
Of the upper <unk>, obviously reviewed by the board.
Robust discussion that will continue as we go forward and we're excited to be moving forward with the plans and the data that we've talked about today it will in the future. Thank you.
Thank you.
Please stand by for our next question.
Our next question comes from a line of <unk> was Colin your line is open.
Alright, Thanks for taking my question I've.
Couple of sort of interrelated questions, maybe the first one just give us a little bit of a sudden somebody you have a fairly extensive pipeline, though looking from phase three you know all the way to preclinical are you still do you have room to bring in more compounds or is it gonna be mostly sort of adventure, where you'll have known as pushing the preclinical programs into the clinic.
And then secondly, just any comments you can make relating to your decision two days ago not to nominate a an additional board member.
And did some of the proxy battle for the time being thank you.
Yeah, the ruins migraines from a question.
The first question.
We are focused on prioritizing the best assets with the best data and the conviction that we have behind that in terms of how we invest in moving molecules forward internally versus externally small molecules versus biologics, obviously, we've got a track record of success.
Yes, there, which led to focusing on <unk> back in the day and the success that led to that in terms of abroad label and again the approximate at $1.9 billion in global revenue that we had last year. So we know how to be disciplined we know how to prioritize that requires data and Ah.
Of the commercial opportunity and the competition and all the different factors that drive into that and that obviously will continue going forward. We're always looking for good athletes on the outside that will continue we have a very high bar for partnering Andrew or acquiring assets as you know our our science.
The conviction is much more.
<unk> much credit is much more critical to us in the short term in terms of the value equation in terms of.
Where things are trading a year ago versus now we have to have conviction in assets externally or internally to get behind them with the financial muscle that we've got and certainly expertise in development as.
As well as commercial so it's all about conviction probability of success and review and how that works. So that will continue we're on the lookout for good drugs and certainly a Santa mentioned like details like <unk> because those are back end loaded repair for success and we see more of those you know in the near term.
Our plan is to be able to transact there to again build value for patients and shareholders in terms of your other question.
I'll refer you back to the press release, we had on Sunday. They don't want to go beyond that we have an open spot on the board.
Greed, not amongst ourselves as a company is aboard the not contest the election.
And we're moving forward so.
<unk>.
Thank you.
Please stand by for our next question.
Our next question comes from a line of Michael King what you're putting your line is open.
Thanks for taking my questions guys are not sure you want to get into this level of detail, but I had some questions on the spend in the first quarter you guys exceeded the street consensus by about 20 million.
And if you use the level in the first quarter or the base and growing modestly. So the end of the year, you're you're above the high end of year <unk>.
Spend guidance, which suggests that you're gonna have to dial down the growth in spending on SG&A.
And then on R&d's spend in the past you had a pretty big Bulletin, a fourth quarter.
I'm just wondering from maybe an order of magnitude basis, if that you know that kind of increase over the <unk>.
<unk> previous quarters is gonna moderate a bit because again, you'll come in over the high end of your spam. So just wanted to see if I can get some color on that.
Yeah. Chris go ahead, yeah, right. So I guess, a couple of things there from an R&D spend perspective last quarter, we had about $100 million or more of a licensee expenses that came into came into play during the fourth quarter.
We had significantly less than that in the first quarter here.
Look at the Annualization of our.
Our first quarter spend it's slightly below our current R&D guidance from a new perspective, but we still feel confident where we weren't there.
Okay from an SG&A perspective, we did have some one time things, which I won't go into but even at 131 annualize that that's it.
549 range. So we're still kind of at the at the lower end of the guidance. So.
Within the guidance and we did have some one time things during the quarter, which.
One time things that I'll repeat themselves. So we still feel confident in the guidance.
Thank you.
Please stand by for our next question.
Our next question comes from the lineup, Chris Sheppard tiny with Goldman Sachs. Your line is open.
Thank you very much Mike you've had such a significant tenure in the industry and certainly have been generating much by shepherding, particularly carbo through challenges of of becoming a leading product in the oncology space as you bring to bear your experience and think about.
You know the future I think a lot of investors and therapeutics think about now into the back end of the decade, where there will be certain pressure points like the I R. A and whatnot and the differences with small molecules and thinking about how to design the strategy to sort of sustain that kind of leadership I think one of the things that I'd be curious to understand.
Is how you think about.
And particularly the voices that could be important to you with a board. There is that one opening seat and there were public salvos that went back and forth in terms of the right constituencies and what kind of activity and voices et cetera. What is your vision for what kind of sort of complimentary skill sets and extra.
Variances would make sense for your board to help desk guide the company to continue to go forth as challenges just continue to be very competitive external dynamics through the back into the decade and again just speaking to the wealth of experience that you've had would be very.
Eager to sort of get a sense for what your vision is there. Thank you.
Thanks for that I'm not exactly sure what the question was but let me let me speak to what I think you're asking again as I as I. Just mentioned are talked about in the context of I think the questions from your own the.
The issues are.
From our point of view as we talked about on on.
The press release on Sunday, we're not going to contest the election as is currently ambitions. So what will happen will happen. We have a very strong board I expect we're going to have a strong board going forward, we have a very good process within the company and the.
Dialogue that we have with the board of the dialogue and discussions debates the arguments that I think are healthy from the standpoint really refining.
Optimizing our chance of success as a company as we again see.
To build shareholder value by helping more patients with cancer again as I mentioned in my prepared remarks, those to those two goals those too.
Topics have the travel together that's the business that we're in again, we're we're really excited about our future. We have as you heard from Vicki today with with museums, a strong momentum with that program X P. O. Two is one step behind that in terms of entering.
Expansion cohorts very quickly.
The the wealth of opportunities we have from internal sources from external sources of strong hand.
By the fact that going back to as early as 2015, we built the company actually run like a business from the standpoint of generating free cash flow and using that to fund our ability to drive top line growth through pipelines advancement. So so we're real excited about where we're at are you looking forward, we've got a lot.
A lot of opportunities. The team is very strong and is very good morale right now and we're looking forward to doing well by shareholders, while we help patients with cancer.
Broader basis than we have in the past.
Thank you.
Please stand by for our next question.
Our next question comes from the line of Peter Lawson with Barclays. Your line is open.
Great. Thanks for taking my question, Chris just as we think about the underlying script gross kind of any guidance there and.
And kind of expectations for the kind of the level of discounts allowance is and how 'bout trends through the rest of the year.
Yeah. Thanks for the question. So yeah, we did see around 30% growth in the first quarter.
Like I said in the prepared remarks, we did see our Medicare part D patients are going through the durable and also appear just expenses.
Yeah, when I stopped at the fourth quarter call back in February I was thinking that the year is going to be 31% range for gross to that and we still feel like that's the appropriate range for right now, but it's still early in the year.
So.
That's where we are from the <unk> perspective.
Thank you.
Please stand by for our next question.
Our next question comes from the lineup Steven Wiley with Stifel. Your line is open.
Yeah. Thanks for taking the questions. So just on stellar 303, and colorectal I don't think there's been much in the way of clinical benefit demonstrated in patients with liver Mets with any I O Regiment and I think both the phase twos, you referenced at a pretty high incidence rate of liver minutes. It takes over maybe per.
<unk> so.
I guess I'm just curious what you think the inclusion of <unk> is adding and this and this liver motivation population. Thanks.
Oh. Thank you yeah sure. So you know I think coming back to stellar 303. This is.
As three study looking at the combination of Zen that with a <unk> versus <unk> in late line caller rectal cancer patients right I think these patients.
Have very limited treatment options the rationale as I said, it's supported by two essentially face to kind of single alarm trials.
One was a cohort on cosmic of 21 and the other was an I S T right and they were very similar patient populations.
In terms of this sort of late line previously heavy treated as you you mentioned liver Mets.
Are very common and colorectal cancer. So they were certainly represented in both of these trials uhm given that their single arm.
Trials, you know I I I would say that what we're seeing however is that there's a clear signal of <unk>.
Response rate Alice.
Outside of what we would expect from traditional standard of care on the order of 50% from the Camilla I S. T and 25 per cent now that's in the overall population of course, we.
We do believe it is the combination you know based on other data looking at contribution of components. You know, obviously that'll be something that we have to address with the regulatory agencies at the at the time, we file should the trial will be successful, but we do feel like we are well positioned potentially to improve upon the standard of care in this.
Particular high unmet need patient population.
Thank you.
Due to the extra time now like to turn the call back over to today's house, Susan Hubbard That's Hubbard.
Yeah. Thank you <unk>. Thank you all for joining US today, we certainly welcome any follow up questions you have either by phone or email and you'll be happy to get back to you. Thanks again.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
[noise] Goodbye.
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