Back, everybody, to the 2024 RBC Global Healthcare Conference. My name is Greg Renza, one of the biotechnology equity research analysts here at RBC. We're pleased to have Exelixis with us right now. Joining us from the company is Andrew Peters, the Senior Vice President of Strategy. Andrew, it's good to see you.
Yeah, good to see you. Thanks for having us.
Great. Well, I look forward to the discussion. A great deal going on with Exelixis, and maybe we can just pitch it over to you to provide, you know, a brief update or introduction to the company, to Cabo, and to the pipeline.
Yeah. And thanks again for the invitation to attend. And before I get started, I just wanna mention that I'm gonna be making some forward-looking statements today. So please see relevant disclosures around risks in our business in our SEC filings. So Exelixis, a commercial stage biotech company focused in the solid tumor, kind of GI/GU oncology space, with lead product Cabometyx approved not only in kidney cancer, RCC, but HCC liver cancer as well, as well as a couple of other thyroid cancers as well. Mentioned before, Cabo's approved. We've given 2024 product revenue guidance of $1.65 billion-$1.75 billion. And that really reflects kind of the strength of Cabo as the number one TKI IO combination in frontline RCC. It's really driven kind of the bulk of that utilization.
As we look ahead for Cabo, on the back of two positive pivotal studies last year in NHT or post NHT castrate resistant prostate cancer, as well as neuroendocrine tumors, we're planning to file for approval for those indications and look forward to launching those as well. And so company really focused on execution from a prioritization perspective for Cabo there. And then beyond that, we have a really exciting pipeline. And the way that I really think about and frame Exelixis's big picture is Cabo's the gas that fuels the Exelixis's engine. And the Exelixis's engine, we kind of framed at a really high level, and actually in a lot of depth at our R&D day in December, 1st one that we'd had in quite some time.
It gave us a chance to focus on the areas of science and strategy that we're interested in: indications, modalities, small molecules and biotherapeutics across both mono and bispecific antibodies, as well as ADCs. Then on the small molecule side, really focus on synthetic lethality for our earlier stage pipeline. Our lead product candidate is Zanzalit, which is a 3rd gen VEGFR targeting TKI that really builds upon kind of the Cabo legacy. So if you think about Cabo as a second gen improvement, a lot of the earlier gen VEGFR targeting TKIs, what Zanza does is similarly build upon Cabo.
Whereas kind of the core liabilities of some of the 1st gen TKIs really were focused more around some of the improvements in efficacy and potency and hitting some of the other kinases like MET and AXL and the TAM kinases that we know are important in kidney cancer, especially Zanza takes kind of that same kinase inhibition profile of Cabo and then improves upon that into half-life. One of the main limitations of Cabo is, as a reasonably long 4-day half-life, which can have practical implications from a patient management perspective, as well as, you know, tolerability, adverse event profile perspective. And so we were able to engineer a metabolic liability into the Cabo scaffold and take that 4-day half-life and turn it into a little under 24 hours. And so that's a program we're particularly excited about.
Have initiated three pivotal-stage trials there. STELLAR-303, 3rd-line+ colorectal cancer, STELLAR-304 in non-clear cell RCC, and STELLAR-305 in a frontline head and neck in combination with pembrolizumab. All of those really build upon a lot of the encouraging data that we've generated so far with Cabo to help kind of inform and shape where can a Cabo or Cabo-like molecule be successful as part of a an IO-based combination beyond Zanzalintinib. We have XB002. That's our next-gen tissue factor-targeting ADC. Again, everything that we do at Exelixis is kind of shaped through that Cabo lens of how can we differentiate? How can we optimize? And XB002 is really predicated on the success that Tivdak has had in in cervical cancer.
That's from seagen, now Pfizer and Genmab, but really asks the question, if you were to optimize on the antibody side, on the linker side, and the warhead side, what's the profile that we can generate? And then, lastly, XL309. That's our USP1. Recently went into the clinic. That's another one that we're excited about. And then, beyond that, again, as I mentioned, we outlined the R&D day in December, you know, really focused on a whole host of really exciting pipeline programs that again, we're using kind of the Cabo cash to invest in the Exelixis engine.
That's great. Really comprehensive intro. And it's certainly a testament too that there's a lot going on at Exelixis and a lot for investors to focus on. Maybe just to get it out of the way. I think one of the more near-term focuses for investors is certainly, you know, the patent risk with respect to Cabo. We know we have the MSN II trial ongoing, release on outcome potentially looming. So just to give you the floor to kind of get that question out of the way. What is the latest development there? And how you're communicating, you know, what you know as far as time for a decision?
Yeah. So on the last earnings call, we reiterated our expectation for a decision from the judge first half of this year. I think, from our perspective, we're on the glide path towards resolution. All the briefs are filed. All the back and forth has been completed and just kind of waiting for that decision. You know, I think the best way that I'd think about it or frame it is, we have confidence in our position, but we don't have clarity. And that clarity on the outcome is really what we're waiting for.
Great. So let's talk commercial and Cabo performance. You mentioned the guide range. And just walk us through, Andrew, just some of the assumptions regarding the performance for the year, some of the pushes and pulls there.
Yeah. So, as we outlined in the beginning of the year, when we gave 2024 guidance, probably the biggest dynamic to think about is this year is more of a kind of a pause from a demand growth perspective ahead of two new potential product launches in NET and prostate. You know, drilling into that a little bit more. If you think about most oncology launches, I think, on average, it's between five and seven quarters post approval for an indication is when you start to see a maturation of that, you know, market share dynamic, duration dynamic, etc. And we're now 12+ quarters post the frontline Cabo Nivo approval. So not really a surprise that we're seeing a maturation of that market. So our 2024 guidance reflects that dynamic.
But instead, you know, we're really excited about the opportunities in NETs and prostate in particular. As P.J. talked about on the last earnings call, those are both indications where I think there's a pretty significant unmet need, certainly in NETs. You know, kind of the existing oral TKIs has been approved new therapy since 2016. And really, as we kind of do more and more market research, kind of KOL checks, really kind of getting into what that opportunity set is, frankly, the more we're excited about it. And then, similarly, in prostate CONTACT-02.
That was the pivotal phase 3 study that we ran there again represents an unmet need that's, you know, differentiated among kind of other contemporary studies in late line prostate, in a sense that was a study solely focused on patients with baseline visceral metastases, which is really kind of the highest risk, highest unmet need cohort. And again, kind of positive study there hit PFS and had that data presented at the ASCO GU conference earlier this year and really received a lot of positive, you know, feedback and reaction from that data, in particular from the patient community, who I think represents kind of an often underserved voice in our industry, and really reflects the fact that these patients really don't have that many options.
as P.J. has talked about pretty frequently, you know, Cabo Atezo really has the chance to be the first IO containing regimen in prostate cancer and has the potential to really add another treatment option for patients and physicians in their quiver.
Great. And on neuroendocrine. Just remind us and touch a bit on the CABINET trial. How is that a foundation for your confidence? How is that suggesting the competitive potential about second-line plus NET?
Yeah, I think, in particular, that CABINET data set have been very well received again from the clinical and, you know, patient community alike. You know, as I mentioned, there are other oral TKIs available, as well as radiotherapy in the form of Lutathera. But it's a relatively large population of about 8,000 incident patients in an even larger kind of prevalent patient pool. And so we think that Cabo really has a chance to play an important role kind of in that patient journey. And, you know, certainly, when you kind of compare and contrast and talk to physicians about their familiarity with oral TKIs, certainly the RCC experience, where not only Sutent and everolimus, which are standards of care in NETs, but RCC as well. And so there's a familiarity with kind of all of those dynamics as well.
As I mentioned before, it's an indication we're excited about. I think the community is excited about, and all hands on deck from an execution perspective to kind of get that filing in and hopefully get Cabo to patients as soon as we can.
Yeah. And what would an optimal label for Cabometyx and NET look like?
That's an interesting question. I mean, I think it's, you know, kind of a statement of the obvious that, in general, you get the label of the population that you studied. And if you look at the patient disposition, patient population for CABINET, it reflects not only EP-NET, but P-NET. So pancreatic, extrapancreatic neuroendocrine tumors, as well as patients who had experienced Lutathera. Some experienced Sutent. Some have experienced everolimus. So reasonably broad population there. And so, you know, we'll wait and see kind of what the final label looks like. But I really think it gives a pretty good perspective and data set on what Cabo can do for these patients who really do have a pretty significant NET.
Yeah. And you touched on prostate just following the CONTACT-02 results. And you touched on this earlier. But where do you see Cabo fitting in here in the current treatment landscape?
Yeah. Again, I think kind of the critical thing to keep in mind when considering CONTACT-02 is really the differences in that study versus some of the other contemporary contemporaneous trials like PSMAfore SPLASH. Kind of that cohort of patients focused only on patients with visceral disease at baseline. That was actually pretty purposeful on our end. You know, obviously, we have a long history of Cabozantinib and prostate cancer with the COMET trials. So we designed CONTACT-02 specifically and purposefully to kind of ask the most simple, straightforward question. Can a Cabozantinib based combination drive tumor reduction and benefit on PFS and benefit on survival and all of these those other endpoints, just given the complications around prostate cancer and understanding benefit around, you know, patients who don't necessarily have visceral mets, but have high bone disease only?
Kind of understanding what that dynamic from an efficacy perspective is somewhat challenging and complicated, as we experienced in COMET. And so CONTACT-02 was the most straightforward way to ask that question. Also is probably the highest unmet need there. You know. As we've gone out to the market to understand and talk to patients and physicians and KOLs, and you know, all of that. You know, patients who do have visceral disease, liver metastases, patients who had already received prior dose of Taxol in the CSPC setting. You know, those are the ones who right now, for the most part, are getting a second NHT in clinical practice. And it's really not a particularly effective therapy for patients. And so having a kind of chemo alternative layering on the availability of a checkpoint inhibitor into that combination.
You know, it's something that we think presents a valuable opportunity set to treat patients.
Great. Great. The next OS analysis. What?
I always said it's gonna occur this year.
Okay. All right. Well, let's turn to Zanza, then. And you touched on the half-life improvement. Maybe just explain how Zanza's profile can stand out from Cabo, based on the data so far. Maybe just touch a bit on the takeaways from the STELLAR-001 results.
Yeah. So just as a reminder for those in the audience, and then those listening on the webcast. We presented kind of the first cohort of the STELLAR-001 study. That's kind of the first phase 1, 2 that we looked at Zanza across specific cohorts of tumor types. So clear cell RCC was the first one, and we presented that data at the IKCS conference last year. Kind of from an overview perspective. You know, a lot of our hypotheses around Zanza were confirmed. You know, we had shown previously the half life. But certainly, when you look at either the efficacy perspective. You know, obviously, all the caveats with small n and cross-trial comparisons and all of that looks as good, if not potentially better than Cabo.
We saw responses in patients who are both naive to Cabo, as well as other TKIs. In that segment, saw a 60%+ response rate, which, you know, frankly, is pretty rare in oncology these days. Then, similarly, in patients who had actually received prior Cabo, we saw a pretty substantial activity as well. On the tolerability side, certainly, we're seeing in that data set both a reduction in the frequency and severity of adverse events, which kind of also play into that, you know, Zanza hypothesis. One of the other things I'd add that Dana Aftab, our CSO, talked about on our last earnings call is data we're continuing to generate around Zanza, in particular around, you know, interrogating why we are seeing that differentiated profile.
One of the things that he highlighted is actually tissue distribution differences and things like peripheral tissue versus the tumor versus plasma. That could have a role potentially in why things like PPE or hand-foot syndrome, which is really one of the major adverse events for Cabo. We're seeing both less in frequency and severity there. So kind of that PK protein binding tissue distribution all plays into that potentially differentiated profile. So when we look towards the pivotal studies for Zanza, it's really about where can we learn from the Cabo experience, and then apply it with what we think is a differentiated next-gen TKI? You know. So colorectal cancer 303, certainly learning from the Cabo experience, but candidly also have shown an ability to leverage data sets from other companies as well. Notably, LEAP-017.
That was a phase 3 study of pembrolizumab plus lenvatinib that Merck had run. After that data read out similar population. We amended our study to take kind of the learnings from that IO TKI study and say, Okay, how can we increase the probability of success of running a successful study to really generate differentiating data and ultimately help patients? So we made a few amendments there, including kind of changing the primary analysis to patients with non-liver mets at baseline, as well as some other changes as well. So that's kind of the philosophy we have on Cabo going forward is really to understand, how can we differentiate? How can we generate differentiating data? Because that's ultimately is what's gonna drive utilization in the market.
Yeah. Great. Great. Maybe just touching on some of the other pipeline initiatives that you called out just on the broader strategy with Exelixis for your ADC programs. How does this complement Cabo and Zanza?
Yeah. So again, as I mentioned before, I think everything we do at Exelixis is really informed by that Cabo lens. Certainly, Cabo wasn't the 1st VEGFR targeting TKI. I think it was, you know, Mike said, something like the 43rd or something something pretty wild. But what we do think it was kind of the most differentiated and the best in class. Yeah. And so when we think about our ADC portfolio or our earlier stage small molecule portfolio, it's really about, can we generate differentiating data? Can we build a best in class molecule? So, you know, take XB002 or XB010, or even XB371 as examples of kind of that ADC strategy, where it's our perspective that, you know, any single platform probably doesn't have a one size fits all approach. It's a complicated technology antibody drug in the conjugation modality.
You know, we think requires iteration and optimization across all of those components. And so if you take again, XB002, you know, on the antibody side relative to Tivdak. You know, our antibody is non-binding or non-competitive with Factor VII. So if you think about the role of Factor VII and tissue factor in the coagulation cascade. Unsurprisingly, that Tivdak has bleeding risk associated with it. Similarly, on the linker or warhead side. You know, if you contrast kind of the Val-Cit-MMAE kind of standard Seagen platform versus the ZymeLink. Certainly, in the preclinical data that we've generated would suggest differentiation there. So the philosophy, kind of the cabozantinib lens of, you know, taking a known target, known modality, and improving upon it to really generate what we hope could be a best-in-class profile.
That's kind of the through line across the organization, whether it's Cabo, whether it's Zanza, whether it's our ADC platform. Then, in particular, and you know, even the synthetic lethality kind of earlier stage portfolio, where we have a pretty good understanding of a lot of these targets. But have we been able to optimize and really create kind of best in class molecules there?
So while a great deal happening with the pipeline and the portfolio. We certainly want to cover your view of the assets externally, and how you're looking at business development. And while we believe you've been consistent in how you're describing that, I think it's also been now maybe on the more provocative side with the updates. And it for 1st quarter earnings call, maybe just walk us through your lens, where you're prioritizing, and how you're viewing external assets. And maybe just that potential for call it ramping up or amplifying the efforts. How should investors think about that?
Yeah. So I think we've been pretty consistent about focusing, you know, this year, especially on kind of later stage programs. Just quickly, I'll say a lot of that is influenced kind of by the bookended, you know, R&D day in December, where we outlined our kind of disease indication priorities, and then modalities, small molecules and biotherapeutics. And then at J.P. Morgan, when we outlined kind of our business priorities, where we, you know, initiated another $450 million share buyback, but importantly, had kind of a cost-cutting measures and rebalancing of focus. You know, away from generating a ton of INDs towards generating high quality INDs and building out and continuing to build out our clinical development side, where we're able to then take in either those INDs or external programs and really run and create value there.
And so the combination of those two things basically said, Okay, our strategic priority is gonna be finding those sorts of assets in those areas of focus for us on the later stage side, so that our development organization can take and run with them and really drive value. I think the kind of framing that we've also been pretty consistent about is conviction. I don't think we're, you know, at the point where we're setting corporate goals to do a deal this year, check the box, and move on. We want to make sure that we're bringing in kind of a high value asset that in our hands we can really turn into kind of the next Cabo or the next Zanza sort of thing, you know. So we think about external innovation a lot.
It's, you know, where I spend a good chunk of my time. And it's really about evaluating those opportunities that we can say, Okay, not what does this company look like now? But what does it look like in Exelixis's portfolio? What new studies would we run? How do we amend or change the existing study to increase the probability? How does our commercial organization think about the market in a good way or a bad way? I think that kind of conviction level and our patience level is really important, because the last thing we want to do is go out, do a transaction, either say, see it fail ultimately clinically, or more realistically, fail commercially. And then, you know, you get on the call and be like, Hey, why did you guys do that dumb deal? So, you know, that sort of thing.
Fantastic. All right, Andrew, we'll leave it there. Thanks for joining us. Great to see you.
Yeah.