Great. It's Michael Schmidt from Senior Biology Analyst with Guggenheim. It is my great pleasure to welcome the next presenting company, Exelixis. With us today, we have Peter Lamb, Head of R&D or EVP of Scientific Strategy. I'm sorry. As well as Andrew Peters, SVP of Strategy. Welcome, guys, and thanks for joining us.
Thanks for having us.
All right, we'll jump right into the Q&A, fireside chat. Starting with a commercial question, obviously, cabo has been tremendously successful with over $1.4 billion in net sales last year, and you've provided guidance recently for this year of $1.575 billion-$1.675 billion. Maybe, Andrew, could you remind us of the sort of the primary growth drivers for CABOMETYX sales in 2022 and how we should think about that continuing into this year?
Yeah, no, happy to get into that. Just as a reminder, we may get into some forward-looking statements today, so please see our relevant disclosures in our SEC filings. You know, as we think about 2022 and then ahead to 2023, you know, really there's several factors kind of driving a lot of that growth and success that we've seen. You know, it's really about kind of continued market share gains that we've seen over the past several years, and that's really driven by kind of the strength of the 9ER data. Really that balance of efficacy, tolerability, things like quality of life, which continue to resonate both with patients and physicians.
As you kind of compare, you know, the earlier experiences of cabo monotherapy from the CABOSUN study to 9ER, it's kind of that longer duration of therapy, that stacking of patients. As you look to kind of continued market share gains as well as that longer duration, it's really kind of driving that. You know, as we look at 2022 and 2023, you know, it's a continuation of those sorts of trends. You know, at highlight, we have data coming up at the ASCO GU conference, highlighting kind of the 44-month experience from 9ER, which we think is going to continue to kind of show that importance of the kind of balanced data set that's really been so, you know, been so meaningful from a patient perspective and, you know, is really what's driving our utilization.
Great. Obviously you have a whole host of label expansion, trials ongoing for CABOMETYX. We've seen some data from COSMIC-313, last year, which obviously hit on PFS, but missed on overall survival at an interim. you know, just remind us of the roadmap here as we think about possible regulatory submissions, depending on, I guess, the final OS analysis.
The 313 study is, you know, an exciting study from our perspective and really asks the question of, you know, really kind of two things. You know, what is the addition of ipi to cabo nivo to the 9ER regimen look like, or kind of said another way, what is the addition of cabo to the ipi nivo regimen look like? We're thrilled to have a positive primary endpoint readout of PFS at the plenary presentation at ESMO last year. At the time of that primary analysis, the overall survival were just immature. As we had discussions with regulators around that data set, kind of what FDA asked is for a more mature data on overall survival before we kind of make formal regulatory decisions.
What we've guided is, we expect the next interim analysis on overall survival this year. It's event based, and so obviously we haven't kind of given specific timing yet. It's really about, you know, as appropriate when that data read out, having discussions with regulators, to kind of have a more, you know, fulsome conversation about the data overall and really make sure that once we have a good look of what that mature survival data look like.
All right. Sounds good. You're obviously also doing the CONTACT-03 study, which is a combination in a second line RCC setting. You know, I think some of us wonder, what is the incremental additional opportunity you could capture if that study succeeds?
Yeah. You know, I think the way that we think about it is actually, you know, somewhat very similar to 9ER in that as you look at that opportunity in kind of the second line setting, while cabo is the, you know, preferred and number one agent there, I think we've talked about something around 50% market share, a positive study we think, you know, has the potential to drive additional market share gains as well as longer duration, presumably from a positive study. You know, the good thing about that, the 03 study from our perspective is comparing against cabo really affords the opportunity to just really entrench cabozantinib as a standard of care in RCC regardless of kind of the outcome there.
Certainly we're, you know, enthusiastic about the trial and, you know, as I mentioned before, kind of a positive study should we think, you know, likely translate to additional market share gains as well as, longer duration to kind of drive that opportunity.
Great. As we think about CONTACT-02, which is your study in prostate cancer, we heard this morning at our physician panel as a, I think, a fair amount of enthusiasm around that to potentially come in in a pre-chemo setting. Just remind us of I guess your confidence and potential success here. Maybe, I don't know if you've disclosed any of the powering assumptions, for example. You also have a dual primary endpoint. Do you have to hit both to file or is PFS sufficient in that setting?
Yeah. You know, that's another study we're certainly excited about, and it's kind of in continuation of, you know, some of the encouraging and positive data, strong data that we saw from the COSMIC-021 study. Just as a reminder, COSMIC-021 was a, you know, 1,000-plus co-patient, 20-plus cohort, really kind of exploration study looking at the combination of cabozantinib with atezo. One of the cohorts there was kind of in that, you know, pre-chemo but post-NHT, castration-resistant prostate cancer segment. You know, the data we saw from that study is really kind of what drove our confidence to start, you know, CONTACT.
It's really about kind of that unmet need for patients and, you know, kind of the encouraging signals that we saw from COSMIC-021. You know, we've talked about that study's continuing to enroll and, you know, we're expecting, you know, we're looking forward to the readout there.
Do you have to hit OS, you think, or is PFS sufficient to file?
Yeah. you know, we'll see when data are available and have those appropriate conversations with the regulators.
All right. Obviously, you know, a lot of us are, you know, paying attention to the ongoing patent litigation, which is a big, a big swing factor potentially for the CABOMETYX lifecycle duration. You know, we've seen an outcome recently from the May bench trial. You know, obviously there's the wave two trial coming up later this year as well with MSD. You know, just thinking, you know, were there any notable opinions coming out of the judgment, the judge's decision out of the first trial and, you know, how confident are you know, on the back of that decision as you head into sort of the wave two trial?
Just to kind of orient the audience and those listening online, kind of the way that we've discussed the ongoing litigation with MSD is kind of MSD I, that was the trial you referred or the cases that you referred to, that went to trial in May, and then MSD II is scheduled to go to trial this October. You know, kind of more, you know, factually the patents at issue in MSD I around kind of the core composition of matter for cabozantinib and then the M2 polymorph patent as well.
What the outcome of kind of MSN I was, you know, upheld the validity of the composition patent, while the MSN polymorph that they created was found not to infringe on kind of the N-2 polymorph. You know, I, I think in general, that outcome was reasonably expected, you know, just given a lot of commentary coming from the judge in that case kind of prior to the decision. Really kind of from our perspective, what it does is it shows that, you know, all of the cabozantinib intellectual property has been validated. And, you know, I think that's a big part that as we look ahead to MSN II, you know, we'd point to as something that we're really encouraged by.
You know, we continue to vigorously defend our intellectual property position around cabozantinib, and it's something that's, you know, obviously, we're gonna continue to focus on this year.
Great. Maybe switching over to talk about some of the pipeline agents in development, starting with XL092 or zanza, where you recently announced initiation of your second phase 3 study in non-clear cell RCC. You know, just as we step back, just remind us of your overall strategy for the drug as it relates to, you know, balancing perhaps new indications versus indications where CABOMETYX is already on the market.
Yeah. Maybe I'll start, and then Peter can add to that as well. You know, as you think about zanzalintinib, XL092, you know, it was really about kind of understanding, you know, what the best parts of cabo were from a kinase inhibition profile and seeing if we can improve upon, you know, one of its known liabilities, primarily the short half-life. As we thought about that kind of as a, as a first, you know, first step in the process, we could look to, okay, what are the opportunities from a development perspective where cabo has, you know, clear efficacy signals, but we haven't yet developed there, you know, for various number of reasons.
It's kind of looking at both what are the white space opportunities where Cabo or a Cabo-like compound could have a benefit for patients, but also looking at where can we improve upon.
You know, existing opportunities to kind of further right shift the standard of care for patients because ultimately that's kind of the business we're in. As you look at, you know, kind of the first two studies, pivotal studies that we've announced for Zanza, it's really been about, you know, taking some of the learnings from cabo and then applying it to Zanza. You know, in the colorectal cancer side, it's really looking at, you know, some of the combination data that's come out over the last several years in that space and kind of informing a trial design there. Similarly in the non-clear cell RCC. Peter, you wanna kind of.
Yeah, absolutely. I mean, when we started the program to, you know, develop Zanza, originally, we were sitting on, you know, a mountain of cabozantinib clinical data. I think a better understanding of the biology of some of the key targets of cabozantinib. The aim was really to keep the target profile the same. We really weren't looking to deviate at all because, you know, in our view, that was really the secret sauce for cabozantinib and the broad efficacy that it's shown, both as a single agent and in combination with immune checkpoint inhibitors. As Andrew commented, the idea was to tune the PK profile. From the data that we presented on Zanza last year, you can see it came out around 20 hours, so happily, that goal was fulfilled.
It really doesn't accumulate that much, which again, we really think is going to play into easier adverse event management for physicians and patients. We think the opportunity there basically is it's gonna be easier to keep patients on Zanza potentially than cabozantinib. We think that's one potential advantage. In terms of where we're going, places where we haven't developed cabozantinib yet, I mean, in the indications where cabo's either, where cabo is always approved, it's then gonna be novel combinations. You can see obviously in the, in the kind of, STELLAR-002 studies, we're starting to bring in new combination partners, such as the LAG-3 antibody from BMS.
Yeah. I guess when you think about this concept of, perhaps achieving higher exposures over time with 092 relative to cabo, you know, I guess, what degree of efficacy improvement, you know, might one predict, I guess, based on that profile?
I'd be worried to actually give you a prediction. I mean, that's an experiment. It's gonna depend very much, I think, on. It's gonna vary probably by tumor type, for example. Look, that's a clinical experiment that essentially.
Right.
-intending to do.
Okay. What else might we see this year from XL092 in terms of clinical data updates?
Yeah, I mean, you know, as usual, I mean, I, you know, we haven't put a stake in the ground about additional Zanza updates. I mean, as usual, I think our, we'll stick to our usual script of saying when we have a substantive, you know, chunk of data to present, that's when we'll do it. The timing's not completely in our control, so stay tuned.
Right.
Yeah. I mean, just to add to that, I think what we talked about earlier this week on our earnings call is really kind of framing this year as really a, an execution year from a getting these new pivotal styles, trials up and running. You know, that's really, you know, in our mind, kind of the key value driver there is just, you know, making sure that we're investing appropriately and executing as strongly as we can to kind of broaden that opportunity.
Right.
Set for Zanza.
STELLAR-303 is your first phase III study in colorectal. I guess, any updates on, you know, how enrollment or, you know, ramp up of the study is tracking with your expectations?
Yeah. It's still an early study. You know, as we've done with cabo studies in the past, we'll kind of update as we, you know, continue to enroll and complete enrollment there.
Right. Maybe a few questions on your earlier stage pipeline programs. You said you've built a pretty comprehensive portfolio of, you know, biologics and small molecules and that are in phase I at this point or preclinical studies. CDK7 is one of your, so XL102 is one of your most advanced drugs there. You have reported some early data recently.
Yeah, absolutely. You know, just to generally frame it, I mean, it, we're in sort of the happy position which is obviously now approved, accelerated approval in cervical cancer being the first. There are a number of key points of differentiation from that molecule that we certainly found compelling. First, different antibody. Still targets tissue factor, but it binds in a way that it doesn't interfere with binding of factor VII, whereas Tivdak does interfere with binding of factor VII, which means it interferes with the coagulation cascade. You do see fairly high rates of epistaxis and bleeding with Tivdak. It's actually in the label. Certainly with XB002, we don't see that preclinically. Then the early clinical data that we put out at the Triple Meeting last year, sort of confirmed that.
We've seen no bleeding to date at all. Second, we're using a kinda next-gen linker payload. We're actually using the ZymeLink technology. It's a modified auristatin. Quite a lot of modifications on it actually, and a different linker from the Seagen val-cit auristatin that's used in Tivdak. I think the crucial differentiation there is really around stability, so the stability of that construct. You know, Zymeworks has certainly done a lot of earlier work showing that pretty crisply preclinically. Ikonics, who we actually licensed XB002 from, had done direct comparisons of their antibotdy with the Seagen linker payload versus the Zymeworks one and showed the same preclinically. I think the early clinical data will hold it out.
I mean, I think the big news from our data presentation last year was really the pharmacokinetics. At the 2 mg/kg dose where we showed PK, which is the same dose as the approved Tivdak dose, we see twice the exposure of the intact ADC, but 1/10 the exposure of the free payload. Free payload, we believe, does drive a number of side effects. Although it's early going, we think it's interesting in the AE profile of XB002. We're not seeing alopecia so far, we're not seeing diarrhea so far. We're not seeing much peripheral neuropathy so far, all of which are significant side effects of Tivdak.
We think it's a really exciting next, you know, next-gen approach to the target, and we really think being able to achieve those higher exposures gives us the opportunity to see efficacy in tumor types outside of cervical carcinoma. Our plan, and once we get a recommended phase 2 dose, is to go into multiple different single agent expansion cohorts and really do some signal finding.
Yeah. I guess how are you tracking towards identifying the recommended phase 2 dose, and what are some of the most compelling opportunities outside cervical cancer?
Yeah. You know, I think we're getting fairly late in dose escalation, so we'll still see. We're not there yet, but we're starting to get up there. You know, as I said, there are, I think we've got 10 different solid tumor indications piled up. There's certainly opportunities in, in lung, in breast, triple negative, in ovarian, in head and neck squamous cell carcinoma. One of the attractive features of tissue factor is that it does have broad expression in a wide variety of solid tumors. This sort of old biology, but, you know, it's been known for some time that, you know, patients with significant solid tumor burden often have coagulopathies. That's probably because tissue factor's exposed and is actually triggering some coagulation.
There's lots of opportunities, based on the expression pattern.
Yeah. All right. Looking forward to that. Then, you know, as we kind of zoom out and just again think about the, you know, high level about your pipeline, your R&D strategy. Obviously you've sort of built internal capability. You've done a lot of, you know, a number of business development transactions. You know, I guess given the strength of your balance sheet, you know, at this point, to what degree, you know, how do you think about evolving the pipeline further, you know, in terms of BD M&A or focusing in on certain internal assets?
We've been looking very intensively and I'd say fairly broadly at assets over the last, you know, 2.5 years or so. End of last year, we did a couple of transactions which were really kind of option type transactions. One with Cybrexa for a novel peptide drug conjugate, and one with Sairo for a novel monoclonal targeting SIRPα. We actually like that structure a lot. I mean, those are assets that are in either late preclinical or early phase 1.
I think it'd be very attractive to put together a string of those where, you know, we're not putting $hundreds of millions of dollars up front to get these things, but rather, you know, a modest amount of money up front and then, having the ability to option those assets once an agreed upon package of clinical data is available. We're certainly looking to do more deals like that. I would say beyond that, in terms of bigger stuff, it's all about kind of risk and conviction there. As you get later and, you know, when the transactions gets larger, we just have to have that additional conviction, you know, scientifically, clinically, commercially, that it's the right asset for us. Certainly something we're looking to do, but, you know, haven't found it yet.
All right.
I just, I guess just to add to that, kind of the big picture perspective on Exelixis right now is, you know, kind of the way we view our business going forward is really using kind of the success and tailwinds from Cabozantinib as kind of the gas of the innovation engine going forward. kind of driving that continued investment and growth and, you know, really kind of, you know, the goal for all of us here is to help more patients with cancer. finding those new opportunities, finding those opportunities to benefit patients, kind of driven by that success from Cabo.
Perfect. Well, with that, I think that's a good closing statement. It's time to wrap up. Andrew and Peter, really appreciate the time.
Yeah.
Thank you.
Thank you.