Hello again, everyone. Esther Dirut, a Senior Biotech Analyst at Barclays. It's my pleasure to have Exelixis with us. With us today, we have Senior Vice President of Strategy and Investor Relations, Andrew Peters. Thank you so much for joining us. I'm sure folks are familiar with the Exelixis story, but maybe it'd be helpful to maybe just start with some introductory remarks and then we'll go into Q&A.
Sure. Thank you again for the invite. Always like being in Miami this time of year, even though the weather in California is also nice, this week. As a reminder, gonna be making some forward-looking statements today, so please see, disclosures around relative risks in our business in our, SEC filings. Exelixis is a, you know, commercial oncology company, really built around, our lead molecule CABOMETYX, cabozantinib, which is a tyrosine kinase inhibitor that targets VEGF, as well as a whole host of others, MET, AXL, MER, the TAM kinases. Really kind of designed to be a best-in-class molecule, across a wide range of indications. It's proved in, kidney cancer, liver cancer, thyroid cancer, and now neuroendocrine tumors.
It's really kind of provided the foundation and a lot of the insights as to what we do at the company, both from a research and discovery perspective, but importantly from a strategic perspective as well. I'm sure I'll get to that a little bit later. You know, we did $2.123 billion in net product sales last year. We've guided you know, roughly $2.4 billion or so at the midpoint for this year. Kind of the CABO business continues to you know, hit on all cylinders commercially.
Behind that, we have kind of our next-gen, you know, what we think of as a truly best-in-class and optimized TKI that comes on the heels of CABO called Zanzalintinib, which kind of takes the core essence, the special sauce, so to speak, of CABO and further optimizes it, most notably around half-life and kind of PK and some of that. Zanza is in seven pivotal studies right now with plans to initiate additional studies, you know, hopefully soon. We also had the first positive pivotal data from that program read out last year, and we have a PDUFA date from FDA in December. Beyond that, we have a whole host of both small molecule and biotherapeutics in our internal portfolio.
Kinda lastly, more in my purview is, as we think about where do we wanna be in five years and how do we really grow value, it's treating more patients with more medicines, helping them live longer, and shifting that standard of care in oncology. As part of that, you know, our financial success that we've had with CABO enables us to both invest internally, invest externally, and then we've been embarking kind of on a series of share buybacks as well.
To make sure that, you know, we understand we think our stock's cheap candidly. Yeah. That's kind of a little bit of an overview of the company and happy to kinda go wherever.
Yeah. Maybe first on that top-line guidance that you talked about, you know, what do you see as sort of the key levers around top-line guidance? I mean, I think, you know, positives, I think, over the last couple of years has sort of been the neuroendocrine tumor franchise. If you think about just in general, about sort of top line and then the guidance, and you think about sort of, you know, what are the pushes and pulls as you see it?
Yeah. As we talked about kind of on the last earnings call, you know, the real growth drivers for next year, pretty simple. It's continued momentum in the base business around RCC-
Continuing to kind of execute on the NET launch. You know, both of those, as we expect both for 2026 and beyond, are kind of really drivers going forward.
I think I'd focus there.
Right. As far as the sort of maybe the last part that you talked about, just in terms of BD, and the potential to sort of maybe look at the external environment for potential assets, you know, I guess what are you seeing in the marketplace that you think could potentially generate value? Not necessarily assets, but just maybe indications or specific profiles that you think could be additive to what Exelixis has already built with its commercial platform?
Yeah. I mean, the way that I think about the company and kind of the way we think of, you know, we've described ourselves externally as we're kind of a big small company.
Hmm.
What we really mean by that is, unlike kind of our larger peers, we've chosen to, you know, be particularly focused in solid tumors and even within solid tumors, GI and GU oncology. Within kind of those franchises, so to speak, we think that we're scaled, we're optimized, we're experts, and we're leaders in RCC, NET, CRC. We wanna continue to build out around those. I mentioned kind of the CABOMETYX story and how it is a through line through everything we do. When we think strategically about the company, we use something that we call the Cabo lens, which is what are the learnings as to why is CABOMETYX successful?
You know, how do we continue to double and triple down in the areas that we have been successful, and how does that create value ultimately for all of our stakeholders, for patients, for shareholders, for employees, et cetera? Kind of within that GI/GU landscape, that's kind of very much where we focus. As it relates to kind of what's external, you know, kind of a simple accurate outlook is biotech's a tough business, and I think we have to kinda go in eyes wide open as we're looking both at our internal portfolio as well as externally. The math will say that most things just don't work, and so our job as drug developers is to try and find those needles in a haystack, so to speak, that are gonna be those programs that ultimately help patients.
One of the things that we've learned, kind of again in that Cabo lens, is that the reason we've been so successful commercially isn't because we're, you know, the eighth VEGF TKI on the market.
Hmm.
It's because we've been able to generate differentiating data and shift that standard of care, you know, shift that Kaplan-Meier curve to the right.
Hmm.
That's why CABOMETYX is used. When we look externally, to try and identify those opportunities that can supplement our portfolio, that's really the Cabo lens that we're looking at, is, you know, program X at another company something that we truly believe has the potential to become a new standard of care? If not, it's not for us.
Right.
We're not gonna invest in it. We're pretty disciplined on that front, and we're gonna continue to be so.
Great. Merck disclosed a couple of belzutifan data sets at ASCO GU for patients with renal cell carcinoma. Maybe just, you know, from your perspective, what you view sort of the read-throughs are for CABO and maybe even for Zanzalintinib as you think about potential, you know, non-clear cell potentially other RCC indications for that program?
Yeah. Kind of before, during, and after that conference, we had spent a lot of time, you know, with clinicians who are treating patients trying to understand the dynamics around the data.
Hmm.
One of the things that kept coming up is this question of, you know, that all patients and physicians have when they're trying to understand, you know, new mechanisms, new combinations in particular: is it better to combine or is it better to sequence? Oftentimes, kind of the best way to answer that is really through just the simple question, is there an overall survival advantage? From our perspective and a lot of the feedback we heard from RCC treaters is essentially if you take kind of a second-line TKI program, you know, 10-11 months PFS followed by, you know, the belzutifan monotherapy data from LITESPARK-005, which is 5-6 month PFS, kind of that absolute PFS is actually, you know, similar if not a little bit longer than what LITESPARK-011 saw.
Plus you layer on kind of the added toxicity of the combination and the fact that, you know, with the combination you also lose. What we've heard pretty consistently is a big driver of bel's use is the so-called TKI break. A lot of these patients will have been on a prior TKI, you know, for the past 24 months sometimes. All drugs have, you know, adverse events and, you know, TKIs have a particular set, HIF-targeting agents have a different set. What kind of that sequence approach with bel's has historically offered is providing patients kind of an active modality.
Hmm.
With a little bit of a different tolerability profile, and that's kind of been an important part of why that program's been so successful.
Mm-hmm.
The question then becomes, if you're not really gaining a lot from a PFS perspective, you're adding tolerability issues, and you're kind of limiting your ability to offer patients that TKI break, you know, that's somewhat of a challenging, you know, dynamic, and that's why, you know, our experience was there wasn't a ton of robust enthusiasm for it.
Mm-hmm.
The second dynamic, that's actually come up around Exelixis in the data is for those physicians and patients who do ultimately decide that that combination is probably best suited for them.
Mm-hmm.
In the second line, what it means is we'll probably see a little bit more frontline share for CABOMETYX. The reason for that is, as physicians are kind of looking at all of the arrows in their quiver, so to speak, on how to help patients along their journey with RCC, if they have a sense that they're gonna give len/bel in the second line, they probably won't use a len-based regimen in the first line.
Right.
You know, we've been trying to drive kind of that frontline share for the last three years. If len/pem isn't an available first line, we'll probably go to CABOMETYX. Net-net, I think kind of the overall results of the weekend were a little bit of a net positive for us.
Mm-hmm
We'll see.
Right. Maybe shift gears to Zanzalintinib. You know, with a PDUFA for the third line plus CRC in December. How are you thinking about maybe a incremental sales force and how much of the existing sales force for RCC can you leverage?
Yeah. You know, taking a little bit of a step back, one of the things that we've increasingly talked about over the last couple of years is aspirationally our goal to be reasonably balanced 50/50 between, say, GI and GU.
Mm-hmm.
Obviously, that was kinda kicked off with the CABINET data and our launch for CABOMETYX and NET, but we certainly think with Zanzalintinib coming in for CRC to expect to kind of fully build that out. What we did and what we announced at the end of last year was an increased size of our commercial organization, our sales force, specifically around kind of the NET opportunity, to really kind of maximize and, you know, put our foot in the gas to make sure that we're doing everything possible, to kind of target those patients and really maximize that opportunity.
What it also does is kind of that GI focus enables us to really have a lot of, organizational and operational, boots on the ground, so to speak, to prepare as much as we can ahead of the potential launch, later this year.
Yeah. One of the, I guess, incremental updates that we'll get for STELLAR-303 is CRC data in patients without liver metastases, and update there. You know, what does that ultimately contribute to the opportunity for Zanzalintinib in this, you know, late line setting, initially? You know, how common is that, you know, sort of testing done in CRC patients where this is something where physicians can easily adapt in terms of their, you know, diagnoses of CRC?
I guess that the liver met, non-liver met dynamic is, you know, can often be just kind of observational. Does a patient have metastases in the liver? It's actually something that's quite common. You know, as it relates to the overall profile, I guess, you know, the important dynamic to keep in mind is that the data that read out last year reflects kind of the ITT population. It's inclusive of both patients with liver mets and non-liver mets. What we're waiting for later this year is really the fact that at the time of that primary analysis, the number of events for the non-liver met patients was relatively immature.
You know, somewhat of a kind of obvious dynamic given that patients who have metastases in the liver tend to have much worse prognoses given the physiological impacts of just what that metastasis would represent. Not surprising that you see kind of a different temporal dynamic. What's also important is the data that kind of came out at ESMO, as well as published afterwards, was really that we don't see a meaningful difference in effect size across any of those major populations, liver met, non-liver met, prior VEGF use, etc. I think that was actually honestly a pleasant, I don't want to say surprise, but a really pleasant update for us because it shows that the combination of Zanzalintinib and Tecentriq, they're really active across all patients.
Mm-hmm.
That's kind of the important dynamic. Why we're looking forward to the data later this year is, again, somewhat of a statement of the obvious. When our commercial team goes out into the market and sees physicians and kind of starts to have those conversations, it's a much more powerful message when you can candidly show, here's a Kaplan-Meier curve with the ITT, here's the liver mets, and here's the non-liver mets.
Right.
Really show kind of overwhelmingly that patients live longer if they're on the doublet versus kind of the current standard. That's kind of why we think it's so important as it further adds to the story of why we're so excited about Zanzalintinib in this setting.
Great. For STELLAR-316, you know, you decided to go into adjuvant CRC. Maybe, you know, what data points that you're looking at, whether externally or internally, that sort of prompted the move into that earlier line setting?
Yeah. You know, this is one that I'm particularly excited about, and I think I'm, you know, kind of proud that Exelixis is really at the forefront of the science here. Kind of the incentive one is, you know, as I mentioned earlier, kind of this franchise view of the world. We really want to kind of invest and broaden our presence in CRC, not only with Zanza, but with the rest of our pipeline as well. As we started to look at kind of the CRC landscape and say, "Okay, we have a positive phase 3 study in a late line population. We understand now that kind of this tumor type is particularly sensitive to Zanza.
What can we do with it?" Kind of at the same time as that, a lot of data started to emerge around kind of this, you know, ctDNA positivity and what that means from a patient's perspective. You know, Natera has this Signatera test, and they published pretty extensively around what it means from the patient's perspective, when they're ctDNA positive or ctDNA negative. Unfortunately, for about 20-ish% of patients who after what we call definitive therapy because there's slight little differences between colon and rectal, but you know, broadly speaking, after kind of that adjuvant treatment, if they ultimately do become ctDNA positive, what that means is, you know, they have a reasonably high rate, risk of recurrence in actually a relatively short period of time, around the order of five, six months, six months or so.
The other unfortunate kind of reality for those patients is the current standard, if you do test positive ctDNA, is watch and wait. There's essentially nothing we can do for these patients until their tumor eventually comes back and progresses. You know, the combination of all of those things basically let us realize, well, there's this huge unmet need that we have the opportunity to kind of identify patients who are likely to recur, who are also likely to be sensitive to our drug Zanza, and basically design a study to help them.
When we look at the design of the 316 study, as well as kind of the operational dynamics around working with Natera. It's something that I'm particularly excited about because unlike a normal standard phase III study where you open up 1 million sites and kind of screen a ton of patients and hope that that funnel ultimately delivers it.
Mm-hmm.
The ability for Natera to kind of help us and work with us to help identify those patients that could be potentially eligible for the study from an operational perspective, that's pretty interesting. Similarly, we have the ability to offer these patients an option, whereas right now it's watch and wait.
Mm-hmm.
It enables us as a you know, company to run a placebo-controlled study in oncology, which again helps us kind of define that new standard of care and really help patients.
Mm-hmm.
That's kind of the key dynamics there.
Do you have a good sense of the, maybe, the median rate or median time to progression for those patients?
Yeah, it's about six months if you look at it.
Okay.
That's, you know, kind of generally around pretty consistent around date of ctDNA positivity.
Mm-hmm.
That's kind of an important, you know, dynamic to keep in mind.
Good. Thank you. For STELLAR-304, this is the non-clear cell RCC pivotal study. You know, what conversations have you had with the FDA around sort of choosing sunitinib as the comparator versus sort of the Zanza plus nivo atezo active arm? I guess one of the things we sometimes get from the questions are, you know, having sort of a control arm where you can sort of see what the incremental benefit is of your drug in question versus sort of a completely different standard of care. Just wanted to kind of understand the dialogue there.
Well, I think you know, the challenge and candidly one of the reasons we wanted to run three oh four.
Mm-hmm.
It's a little bit of a new and novel dynamic in oncology where there's actually never been a randomized study.
Mm.
In non-clear cell RCC. It's kind of this, you know, interesting area where all drugs that are approved to treat kidney cancer actually have labels that are inclusive of both clear cell and non-clear cell. Even though there's been no data really to define that, instead, what tends to drive utilization is single arm, unrandomized, small, you know, sometimes even single center kind of sub-studies that tend to have pretty wide error bars and confidence intervals around kind of data. It's somewhat of a tricky question to say, you know, what does Sutent do? What does Cabo do?
Mm-hmm.
What does lenvatinib do? What does pembrolizumab do? That's why in kind of the market, our experience has been that utilization is really kind of a little bit all over the map. It's a hodgepodge of a bunch of different stuff, just because there is no standard of care. When we thought about, you know, embarking on kind of an expansion of the Zanzalintinib opportunity, that was one of those things where, you know, we realized this is a chance for Exelixis to again define a standard of care, plant our flag in the ground and say, you know, with level one evidence, this is what patients should use if they have kind of the clear cell or non-clear cell histologies. That's kind of the background of that whole process.
Right. For Zanzalintinib with STELLAR-311 and neuroendocrine tumors, I guess, you know, a question that we're constantly being asked is the positioning.
Mm-hmm.
Zanzalintinib relative to Cabo given sort of what we've seen from Cabo in that indication. Ultimately does, you know, Cabo ultimately going generic also play a role in how those sort of can co-exist?
Yeah. I think the best way to kinda frame that or think about that is to kind of contrast the CABINET study with what we're doing in STELLAR-311.
Mm-hmm.
CABINET was a, you know, a cooperative group run reasonably broad study that was placebo-controlled and had a pretty wide range of patients in their prior treatment experience. For the most part, there were a lot of, you know, reasonably late-line patients in there. 311 on the opposite side of it and is kind of comparing Zanzalintinib against that first oral option, everolimus. That just, it's a, you know, different patient population one against an active comparator versus placebo. I think our expectation for the evolution of the NET market is kind of that exact dynamic where, you know, hopefully robust data against an active comparator in a much earlier line population is in a little bit of a different category than kind of that later line placebo-controlled study.
I think the dynamic and the difference between the two is really what's gonna drive, you know, uptake in the future.
Right. Maybe a couple of questions on the early pipeline, one of which is XB002, your tissue factor ADC. We also see a few other anti-tissue factors moving through the clinic. How are you thinking about differentiation there, you know, again, relative to a Tivdak, relative to what else is sort of being developed?
Yeah. I think kind of the again, the core of that is really around our view on franchises and kind of the importance there. Tivdak is an example, kind of the more standard historic cysteine-conjugated MMAE val-cit kind of linker technology. 371 we think is kind of a fully optimized ADC where the antibody, for example, is non-competitive with Factor VII, whereas Tivdak is, so obvious implications around the coagulation cascade and potential bleeding risk, et cetera. The other dynamic, coming back to the franchise point, is we chose both a linker and then importantly a warhead, which we think are particularly active and important in CRC.
Mm-hmm.
That's essentially an ADC that we designed to kind of further our franchise view of the colorectal cancer opportunity.
Mm.
Because of that chemosensitivity of the tumor and the expression profile of tissue factor in those patients. It's a really good example of kind of when we approach, you know, where we wanna go strategically, we're trying to be particularly thoughtful around how do we execute on that, and what are the best modalities and targets, et cetera.
Great. Looks like we're up on our time. Andrew-
Great. Yeah. Thank you.
Thank you so much for your participation. Thank you for our listeners as well.