The next company here is Exelixis. I'm pleased to welcome Andrew Peters, SVP of Strategy. Peter, welcome, and thanks for joining us.
Yeah, thanks for having me.
CABOMETYX has obviously been a huge commercial success for Exelixis over the last, you know, year, few years. At this point, how should we think about growth drivers as we head into 2023?
Yeah. I guess just, everyone, thanks for, thanks for having me here. This is a great event. As a reminder, I'll be making some forward-looking statements today, so please see relevant SEC filings for appropriate disclosures. Yeah, CABO, obviously great product. You know, one of the things that we talk about a lot internally is really what drives CABO is great team, great data. You know, we can point to something like the 44 month update at the recent ASCO GU conference as just another reminder that, you know, the 9ER regimen continues to generate, you know, what we think is really differentiating and compelling data that resonates in the marketplace, both from a patient and physician perspective, which is important.
Really kind of the core of that is what we call kind of a balance. A balance of, you know, very compelling efficacy, which was even improved upon, at least from a survival perspective, at ASCO GU, but as well as tolerability and other key secondary endpoints like quality of life. Those are the things that really resonate and kind of are really what's driving that increased market share. What PJ talked about on the fourth quarter call in terms of kind of key drivers for growth in 2023, it's really a continuation of a lot of that momentum that we saw in 2022. It's all about, you know, competing for market share and driving market share and then longer duration.
You know, these patients are fortunately staying on drug longer, just because of that kind of compelling profile, and then you start to see that stacking of patients who are coming on drug, last year and then new patient starts this year. That's kind of the overall, you know, theme of growth this year that we'd expect to continue.
As we think about the RCC market, I guess where is CABOMETYX gaining more share from? Is it from other TKI combinations? Is it from Opdivo Yervoy, or is it, is it perhaps other drivers?
In general, what we've talked about in the past, the dynamic is primarily from other IO/TKI regimens. You know, the dynamic that we're seeing in the market is a lot of market shares coming from axitinib and both going to our regimen as well as others. Not necessarily from, you know, the IO/IO segment. There's obviously another component, kind of the historic legacy TKI monotherapy segment as well.
Right. You know, you're obviously working on a number of label expansion opportunities for CABO. We've seen recently the top-line announcement of the RCC, the second-line RCC study. How does that result impact, you know, CABO use, if at all, in your opinion?
The CONTACT-03 study, I, I think that's an interesting study from a bunch of different in a bunch of different ways. You know, big picture, you know, one of the things that it does is it just continues to reinforce Exelixis as being a company kind of at the cutting edge of, you know, trying to push that standard of care forward. You know, the feedback that we've gotten on that study, as well as something like COSMIC-313, the CABO ipi/nivo study, is we're really again at the forefront of running the right study. This was a question that needed to be asked in the clinical community, and I think there's this growing sense of we're really glad that a company like Exelixis is running it because it is a question. What do you do?
What do you give patients after no longer responding to something like a frontline checkpoint inhibitor? The fact that we're able to, you know, be at the forefront there, you know, just increases our, you know, really cements our position there. In terms of the study itself, you know, we're gonna present the data at a medical conference later this year. At least qualitatively, you know, one of the things that we've said is one of the dynamics that was most surprising was really the performance of CABO in that arm. As a reminder, CONTACT-03 study was CABO plus Atezzo versus CABO itself.
You know, unsurprisingly, in hindsight, given that patients had seen a prior checkpoint inhibitor, if you do have those CD8-positive T-cells kind of floating around, adding CABO on top of that, you know, you are still likely to see a benefit. The fact that, you know, CABO really did perform so well, you know, we think just again further cements CABO in the kind of RCC landscape. You know, study that we're really proud of, both from a kind of how it positions us in the market, but as well as, you know, frankly, how CABO performed.
Right. CONTACT-02 is another phase III study that's pending readout later this year in CRPC.
Yeah.
Just remind us of sort of the opportunity here and, you know, how confident you are in CABO's activity here based on the data that we've seen so far.
This is a really interesting study for us. You know, obviously builds on kind of some of the historic legacy of CABO in prostate cancer. More importantly, really comes out of cohort 6 of the COSMIC-021 study. As a reminder, that was a 1,000+ patient, you know, 20+ cohort, not randomized, single-finding study of CABO plus atezolizumab. That's the sort of real kind of meaty study that we like to run and really gives a sense of, you know, what does a drug look like? What does a combination look like? You know, that data, you know, showed a pretty compelling response and really drove us to start the CONTACT-02 study.
The key dynamic here is these patients have seen a prior NHT. We know that a second NHT in that population isn't particularly effective. We're looking specifically at a subset with measurable disease because we think that's the easiest kind of bar to really understand, is this combination having a clinical effect. As you said, you know, we expect data later this year. This is a real high unmet need population, and we really think can kind of serve to, you know, further push the standard of care. Because ultimately that's the business we're in, you know. Our job is to shift that standard of care, help patients live longer, better lives.
Great. Thanks. I have to ask about the IP trial with MSN as well. I know you can't say much, but as we sort of head into the bench trial later this year on the Wave 2 IP estate, you know, any takeaways from the, you know, the court ruling on the initial trial last year that, you know, increases perhaps or changes your confidence in sort of heading into the second trial later this year?
You know, just as a reminder for everyone, kind of the IP or the ANDA case with MSN is really split into two parts. MSN-1, which went to trial last May, and the decision from the judge came earlier this year. MSN-1, a judge found that our core composition of matter patent was upheld, and also found that MSN's S-form of cabozantinib did not infringe on our Form N-2, which was the specific polymorph that was at issue in that case. MSN-2 is actually focused around kind of a broader set of polymorph patents. You know, what we generally say is, you know, the two don't necessarily have a lot to do with each other given its infringement versus invalidity.
You know, we can point to, say the European experience, for cabozantinib IP, where those same kind of set of broader polymorph patents, were challenged. We were successful. They were appealed, we were successful again. Overall, you know, we remain confident in our intellectual property position for CABO and, you know, are looking forward to the trial in October.
All right, great. Thanks. You know, you guys have always been very active in expanding or building a pipeline beyond CABOMETYX, sort of, balancing perhaps internal, you know, investment and business development, you know, led by you partially, Peter. Can you talk a bit about how your strategy there has evolved in recent years?
I think if you kind of look at the through line, both in our internal portfolio, zanzalintinib, as well as XB002, our tissue factor targeting ADC, as well as some of the recent deals that we've done, we think it really. You know, the key point is, you know, we wanna look at lower risk opportunities ultimately that we do think have kind of upsized commercial opportunities as well. Not really focused on these smaller kind of precision oncology markets, just because I think, you know, it's borne out in recent commercial launches, they haven't really been there. What do we mean by, you know, lower risk?
Zanza is a tyrosine kinase inhibitor that, you know, copies the kinase inhibition profile, phenocopies the kinase inhibition profile of CABO, but we've engineered a kind of metabolic liability in the compound to change the half-life of CABO from approximately four days to about 23 hours. We think that that's actually differentiating from a across a bunch of different aspects, including the combinability, potential for increased tolerability, things like that. It's using kind of the CABO foundation to de-risk development going forward. Similarly with XB002, it's taking a validated target in TV from Seagen and iterating and kind of differentiating based on that, both on the antibody side, it's not competitive with Factor VIIa, so you're not likely to see the same bleeding risk.
On the linker-warhead side, you know, kind of the key data that we presented last year, pharmacology 101, at the same 2 mg/kg dose, CONTACT-02 has about twice the exposure and 1/10 the amount of free drug. Again, that's a really good starting place for us, you know, from a risk perspective to continue to invest in. From a BD perspective, what we've done in the past, you know, last year we did a couple of more option type deals. Those really led us to have kind of a capital efficient model. We can go in, relatively low up front and pay for success.
As those programs continue to mature, you know, as we're generating compelling data, that's when you start to see kind of some of those milestones kick in. Frankly, that's a good thing because that means those programs are being de-risked. That's something that we're cognizant of. You know, we've long said, you know, we run Exelixis like a business, not like a cash burning biotech, and that's something that we wanna continue to do.
Right. As you think about the IRA legislation, you know, has that impacted your approach to business development at all?
Yeah. I mean, I think us along with the rest of the industry are still kind of trying to, you know, ultimately digest what it means going forward. What I'd say is, you know, coincidentally, or however you want to look at it, we'd actually been kind of focusing more heavily on biologics anyway. You know, one of the things that I think surprises a lot of people, is if you look kind of at our company, from a big picture perspective, we tend to see ourselves as one of the bigger ADC companies in the world. What we've done is over the course of the last several years, is put together a series of licensing deals that gain us access to a, you know, basically a wide variety of platforms and ADC technologies.
You know, XB010, our next ADC coming out of our pipeline is probably the a good example of that, where we can kind of mix and match and optimize across all of the components of the ADC to say, "Okay, for this target, what's the appropriate, you know, link or warhead combination? What's the appropriate DAR?" All of those sorts of things. We don't have kind of a square peg, round hole problem where we're trying to kind of force our platform onto anything. It's, we have the ability to say, "Okay, let's let the data drive where we're going and optimize programs going forward." Biologics certainly a focus for us, and it's gonna be going forward.
Maybe last question. As you think about the early stage pipeline, where will we see data this year? You know, which programs are sort of moving along, you know, ahead, moving along well, and how will this data guide, you know, next development decisions?
Yeah. What we've talked about kind of both at the J.P. Morgan conference to kick off the year and then on our most recent earnings call, is really 2023 from a pipeline perspective is gonna be all about execution. We certainly want to, you know, provide updates to both XL092 and Zanza as soon as we can, but we need to focus on execution, on getting kind of mature data sets. Frankly, we're just not kind of in a position as a company to wanna generate seven, eight patients worth of data, have a handful of, you know... I think we all get frustrated when we're seeing these updates where the numerator changes, the denominator changes, all this stuff. What we don't wanna do is kind of play that game.
What we wanna do is have a mature data set to say, "Okay, this is the profile of the drug." What we're doing this year is really focus on the execution to kind of get to that point. When you see data, you say, "Okay, we really understand both as investors and importantly, for our investigators, for patients, et cetera, when they kind of want to enroll in these studies, they know exactly what they're getting into. Execution and, with the goal of, you know, generating data as soon as we can.
All right. Well, we'll keep our eyes wide open to look out for those data. With that, we'll wrap up the call.
Yeah. Thank you.
Thank you so much, Peter. Andrew.