Exelixis Inc at Bank of America Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. Great. So maybe just one question just to get out of the way just from a timing logistics perspective. You're effectively a single product company in the eyes of investors and that product has a patent litigation matter that's going. I know you can't speak to the litigation matters specifically, so it's not for going with this. But just can you just speak to the timing and if there's -- help us understand, I think it was initially spring because the decision was expected. In a few days, it will be fall. So just wondering if you can speak at all to timeline of that legal matter, which is very important in the eyes of the investors.

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. If you could just maybe help frame, I guess, there are scenarios predicated by the IP that you have. So if you could at the earliest, right, you have a composition of matter patent and presumably some pediatric extension off of that, that gets you to, what, early '27 for investors thinking through the different patents and different range of scenarios that's in play. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:50AM, EXEL.OQ - Exelixis Inc at Bank of America Global Healthcare Conference

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. Great. So with cabo, on the commercial side, you've got a $2 billion business, give or take, right, in terms of product revenues and royalties and so as we think about where the product is in its life cycle right now, how would you frame where you're at? What are some of the growth drivers here to forth?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. Okay. With NET, I know you guys are holding off until you see a label, right, until you talk about maybe what that can be commercially, but it does sound like your tone is a little more bullish about, saying, NET then maybe it was with some of the prior label expansions like DTC and so I'm just curious, am I reading that appropriately that you see that as maybe a more substantial market opportunity than, say, DTC was? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:50AM, EXEL.OQ - Exelixis Inc at Bank of America Global Healthcare Conference

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. So how should investors be thinking about you guys? On the one hand, you generate a lot of gross profit off of your sales and royalties on cabo and you've had tighter expense management this year, leading to greater profitability. So a lot of companies in this space, there is this balance, right, between profitability and investing in pipeline. So I guess, how do you guys manage that balance? And how do you think about that in terms of profitability and profitability growth from here versus seeding the pipeline?

Question: Jason Gerberry - BofA Global Research - Analyst : So if you secure a favorable patent ruling and you get yourself six, seven years of product of what seemingly is a pretty stable RCC-driven business, right? How does that affect the capital allocation strategy, if at all, right, in terms of this level of R&D spend, this periodic share buyback versus perhaps being more aggressive playing offense on BD side? Or maybe having that runway gives you the comfort to just say we're going to play the long game with our internal R&D assets that we have?

Question: Jason Gerberry - BofA Global Research - Analyst : Curious, what are you seeing out there in terms of at a high level? It seems like the oncology space publicly traded names of maybe had a bit of a setback in the past few years. When we look at deal flow, there's a big -- it seems like a big uptick in private how companies are getting bought and maybe that's a challenge accessing the capital markets. So as you see where you're positioned, do you feel like the opportunity set maybe is more on the private side?

Question: Jason Gerberry - BofA Global Research - Analyst : And is investing in Exelixis stock still something that like there's -- investors should expect that to continue in the future? Or were those more one-offs in terms of the repurchase programs?

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. Maybe just in terms of your ADC ambitions, about four years now or so, you've been piecing together a series of partnerships and transactions? And where do you see the company right now in terms of the ADC ambition? Maybe the lead program didn't, maybe, go as quickly as you maybe help and how quickly could you maybe have an asset that's ready for prime time?

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. Maybe shifting gears to neuroendocrine tumors, and this is an opportunity both for cabo and for zanza. It's -- our understanding, as you frame, Andrew, it's a very indolent disease. People tend to have a pretty long life span and cycle through a lot of different therapies. So maybe how you think about the size of this, how the prevalence plays into the market sizing, if at all? And then just the segmentation that you think about that's relevant to thinking about the opportunity for first cabo and then eventually for zanza?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. So one thing I wonder about like -- so you mentioned that 75% are cabo writers. Is this concentrated in GI, GU type of specialists. The reason where I'm going with this is, we've seen in certain like maybe rare cancers via this community onc sees one or two patients sporadically over the year, and these become like more challenging markets to launch into versus, maybe, markets that are maybe better understood and patients are concentrated within certain specialist offices.

Question: Jason Gerberry - BofA Global Research - Analyst : So with the CABINET data, imagine the base case is second line plus with treatment irrespective of, I guess, the site of the tumor location. And you've generated a lot of data broadly, right, that the activity in patients irrespective of the site of the tumor location. So is that a fair base case framing?

Question: Jason Gerberry - BofA Global Research - Analyst : Is the right way to think about the primary competition and effectively everolimus or chemo in that post Lutathera setting or alternatively could even play a second line for people who don't want exposure to the radiation with Lutathera?

Question: Jason Gerberry - BofA Global Research - Analyst : And I realize the answer to this question leads to the obvious, well, it depends on the data, right? But I think about zanza versus cabo, right? And what the study that you're running could afford you competitively in that space versus what cabo gives you having an active comparator is just like the main difference, right?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah.

Question: Jason Gerberry - BofA Global Research - Analyst : As we think about this idea of functional status of the tumor, when we've talked to physicians at least as it pertains to something like everolimus, what we tend to hear is that our irrespective of functional status, they use the therapy and that it's very difficult, I think, to distinguish functional, nonfunctional. So I'm not asking you to speak to the label, right, but as it pertains to the a practical market reality and how these clinicians are wrestling with that distinction in treating these types of patients? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:50AM, EXEL.OQ - Exelixis Inc at Bank of America Global Healthcare Conference

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. And I know you mentioned that the Phase 3 zanza design hasn't been fully made available yet. But I mean, going head-to-head against something like everolimus, what gives you the confidence that you can win on a PFS endpoint. So I guess we would look at CABINET, we look at the RADIANT trial for everolimus and is that the right way to think about it? Or is the internal assumption that zanza can generate a more profound PFS in this setting? And that's what underpins confidence that you can ultimately win on a PFS endpoint.

Question: Jason Gerberry - BofA Global Research - Analyst : How do you think about -- you're effectively competing against nonpromoted treatment options and just simplistically having promoted treatment option where physicians are forced to some cross-trial inferences, right, around cabo versus everolimus or chemotherapy. And so have you looked at just the basic premise of our promoted treatment option may compare against nonpromoted options and sometimes physicians just want the newest more innovative thing?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. Okay. Maybe shifting gears to zanza and frontline nonclear cell RCC opportunity and realizing that a lot of TKIs are currently used there. So what does the current landscape look like in terms of nonclear cell? Is that a space where cabo derives a lot of utilization because we think ahead to the world that potentially be launching into it secures a label in nonclear cell?

Question: Jason Gerberry - BofA Global Research - Analyst : You've guided, I think, to completing enrollment of the study middle of next year. How quickly could we expect top line with the study?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. Yeah. Okay. Within the nonclear cell, as you know Merck with LENVIMA has got the label update, they've run a, I should say, like more of a single-arm study. And so, I guess, how do you see that as a competitive interplay? Merck planning is flagged, maybe in the nonclear cell space with LENVIMA. And I imagine you might come back to, hey, look, we've done pretty well against LENVIMA in the broader RCC market, and we feel pretty good about how our profile will stack up.

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. So you've got, what, four pivotal programs right now. I think for zanza that have been announced, you've got a Phase 1 basket trial evaluating zanza I believe, in multiple combinations, different tumor types. Maybe if you can just talk about the progress that's made on this basket study and when we could expect perhaps new data to emerge.

Question: Jason Gerberry - BofA Global Research - Analyst : Okay. And you're just thinking on that in RCC, the HIF 2 PD-1 combination approach. I know competitors are looking at this approach, and you guys have been a leader in RCC. And so -- is that something that you guys, I imagine look at and think about is something?

Question: Jason Gerberry - BofA Global Research - Analyst : Yeah. Okay. So more to come, I guess, on the frontline RCC strategy from the company?

Question: Jason Gerberry - BofA Global Research - Analyst : All right. And then maybe just at ESMO, you have updates in NET and prostate. Maybe what do you feel like are some of the key highlights that you emphasize to investors, I feel like from a net perspective, I think you disclosed a lot of the data, maybe previously, but what do you feel like maybe was incremental coming out of ESMO for either of those two? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:50AM, EXEL.OQ - Exelixis Inc at Bank of America Global Healthcare Conference

Question: Jason Gerberry - BofA Global Research - Analyst : So with prostate, then I guess you're still on track to submit the sNDA later this year for cabo. And then, I guess, the event here is based on some precedents that are out there, the PFS with no sentiment underpins the confidence that you could get and assess the label out of?

Question: Jason Gerberry - BofA Global Research - Analyst : All right. Well, we're out of time. But thank you so much for joining us at the conference.