Exelixis Inc at Jefferies London Healthcare Conference Summary

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

Question: Akash Tewari - Jefferies - Analyst : Yeah. And actually, I'll ask -- I mean, first of all, you had a great Q3 and then you had the ANDA resolution. But I think the question that I got most commonly with the long-term guidance is that's not something that you expect on a Q3 call, right? Long-term guidance on zanza and then even for $3 billion on cabo. You alluded to it, but I'd love for you guys to expand it a bit more. Why was there an urgency to put that out now on the Q3 call and not wait, let's say, to JPMorgan next year to kind of reset expectations?

Question: Akash Tewari - Jefferies - Analyst : Understood. Now I feel like you kind of led with the conclusion with zanza, in the sense, Mike's been very conservative. And I think rightfully so, the data is going to speak for itself. We'll show you when the data comes out. When zanza's initial clinical profile was kind of announced, the allure of that asset was, hey, A, I can have better safety, so I can get better target coverage. I can have patients adherent on the drug, and that's certainly important, especially in RCC. But then B, there's also that potential where I can titrate patients to different levels of exposure, and ergo, I'll actually not only have better safety, but I can actually also have better efficacy. Now you haven't presented a lot of public data for zanza, but you're suddenly putting out a $5 billion peak sales number. I mean, talk to me about, A, the data that we're going to see for zanza. It might not be placebo-controlled, but the data we're going to see in the course of 2025. And then number two, when we think about zanza differentiating not only on safety, but efficacy, is that the right way to think about it when you put out such an exciting long-term peak sales number?

Question: Akash Tewari - Jefferies - Analyst : Understood. You mentioned head and neck. I actually wanted to touch on that. Obviously, I think the darling in the room is Mirus. They've shown exciting early data for sure. I do point out to investors, I mean, cabo/nivo with far more end showing a 53% response rate in that kind of first-line population shouldn't be dismissed. You're probably going to see the error bars also overlap there. I think that's probably fair to say. I think there's an angle here, though, that people don't appreciate, which is as we think about PD-1 use in the adjuvant setting, right? First-line head and neck is going to start to transform. You're going to have a lot more patients who are actually refractory to PD-1 being used in that setting and in your clinical trials. Can you talk to me about the clinical profile that you're generating in kind of that PD-1 refractory population in first-line head and neck and how you think that might be able to stack up with the competitive threats that are coming out in that space right now?

Question: Akash Tewari - Jefferies - Analyst : Understood. I mean maybe to that point, it is interesting that it was Merck, right? I mean Lenvima has been, quote-unquote, dirty, VEGF TKI for quite some time. What data did Merck see that kind of gave them confidence? Because even on the Q3 call, Merck explicitly talked about that Exelixis collaboration is one of the things that investors should be paying attention to. Talk to me about, A, what led to that deal actually occurring? And then number two, could this potentially expand beyond just first-line RCC and head and neck, but into other indications as well?

Question: Akash Tewari - Jefferies - Analyst : Chris, I wanted to hit it -- there's an aspect about cabo's development that I think gets lost in the weeds where you had Ipsen, you had Bristol, you had multiple people that you were collaborating with in order to lead such a broad development program. Talk to me about from a cost savings perspective, simply not having to pay for PD-1. How much flexibility does that give you from an R&D perspective to potentially improve your margin profile and actually save money?

Question: Akash Tewari - Jefferies - Analyst : Understood. And maybe to that point, I mean, just to clarify, is the Merck collaboration exclusive, right? Like does it mean that I can't do a deal with -- a collaboration deal with Bristol? Is that the case or not necessarily? And then number two, could we expect Exelixis to look at partnerships in ex-US territories to help, again, spread the cost burden a bit more just like you did with cabo?

Question: Akash Tewari - Jefferies - Analyst : Understood.

Question: Akash Tewari - Jefferies - Analyst : Understood. Now the rage all the day in oncology is these PD-1 VEGFs or PD-L1 VEGF bispecifics. And I can't help but think there's a lot of similarities between what you're talking about with zanza about patients staying on drug having that sustained benefit. You talked about LEAP-001, and that actually will then translate to OS. I mean, I know those bispecific companies talk about the cooperative binding, and that's really what's leading to the potential differentiation on efficacy versus just two separate targets. But is that the right way to think about it? I mean, could zanza also provide that same kind of higher therapeutic index sustained exposure that you've seen with the bispecifics? Yeah, any thoughts would be interesting to see.

Question: Akash Tewari - Jefferies - Analyst : And just finally to close that out, why not lung, right? I mean, obviously, the LEAP studies were run in first-line lung. You had a PFS benefit, didn't translate to an OS benefit. I mean it's the same dynamic that you're talking about with Lenvima, where you have a PFS benefit doesn't translate to an OS benefit, maybe you're not getting sustained exposure. Is there appetite to maybe explore some of these larger indications outside of GU/GI cancers. You look at lung, you look at bladder cancer, other areas where VEGF inhibition and PD-1 inhibition could show a signal. Should we be thinking about that scope of the opportunity? Or it's like really no, our focus is really GU/GI?

Question: Akash Tewari - Jefferies - Analyst : Understood. Now Summit had data -- I mean, you're starting to see these combination targets, like your Merck partnership includes potentially HIF-2 alphas in combination with cabo and VEGF. Summit had data with the CD47 in first-line head and neck. You actually have -- no one talks about anything in Exelixis' pipeline ex zanza right now. But you also have some synergistic targets that you could potentially layer on top of zanza and a PD-1. Can you talk about maybe some of the hidden gems that could be synergistic with your development strategy in GU and GI cancers that maybe aren't getting enough attention by investors right now?

Question: Akash Tewari - Jefferies - Analyst : Okay. Understood. On IRA, I just wanted to hit on an outpatient drug like this, can you remind us, A, Medicare Part D exposure? How much is that for cabo? And then number two, isn't this one of the drugs where you feel like it's an expensive drug, it's out of pocket, you're going to be eating into catastrophic coverage. This might be a drug that actually has a negative impact with Medicare Part D reform. Is that the right way to think about it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2024 / 10:30AM, EXEL.OQ - Exelixis Inc at Jefferies London Healthcare Conference

Question: Akash Tewari - Jefferies - Analyst : I don't think a lot of people appreciate that. It's really interesting. Now obviously, you had a really, really strong Q3. But on Wall Street, we always get ahead of ourselves. When I look at the fundamentals of your business, you've been pretty clear. On first-line RCC, we've kind of tapped out how much growth we can have. And then maybe the majority of the growth is going to be NETs expansion and really that's the opportunity. I just want to make sure we're level set as we go into 2025. Like, A, are we going to start to see market uptake in NETs given some of the clinical data that you've generated with cabo already? Or is that really going to take two or three years before we start seeing that? And then number two, how much more room is there really for upside in first-line RCC expansion?