Exelixis Inc Q1 2025 Earnings Call Transcript

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

Question: Michael Schmidt - Guggenheim Partners - Analyst : Congrats on a great first-quarter results here. So 1Q sales were obviously very strong in terms of growth over last year. Could you just help us understand a little bit better what's been driving capital growth at this point? And obviously, neuroendocrine was approved at the end of 1Q. Did you see some contribution from that prior to approval already? And secondly, could you just provide some more color about the launch in neuroendocrine tumors and sort of expectations for the early trajectory there throughout the rest of the year?

Question: Asthika Goonewardene - Truist Securities - Analyst : I'll echo the congratulations on some pretty rough outperformance in Q1 here and the guidance raise. I want to add on to Michael's question, just to get a little bit more of the dynamics on the NET launch. Did you guys see a bolus effect? Or do you guys anticipate a bolus effect here in the early days of launch at NET? And then when do you -- and if so, when do you kind of expect it to kind of stabilize to give you a more accurate run rate in terms of acceleration and uptake? And then second, if I may, when you modified the statistical analysis for STELLA-303 to do it from -- instead of doing sequentially from [non-liver met] to ITT and do it more as a dual primary end point for both those groups, does that help in any way with the alpha spend or maybe the hazard ratio you need to meet statistical significance?

Question: Sean Laaman - Morgan Stanley & Co. - Analyst : Good afternoon, Mike and team, great set of results. maybe just sort of contextualize what seasonality we can expect for cabo for the year? I think the beat on Street was around $50 million on revenue and the raise is about $100 million on revenue. Maybe just to give us some context around that, please.

Question: Silvan Tuerkcan - Citizens - Analyst : Congrats on this stellar quarter. I just wanted to ask some more general question on your BD appetite. Can you just maybe talk about specifically the scenario for Exelixis and maybe by extrapolation to some of your peers, how does the current environment influence your BD plans? Are you currently on hold? Are you looking? Are there certain road blocks that need to get away for you to pull the trigger here?

Question: Yaron Werber - TD Cowen - Analyst : Great, congratulations again. It's really a terrific showing. So I have maybe two interrelated questions. One is just a little housekeeping, if you can just remind us, partly redesign, how much of an impact did you have this quarter, if any? And what percentage of your business is Medicare facing versus commercial? And then sort of the more Medicare question is, it's clearly, Mike, it sounds like you're waiting for the uptick in NET and you're saying it's a $1 billion opportunity. How much of that $1 billion is sort of first line versus second or third line for small molecules? I mean it sounds like you're aiming and you're intending and you should probably raise guidance again.

Question: Chi Meng Fong - BofA Securities - Analyst : This is Chi on for Jason. One question on capital allocation. Mike, I've asked you this question early in the year before, and I'm going to ask you again. I'm curious about your philosophy in terms of the buyback program. Obviously, you guys have been consistently buying back since 2023. I think, roughly high single-digit percentage of outstanding shares if I can correctly, I think annual, maybe like $500 million at least, give or take. So I'm just curious, if share price remain current in existing level or even if cabo sales increase, what's your philosophy on share buyback versus reinvesting capital into R&D or business development?

Question: Akash Tewari - Jefferies - Analyst : It sounds like you're going to have a de novo decision on your head and neck study with Merck at the end of the year. What do you want to see on event rates to justify moving forward with that trial? And then also, when we think about the PD-1 VEGF bispecific class, there's a lot of simulators to kind of the pitch on Zanza. You hit VEGF, but you have a wider therapeutic window. Have you thought about acquiring one of those assets for RCC and head neck given your partner, Merck already has the [Linuv] assets?

Question: Andy Hsieh - William Blair & Company, L.L.C. - Analyst : Congratulations on the beat and raise. Two quick ones for us. Just going back to the 303 statistical analysis change, I'm curious about the definition. So dual versus co-primary endpoints, can you declare victory with this win in either end point? So that's part one. Part two, so the alpha spend, so do you need [2.02] for success on just 1 of the 2 endpoints, if that's the scenario? And I was captivated by Dana's commentary about the induced proximity mechanism for 628. I saw several of the presentations looking at kind of dual kind of bispecific ADCs and dual payloads. Curious about your thoughts on expanding on your tool kits to explore that opportunity.

Question: Cheng Li - Oppenheimer & Co. - Analyst : This is Cheng Li on the line for Jay. Congrats on the quarter. Maybe two questions from us. First, going back to the early launch of cabo and NET. I'm wondering if you can maybe describe the characteristics of those early adopters? For example, like the number of prior myotherapy and also their tumor location? And secondly, on 309, I'm wondering if you can provide some color on the data to be presented this year whether that will include both single agent and also combination data?

Question: Ashwani Verma - UBS - Analyst : I wanted to understand like the NET launch dynamic a little bit. If you can elaborate on where you expect the uptake to come from? Is it from the epNET or the pNET setting? And is there any difference between like this being used before or after Exelixis or SUTENT? Or how should we think about the competition with Lutathera?

Question: Peter Lawson - Barclays - Analyst : Congratulations on the quarter. Just on the quarter, I don't think you mentioned about clinical trial sales. If you could talk about that? And then how are you going to think about pricing power considering your position in RCC?

Question: Felix Ampomah - Stephens - Analyst : This is Felix on for Sudan Loganathan, Congrats on the quarter. I have a quick question regarding STELLAR-311 in the next indication that will be initiated by first half 2025. Given the approval of cabo for the same indication, how does that change the bank for subset for the STELLAR 3 on NET drop? Amy Peterson - Exelixis Inc - Executive Vice President, Product Development & Medical Affairs and Chief Medical Officer Thanks, Felix. I'll try and answer this quickly. This is a study that is going up against everolimus. This will be zanzalintinib versus everolimus as a first oral therapy in patients who have progressed on their SFA. So it's a slightly different space. All of the KOLs have a global steering committee and we've been talking globally with thought leaders around really the world. They're all very excited about this option and the trial. So at this point in time, we're not that concerned about competing with cabo.