Exelixis Inc Q2 2024 Earnings Call Transcript

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

Question: Asthika Goonewardene - Truist Securities - Analyst : Hey, guys. Thanks for taking my question. Just want to say congrats on the progress and the beat on cabo sales quarter. So I have another question for you. It's unfortunate that contact did not hit on OS, where hopefully it still gets approved. And if it does, what is the level of confidence that not having ORS will not be detrimental to uptake. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2024 / 9:00PM, EXEL.OQ - Q2 2024 Exelixis Inc Earnings Call And if I can squeeze a quick one, a quick side question in here, can you just give us a little bit more color on the update on the recruitment to STELLAR-305. I know you said site activation is going well, but there's just quite a lot of other clinical trials underway in the study. I just want to get a little bit more color from you if you can provide on how patient enrollment is going? Thanks.

Question: Jay Olson - Oppenheimer & Co Inc - Analyst : Hey, thank you for providing the update and congrats on all the progress. For the new 311 study of zanza in first-line NET, can you talk about how you're weighing the use of single-agent zanza versus combination approach? And would you consider running a head-to-head trial of zanza versus cabo? Thank you. Amy Peterson - Exelixis Inc - Executive Vice President, Product Development and Medical Affairs and Chief Medical Officer Thanks, Jay. Great questions. So at this point in time, we're focusing on the zanza head-to-head versus everolimus, which we think is a reasonable therapy to offer patients in this line. We have to maintain Equipoise whenever we design the study so that the physician is okay talking about each option that they have we are interested in combinations. However, at this point in time, it's a little bit early days. We would have to assess the safety, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2024 / 9:00PM, EXEL.OQ - Q2 2024 Exelixis Inc Earnings Call tolerability of any combination before we could initiate a Phase III study. We believe that this is the first of probably multiple trials that will run in this space. So stay tuned. We'll look at combinations as well.

Question: Andy Hsieh - William Blair & Company LLC - Analyst : Okay. Thanks for taking our questions. So maybe a quick one for me. Just curious about your reaction on the standard review. I was shocked about the FDA's decision to not give you breakthrough when I read the press release. Secondarily, I'm curious about kind of the overlap and potential for cannibalization. I'm just looking at the STELLAR-311 study and also the CABINET study population. There is an example before with NETTER-1 that the FDA gave them a really broad label. I'm just curious about the broad label and its potential implication to the STELLAR-311 study. Thank you.

Question: Silvan Tuerkcan - Citizens JMP - Analyst : Hey, good afternoon and congrats on the top-line BTF, and thanks for taking my question. My first question is more strategic. And can you just speak on your -- the M&A strategy and maybe the urgency versus the new $500 million stock buyback that you just authorized? Just how do you think about the two? Does that mean the M&A strategy is maybe more long-term? Or you don't have something that crosshairs as of this very moment? And then my second question is just about the discontinuation about XB002. And if you could just remind me that has no real cross whatsoever to your other ADCs, right? Because they are different probably different toxins constructs and from a different collaboration. Thank you.

Question: David Lebowitz - Citigroup Inc - Analyst : Sorry about that. Thank you for taking my question. Could you speak to your launch preparedness for treating neuroendocrine tumors given that it's not overlapping as much with renal, how much of an extra lift does this represent for the team?

Question: David Lebowitz - Citigroup Inc - Analyst : Thanks PJ.

Question: Michael Riad - Morgan Stanley - Analyst : Hi, this is Michael Riad on for Jeff Hung. Thank you for taking our question. For CABINET and neuroendocrine tumors you noted that five-year survival rates trend down when going from GI to lung to pancreatic. Given that, but also given the CABINET was stopped early due to the compelling efficacy, how long into the treatment course do you want to go into with STELLAR-311 to see sort of the competitive landscape? Thanks so much. Amy Peterson - Exelixis Inc - Executive Vice President, Product Development and Medical Affairs and Chief Medical Officer Hi, Michael. Yeah, thanks for the question. I think we're still refining the study. We hope that zanza, if the study ultimately is positive, would be -- would effectively be the preferred first oral treatment in patients who have advanced or metastatic neuroendocrine tumors. So in that sense, it's looking pretty early on. In the treatment setting, we know that median progression-free survival in this setting can be up to 22 months as observed with lutathera. So we're hoping that we'll beat everolimus and that we can establish zanza as the preferred.

Question: Jason Gerberry - BofA Securities - Analyst : Hey, guys. Thank you for taking my questions. I think you largely answered it. But as I was thinking about NET and the opportunity with cabo and how it differs ultimately with zanza, it sounds like with cabo, you're kind of in that third, fourth line of treatment absent some of those segments you highlighted like NET lung, but it's really with the second, third line study that you have with zanza where you can really open up the market opportunity and see a dynamic like in RCC where you can get some patient stacking. And I know you mentioned 22 months PFS with luta. What would be your expectation for like whatever alignments will do in this setting just to try to get some sense of how long these patients are staying on therapy in sort of the second, third-line setting? Thanks.

Question: Alex Bullocks - Barclays Bank PLC - Analyst : Hey, good afternoon. This is Alex on for Peter Lawson at Barclays. Thanks for taking our question. I just had a quick one on the USP-1 program. I was wondering if you had any comments on your development from competing programs. We've had some discontinuations in this space and also some data at ASCO. I'm curious if any of these developments impact in any way your clinical development strategy with this asset. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2024 / 9:00PM, EXEL.OQ - Q2 2024 Exelixis Inc Earnings Call

Question: Sudan Loganathan - Stephens - Analyst : Hi, everyone. Thank you in advance for taking my question and congrats on the strong quarter and all the pipeline progress. In regards to COSMIC-313, was that program kind of considered the last opportunity to really further tap into the first-line RCC population? And then is there a path to exceeding 50% to 60% market penetration by taking share away from with another strategy? And then what would be a marketing strategy here to kind of show growth in the near term for CABOMETYX in the first line RCC?

Question: Chris Shibutani - Goldman Sachs - Analyst : Great. Thank you very much. I appreciate the opportunity. There have been a lot of detailed questions about the pipeline. If I could just throw in two bigger-picture questions. Broadly speaking, the pharmaceutical industry is going to be faced with the Inflation Reduction Act, IRA-related adaptations to commercial models and Medicare. Everyone is trying to understand the impact on 2025 from Medicare Part-D Redesign. And obviously, I believe you guys have the small company exemption. Can you just give us a sense for how you see Exelixis' exposure and impact, including in 2025? And then secondly, Michael, the Board has included several new phases over the last 18 months, which is healthy and good to see. Just curious to know in what way those new voices may have been shaping some of the strategies going forward. It certainly seems as if execution has been very consistent, but if you can provide us with any hints about this broadened board and directionally ways that is influencing your thinking strategically. Thank you.