Exelixis Inc Q4 2024 Earnings Call Transcript

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

Question: Asthika Goonewardene - Truist Securities Inc - Analyst : Hi, guys. Thanks for taking my question. Congrats on all the progress made here. Mike, just for everyone who's worried about zanza looking like cabo, the misguided notion that you talked about earlier today, could you just talk to us a little bit about, one, the lack of overlap in the approved indications for cabo, and where you anticipate zanza will be? And I think the important one here is, if you've ever seen the payers, I guess, force a substitution with the generic of something that is not the actual generic product. I don't think I've ever seen that happen, but I would like to get your thoughts on that.

Question: Michael Schmidt - Guggenheim Securities - Analyst : Thanks for taking our questions. One is on cabo for NET, sort of pending the label discussions and formalization, how are you currently thinking about the launch trajectory and expectations for uptake? Do you see any potential for an initial bolus here given that this is a sort of indolent disease? And then for zanza, can you just comment on the emerging safety profile now that we have more data and indications beyond RCC? And on balance, what are your current thoughts on the ability to maintain dose intensity with zanza especially when combining with checkpoint inhibitors? Thank you.

Question: Sean Laaman - Morgan Stanley & Co LLC - Analyst : Hi, Mike, Chris, and Susan. Hope you're all well. My question relates to the balance sheet. There's really good liquidity there despite that, I think on the cash flow statement, you bought back $650 million worth of stock. I think the commentary has been that you're winding down investment in cabo and winding it up in zanza, but you're probably looking at a net neutral outcome, if I got our past discussions correct, in terms of OpEx. Then you've talked about accelerated development of 309, potential three new INDs I think you said, Mike. But it kind of still suggests that you're going to still end up with a highly liquid and lazy balance sheet. So how do you think about that in terms of further buybacks versus potentially bolstering the pipeline with M&A?

Question: David Lebowitz - Citigroup Inc - Analyst : Thank you very much for taking the question. On the recent NET data presented in ASCO-GI, could you tell us about how we should view the various subgroups relative to actually how the drug might be used in clinical practice, and what the label might ultimately look like? Amy Peterson - Exelixis Inc - Executive Vice President, Product Development & Medical Affairs and Chief Medical Officer Hi. David, this is Amy. Thanks for the question. So we can't really speak to what the label might look like. We're in negotiations and discussions with the agency. But given the population that was evaluated in CABINET, it really reflects a very broad patient population. We have pancreatic neuroendocrine tumor, GI neuroendocrine tumor, lung neuroendocrine tumor, functional/non-functional neuroendocrine tumors, and neuroendocrine tumors enrolled regardless of their somatostatin receptor expression levels, and the benefits we're seeing across all subgroups. And what was shown at ASCO-GI, was that the benefit within those patients whose tumor originates from a GI origin, their benefits were consistent with the benefit overall population. So again, broad population, we think, broadly applicable.

Question: Anastasia Parafestas - Jefferies Group LLC - Analyst : Hi. This is Anastasia on for Akash. I just had a follow-up question on NET. Specifically, for your 2025 guidance, just wondering how much of that comes from NETs versus other indications. If you could give us a sense of what the near-term versus long-term growth might look like, that would be great. Thanks.

Question: Gregory Renza - RBC Capital Markets - Analyst : Great, good afternoon, Mike and team. Congrats on the progress. Thanks for taking my question. Mike, just in relation to that pursuit of expansion, getting more out of cabo, just beyond NET, I just wanted to ask that you comment a bit on the pushes and pulls for a submission in prostate cancer and CONTACT-02. If you could just speak to your confidence in that regulatory process, of course, in absence of OS, and your plan on timing and getting the ducks in a row there?

Question: Eva Fortea-Verdejo - Wells Fargo Securities LLC - Analyst : This is Eva on for Derek. A quick one from us. On STELLAR-303, the patient population included is both a RAS-wild-type and mutant, but in the recent STELLAR-001 readout, the patient population was just RAS-wild type. So how should we be thinking about how the differences in patient population could impact the overall survival for zanza plus atezo? Thanks. Amy Peterson - Exelixis Inc - Executive Vice President, Product Development & Medical Affairs and Chief Medical Officer Hi, Ava. This is Amy. Thanks for the question. I'm just going to step back a second to remind everybody what was the purpose of STELLAR-001, which was really to establish or evaluate whether or not there was a contribution of components when you added atezolizumab to zanzalintinib in patients with colorectal cancer. The rationale for choosing RAS-wild-type patients was because we observed higher responses in those patients. And of course, that's one metric of contribution of components. Suffice it to say that in that study, we actually saw the contribution of atezo to zanza across all three efficacy components, namely ORR, PFS, and OS. And so we're encouraged by those results. As far as the read through to 303, I think we're anticipating the events, as Mike alluded to, the second half of 2025, we are encouraged by the results that we saw in STELLAR-001, and that's really about all I can say with regard to how to pull that through.

Question: Jason Gerberry - Bank of America Securities - Analyst : Hey, guys. Thank you for taking questions. Mike, I just wanted to follow up on the comments earlier about the non-overlap and the $5 billion peak. I think the thing that I think investors struggle with is RCC is still a big percentage of the addressable patients in the kind of patient build. And then the comment about the nonoverlap. I guess it suggests either that the novel agent RCC combination are really what drives the incremental benefit or that you won't compare against cabo, which is one of the RCC standards of care. And I imagine the answer is we can't tell you much until second half when you and Merck disclose your trial designs, but anything you can offer just to help maybe investors get around that issue or that lack of understanding?

Question: Andy Hsieh - William Blair & Company LLC - Analyst : Thanks for taking my question. So the ADC modality is a core corporate focus. So I'm just curious about the learnings that you can leverage from the XB002 program to XB371 to ensure it's best-in-class. And more specifically, do they share the same antibody component?

Question: Yaron Werber - Cowen Inc - Analyst : Great. I have an interrelated question, Mike, or whoever wants to take it. For RCC, I mean it sounds like the future is going to look different than now. So should we, and I know you don't want to say too much ahead of announcing the trial design, but should we assume there's going to be a zanza belzutifan triplet combo going to first line? Is that sort of how you're thinking about it maybe with IO? And then secondly, just for STELLAR-305, what's the go-no-go based on the Phase 2, what do you want to see then to progress into the Phase 3?

Question: Peter Lawson - Barclays Capital Inc - Analyst : Thank you so much. Thank you for all the detail and for taking my question. I guess maybe just around CONTACT-02 if you could give us an update on where that stands? I didn't hear it mentioned today, but I know you talked about it at the beginning of the year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 10:00PM, EXEL.OQ - Q4 2024 Exelixis Inc Earnings Call

Question: Ash Verma - UBS Group AG - Analyst : Thanks for taking my question here. So for zanza and CRC with this ASCO GI data in hand, I'm not trying to compare it to cabo, but if you look at the zanza vs. atezo efficacy, versus what we've seen with the regorafenib, would this level of efficacy still allow you to get to your peak sales guidance more broadly speaking? Thanks. Amy Peterson - Exelixis Inc - Executive Vice President, Product Development & Medical Affairs and Chief Medical Officer Thanks, Ash, for the question. So we're actually encouraged by the data that we saw. Again, the study design was really to demonstrate whether or not there was a contribution of components, which we clearly did demonstrate across all three efficacy endpoints. When you actually look at the outcomes of OS, say, for example, in the ITT of 11.7 months for zanza (inaudible), that actually bodes well against what one might expect or what has been published in the literature with regorafenib where the median overall survival is anywhere from 6.5 to 7.5 months. How that pulls through to 303 remains to be seen. As Mike has said, and as we have said, it requires a very large randomized Phase 3 study that can generate a p-value that gives you some sense of truth. And the other thing I'll point out as well in the non-liver met patient population, the median survivals ranging from 18 to 21 months also, I think, bodes well given that the ARCAD Foundation published data from their data set that includes correct and recourse in a couple of Phase 2 studies with cas and rego as the control arm and in the non-liver met patient population, the median overall survival ranges from 12.1 to 12.9 months. And we know the median overall survival from the IO combination in non-liver mets was about 20 months. So we're benchmarking well.

Question: Sudan Loganathan - Stifel Financial Corp - Analyst : Hi, good afternoon. Thanks for taking my questions. Specifically, I want to ask about the STELLAR programs 303, 304, and 305, what will be the driving force to prioritize one program over the others to bring to market first, or does the balance sheet and the R&D guidance kind of include the potential of taking all 3 indications simultaneously, submitting for regulatory approval if the data looks good, and it's undeniable that you have that strategy to submit for approval? Thanks.