Exelixis, Inc. (EXEL) Earnings Call Transcript & Summary

Yes. So it's very analogous to the 9ER situation back and narrative that we had in dialogue that we had in 2019 around frontline RCC, right? Any competitive regimen in frontline HCC, now with IMbrave having such good data is that you've got to have a survival readout that makes sense, that can be competitive and then find a way to differentiate across the board, right? So again, they're very similar trials. The one big difference from a variable point of view is we're basically swapping out bev -- bevacizumab for cabo. And all the caveats involved there about comparing those 2 agents, cabo has a different profile, right? That gives us very encouraged, especially when you look at the totality of data that we presented on -- in 2020 in terms of renal, in terms of liver, in terms of lung and prostate and bladder, cabo just looks different. So we'll see. We have to run the trial. We have to get that data in place. Again, that's a trial that enrolled extremely well this year in the face of a global pandemic. So again, that's encouraging to us and to me in terms of how fast that enrolled and the team did a phenomenal job of tracking that in the tough months of the April-May time frame to make sure we kept that going and kept track of patients and got them drug and all that stuff that was so critical. There's lots of room for improvement, and that's our goal. It's not just to meet standard of care, but to surpass standard of care with as many improvements in key clinical outcomes as possible. So how that plays? We'll see. I wouldn't want to speculate on that now, but that's the goal. And certainly, with a look at the profile of cabo by itself and then cabo with IOs if you will, it's pretty interesting. So we'll, again, very excited about that. We hope to get that done in 2020. That was our initial guidance back in January. Events are just coming in a little bit slower than we had modeled. So first half '21 seems reasonable. So stay tuned.

And then have you seen any impact on refractory cabo use as a result of the atezo/bev gaining some fairly meaningful adoption in the frontline setting? Or do you think that's going to take a little while to play out? I know -- like in RCC, for instance, right, a lot of the frontline TKI drugs who or which have been displaced as a result of some of these novel regimens have not necessarily been slotted down into second-line therapy. They now have again bumps behind into the salvage setting. So do you think some of the older TKIs in HCC like sorafenib and even lenvatinib, which I think showed noninferiority to sorafenib. Do those get bumped down below cabo in kind of a similar way?

So we've asked that question from a market research point of view and gotten, I think, pretty positive feedback that cabo would be a mainstay second-line post IO frontline because of its -- the trial that we ran with CELESTIAL and the survival advantage that we have in the second-line setting. It's still a bit early bev/atezo approved summer time frame. So it maybe a little bit earlier to see that shift in the second-line. Certainly seen a big drop-off in the frontline TKI monotherapies, and that's been -- that was pretty clear in the third quarter earnings from various players. So bev/atezo was clearly taking up a big lion's share of the first-line market share in frontline HCC. So how that plays out in second-line, we'll see, I think, starting end of the year, early next year. And I think the most important thing is that, again, we're myopically focused on frontline getting 312 done, if successful getting that filed and approved as soon as possible because we think if that -- if the data is differentiating, like we hope it will be, then that can really offer patients and their prescribers and their physicians, another important option. But again, need the data. Stay tuned.

And then how should we be thinking about just the commercial dynamics there with respect to how those play out with Roche? Have you provided any kind of commentary or insight around that? Or I guess, do you anticipate doing so?

We will at the appropriate time. Obviously, we have a very motivated partner that wants to, in this case, a clinical partner, who wants to maximize the value of their part of the combo for these patients with liver cancer. So we -- they're across the bay now and they're not down the street anymore. Now they're across the bay. But we talked to them a lot. There's good interactions ongoing across the various groups that are at play here in terms of clinical, commercial, et cetera. So we'll see. But yes, I think there's a pretty good alignment on good data, better data and opportunity for both sides to help more patients, which is what the goal is here across the Board.

Okay. Okay. I know kind of the last point here regarding cabo that's of significant issue to investors is just the COSMIC-021 cohorts in prostate and lung. And I guess, it sounds like we're going to be getting an update there at some point next year, but -- and I know that you've secured regulatory feedback regarding an accelerated approval in prostate. But is there any hope that you're holding out that you might be able to pursue a similar path in lung?

So prostate, let's talk about that. Again, we've fully enrolled the cohort 6 expansions, 130-plus patients. We're just wrapping up the single-agent cohorts that we need to be able to define the contribution of components. So that's moving forward as planned. Obviously, it's data dependent and long-term follow-up and all that stuff that we need to do to dot the i's and cross the t's. You -- I'm a little bit confused by the next update comment because we haven't guided to that. So I want to make sure people understand that we're not guiding to any more updates going forward. Our priority -- our single priority is to get a filling relative to the opportunity for prostate cancer. So that's where the main focus is, right? It's all about that. And we just can't accommodate any other sidebars or distractions in what we're doing there. In terms of lung, we'll see. Again, that's been in my guidance all along, is that we've now fully enrolled both a single-agent cohort as well as the cohort 7 up to approximately 80 patients, and I want to see the long-term follow-up data to understand if there's a viable approach here for accelerated approval or not. So stay tuned.

Okay. And I know you're running CONTACT-01 in lung as a registrational Phase III. So presumably that's your backstop?

Yes. Yes. We have all 3 CONTACTs up and running for lung, for prostate as well as for second-line renal cell as planned. So -- and again, really pleased that those actually -- we're initiated on time, and we're seeing lots of sites come up globally and really promising enrollment again in the face of this pandemic, right?

Okay. So maybe we can switch gears here to 902 -- or to 092. I know that you outlined a pretty aggressive development plan to this agent pretty recently. And I guess, I understand why you can move fast here just given the overlapping biology between this drug and cabo, especially indications where cabo is currently not approved. But maybe just try to help us understand a little bit better, the longer-term development strategy and treatment types for cabo is approved or where you're intending to seek approval? And just the level of investment that's going to be required to identify those novel combinations and regimens, which you'll presumably need, right, to establish some level of clinical differentiation against cabo or cabo-based regimen?

Yes. So the whole goal here is to essentially massively parallel process a large number of pivotal trials across different indications, different lines of therapy with different combination IO agents as well as different clinical partners that allows us to cover a very large exhaustive landscape that's currently represented by the IO white space, right? And we think about it in terms of indications, again, combinations -- known combinations, existing IO players, existing IO agents, new IO agents that are coming on the scene or chemo or other molecules as well as going early, going late, going against the standard of care across different lines of therapy. So it's an opportunity for us to be very expansive in a way that we could never do with cabo by itself as we were working out the clinical biology or pharmacology of that agent with limited cash flows, with a balance sheet 10 years ago that was not very enabling, right? So we're in a very different situation now. Especially as revenues grow, we can invest more and we can draw on a wide variety of clinical partners that can either contribute their IO portfolios and/or cash to be able to do this as well. So we view this as kind of a big pharma view on what a life cycle management program would look like for 092, taking the knowledge, taking the data, taking the momentum from cabo and then putting that on to a molecule that has much, much lower risk because we've basically taken cabo phenocopy to its activity and packaged it, if you will, in a much more user-friendly clinical half-life, which I have to say, people on the clinical side in terms of investigators, they get it. When we talk to a variety of pharmas, who, again, own these big, deep IO portfolios, they get it too. They understand the value of having the improved next-gen cabo kind of interacting with their different IO agents with a molecule that hits all the key cell types in the tumor microenvironment and has the kind of activity that cabo has in terms of its broad activity, it's differentiating activity. So it's an effort that will certainly take shape. We want to be able to start some of these pivotal trials as early as next year. And it's -- as we talked about on earnings, and I thought Gisela slides and her description was just spot on in terms of having a multifaceted approach that covers a large piece of that IO white space to really improve outcomes for patients across various indications and lines of therapy.

Okay. With respect to the earlier stage pipeline, I know you guys have been really active in terms of building that out, and you've got a couple of IND filings that are slated here for year-end. And I think a couple more for the first part of next. I guess as you think about doing more BD, right, you've got later stage opportunity with 092 and certainly cabo label expansion and now you have some of these newer kind of IND and Phase I candidates, do you kind of feel like you need to plug the pipeline with something in the middle, just from a portfolio management perspective? Or are you just going to continue to be kind of opportunistic and agnostic to the rules of portfolio management?

Yes. So the middle segment within oncology, you can -- sorry, you can get there relatively fast by going from Phase I to Phase Ib in an accelerated approval approach. So I'm not all that concerned about the middle of things, the middle of our pipeline because with our early-stage assets in 092, we can fill that by either direction, right? So obviously, we're still looking for clinical assets because they have -- if there's the right profile, the right compound, in the right therapeutic sense, they could really add a lot of value, but it's a very dynamic process right now. And we're trying to do -- find the right molecules with the right data, the right biology and the right pharmacology that gives us the momentum to be able to find differentiated clinical assets that we can sell eventually, right? So again, it's all hands on deck. We've done a pretty good job, I think, of being able to find early-stage assets. We're continuing to look for mid, late-stage assets, but it's a different market out there in terms of expectations from the seller's point of view, and we have to maintain a high degree of discipline and focus to make sure that we're doing the right deals at the right time that have the potential to build value in long term going forward.

Okay. And one of those drugs is ICON-2, which looks to be kind of a really interesting asset. I know [Technical Difficulty] compounds getting a lot of attention. And this looks to be a better internalizing antibody. And I think we're [Indiscernible] payload, which you've attached to this. Are there certain tumor types that you want to pursue development specifically with this drug? And just how are you thinking about highlighting the value proposition of this going forward?

Yes. So we'll talk more about that once we file the IND and we can start getting some clinical data. And there's a pretty clear list of tumor types you want to target going in based on existing data. Question for me really is, can we dose higher because we've got a noncompetitive binder with Factor VII and with a better payload, better toxin? Do we get better cell kill? So -- but yes, it's -- the tissue factor target is one that is really interesting to us and, I think, has pretty good breadth in terms of both its ability to be expressed on a variety of different tumor types but also be internalized. So it's a great target, and we think we've got a potentially better molecule. So obviously, it's all in the data as we get into the clinic, but we're super excited about that and hope to get that moving in terms of clinical work in 2021, for sure.

Okay. And then -- so that's it for me. I know that you kind of framed up 2020 beginning of last year is kind of being less about growth and a lot more about opportunity and I think it kind of feels like 2021 is going to be a combination in both those things. So I wish you the best of luck. I appreciate the time and be in touch. Thanks.

Thank you.