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

All right. Good day, everybody. Welcome to the Bank of America Napa Biotech Summit for lack of a better term, normally held in NAPA, this year virtually, but hopefully, next year will be in NAPA, enjoying some good red wine in the evening. Pleased to be introducing our next company presenter, Exelixis' CEO and President, Mike Morrissey. And my name is Jason, I cover biotech at Bofa. And Mike, thanks for joining us for another year at the Napa Virtual.

Almost NAPA virtual, there you go.

Yes. Yes. I'll be preaching about you.

Great to be here. Thanks again for -- yes, thanks again for the invite. Had a blast last year. Certainly, miss going this year and look forward to next year. Sure.

Yes. Yes, next year should be good. So look, it's busy times at Exelixis. You're launching new indications. You're running new studies for cabo. You're doing lots of new interesting early stage deals to kind of bolster out the early-stage pipeline. We just had ASCO. So very busy times, I imagine, but I'm just curious at a high level, if you can talk to us about where you're spending your time? What are some of your high-level objectives through the next 1 or 2 years? And maybe you can give us a little bit of that color before we jump into some of the more specific questions.

Yes. So again, thanks again for the invite. Great to have chance to chat. Again, before I begin, I'll remind you and the audience that I'll be making forward-looking statements today. So please see our SEC filings for a description of the risks that we face in our business. So yes, we're busy right now. We've been busy all year. Certainly, COVID was an additional set of challenges that we had a maneuver around. I think it's safe to say that we're exiting COVID much stronger than we began, COVID back in Q1 2020. So we've been very pleased with the performance that was only complicated by a global pandemic and having to shelter in place and work from home, but the company is cranking on all cylinders. Obviously, we're in the middle of really important times with cabozantinib relative to launching in first-line RCC with the cabo/nivo combination that approval happened late January 2021. We've gotten off to a great start. We had Q1 numbers that were, I think, in terms of net product revenue, pretty impressive. And if you look at kind of Q4, things opening up with kind of as COVID was kind of getting under control. And then strong Q1, we had a 35% growth over those 2 quarters in that product revenue. So we're certainly feeling good about that. And the entire cosmic contact set of programs is really evolving well. So lots of good times there in terms of, hopefully, more positive data, that can lead to more regulatory filings and approvals. So we're keeping our eye on the ball with cabo. We have a lot going on with the pipeline with 092, with 102, with 002, building out this pipeline with new opportunities, new collaborations, a new building, our second lab building just came online in the last week or so. So we're excited about that. So we've had a long 25-, 26-plus year existence. And I think we've navigated things pretty well, but we're hitting the ground coming out of COVID now. California opened up on Tuesday, and we're excited about that. So we're looking forward to continuing our progress and our success and being able to continuously consistently raise the bar in terms of standard of care for patients with cancer and have shareholders benefit from that as we go forward as well.

So as the world reopens, we go back to our offices, restaurants are back at 70% capacity. Our -- as investors, are we getting too relaxed, assuming there's no residual issues around COVID-19, either as it relates to clinical trial protocols, enrollment and/or just in person visits with patients to the oncology practices? Do you think that we're generally kind of at a good place to kind of normalized here in second quarter going into the back half of 2021?

Well, I think we're getting back to normal, but the question really becomes what is the new normal relative to March, April, February of 2020, right? So certainly, you see global issues are very real right now outside of the U.S., where I think it's probably safe to say we're leading the world in terms of vaccination rates and the vector of case rates going down dramatically. That's certainly not the case in other parts of the world. And I think that will come online as the vaccines are made more available and that propagates throughout the world. But certainly, in terms of how we run our business and how global biopharma runs their business like us where we're U.S.-centric in terms of our commercial outreach. Certainly, we're a global player in every other part of it in terms of discovery, development, how we do broad, large global pivotal trials. So there's still some work to do there, obviously. I think the success we've seen. And certainly, California has been leading the charge in terms of vaccination rates and just tremendous progress in driving down infections, hospitalizations and COVID-based mortality. Hopefully, that will be a model for the rest of the country and the rest of the world. The question is just kinetics, right? How long will it take to get back to that process? So we're looking at -- I think things are more or less back to normal for us in terms of how we operate the business, knowing that we're part of a global infrastructure and global ecosystem that is still maybe differentially impacted by COVID compared to us in Alameda, et cetera, right? So -- but I'm excited about where we're at. Certainly, there's a lot of people at the company and the region who, I think, are breathing a pretty deep exhale in terms of being able to get out a really, really challenging time with a lot of momentum and a lot of conviction about what we're doing. And I'm excited about that, but there's more challenges ahead, right? Even from the standpoint of we've all been locked down for the last, about 15, 16 months. I can't imagine too many people went on vacation in that time frame. So there's a lot of really tired people across the continuum in this community and the broad country that are going to be looking to take a break this summer. So what does that do for the impact on people's businesses, right? So those kinds of things we should all expect and anticipate it's not going to be -- it will be a little choppy as it normally is, and we just need to expect that and navigate that as we go.

Great. Great. And look, it doesn't seem like it's had any impact on the CheckMate 9ER launch, and we'll get to that in a little bit more later in the discussion. But what I wanted to maybe start with was from a business development perspective. You oftentimes talk about the history of the company when you talk about BD, right, because there was a period of time where you moved away from discovery work. You focused on profitability, cabo, rolling that out. Now you're seemingly playing more offense, right? Going after more product opportunities that can kind of bolster the pipeline. I feel like historically, the message has been focuses oncology. We're agnostic, if it's IO, if it's targeted oncology. If it's something like TKIs, right? So it seems like you guys are keeping a broad lens of opportunities that are out there. You definitely bolstered your early-stage pipeline. And I think you kind of conveyed having a very selective lens for anything that's commercial and valuations probably are challenging for things that are commercial. So maybe if you can just offer some perspective on your end. With all the activity we've seen from you guys, do you feel like you're in a good place with the portfolio having balanced it out going forward now? And it's more just a function of execution? Or do you -- is there still a high appetite for BD?

Actually, yes to all of the above. We've certainly hit a strong cadence in terms of doing early stage, back-end loaded transactions with companies where we have a lot of conviction on their science, their people, their technology and able to apply the appropriate assessment across the range of scientific financial and commercial components to be able to get those deals done. So I really like that approach. It basically -- we're going to pay for success if it's there for the most part, we're the 1 driving that bus in terms of taking molecules forward. And I think we do that pretty well. And there's a whole queue of things coming up behind those deals that will continue to, I think, bolster the pipeline and bolster our platforms that we choose to pursue, right? I think the themes you're seeing, say, around ADCs are consistent with, I think, our kind of corporate approach here. We don't approach science in a dabbling manner. We -- if we're going to do something, we're going to do it well. We're going to go in heavy. We're going to muscle up and make sure that we have the right depth and breadth of people and technology and scope to be able to be effective. So -- and you're seeing that. You saw that with the kinase work that we did years ago, and that's still a strong part of our history and a strong part of our R&D focus, but that's true with ADCs too, and that will be true with other modalities and other approaches that we may choose to pursue going forward, right? We're not dabblers were serious, and we understand that success is -- some of you have to earn by doing a lot of really basic hard work to be able to get over the goal line. So that will continue to -- look, we're very interested in looking at later stage assets, and that continues to be a main focus for the combined kind of BD effort, which involves commercial and financial and R&D people as well. So it's kind of a full-court press across the different components of the organization. There, again, keywords conviction. Do we have the conviction that what we're looking at where some of these clinical assets really has legs to get into differentiating data that we think we can help more patients with. And then, obviously, commercialize if appropriate. So the lens there is thicker with our balance sheet and the strength of our balance sheet and the ability to access capital right now by a variety of different means. We can do big deals if we choose to do those big deals, but that's all driven by conviction on the science, on the clinical data and on the potential upside from a larger patient perspective and a commercial perspective. So spending all that money and what you've seen now. What I'm seeing now with a lot of the early oncology launches or people are printing $5 million, $10 million quarters, and those are flat after the first quarter or 2. To me, that just doesn't warrant the level of investment. So we're looking for big opportunities. If it's there and we have the conviction, we'll certainly move forward aggressively as those opportunities present themselves, right?

And so mindful that it's all about the conviction and your comfort level around the science. But just from a valuation perspective, I feel like maybe it was a year ago, you and I had this discussion. And I think the public markets, certainly for assets in oncology can be pretty demanding from a valuation perspective. Do you feel like maybe the better place to play is in sort of earlier-stage privates right now, just from a valuation premise, if you think about all else equal, if the conviction is kind of in both places. Maybe it's just too difficult to operate in maybe the publicly traded realm or more advanced assets that we need to get in early?

Well, getting in early is certainly a viable way to go on. We've done that broadly, which whether we're buying platforms -- buying into platforms, buying into assets. I think that's a good way to go. Obviously, you add more time, you add more risk. So your formal PTRS is going to go down dramatically when you do that. So ideally, you would pursue a mix of those kinds of assets. And we've certainly tried to do that. I think the valuation, asymmetry that we saw in 2019 and 2020 was driven by market dynamics that are out of anyone's control, and some people were able to capitalize on that and raise a lot of money and give them a runway that you have the more free to operate in terms of generating data. But I mean, for us to transact on multibillion-dollar valuations existing without any kind of premium when you've got a handful of patients with either stable disease or maybe a few PRs kind of sprinkled in there, just didn't make sense. This is a really, really challenging business. And the rubber hits the road in Phase III when you're running large global randomized trials as we've learned and as we know. So that it's all about conviction. It's our -- and that's -- for us, it's somebody is formed by the whole cabo story, where we spent years and years and years, understanding that molecule, obviously, had some challenging times in the 2010 to 2015 timeframe. Being able to operate and find a sensitive tumor type that would allow us to then run the appropriate pivotal trials and win on the back end. So -- but again, it's a hard business and having the valuations be as out of whack as they were and they pulled back since February. But so -- but for me, it's less about -- I mean valuation is certainly very important, but the obvious #1 most important priority is the conviction around the clinical applicability of that data and what it mean for patients and what it can mean from a commercial point of view. That's the driver. If that's there, then we feel pretty good about being able to line up the business opportunity and be able to transact if we have that momentum. So just waiting for conviction.

Yes. Okay. Great. Maybe your kind of a quarter now or so into the launch of your frontline combination CheckMate 9ER indication. It looks like you're gaining market share in the categories for I-O/TKI might be growing, if I'm right from what I see in IQVIA. So it's both share gain and perhaps more I-O/TKI as a combination modality, getting more share within frontline RCC. So just curious, is that what you're seeing? And is the market just kind of migrating away from perhaps ipi/nivo or TKI monotherapy? What are the losers as you guys sort of ramp up this opportunity? And then can you talk a little bit about the interplay with your second-line business, because I imagine that even if you're migrating the 25% share of front line, your preferred second line options still. And so you kind of have a nice balance of your frontline business and second-line business in the RCC setting.

Yes. So I will avoid speaking specifically to Q2. We're kind of getting towards the end of the quarter, so I want to make sure that I don't break into jail on talking about stuff that's still baking. So -- but in general, we talked about this, I thought P.J. did a great job on the Q1 call. We got, I think, to a really strong start. The data resonates really, really well with HCPs, with prescribers, the trifecta of efficacy, safety, tolerability, looks really encouraging. Low discount rate. The quality of life data continues to, I think, differentiate cabo/nivo versus other regimens, and I think that was, I think, pretty strongly reinforced at ASCO a few weeks ago. So I would say the market dynamics are going to be what they're going to be. And I think we'll hit steady state across the board as time goes on. I think I-O/TKIs are probably more -- I think that class is probably more appropriate and certainly viewed more favorably in the community setting. The IO-IO believers, if you will, academically, are still pretty strong in that camp, and they're believers. And certainly, the 214 data has matured really, really well. So we're thrilled to be part of that process. Our team, especially as things open up are making, I think, a really good headway in reeducating and helping prescribers understand the value that cabo/nivo brings. And I think it's a really strong coalescence of great data, great team, great momentum. We're -- we've always had a pretty strong share of voice in our CC going back to the media launch in 2016. And I think that resonates by itself well, people understand that we bring high value product, high-value data and just -- it's just a pleasure to watch it all evolve.

So what's interesting, I guess, is the triplet that you guys are evaluating as an expansion opportunity potentially. And I think you've mentioned that, that data, maybe it flips into late this year, but more likely, it's next year. For your ipi/nivo/cabo combination. And so can you talk a little bit about where you see that potentially fitting? I guess some of the -- the tax will always come up in this discussion, right? But then you have a certain -- as you mentioned, group of loyalists who really like ipi/nivo and are willing to kind of manage through the immune-related AEs. And so as you think about that, it would seem like a logical opportunity to sort of play in that piece of the market, right, where -- and it's not attributable. It was at 1 point, I think, 1/3 of the frontline market was getting in ipi/nivo type of combination.

Yes. Well, it's all going to come down to the data, but I think that's what our job is. And certainly, the oncology therapeutic area is so so competitive right now. There's so much investments across biopharma, large and small, across every segment of the investment community relative to what's happening in oncology. Our job, plain and simple, is to drive the upward movement of the standard of care. We need to make standard of care better for patients, right? And going -- it's -- I think it's a natural progression to go from a doublet to a triplet, especially when you've got best-in-class IO-IO coupled with best-in-class IO-TKI like cabo/nivo, right? So we're really excited about that. Certainly, it's a global -- it's a large global randomized pivotal trial. So the Phase Ib data that we talked about previously. And that's been, I think, pretty well published, speaks for itself. But again, that's not randomized. It's relatively small number of institutions enrolling patients there. So again, the rubber meets the road in a large global pivotal trial, which we're very facile at doing, and I think do really well. So the opportunity here is to -- you look at the 214 data. And some parts of it look really, really good. Some parts of it could be improved in terms of the stay, for example, the number of patients with primary progressive disease with that combination, so could layering cabo on top of that right shift that further in terms of the PFS and patients that actually respond, right? So lots of speculation, and I think that's all appropriate. And again, we're thrilled to be part of the -- of that whole kind of community within biopharma, trying to raise the bar in terms of standard of care. But you have got to do the trials, you have got to open the envelope and look at the P values and understand if it's worked as you hoped or not. So that's just -- it's part of the game we're in, right?

Can you talk a little bit about like what you think some of the parameters are that will tell that story, right? And when I recall CheckMate 214, really, what kind of was the marketing hook for that? Was it CR, right? Oncologists would say, this gives me a really good chance at a CR? And that's what we're ultimately in this for as oncologists to treat for CR. And so is that a situation where you need to accrue multiple years to say, hey, this has a better long-term durable CR than what I get with some of the existing frontline modalities? Or are there some -- maybe earlier metrics that we could even see next year when they are made available, that can give us that sense of confidence that this might be a step change in therapy for frontline RCC patients?

Yes. It's hard to speculate. It could be any number of different factors relative to the existing IO-IO data and the existing IO-TKI data. So I'd rather just get the data and then talk about how that's potentially differentiating than speculated on here because literally, every different components of that top line set of results could be impacted by that triplet approach. So bottom line, again, we need -- in order to have a competitive commercial regimen. You need to change a trajectory for patients, right? That's the bottom line. And if you do that by PFS or overall survival or some combination of that with different parameters. That's all good. So let's get the data, and let's parse it out and see how it looks. But certainly coming off, you look at 214, you look at 9ER. It just begs the question, what can those 3 molecules do together in a way that can help patients, again, live longer, recover stronger, right? That's the bottom line.

Okay. Next question is more of a housekeeping question, and I hate to ask it, but I guess I have to because it's my job.

You can do it. Go ahead.

Frontline HCC, are we still on track for June?

We are on track for Q2. And since -- for the first half, which is now Q2, which is now June. Yes. So I would like in this process as once you hit your events, there's a pretty standard set of steps you take to be able to get to top line results. And we're not kind of on that glide path right now to be able to get that in this month. So stay tuned. I know there's lots of interest and speculation on timing and that kind of stuff. I certainly don't want to give any more details, but we've been, I think, very effective at communicating data once we have it. And I think we're on track to have it this month and this quarter and this half of the year, like we said. So stay tuned.

Yes. Yes. All right. Well, I've been around these processes long enough to know that I'm not going to ask you about bogeys and things like that, that's close to data. But what I'm curious about is the dynamic in this market. You've talked about HCC and analogize it to RCC. And if the market is really driven by interventional radiologists, and they want to see TACE plus systemic combinations. It sounds like you guys in the past have talked about an openness to this sort of combination. I think competitors are starting to explore this approach. So where are you in terms of viewing that as perhaps a necessity to driving this market kind of towards where RCC is now?

Well, I think the math around how big the HCC pie could be is driven by patients, duration of therapy and pie. And then how many competitors have arguably competitive data sets to be able to play a role there, right? And certainly, we see that shipping up pretty well with RCC and from RCC is a what, $5 billion, $6 billion a year market. So there's plenty of room for people for groups with competitive data to be able to do well by patients and certainly do well for their shareholders in that regard. I think liver is, as I said previously, is the same thing. The analogy between 312, COSMIC-312 and 9ER continue to be pretty pretty similar, right, in terms of -- I mean, with the Embraer data from Roche/Genentech with bevacizumab and atezolizumab show in survival data. I think survival is a a necessary component of a successful regimen here. So like with 9ER, where we needed OS to win early and put a stake in the ground about the efficacy of that combination, in that case, cabo/nivo and prolonging overall survival in frontline RCC relative to sunitinib. It's a statement of the obvious that we need that here with cabo/atezo relative to sorafenib as well. If we don't have survival, anyone doesn't have survival going to be hard to compete in that world. So we know that, obviously, everyone, I think, understands that and feel good about it. But again, it's a global pivotal trial. You got to get the envelope, kind of open it up and look at the P value, right? So in terms of other components, I think the -- if you use the atezo launch as a benchmark. That's gone really well. That is the dominant first-line player right now. Obviously, we all have plans to do more there. 312 is our first trial in the frontline setting. I expect we'll do more, probably focus more on 092 than with cabo for all the reasons that we've discussed previously. But again, that's -- we're not dabbling, like -- kind of like I said before, in terms of discovery platform. So we don't dabble. And if you look at RCC, as an example, where we did median, then we had CABOSUN, then we had 9ER, then we have 313, and then we have contact-03. I think that level of investment that cadence of follow-on trials to build the franchise will be the case with liver, with prostate, with lung, et cetera, right? So -- and now we have a second molecule that can do the majority of that driving going forward. So stay tuned.

And do you have a view -- I know that ESAI, they've got their interim analysis with KEYTRUDA, Lenvima and Frontline HCC. Sort of the strength of the evidence that's out there regarding FGFR over-expression in frontline HCC? And to the extent that that might lend itself. I know that Lenvima has -- was a frontline standard of care in HCC. And so as we kind of think about the different modalities, how you see that as a potential issue or not an issue with respect to how you'll stack up?

Yes. Again, that's all on the data from their Phase III trial versus 312 versus others that are ongoing versus the kind of the standard -- kind of the baseline bevatezo membrane. So it's hard to really connect the dots in terms of preclinical data around FTF versus , say, VEGF versus other versus the other targets that hits. That's been a point of their, I would say, rationale, just like we use cabo with Met and Axle on top of VEGF. So mechanistically, I think both are pretty strong. I think it's challenging to prove with a multi targeted agent translationally. It's really, really tough to prove that those targets are hitting those targets hard actually plays a role in terms of what's happening in a given disease state, given line of therapy, especially with within the combination realm. But clearly, cabo looks different than the vast majority of first-generation TKIs. And I think that was some of the design considerations that we had back in the early 2000s. It really drove a lot of that success. And again, when you look at the differential activity for cabo, again, EGF, Met, Axle versus more or less selective VEGF inhibitors. It has a different profile in terms of prolonging survival, et cetera. So we're excited about that and going to continue cranking there certainly with cabo and then afterwards with 92 going forward.

Got it. Okay. And with the rollout of vem/atezo, has that at all expanded a second line opportunity for cabo in any way? Or is it too early to know because perhaps patients are -- who started on that combination just haven't kind of made their way to seeking a second-line treatment opportunity. We've been hearing that from some liver specialists that with the emergence of systemic IO therapy frontline that cabo made for a logical second line default option.

Yes. Yes. I think it's safe to say we're seeing an uptick in second-line utilization for liver cancer patients with liver cancer. I think the challenge there is second line RCC and second-line HCC. It's just a different -- a very different population in terms of the robustness of that patient. What you would expect to see in terms of duration of treatment in PFS in those 2 different categories. So I think that's the challenge. I think that for us, it's really being able to make our mark in the frontline setting where the patients are a little bit healthier earlier in their disease course that we think we can bring potentially more benefits and certainly have a much longer duration, if you will, where we can hopefully keep these patients doing well. So that data will get the fund in 312. And certainly, like the think about IMbrave versus COSMIC-312, the only similar patient population, similar investigators, both use atezo as the IO agent. The 1 big driving difference is cabo versus bevacizumab. And I think we've done fair enough to kind of cross comparisons, which are always challenging with all the caveats, but we like having cabo in our combination and look forward to seeing that data shortly, for sure.

Yes. Yes. Okay. Great. You recently had an update on prostate, and I know that, that's been a long odyssey, really when you think about the cabo story in prostate cancer. And so you announced the data -- top line data in high-risk patients who progressed through 1 novel hormonal therapy or an NHT. So I guess how should we think about the cadence of updates going forward here on the program? And obviously, I assume you've been meeting with the FDA. Just kind of curious how the cadence of updates will look for the rest of the year. Is the main sort of update here is what we've learned from our meeting and here's the path forward?

So yes, we had top line results a few weeks ago. Modest erosion in response rate between investigator versus the blinded independent review, which I think isn't a big surprise. I was -- and I remain very excited and very encouraged by the data. When you look at the, say, the control arms from contemporaneous pivotal trials in this kind of this population, if you look at the AMBASSADOR 250 study, look at profound, even the Vision data that was an ASCO a few weeks ago. I mean all those used a second NHT as the control arm with the idea that you wanted to avoid using chemo in these elderly patients. And where you see low single-digit response rates with a nearly 20% response rate with cabo/atezo. I think that's a pretty impressive number done by blinded independent review. The -- as we talked about in the press release and since then, the disease control rate, or DCR, duration of response as well as PFS. There was -- those numbers were similar between investigator, very similar between investigator determined as well as BIRC determined. So I think that kind of reinforces the, I think, the depth of the totality of data with that. And I think it plays relative to some of our assumptions that we haven't gone into a lot of clarity on for CONTACT-02, the pivotal trial, I think make it plays really well relative to some of our assumptions there as well. So we're excited about the data. As I -- as we said very clearly, we're going to talk to the agency to get their view on that and to seek alignment on the path forward. If we are aligned about pursuing the subparty's filing, then we would certainly do that as quickly as possible. And in terms of a cadence of communication, look, we have been, I think, always prided ourselves on making sure that we're as transparent as possible when we have information that is mature that we can share. So we're talking about having this data presented later on this year at a major international medical meeting, which I think would be great. And as we get definitive feedback from the agency, we'll report that out one way or the other, like we always do.

And so the point about not a lot of detail for CONTACT-02, that specifically gets to whether or not that trial is going to enroll high-risk only or will be an all-comer population and maybe some of that just is contingent on an FDA meeting and how you might need to modify that to be confirmatory if some part age is the pathway? No?

No. It's -- I mean, the population is set. It's the same high-risk population, all with measurable disease. It's a pretty -- when you think about the kind of the scope for metastatic CRPC, it's a pretty large population. So it's not a -- it's not 1 of these micro-niche or nano-niche populations. But no, that's set in place. So we think that's the right way to go. We want to avoid the controversy and drama, if you will, lack of understanding around the bone scan response assessment tool, RECIST 1.1 is the way to go here and looking at PFS and OS as endpoints makes a lot of sense because that will tie it all together in a way that I think people can understand using conventional response assessment tools. So that's up and running. Global trial, lots of sites being activated as we speak. So very important part of the CONTACT trials. We're doing that 1 ourselves. Roche is doing the lung and the renal study, driving those forward. So again, great collaboration, super excited about cabo/atezo and what that means for the franchise now, but also implications for the 092 atezo work that we're doing as well.

Okay. And so just to clarify, the high-risk population, that represents a high proportion of patients in that kind of second-line plus setting, it wouldn't be a meaningful haircut to the addressable market? Just wanted to clarify that.

Yes. So it's a mixed first and second-line population first. So I would not confirm it's just a second line population because, again, a patient can be metastatic in the frontline setting, close an NHT that came in with getting the NHT at the M0 stage or at the cash recent sensitive stage, right? So -- and yes, the the population and the math that we had at JPMorgan 2020, where we kind of outlined what success could look like, that reflected the high-risk population.

Okay. And do you recall -- I'm trying to recall, like, so what were the aspirational numbers in that 2024 for HCC and assume this high-risk group, you don't recall off hand, do you?

Well, I have that slide in front of me, like I normally do. So the eligible patients based upon the target clinical trial population is about 25 -- it's about 20,000 patients per year, and we were assuming a 25% market share there, which got us to about a $600 million year -- $600 million per year run rate in 2025.

Okay. And just to clarify, I think you indicated about low single digits. So that would be your understanding, I guess, of the historical control benchmark, if you will, for this high-risk population, similar ORR, what they're achieving with existing treatment option?

Yes. So that was a number I gave a few minutes ago relative to the populations from the control arm from typical populations from profound from AMBASSADOR 250, that was atezo ENZA versus ENZA as well as vision, which I would say are more typical CRPC populations. Those are not the traditional high-risk populations, okay?

Okay. Yes. Great. Maybe if we could shift gears to XL092. This is an important program, and I know a lot of investors if you can just remind us, I think, last year, the update was at the triple, if I recall, where you sort of shared with us sort of conceptually the half-life and sort of we're going to get our first data look here in the back end of the year. But maybe can you just kind of remind us what underpins your level of enthusiasm around XL092 before we jump into some specific questions?

Yes. So XL092 is the next-gen cabo with not speculated but documented shorter clinical half-life. We had that data at the triple meeting last year. Again, very -- we sought and we're successful at phenocopying the inhibitory spectrum of activity, VEGF, MET, AXL, TAMs, et cetera. So we have a cabo type molecule, if you will, that has a sort of a 4-plus day clinical half-life. We have like a 20, 28-hour clinical half-life based upon that data we had at the triple meeting last year. So very -- the whole idea was make it easy, easier to clinically dose adjust, which literally every VEGF TKI has to have relative to patient experience, especially when you're looking at long, durable 90-hour like activity, where you're keeping patients on potentially for years, you have some level of cumulative toxicity over time that you then mitigate by dose reducing. So if you can do that with a short half life that theoretically could happen much faster than if you have a 4-day half-life and you have to wait several half lives to get that down based upon the individual patient's characteristics. So it was a -- that's been the constant feedback over the last several years as we've taken cabo forward that if you could just tweak the half-life and make it easier to dose adjust, it would be that much of a bigger molecule. So we've done that, right? So that's all going. We've been very successful at driving clinical collaborations with Roche, with Merck KGA and now with BMS to look at novel doublets and triplets and the announcement that we had this week also includes bempeg from Nektar. So looking at some -- again, novel triplet potential as well. So the whole goal here is to set the baseline across various tumor types and then very aggressively look to do full development with that molecule across different combinations, different tumor types, different lines of therapy that would allow us to really explore either indications where we've got some traction but we can do a lot more work in or brand-new indications where there's some level of confirmed activity with cabo, either as a single agent or in combination, but we haven't pursued full development yet.

So yes, you mentioned some of these collaborations, which are effectively cost-sharing for the clinical trials with partners, and I would assume that's not a trivial undertaking for partners, right? They're going to want to know that XL092 is as good as cabo. And so I guess I would assume that a lot of this might be informed by internal in-house data from your ongoing Phase I trial as you sort of think about what's going on behind the scenes that sort of help inform and motivate these transactions?

Yes. I think there's a general interest in pursuing new indications with 092 based upon the success of cabo. And I think everybody gets what we're trying to do here in terms of making it that much more user friendly from a pure clinical investigator commercial point of view with how you -- again, how you dose adjust, right? So the -- getting these deals done is really, really important because we have -- obviously, we want to get access to to kind of Canyon IOs and other -- whether it be doublets or triplets, it's just the way we're moving. These 3 deals to date have not been cost sharing. We're getting free drug, but we're paying for the studies ourselves, which is fine because we're obviously, I think, very successful commercially and have a strong P&L and a strong balance sheet. And more importantly, time is of just critical component, right? That really is what's driving us, right? So whenever you get somebody filling in some cash, they usually want something in return for that. So we're very happy to fund it ourselves move at our speed, be able to generate data quickly and go to the next level then with these combinations as the activity warrants. So -- but super thrilled, and we'll certainly expect to see more of these come out over time, and it's cabo and 092 really have to march together in terms of building out the franchise completely and maximizing the value for patients, right?

So I'm going to ask you like the impossible question to answer, which is as we move to like doublets and triplets, proprietary oncology combinations, to what extent are you -- is cost the concern in the back of your mind as you think about these investments and the system possibly reaching a breaking point and how it's almost like the age-old question in oncology. Would it ever be cost managed, would it ever be formulary management, which to date has not. There are some cost -- early stage cost disruptors out there, companies like QRX and Coherus, which have these sort of value branded type models. But just sort of curious at a high level, is this on your radar at all as you think about this and go down these pathways with triple therapies that could be in the $300,000 to $400,000 per annum. That's the ballpark.

Absolutely. Look, our job is to -- and we talk about this all the time, is to maximize innovation and maximize access, right? It's not balancing those, but it's maximizing both simultaneously. So sure, we think about this all the time. We're only 1 -- if you think about these combinations, we're 1 part of that process, and we have the flexibility that we have built in to be able to, again, achieve that mission of maximizing innovation, which is data benefiting patients and then maximizing access, right? So no doubt, good data, differentiating data. Raising the bar on standard of care, I think, gives anybody more leeway and more momentum to be able to premium price based upon the old standard of care versus the new standard of care. But I think people have to expect that you're not going to get that premium if you don't generate data, which helps patients more than existing standard of care does currently, right? So that's the -- I think that's the grand bargain, and I think we understand that, and I think we've been very successful at with cabo to date being able to show that, hey, we're different than the first-gen compounds. We're different than the other combinations, and here's why it's the appropriate value proposition for patients and for payers, right? But that has to continue. There's no doubt about that. But it's certainly with the news this week in neurology and Alzheimer's, it's -- I mean, the system is going to be challenging. And the most important thing for us is to generate data with either cabo or 092 or new molecules that makes that investment worthwhile because we're helping patients more than what they've got. Correct.

Okay. We're close to our time. So post ASCO, I think 1 thing that caught some people's attention was the FDA oncology center for excellence, talked about, I guess, cultural issues within the agency about pushing for max tolerated dose and perhaps asking companies to explore multiple doses. So as you think about this in the context of XL092 development, I'm curious if there's any read across from this to you guys, as you guys think about this FDA commentary? And I'll leave it at that.

Yes. Well, I'm smiling because that was the journey with the cabo dose, right? In terms of finding the MTD versus finding the right dose where patients can be on cabo for essentially years, right? So it's a challenging process with a new molecule and NCE to find the right dose in an unknown sensitive tumor type. You got to find that first, right? And then to optimize the dose for activity and then for longitudinally and keeping patients doing well on that dose. So I think you're referring to some of the feedback or pushback with the recent approval with the KRAS inhibitor, which I totally get. I mean, we've lived that with cabo since literally 2012, right? The MTC indication exam was done at 140-milligram dose, which was the MTD out of the Phase I. And now we're at 40 in combination with ICIs giving phenomenal efficacy and keeping patients doing well literally for years in terms of that data endpoint. So we're very comfortable navigating those issues because we've done that with cabo for the last -- literally the last 5 or 6 years.

Yes. All right. Well, great. We're up against our time. But Mike, always a pleasure. So I appreciate the time and your insights and looking forward to this next year.

You bet. Thanks, Jason.

All right. Thanks.