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Msg  25462 of 25664  at  9/15/2020 10:12:09 PM  by

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Exelixis, Inc. (EXEL) Presents at Morgan Stanley

Exelixis, Inc. (EXEL) Presents at Morgan Stanley Global Healthcare Broker Conference Call - (Transcript)
Sep. 15, 2020 8:55 PM ETExelixis, Inc. (EXEL)
Exelixis, Inc. (NASDAQ:EXEL) Morgan Stanley Global Healthcare Conference September 16, 2020 3:30 PM ET

Company Participants

Michael Morrissey - CEO, President & Director

Conference Call Participants

Jeff Hung - Morgan Stanley

Jeff Hung

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. Before we start, please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representatives.

For this session, we have Mike Morrissey, CEO of Exelixis. Welcome, Mike.

Michael Morrissey

Hey Jeff. How are you doing today. Good morning.

Jeff Hung

Good. So for those who may not be familiar with Exelixis, can you provide a brief introduction?


Michael Morrissey

Of course, first, let me just say 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 we are -- Exelixis is a commercial-stage biotech company focused on oncology. We have had a 25-year history of discovering, developing and now commercializing drugs, which has been obviously a lot of exciting times. We have -- our lead molecule is cabozantinib, which has been approved in numerous indications around renal cancer, thyroid cancer and liver cancer. We've, along with our partners, Ipsen and Takeda, we've generated about $1 billion in global sales in 2019. And I think we've got a good franchise in the making. Looking broadly at a variety of other tumor types in combination with immune checkpoint inhibitors that I'm sure we'll be talking about today in some detail as well as a very interesting and, I would say, exciting portfolio of compounds that are either in the clinic or soon to be in the clinic from our internal as well as collaborative efforts. So obviously, a lot going on right now, exciting times for us and for the industry focused on helping patients with cancer live longer and survive well with their disease, and we're very pleased to be part of that process.

Question-and-Answer Session

Q - Jeff Hung

Great. Before we dive into other questions, this morning, you reported promising data for ICON-2. Can you talk about the announcement and what you're seeing?

Michael Morrissey

Sure. So ICON-2 is a -- it's an ADC molecule, and it's a antibody drug conjugate. So it's -- for those of you that aren't familiar with the technology, it's basically a mix of biologic and small molecule kind of programs put together into a single molecule where the antibody component targets the molecule to specific tumor types for the design of the antibodies target and then the payload, which is the small molecule part is then delivered into the tumor selectively. Been a lot of advancement this year over the last few years. Lots of news in that space this weekend. I'm sure everybody saw that.

We've been a small molecule-focused company over the years and certainly over the last 3 or 4 years as we're building out our discovery operation, looking to certainly invest in biologic approaches as well, which we've done through a variety of different collaborative efforts. The ICON-2 molecule is from Iconic. It's a collaboration that we struck 1.5 years or so ago. They have very interesting technology around a tissue factor targeting ADC, which uses a binder, right, an antibody that does not compete with Factor VII. So has minimal to no bleeding complications because -- at least preclinically because it binds in an uncompetitive fashion at the cognate target tissue factor and then delivers a really optimal next-gen payload that they were able to put in place with -- do a collaboration with Zymeworks.


So they've had data previously, showing the characterization of that molecule. They had an update today, showing additional data in xenograft models, all preclinical. They had data in patient-derived xenograft as well, which are kind of the next wave of being more -- a little bit more closer to the clinic in a preclinical setting, which is always good to see. Very interesting additional data around the ability to not interfere with the coagulation cascade, which is obviously very important here in terms of maximizing the dose and then some early PK and tox parameters as well. So again, it's exciting.

We're really, I think, very motivated to be player in this space. I would say, in a manner similar to what we did with kinases 15, 20 years ago. As we moved into that space, we certainly weren't first, but we had a very clear eye on biology and the key targets and pathways to study with our molecules as well as, I think, novel chemistries that helped us be not just a me too kind of effort, but really me better in terms of having molecules like cabo that came out of that, that were fundamentally different and arguably better based upon the -- kind of the long-term clinical data.

So we're looking to do that here too as well. We had the opportunity to announce 2 new collaborations. Last week, one with NBE and a second with Redwood Catalent as well. So it kind of reinforces our interest in the space and the investment that we're making in terms of critical mass, both internally and externally to make sure that we have the -- everything moving in the right direction to potentially provide new offerings going forward.

Jeff Hung

Great. Maybe let's turn to a couple of questions on the commercial side. In 2Q, you saw a modest decline in demand due to COVID. Over the summer, did in-person interactions increase than -- did the impact from COVID reverse?

Michael Morrissey

Yes. So it's probably wise I don't speak about the ongoing quarter. We'll certainly do that on the third quarter call later in the fall. Just to reiterate what we said on the Q2 call back in August, which I think was seen in general by a lot of people in health care is that there was inventory build. And to a certain degree, I wouldn't say demand build, but both on the wholesaler side but also on the end user customer side. And as the pandemic was starting to take hold in Q1, there was a build; second quarter, there was obviously inventory burn with everybody sheltering in place as well as lower -- a little bit lower demand. So again, typical dynamics, I think most companies saw that Q1, Q2 dynamic and not a big surprise there. We'll certainly talk about the Q3 performance on the Q3 call that we have in the fall.


Jeff Hung

And then, I guess, as it relates to COVID, I guess, are there other initiatives that you can or plan to implement beyond virtual speaker programs, phone calls and digital tactics?

Michael Morrissey

Well, I think things are opening up to a certain degree. So as we talked about in August, where we can have direct personal interactions safely in the context of either local or regional-type instructions, we do that. And that's obviously on a case-by-case basis in terms of given regions or territories. So we've been very effective. And with our -- we have a very -- I think, a team that's very versant in digital tactics and nonpersonal promotion. We've been doing that from day 1 since we launched back in 2016. So I think that's been a very strong part of our really market-leading share of voice that we've been able to generate.

It's not just making that visit that might be 3 or 4 minutes, five minutes at most. But it's having the surround sound that you need to be able to give people attention. And certainly, the single-agent launch that started in 2016 and going forward it was very successful based upon that multipronged approach. So that will continue going forward, but I'm certainly very pleased with the broad commercial effort across the board to make sure that we're getting patients, the drug they need. Certainly, when cabo is prescribed, they get the drug, and we go through every possible hoop to make sure that, that happens during the middle of a pandemic or fires or whatever. We're very, very customer-focused and very patient focused, as we should be to make sure that patients who need our drugs, get our drugs ASAP.

Jeff Hung

Great. Maybe let's turn to CheckMate 9ER. The full data will be presented this coming weekend at ESMO. Can you remind us what you reported in the top line data back in April?

Michael Morrissey

Certainly. So we had an 8-K, the company that followed the press release on -- I think it was April 20, that highlighted the top line -- uber top line hazard ratios for PFS, which was in the 0.5 range as well as overall survival in the 0.6 range that had many zeros in the p-value, as you like to see. So clearly active. I mean that was -- as you and I have talked about numerous times, it's been a lot of time in 2019 talking about debating. Could cabo/nivo perform in a way that would be competitive with other regimens that are out there and that were ahead of it.

And I think there was a lot of debate about that with these additional therapies, we just see survival and blah, blah, blah. Well, I think we're -- I think that's very clearly the case. We had, I think, very strong data. And we're very, very excited to be able to get that full data set out this Saturday, again, Toni Choueiri from Dana-Farber will be presenting at the Presidential Symposium on Saturday early morning, at least West Coast time.


We have a very strong group of KOLs, really the A team in geo-oncology coming to an virtual investor briefing that we're having an hour or so after that on Saturday. So I would recommend that if you're interested or people who are interested on the phone today, take a little bit of time on Saturday and listen into both events. I think it'll be very illuminating. We're -- we've been sitting on this data for like 4 or 5 months now, and it's -- we're very excited to be able to get it out there and start talking about specifics across subgroups, across the ITT population, everything that we've be kind of hanging on to, to be able to get that out in the open and help people understand why we're so excited about the data.

Jeff Hung

Great. And since the top line results, like what feedback have you heard from physicians? And how they're viewing those top line results so far with respect to PFS and OS?

Michael Morrissey

Yes. So we've done a lot of market research, both before the data was unblinded and certainly afterwards. We spent a lot of time trying to understand the different nuances of the data, the different toggles, different levers that could be pulled. And certainly, once we've had that data, we have invested a lot of time, both in terms of ad boards as well as market research that we understand how that is perceived.

We've been very, very pleased with the feedback across the variety of different readouts in terms of activity, of safety, of tolerability. I think the feedback that I've gotten, which I think is most exciting in terms of big picture-wise, certainly, frontline renal is a very important indication for us, and we're going to engage there very aggressively once we get approved. But the -- I think one of the key messages here is that starting these cabo ICI combinations at the 40 mg combo dose really provides a very strong activity tolerability, if you will, optimization, right? Again, to be able to have a PFS hazard ratio of, I think it was 0.51. They have a survival benefit with all these other therapies around that could salvage really underscores the, I think, the idea that we really have the right dose, starting at 40 with cabo. It was really the way to go here to get this long, durable duration of treatment, long durable [indiscernible] survival, long durable responses was really the way to go. So you'll see all the details on Saturday. And certainly for people that want to join the investor briefing, certainly can ask questions of the panel involved there.


But that's the message that I think could resonate across trials, across combinations. We've had some -- a number of Phase Ib presentations this year for liver cancer, for prostate cancer, for bladder cancer, for lung cancer, all using that 40-milligram starting dose. And again, the activities in terms of response rates, at least in those trials, have all been very compelling low discount rates, good tolerability, et cetera. So we think we really are on to something here that could really help maximize the potential benefit cabo in combination with ICIs could bring across tumor types. Now of course, we have to prove that, and there's a lot of efforts going on there in terms of ongoing and recently started pivotal trials as well as COSMIC-021. But certainly, having this data set as a foundation to take us forward is very, in my mind, very reassuring and very compelling.

Jeff Hung

And you've already kind of touched upon this, but I guess, what should we look for in the full data this weekend? Beyond response rate and discontinuations, like what other measures should investors focus on?

Michael Morrissey

Yes. It's funny. I get that question a lot, and it's always a bit of a head scratcher for me. Every piece of data in that presentation is important, right? Because it's the full picture. It's the totality of data that highlights the offering that we have here relative to what attributes and what benefits that we potentially can bring to patients with this combination. So as you would imagine, the presentation has been highly, highly scrutinized by the investigators by people at both Exelixis and BMS. So we're -- I think every slide, every bit of data on that slide is important to look at carefully and absorb and understand relative to what we think we have here and how we can potentially bring benefit to literally any patients with advanced, untreated kidney cancer.

Jeff Hung

Okay. A few weeks ago, you announced the submission of the sNDA filing. I guess, assuming the combination is approved, what patients do you think will be best treated in frontline with a combination versus pembro/axi or ipi/nivo? And how do you think physicians and patients will make that decision?

Michael Morrissey

Well, I think, like I just said a second ago, I think the totality of the data supports the idea that every previously untreated patient with first-line, with metastatic untreated kidney cancer could benefit from this regimen. And you'll see the details of that on Saturday. And again -- I would, again, ask the appropriate hard questions of the investigators because they've got -- on our investor call because they've got very clear insight into why it's applicable for most, if not all, patients. And certainly, our commercial approach will be to address the broad population.


We're not going to target this category, a patient or this subtype of patient. We're going to go really after everybody because the data is that broad and that strong and that deep relative to literally every untreated patients with advanced metastatic RCC. So that being said, how it'll play? Obviously, there's lots of other options out there. We think we've got a very strong data set. There's certainly a lot of messaging and different ways to view the competitive data set across the board in terms of what's available with IO/IO and what other IO/TKI combinations. But we will engage there, right? I think the offering is incredibly strong and will provide prescribers, both in academia and in the community a very strong data set to be able to help make that decision on an individual patient-by-patient basis.

Jeff Hung

That's helpful. Why was it important for the commercial team to be launch ready by the end of August? What initiatives are they focusing on in the near term for the combination?

Michael Morrissey

Well, Jeff, it's always better to be overprepared than underprepared. It's always ready to be -- it's always better to be ready to be sprinting than to be trying to find the light switch that you can get your shoes on to start. So we've had this data in our hands for a while. We've -- number one. Number two, we have been active in the kidney cancer space for years. So we have the activation barrier to get our people trained, to get our messages refined to, have all that locked and loaded and ready to go was actually pretty easy. And you could imagine what good data does in terms of having a motivated team be even more motivated. Plus the fact that -- I mean, quite frankly, both cabo and nivo are approved single agents in RCC. So the data's strong. There's very, very strong foundation for those individual agents working in this space. So we want to make sure that we're ready to go, and we don't waste a minute relative to being launch ready for when that approval letter comes.

Jeff Hung

Okay. Maybe moving on to cabo/atezo, you have 3 Phase III studies underway in solid tumors. Can you remind us what you saw in COSMIC-021 that gives you confidence in lung and prostate?

Michael Morrissey

Yes. We're seeing high response rates with the combination, 30% plus or minus in both prostate and non-small cell lung cancer in patients with measurable disease by RECIST 1.1. And those are really solid numbers in refractory populations relative to kind of what's out there right now in terms of standard of care, with all the deficits from a tox point of view that things like docetaxel offers to these elderly, very frail patients.

So yes, so we've got a large data set. So we have been aggressive in rolling in COSMIC-021 in both cohort 6 and cohort 7 as well as a single-agent cohort. So that has gone, I would say, exceedingly well relative to the challenges of enrolling these trials in a pandemic. And the fact that we're working so closely with Roche on the contacts, we are sharing the responsibility as the study sponsor for those as well as sharing costs, I think, underscores the interest for both ends relative to what we think those can do.

So these are important studies, as we talked about previously throughout the year. Going into 2020, the big message was we are more -- Exelixis is more than cabo and 9ER. And I think the messaging and the data presentations and the progress in terms of existing pivotal trials, starting new pivotal trials, pushing forward these important initiatives presenting data, all reinforces those very important next steps in terms of building this franchise out as we go.

Jeff Hung

You've indicated that you could file for accelerated approval in prostate as early as next year. What has the feedback been like from the FDA on accelerated approval? And what additional data would they want to see to support that pathway?

Michael Morrissey

Yes. So I won't speak to our discussions with the agency. I will tell you that we are behaving -- we're running cohort 6 and the single-agent cohorts for the contribution of components in a way that is consistent with what the agency wants to see in a data set that could be considered for accelerated approval. Again, the fact that we're at 130-plus patients now in that primary efficacy cohort, and we're enrolling numerous single-agent cohorts to be able to really define the contribution of components, covers the basic nuts and bolts of what you need to move forward then. If the data is there in terms of activity and tolerability and safety, all those things that are critically important with a potential Subpart H filing.

So we're still on track for all that. Very pleased to see the progress, again, the team has done. It's a fantastic job of navigating all the challenges with the pandemic to be able to move this forward. And again, we're just going to be tracking patients and cleaning up data and moving that forward as appropriate. So very exciting times for us in that space. Obviously, we have a long history in metastatic CRPC. We've -- I think we've got really important insights into how cabo and atezo work together in this regard. And as you saw back at the ASCO GU earlier in the year, the level of interest in that data set and the implications for what that means for those patients and maybe the broader ideas around how cabo and ICIs interact in terms of building this immune permissive environment is very compelling. So we hope to capitalize on that further with cabo and certainly 092 as we go forward.

Jeff Hung

And for CONTACT-02 for prostate and CONTACT-01 for lung, I guess beyond statistical significance on the primary endpoints, what is the bar for OS in lung and PFS and OS in prostate?

Michael Morrissey

So yes, I mean, what's the bar for commercial success? It's a hard question to answer. Obviously, you need the p-values in place as the initial first step, better data wins today, right? And I think we've shown that with METEOR. We've shown that with CELESTIAL. We've shown that now with 9ER. Compelling survival data is very, very important in terms of being able to maximize the, I would say, the effectiveness of your commercial efforts. So obviously, we're very focused on that, and we're excited to be able to be in the position to answer some of those questions with these trials.

Jeff Hung

Great. For COSMIC-311, data from the first 100 patients are expected by year-end. What should investors look for in that data?

Michael Morrissey

The response rate. I mean we've got, again, compelling Phase Ib and Phase II data with single-agent cabo in differentiated thyroid cancer. Response rates vary between 40% to 50% in those different populations. And again, the whole goal behind 311 is that if we are able to recapitulate that data with the first 100 patients with good safety and tolerability, then that would be enough potentially to move forward with the Subpart H filing. So that's the plan. So it's a matter of just -- we've got 100 patients enrolled. They've been followed up now for quite some time. So that data is maturing nicely, and we've got to do all the work now to be able to get to the top line results.

Jeff Hung

Okay. And maybe on some of your earlier stage programs, can you talk about XL092 and what advantages they may have over cabo?

Michael Morrissey

Yes. So 092 is the next-gen cabo that we have invested, I think, some really important quality timing in terms of designing. Obviously, making it on scale, characterizing it very extensively, both preclinically and now clinically. I won't go into the details. We'll have a presentation on that at the Triple meeting in about a month, I'll save the data for that and the information for that. I get that question a lot. What I can tell you, and the way I've answered this question a lot in the past is that it will be very clear from the presentation why we did what we did, how we did what we did. And the data which supports the fact that we actually accomplished what we set out to accomplish.

So that will all put it into, I think, pretty clear context. And then from there, obviously, the challenge is to now do full development with the molecule because it's behaving as we hoped it would. It's behaving in a way that we're, I think, very excited about relative to how we can now maneuver with a better, if you will, next-gen cabo. And the future ahead of us is very exciting because our life cycle management plan can now focus and transition from cabo to 092. And we look at the white space involved in terms of how 092/ICI combinations can evolve, it's wide open for us, right? So it's very exciting. We'll start doing the first set of 092/ICI combinations shortly. And I think what you'll see involved is a very extensive, deep development program, covering numerous indications, numerous combinations, numerous lines of therapy that really address the unmet medical need of just improving upon single-agent ICIs by themselves.

Jeff Hung

And you've announced -- what you talked about earlier, you've announced collaborations with Catalent and NBE-Therapeutics, both are focused on ADCs. I guess how do those ADC technologies differ from each other and from Iconic? And then can you talk about your focus on ADCs? And are there other types of technologies that you find promising?

Michael Morrissey

Yes. I think I covered most of that before. Look, we have a suite of complementary but distinct binders, linkers and warheads that we can choose from and really mix and match relative to what the tumor biology of individual tumor types, individual target types, pathways as well as potential combinations calls for. So I really like this idea that we can do a la carte ordering in terms of what the biology calls for instead of what we've got. So -- and I expect we'll do more of these collaborations over time to be able to expand that offering even more so.

So we have maximum flexibility and really the ability to optimize single ADC for, what the biology calls for, the signaling calls, what the tumor calls for as opposed to kind of what we've got because that's all we got, okay? We're -- I think what you're seeing evolve is strategic investments, like I mentioned before, in our discovery platform that covers, with critical mass and critical focus and critical investments, key investments around small molecules, around biologics and around that intersection between the two. And that makes sense to me from a standpoint of how to maximize our chance of success, how to maximize the overlap and the synergy of our investments and how we can then move rapidly across the board in terms of discovery, translational medicine and then certainly into the clinical setting.

So it's all about speed and focus for us right now. We've learned a lot over the last decade. We've done a lot. We made a lot of mistakes, and that's just part of the process. But I think now is the time when we're really focused on targeted execution across the board in terms of different components of that process so that we can maximize our chance of success to minimize the time it takes to go from preclinical ideas, the clinical POC to a filing.

Jeff Hung

Great. Well, looks like we'll have to leave it there. Thanks so much for your time, Mike. Appreciate it.


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