Exelixis, Inc.'s (EXEL) CEO Mike Morrissey at BofA Global Healthcare Conference (Transcript) | EXEL Message Board Posts

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Msg  25471 of 26608  at  9/16/2020 11:42:16 PM  by


Exelixis, Inc.'s (EXEL) CEO Mike Morrissey at BofA Global Healthcare Conference (Transcript)


Exelixis, Inc. (NASDAQ:EXEL) BofA Global Healthcare Conference September 16, 2020 12:35 PM ET


Mike Morrissey - President, Chief Executive Officer


Jason Gerberry - Bank of America Merrill Lynch

Jason Gerberry

All right. Good afternoon, good evening everybody on the webcast. Thanks so much for joining us at the BofA Global Healthcare Conference. I am pleased to be introducing the next company presenter, Exelixis and CEO, Mike Morrissey.

Exelixis is a commercial stage oncology company with an expanding pipeline in the area of oncology. So a lot to talk about as it pertains to Exelixis' lead asset, CABOMETYX, but also the pipeline buildout and some behind the scene strategic efforts to help diversify the company away from CABOMETYX.

So first off, Mike, thanks for joining us today.

Mike Morrissey

Jason, great to see you again. I hope you are doing well.

Jason Gerberry

Doing great. So look, obviously, you have got an important weekend coming up on us. I am not going to belabor you with the questions about what do we expect, this and that. I think you said all you could really say on this topic. But look, as we think ahead to just the importance and just turning the CheckMate 9ER study into a commercial reality that helps grow CABOMETYX in the frontline renal setting. Can you just talk a little bit about when you would actually expect to start to see the benefit of the CABOMETYX IO combination in frontline RCC? How quickly can that really become something that physicians embrace? As we think about second half and then next year, you have got some moving parts with either COVID-19, lingering dynamics in the marketplace, maybe, maybe not and then just how quickly you think physicians ultimately will embrace the data you will publish in greater detail over the weekend?

Mike Morrissey

All right. Fantastic. Before I begin, let me remind you that I will 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 lots of questions packed into that one question.

So again, just as I kind of uber topline summary, we had data, topline results in April. The filings is in, in both U.S. and Europe. Big weekend ahead with ESMO. The presentation will be made Saturday morning, West Coast time by Dr. Toni Choueiri of Dana-Farber, who is one of the PIs for the study. And then, we will have a very exciting investor meeting about an hour afterwards that Susan Hubbard and her team have put together with some rock star KOLs in GU landscape. Toni will be there, Dan George from Duke, Rana McKay from San Diego and Monty Pal, who is our key PI for the 021 study who has some data on cabo/atezo in RCC at ESMO.

So we are cranking right now. Obviously it's an important time frame for us. We are really excited about finally being able to get the data out. And that's certainly critical for us. It's exciting data sets. Appreciate, you not probing into things I don't really talk about relative to the data. In terms of timing, look, we are, as we mentioned on the Q2 call, we would be launch ready and we are launch ready by the end of August. Very strong momentum inside the company around what this potential label could do for us.

Obviously, we are going to be compliant and not get out there beforehand and wait for the data to come in and the approval to happen. But we are really ready to go. We are working very, very efficiently inside the company to make sure that we have all of our messaging intact, all of our people trained on the data because it's something that we just need to be sprinting out of the block on day one, hour one, relative to the kind of benefit we think we can bring to patients broadly across this important indication and the importance, obviously, to our company relative to getting back in the first-line space, capturing as much market share as we can as quickly as we can, but making that a priority from literally hour one of day one.

So in terms of timing and those kinds of things, I wouldn't want to speculate too much on the details except to say that we have very strong data set here. You will see that over the weekend. We have a very strong team here. You have seen their performance over the last four or five years in terms of the RCC space, strong share of voice, which has always been the case with us. And we think we can put all those things together and maximize our chance of success going forward for sure.

Jason Gerberry

Got it. And so frontline, I think you mentioned 75% of frontline is getting some from on an IO combination, split between IO/IO or IO/TKI. And do you think that that relative split of the 75% between IO/IO and IO/TKI has somewhat hit a steady state? Do you think that as we see more IO/TKI combinations become available, we could see that dynamic shifts or change in any way? And then also that 75% rate, do you think there is room for that to creep upward towards more combinations? I know that there's obviously some issues around certain patients who might be contraindicated for an IO-based therapy. I have heard estimates ranging 10% to 15%. So just as you think about the underlying dynamics of the market that you launch this combination into, how you see that evolving?

Mike Morrissey

Yes. I think this is a market that has been somewhat static over the last several quarters. I think it has the opportunity to grow, based upon better data, right and new data that can change that dynamic in terms of market shares, in terms of duration of therapy, in terms of how that whole dynamic works in terms of how the revenue pie grows relative to what's a relatively stable population in terms of the Epi that has been well-known for a long time.

So again, it's all based on the data. It's all based on having that be understood. We are going to be very aggressive in how we compete here. We that and certainly the data, I think, will support this over the weekend, that the combination is appropriate for every eligible frontline patient. And our mindset is to educate, educate, educate, to make sure post-approval everybody understands the benefit this combination could bring to all patients.

And again, that will, I think, come up pretty clearly on the weekend presentations and investor meetings and those kinds of things. But to be very aggressive there, right. So we think we have got something special here and we are going to make the most of that relative to all the combinations, all the other different pieces that you will see this weekend. So, yes, stay tuned.

Jason Gerberry

Okay. One last question before I jump into label expansion and pipeline. But are there segments of the frontline RCC market, patient segments where you think IO/TKI specifically is under utilized?

Mike Morrissey

I think the debate amongst different phenotypes of prescribers is one that's based on, both empirical data set as well as a belief system, right. I think a lot of academic prescribers really have a therapeutic intent that their goal is to cure a patient. CR rates, long durable responses, all those kinds of things come into play with both IO/IO as well as IO/TKI combinations. The issue of how a community position might view that is fundamentally different.

And I think we have the data sets are data, right. I mean data's data, right? But I think we have the ability to help educate different segments of that with the same data somewhat differently and address their intent, their concerns. There may be knowledge gaps that exist in terms of what we can do here.

So I would like it back to the launch post the approval in the second line with METEOR, right. The consensus view was that, this is just another run-of-the-mill TKI, lots of competition, good luck, low expectations. So that was fine because I think that was a motivator for us. But I think the situation is very similar here.

We have got a great data set. We have got a great team. The motivation amongst us is extremely high to be able to maximize the value here for both patients and for the company. So we are going to get out of the block really hard, really fast and I am really excited about going to the next level here for sure.

Jason Gerberry

All right. Cool. I am looking forward to this weekend. Maybe shifting gears to the liver cancer program. And one thing that perhaps doesn't get talked a lot about is just, you have sort of a separate cohort looking specifically at the Chinese population which is important obviously in the context of liver cancer epidemiology, a huge proportion of the patients. Soc can you just talk about, if the data are positive, how we should think about your ability to access the Chinese market through your partner? How much further behind would a Chinese program be? And how quickly could NRDL listing based on your tracking of developments in the Chinese end market? Because it seems like the royalty stream for Ipsen could be a big part your value capture for the HCC opportunity.

Mike Morrissey

Yes, for sure. Yes, that's an important, I would say, untapped resource for us. Obviously, we haven't made a lot of progress there in the past and we are aligned with really both Ipsen and Roche, if feasible, if data is there, to be able to move quickly there. Ipsen has a strong team in China and certainly has a lot of interest that they share with us about being able to maneuver there quickly and effectively and we have added patients there and I think going through a lot of extra effort to maximize the potential impact of that in terms of helping patients there, but also moving the needle for a combined cabo efforts in China.

So Roche is a big player there as well. They certainly have traction already with bev/atezo globally based upon the IMbrave study and the question is how does this data compare to that and if things kind of swing in our direction based upon 312 data later next year, early next year, does that help thing in terms of how they might view this as well. So lots of moving pieces, obviously.

You are correct. We are getting the ex-U.S. licensing deals have been an important part of our financial story over the last couple of years. Ipsen has been very effective at both moving the needle in Europe in terms of their commercial efforts as well as basically paying us milestone checks which have been very important part for our story to be able to do some of these early stage deals and invest in discovery. So we have a very strong collaboration there. We are very aligned here in terms of, not only liver but also lung, also prostate, et cetera. So again, full steam ahead but certainly very excited about what the Chinese opportunity could bring for us in the frontline HCC space for sure.

Jason Gerberry

Got it. At this point, is it too early to say or is there any positive indications from the atezo/bev U.S. launch as it pertains to that frontline market transformation TBD or are you seeing pretty quick and early positive validation of maybe your hypotheses around HCC looking like RCC?

Mike Morrissey

Yes. I would say again, it was approved around ASCO, that combination. And kudos to our team, we have very detailed market surveillance across the board. So it looks like its uptake is really good. I would defer to Roche because this is a broad team effort here. No one company, no one compound, no one combination is going to make that move happen by themselves. But to have them be, I would say, the trailblazers in terms of the first move in that direction. And then, again, data pending, good data, competitive data, maybe better date, we will see. That would be a great way to follow in that momentum as we are looking to move more and more patients globally towards medical oncology with better combinations versus what there is. But early on, we are very encouraged, for sure, yes.

Jason Gerberry

Okay. Now, there as a slight delay, I guess, in topline readout or the interim readout for OS for the COSMIC-313 study. I am just curious, from your perspective, we have seen with sorafenib, OS has improved in the last decade in trials. So I am curious, were you surprised at all as it came to event accrual, as we think about that and to the extent that that poses any risk in terms of showing a benefit relative to a comparator arm versus what you were kind of assuming in your statistical plan?

Mike Morrissey

Yes. So I would say, certainly the control arm over time, I would say the last several studies have been, I think, fairly consistent in terms of what you are seeing with sorafenib OS. And it's pretty easy to triangulate backwards as papers are published and you can see event, both event rates and distributions in various publications and presentations. So again, this is a blinded study. We don't anything but the total event rate. So hard to speculate. Wouldn't want to speculate on what any kind of delay or a slower rate might mean. But again, we just played this general game with 9ER. Our level of confidence is running extremely high right now relative to the similarities.


It's a relatively simple process. Very, I would say, straightforward around how we conduct the study. We are very pleased that even in the middle of a pandemic, the overall enrollment was more or less on track and actually ahead of schedule from what we initially thought back when the study was started. So it just really reinforces the idea of the momentum that we have got here with the combination, the momentum and the indication in terms of better therapies can really move the needle for patients. So we have take our time, do it right to make sure that we have dotted all the I's and crossed all the T's. But again a lot of experience here, a lot of confidence here relative to where we can go. So stay tuned.

Jason Gerberry

Okay. Well, on COSMIC-021, obviously, next year is an important year. We presumably will get our final update on CRPC and regulatory path forward and presumably I would assume get full lung data in its final complete form. Is that how investors should be thinking about the next sequence of updates there? From our conversations, it sounds like no more incremental updates, more or less, final data from here forward. Is that a fair assumption?

Mike Morrissey

Yes. I don't want to be committing one way or the other. It certainly is something that we get questioned a lot about. And my answer consistently is, the priority for us is to get the data, get the follow-up that we need to be able to do go, no-gos and then move forward from a regulatory point of view or in the case of cohort 7 with lung, potentially add more patients to cohort 7 and the single agent cohort if we think that's the important next steps.

So we have 2020, as we talked about back in January, was the time for us to basically get data out, put a stake in the ground for liver, for prostate, for bladder, for lung that help people understand data with very strict response assessment criteria. Tolerability of 40 milligram dose in combination with various IOs and then focus on what's a critical path for which is moving things, moving trials forward, moving potential filings forward, et cetera that would allow us to meet our goals in terms of helping more patients and driving revenue growth.

So what happens in the future? Again, I don't want to speculate either way. But in terms of presentations and publications, our focus, my focus is trials reading out, filings and approvals. That's what's going to move the needle for us.

Jason Gerberry

Yes. It sounds like you haven't slammed the door on the idea of potentially upsizing the lung cohort to potentially have at least the optionality that upsizing that would give you vis--vis the regulatory situation. Is that a fair statement?

Mike Morrissey

Well, what I think we said consistently is that we want to see the full data set from the 80 patients in cohort 7 and the 30-plus patients in the single agent Cabo cohort to understand with longer term follow-up, how that looks and then basically ask the question, is there a potential regulatory path here? Do we need to add more patients, et cetera. So very consistent, nothing has changed since we talked a month ago or two months ago. Again, we need more data, we need more follow-up time to make that decision.

Jason Gerberry

Got it. And I guess ultimately, I don't know if you would agree with this statement but single arm or I guess a Phase 1/2 data, given that there is already a couple of Phase 3 IO/TKIs ongoing. You guys as well have your study ongoing. Practically speaking, to really make inroads into this market, it would seem like a positive Phase 3 is sort of prerequisite to that. But I don't know if you agree with that comment.

Mike Morrissey

I think it's a statement of the obvious. Positive Phase 3s are always a good thing to have, right. The question is. is your early data compelling enough to be able to make that available to patients earlier, right. And there have been 55-plus Subpart H approvals over the last five years that were all then supported in some shape, manner or form by a confirmatory pivotal trial. So it's not a matter of either/or. It's just a matter of timing and the corners here. We never do that. Patient benefit is our number one, number two, number three priority always. That being said, if there is compelling data and the unmet medical need is high and we have options that we think are worth pursuing from a regulatory point of view, I think we have a responsibility to do that. And I think we have done that very well over the last five, 10 years and that will continue going forward.

Jason Gerberry

Got it. And more broadly, can you talk a little bit, I know that there's been increasing evidence that perhaps although synergistic with IO, I think there is also this idea that perhaps starting with the 40 milligram starting dose, lowering the discontinuation rates that you might ultimately be seeing a benefit across your studies with a 40 milligram starting dose. So can you talk about those two kind of ideas? And how do you think that the change in the starting dose strategy is potentially helping you?

Mike Morrissey

So, yes. I mean it's a really important part of our story. I mean obviously this has been evolving for years for us. Again, another statement of the obvious, it's hard to find the right dose for chronic therapy until you can do that really dose range finding work in a sensitive population. And that's further complicated when you are thinking about single agents versus combination approach. So we have certainly had our challenges there over the years. We started the at the MTC labels at 140. And we are now working at a 40 milligram level in 9ER and all these ICI combinations. So we have learned a lot. We have done a lot of work to be able to really not only fine tune and refine how we look at dosing, but then make that a big part of the story as we go forward.

For us, the issue is and for everybody, right. It's a matter of, it's the classic MTD determination, maximum tolerated dose, by standard criteria versus long term chronic dosing where you dose of patience for months or even years and might that be different, right. So we have a lot of success here and going forward. 40 milligram dose has single agent activity by itself and we have seen that. It's a dose, say, when you start at 60, most patients that will end up at anyway if their on the study long enough.

So starting at 40 made a lot of sense to us and some of the earlier work we have presented this year in prostate and lung and bladder, liver, I think, gave people hints of that efficacy and that balance of efficacy and tolerability, if you look at some of the discounted rates in those presentations. But we are certainly very gratified to see the results of 9ER, right where large global pivotal trial starting at 40 gave pretty compelling efficacy, right. It has a ratio of 0.5 against what was standard of care which is an outstanding result for PFS survival advantage with really notable tolerability that you will see cut numerous different ways over the weekend.

So I don't want to preempt that but I think it's a big part of the story and gives us more confidence that we have got the right dose for 312, for 313, for the CONTACTs as we go forward because honestly it's all about keeping patients on the drug on the combination. We wouldn't have a hazard ratio of 0.51 in 9ER if patients couldn't tolerate the drug, right. Just, it's a no-brainer. So we are excited about that. The KOLs that we have talked to have, I think, mirrored that excitement and are really pleased with the idea that now it's documented and it really changes the narrative around what cabo can do at the right dose in the setting in this combination.

Jason Gerberry

Yes. Okay. Now you guys obviously announced or it was announced that you will be updating the investor community on XL092 at the Triple meeting in October. So in the past, I think you have said or your team has said that there will be at a substantial update and it would be second half. So I assume that this is the substantial update. So anything more you can really say? I think the investment community is wondering, is this more or less a play on improving the toxicity profile of established TKIs? If we look at the treatment cohorts in clintrials.gov, it looks like it's pretty similar populations where we know cabo works. So more or less curious if you can talk a little bit more openly about that? And what we can expect with that update?

Mike Morrissey

Yes. You are correct. The title for the presentation for the Triple meeting is up now. It is what it is. I don't want to go beyond that. I think the title is fairly descriptive of what will be in the presentation. As we have said numerous times, the goal of the presentation is to basically tell you what we tried to do, show you how we did it and to provide data which supports that we actually accomplished what we set out to do. So I don't want to go into more details around that except to say that we think we have a better next gen cabo in 092.

We will be pretty aggressively transferring our efforts from doing cabo related pivotal trials to 092 related pivotal trials in the near term with all the learnings from cabo and from the cabo combinations, all the data we have, say, from 021 and all the ISTs, the 100-plus ISTs that we are running, to be able to look at really the ICI white space across tumor types, across combinations, across current and future combinations and indications and really ask some very important questions very aggressively around, can a compound like 092 improve the activity of those different ICI based approaches. So it's an exciting time for us because again with the momentum we have got with cabo, with the understanding we have got of how we can improve that with a molecule that, I think, is behaving as we expected or designed in the clinic, we can go forward pretty aggressively now.

Jason Gerberry

Given your registration strategies in, say, lung, prostate or with ICIs and cabo, does that mean that you would potentially pursue sort of redundant, if you will, ICI/092 combinations? Or it's more about planned future combinations either in those areas or in different tumor settings? I just wanted to clarify that because it does look like a lot of your planned registration trials with key ICI combos are with cabo.

Mike Morrissey

Well, that's the current wave. And I wouldn't confuse the current wave with the next wave or two that we could do and that we envision doing in terms of a broad lifecycle management and indication expansion and combination expansion with 092. So again, I would really focus people on thinking about 092 as filling the white space, the large white space that exists outside of cabo in terms of potential ICI combinations across different lines of therapies, across different indications. It doesn't mean we can't go into current indications, right, in terms of what's -- there's plenty of additional work we can do in renal, in prostate, in lung, in liver, et cetera.

But doing kind of redundant head-to-head trials with cabo doesn't make a lot of sense to me in terms of the opportunity costs and the time that would be spent doing that when there's so much other work that we can do that's wide open to us right now. So I can see certainly a time when we have the opportunity to both be successful with both cabo and 092 as opposed to having 092 replace cabo. I would rather expand the universe of impact than just kind of refocus, double down on what we have got already.

Jason Gerberry

Great. And sticking with earlier states pipeline, you have the update this week with the Iconic partnership. And I am curious, assuming there's a press release comment that once in and around the time of IND, you have then the decision to opt in. So curious, to what extent can you comment on next steps? And then really, in terms of what attracted you to the asset? It sounds like this is something where you feel like there's an opportunity to optimize the safety profile with the comments around the coagulation cascade. And so I was just thinking about, as you think about the opportunity set that we understand with Seattle Genetic in cervical cancer, I assume that you guys can just be a me-better from a comment that I heard maybe from a recent conference. So any color you can provide on those fronts would be greatly appreciated.

Mike Morrissey

Yes, for sure. So we are excited to move into the EDC space. Obviously there's been a lot of news flow there over the last week or so. We have seen this as an area that we could invest in for years now. The ICON-2 asset is the first mover for us. Again, I think as I mentioned maybe on a call yesterday, it's a me-better opportunity. Certainly, there's lots of validation around tissue factor as a target for EDC binders. We like their approach in terms of having an asset that binds in a non-competitive fashion without Factor VII. They have got data which I think is pretty compelling that they have got a potentially better linker or warhead. So again, it's all based on preclinical data.

The fun starts when you get into the clinic obviously. But we like that overall approach in terms of good insight into the biology, better binder, potentially better warhead linker approach. So you talk about tolerability, toxicity and I would say that's related to dose as well. Can you see better efficacy if you can does higher because you have been able to optimize the various components? So we will see. But certainly with that deal with the NBE deal and Catalent deal that we announced last week and others that we are contemplating going forward, this is an important area for us.

So we have consistently, in our EXEL 1.0, we were big believers in having critical mass of people and technologies and platforms that would allow us to move in a very decisive, exhaustive manner. And I think what we did with Kinesis back in the day, we are looking to do with getting more small molecules now as we build up our internal collaborative efforts. But certainly invest heavily and in a very diligent and deliberate fashion with these biologic approaches.

We have a very strong collaboration with Invenra to find novel binders. We have got an opportunity. If you look at just our current collaborations in the ADC front to be able to mix and match and merge and purge binders from Invenra and our biology insights into the linkers and warheads with these collaborations. So all-in-all, I think it's a great way to go. We are not limited by what we have got in-house. We are limited by our breadth of biological insights which I think it's safe to say is pretty deep. And then this a la carte menu where we can pick and choose based upon what the tumor biology calls for. So I am excited about that.

We have drug discovery and development in our blood. We took a little detour for a while to kind of fix, kind of right the ship, get the company on track, fix our financials and establish ourselves vertically as a strong commercial organization. But the cash flows we have got and the cash balance we have got, no debt, we invest a lot here. So we are excited about that with the goal of aspirationally having a multi product offerings that can drive revenue growth for years to come. So it's a pretty simple game. It's not all about execution. And we have got the team and the momentum and the financials to be able to do that.

Jason Gerberry

Well, that's a good segue for the last couple of minutes here in terms of my questions in capital allocation and general strategic positioning of the company. So as you moved away from drug discovery, focused on cabo, what are the expectations in the medium term for driving profit growth versus maybe investing more aggressively in R&D for the company for this pipeline buildout that with three INDs, these are probably programs that you will start to prepare more of the cost on your own as opposed to just model with cabo when you get to share that spend with your partners and that has a P&L sparing impact. So can you talk about those competing interest in driving profit growth versus aggressively investing in R&D? And maybe just from a sequencing perspective maybe some of the cabo related spend kind of steps down in the next few years and there's a natural shifts to these newer programs and so we are at a decent level for R&D to think about in the more medium term?

Mike Morrissey

Yes. There is a lot packed in there. At a high level, I can say that our number one priority is driving revenue growth, right. We feel like we have got pretty good traction there with cabo in the short to mid term. We articulated aspirationally what success could look like in the out years if we achieve our goals around existing efforts, pivotal trials, et cetera. So doing some simple back of the envelope, modeling DCFs, I think it underscores that if we are successful in meeting those goals, we have a very strong opportunity to grow revenues, generate free cash, reinvest that free cash in the business.

Quarter-to-quarter, I can't predict, I wouldn't want to predict to give guidance on how that's going to look. But we have always said that we will invest more as we generate more cash. And I think that's part of the reason why 9ER launch in the first line setting is so important in RCC because the more cash we generate, the more we can invest, the faster we can invest, we can be more aggressive in our 092 efforts so we can be more aggressive with new programs, whether they be three or four INDs that are kind of first in line or the next wave that's coming in 2021 and beyond.

So profitability is critically important. You can't often see that within mid stage biotech companies. We have been, I think, the outlier there. It's important to us for all the obvious reasons I like having free cash to be able to deploy effectively. I think we have been very good stewards of shareholders' money as well as very disciplined in our approach in terms of how we have operated the company in terms of operating expenses, BD, et cetera. So that will continue but we need to make the appropriate investments internally through collaborations maybe through M&A that makes sense, that gives us the highest chance of success as we go forward.

We are comfortable with clinical risk in terms of how that works. We understand that game I think really, really well and we will continue to make those bets based upon what we think makes sense based upon existing data and the biology. We are not comfortable taking a lot of commercial risk. And I think that's been one of the differentiators for us in terms of, you have seen small deals, big deals kind of blow up where the biology has really worked out for these nano niche populations and they just don't deliver the kind of revenue that's warranted based upon the value of those transactions.

So we will be, again, very, very careful about that as we go forward because we think that's what differentiates us in terms of how we want to maneuver the business to capitalize on success to make sure that what we are doing clinically correlates within our ability to monetize that going forward.

Jason Gerberry

All right. Great. Well, Mike thanks so much for sharing some time with us in articulating the story. And we are up against our time. But I really appreciate your time and looking forward to this weekend and the updates.

Mike Morrissey

All right. I will see you on Saturday, man. Take it easy.

Question-and-Answer Session

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