Exelixis, Inc.

Good day, ladies and gentlemen, and welcome to the Exalexis First Quarter 2021 Financial Results Conference Call. My name is Daphne, and I'll be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host for today, Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please proceed.

Thank you, Daphne, and thank you all for joining us for the Exelixis First Quarter 2021 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO, Chris Center, our Chief Financial Officer, TJ Haley, our Executive Vice President of Commercial, and Gisa Schwab, our Chief Medical Officer, who together will review our corporate, financial, commercial, and development progress for the first quarter 2021, ended March 31, 2021. Peter Lamb, our Chief Scientific Officer, is also here and will join us for the question and answer session following our prepared remarks. During the call today, we will refer to financial measures not calculated according to generally accepted accounting principles. Please refer to today's press release, which is posted on our website, for an explanation of our reasons for using such non-GAAP measures, as well as tables deriving these measures from our GAAP results. During the course of this presentation, we will be making forward-looking statements regarding future events and the future performance of the company. This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial, and strategic matters. Actual events or results could, of course, differ materially. We refer you to the documents we file from time to time with the SEC, which under the heading Risk Factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitation, risks and uncertainties related to product commercial success, market competition, regulatory review and approval processes, conducting clinical trials, compliance with applicable regulatory requirements, our dependence on collaboration partners, and the level of cost associated with discovery, product development, business development, and commercialization activities. And with that, I will turn the call over to Mike.

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. XOX has started 2021 with a strong first quarter, where we saw significant revenue growth from the Cabo Nevo first-line RCC launch and posted our highest quarterly net product revenue since the initial Cabo Medics approval in 2016. Please see our press release that was issued an hour ago, for our first quarter financial results and an extensive list of key corporate accomplishments. We'll keep today's prepared remarks short so we can get to your important questions. Obviously, we're thrilled with the early performance of the Cabo Nebo launch in Firstline RCC, which we believe reflects the strength and breadth of the efficacy, tolerability, and quality of life data from the Checkmate 9ER trial. We continue to build momentum with a combined 35% growth in revenue over the last two quarters, and anticipate a near doubling of CABO RCC revenues by the end of 2022 when we expect to exit with a $1.5 billion annualized run rate in the U.S. if our launch assumptions and trajectory continue on its current course. Also in the first quarter, we advanced key 2021 discovery, development, and regulatory activities. We remain on track to report top-line results for the CABO ATEZO double it in first-line HCC from COSMIC 312 and in metastatic CRPC from COSMIC 021 cohort 6, and expect to file up to three new SMDAs for CAVO across these indications, pending positive results, along with the filing for COSMIC 311. Our early clinical pipeline also advanced nicely in the quarter, with significant progress in the XL092 program, the initiation of the Phase I clinical trial of XL102, our novel CDK7 inhibitor, and the IND filing for XB002, which was accepted by the FDA in April. Our discovery and preclinical teams continue to make important progress towards the optimization and characterization of new development candidates for both small molecule and ADC programs, which we believe will provide the foundation for new clinical candidates in the near future. I'll close here by saying that the Exalexis team has hit the ground running in 2021 and is building on the urgency and focus from our recent progress to maximize our chance for success across the range of milestones ahead of us. I'm incredibly proud to say that we're coming out of COVID stronger than ever as we drive our business forward to help cancer patients live longer and recover stronger. So with that, I'll turn the call over to Chris, who will provide an update on our first quarter 2021 financial results. Chris?

Thanks, Mike. For the first quarter of 2021, the company reported total revenues of $270.2 million. Total revenues for the quarter included Cabo Zante to franchise net product revenues of $227.2 million. Net product revenues in the first quarter of 2021 were impacted by higher demand for Cabo Medics and a decrease in wholesaler inventories. CaboMedic's wholesaler inventory decreased by approximately 300 units, and when combined with the higher demand, resulted in a decrease in our inventory weeks on hand from approximately 3.1 weeks on hand in the fourth quarter of 2020 to approximately 2.3 weeks on hand in the first quarter of 2021. Total revenues also included $43 million in collaboration revenues from Ipsen, Takeda, and Genentech. Our total operating expenses for the first quarter of 2021 were $274.8 million compared to $245.8 million in the fourth quarter of 2020. SG&A expense was the primary driver of the increase in total operating expenses, which was primarily employee-related expenses, including an increase in stock-based compensation expense. Also impacting our total operating expenses for the first quarter of 2021 was approximately $24 million in licensing, upfront, and milestone fees. Benefit from income taxes for the first quarter of 2021 was $3.6 million compared to a benefit of $300,000 in the fourth quarter of 2020. The company reported gap net income of $1.6 million, or zero cents per share, on a fully diluted basis for the first quarter of 2021. The company also reported non-gap net income of $28.5 million, or nine cents per share, on a fully diluted basis. Non-GAAP net income excludes the impact of approximately $26.9 million of stock-based compensation expense net of the related income tax effect. Cash and investments for the quarter ended March 31, 2021, was approximately $1.6 billion. And finally, turning to our financial guidance for the full year 2021, we are maintaining the financial guidance that we provided earlier this year. And with that, I'll turn the call over to PJ.

Thank you, Chris. Today, I will discuss the CaboMedics business with regards to Q1 2021, particularly in the context of the first approval for CaboMedics in combination with an immune checkpoint inhibitor. As you know, on January 22nd, CaboMedics received FDA approval for use in first-line RCC in combination with nivolumab. The team was fully prepared to hit the ground sprinting, and we were pleased with the execution of the launch which is resulting in rapid and importantly broad uptake of CaboMedix. CaboMedix was the only TKI in Q1 among the CaboMedix in LIDA, SUTEN, and Votrien, or CISV market basket, to grow NRX market share, increasing from 32% in Q4 to 36%, according to Acuvia data. Importantly, CaboMedix NRX volume grew 31% Q1 2021 over Q4 2020, driven primarily by uptake of the combination of CABO and NEVO in the first-line setting. Additionally, CABOmedics TRX volume increased by 21% in Q1 relative to Q4 of 2020. We are also pleased adoption was broad across a number of key segments with strong uptake in favorable, intermediate, and poor clinical risk groups as the 9ER data is resonating with physicians broadly as they think about patients who are appropriate for the regimen. Our market research shows that CaboMedix in combination with NEVO is taking share from all first-line competitors already at this early stage of the launch. Beyond these initial metrics, we won't be providing other details for competitive reasons, specifically market share by line of therapy, which I am sure you can appreciate. Uptake in the academic segment has been rapid, and we are seeing strong adoption in the community setting as well. We believe there is significant opportunity for continued growth in new patient market share, particularly in the community setting. Recently, we have begun to see many community accounts begin to reopen access to industry representatives given improving trends in the pandemic. While this is variable depending on the account and geography, Our belief is that this will continue to improve facilitation of education and discussions of the 90-yard data, which prescribers find compelling and important for their patients with RCC who have yet to receive a therapy. This trend, coupled with our comprehensive launch plan for execution of both virtual and in-person tactics, should continue to drive new patient market share in the community setting. In addition to the broad uptake of CaboMedx plus NEVO in the marketplace, perceptions of the 9ER data have been very positive. There has been a rapid increase in unaided awareness of the approval of this combination, as well as favorable impressions of the efficacy of the combination based on the endpoints of OS, PFS, and ORR across key subgroups, including IMDC risk categories. Importantly, the safety profile with a combination driven by the optimized CABO combination starting dose of 40 milligrams daily is viewed favorably by prescribers and is improving the overall perceptions of safety and tolerability of CABO medics. Physicians also view the quality of life benefit demonstrated in 9ER as differentiating and important for their patients who may be on first-line therapy for extended lengths of time. The Exelixis team is continuing strong and focused execution on the launch. These efforts are aided by the recently published Cabozantinib data at ASCO-GU, including a presentation focused on quality of life. Furthermore, the publication of 9ER in the New England Journal of Medicine on March 3rd, and the recent update of the NCCN guidelines on April 21st, which positioned Cabozantinib plus nivolumab as the only FDA-approved, preferred, Category 1 regimen across all clinical risk groups should continue to support the broad uptake of the combination. The strong Q1 performance and CaboMedix launch trajectory position the CaboZantative franchise to continue significant revenue growth in 2021 and beyond. We're thrilled with the opportunity that 9ER provides Exelixis looking forward as we continue to build upon the foundation in RCC where CaboMedix is the number one prescribed TKI. Beyond 9ER, we're already working on plans to optimize potential future access of the cabozantinib development program as it moves forward broadly across multiple indications and with different combination partners. We look forward to building on this momentum in RCC, HCC, DTC, and other potential future indications such as prostate and lung as our development program evaluating CABA in combination with immune checkpoint inhibitors advances. Our team remains highly focused and motivated to compete every day to bring the benefit of CaboMedix to all eligible patients as we continue to build the franchise and maximize its clinical and commercial potential. And with that, I will turn the call over to Gisela.

Thank you, PJ. I'm pleased to provide an update on the development programs. 2021 is certainly off to a great start for our Cabozantinib regulatory and development program. as well as for our growing clinical pipeline programs, including XL092, XL102, and XB002. Starting with the cabozantinib regulatory progress. After our January 2021 approval by FDA for the cabozantinib and nivolumab combination for the first-line treatment of patients with advanced RCC, the combination achieved a positive CHMP opinion in the EU in February. And quickly thereafter, in late March, the European Commission approved the combination for the first-line treatment of RCC patients in the EU. After having reported exciting presentations in advanced RCC at ASCO-GU for cabozantinib in combination with nivolumab from Checkmate 9ER, as well as single-agent cabozantinib results, including from the PrEP-Base study, We are now looking forward to the upcoming ASCO conference with further data presentations based on the TECNIC-9ER study and also single-agent results from CROSMIX 3.11, our Phase III trial in differentiated thyroid cancer. Turning to an update on our ongoing program for cabozantinib. We have continued our execution of the COSMIC 021, 311, 312, and 313 studies and are on track for milestones on these trials as previously shared, including three potential new Kabuzan-Chenep S-NDA filings. I'll provide a brief summary on key highlights for the program. For COSMIC 311 in radioiodine refractory DTC patients who have received prior VEGFR targeted therapy, we are working towards an SNDA submission based on the strong results in a patient population with unmet medical needs. As announced previously, the trial met its primary endpoint of progression-free survival with cabozantinib highly significantly improving a progression-free survival versus placebo and FDA granted a breakthrough therapy designation for the indication during the quarter. Based on these results, we are focused on an SMDA filing that we expect to complete in the second quarter. COSMIC 312, our phase three trial of cabozantinib plus atezolizumab versus serafilib for the first-line treatment of advanced HCC, completed accrual in the global study in mid-2020. And we anticipate top line results of the event-driven PFS analysis and the concurrent interim analysis for overall survival in the second quarter of 2021. And if warranted by the data and results, we are expecting to file an SNDA in the fourth quarter of 2021. For COSMIC-021, we look forward to the final analysis for objective response rate by the Independent Radiology Committee of Cohort 6 in metastatic CRPC in mid-2021 and plan for regulatory submission of the results data providing. Lastly, for COSMIC-313, comparing the triplet of cabozantinib, nivolumab, and ipilimumab versus nivolumab and ipilimumab in first-line RCC patients with intermediate or poor risk per IMDC. We completed a patient enrollment in late March. And we are now looking forward to top-line results of the event-driven analyses for the study in 2022. For the ongoing contact to Phase III program under our collaboration with Roche, We are actively enrolling patients globally across all three Phase III trials in checkpoint inhibitor pretreated non-small cell lung cancer and RCC patients and in novel hormonal therapy pretreated CRPC patients. So in summary, the Cabozantinib program continues to make significant progress, and we remain on track for data readouts in the next couple of months as well as data providing potential supplemental NDA findings. I'll now turn to the progress on our XL092 program and our new IND of Phase 1 programs for XL102 and XB002. First, XL092, our next-generation MEG, AXL, MER, and MEGFR tyrosine kinase inhibitor with a shorter pharmacokinetic half-life, is advancing in Phase 1, and we are in the midst of evaluating the combination with atezolizumab in a parallel Phase 1b part of the study. Importantly, we have recently entered into a clinical collaboration agreement with Merck KGAA, under which we will evaluate Xl092 in combination with Avaliumab in various urothelial cancer cohorts, including in the maintenance setting after prior first-line platinum-containing chemotherapy, as well as in the second-line setting in patients who have failed prior checkpoint inhibitor-containing therapy. And further, we are actively discussing additional combination approaches with various checkpoint inhibitors and agents targeting novel mechanisms preclinically and clinically. to continue to define opportunities for this important development program. We have a deep and solid foundation in tyrosine kinase inhibitors and extensive experience with cabozantinib and see many opportunities to build on and expand on the therapeutic settings as we plan for potential tumor indications and lines of therapy for XL092 combinations. Given this extensive experience, we view the XLO9-2 development risk profile as potentially being greatly improved versus more typical early stage programs. So with that, we are driving our XLO9-2 development plan forward that includes a broad and comprehensive program across various tumor indications, lines of therapy, and settings of broad therapeutic interest. We intend to pursue the comprehensive evaluation of XL-092 in combination with various established checkpoint inhibitors and potential new combinations, including promising new checkpoint inhibitor doublets, as well as other combination partners. With the goal to potentially start late-stage pivotal trials as soon as 2021, we are focusing on advancing our Phase 1b dose ranging in combination with checkpoint inhibitors rapidly to move into expansion cohorts that may support data-driven late-stage development options across a variety of tumor types. And secondly, we are excited to report progress with our latest IND candidates in 2021. For XL102, our oral CDK7 inhibitor, We have already started the phase one trial and the cohort dose escalation phase is ongoing. And also, we have recently announced FDA's acceptance of the XP002 IND for our first biologic product candidate. XP002, an antibody drug conjugate or ADC targeting tissue factor, has been rationally designed such that the binding site of the antibody does not interfere with the coagulation cascade. Based on this design and the available preclinical profile, we believe that XP002 may have the potential for a best-in-class ADC targeting tissue factor. We're looking forward to progress on the Phase I studies for both compounds. The trials have been designed as efficient dose escalation trials with disease-specific expansion cords to allow for early assessment of initial antitumor activity. And I look forward to updating you on progress on our clinical pipeline in the future. And with that, I'll hand the call back to Mike.

All right. Thanks, Gisela. As you heard on the call today, we're off to a great start in 2021. Just last week, we marked the fifth anniversary of the first regulatory approval and launch of ComboMedix in the U.S., That milestone, based on best-in-class data for Cabo in the Phase III Meteor Trial in Second Line RCC, set ExoLexus on the path to becoming the company it is today. Over the last five years, we've expanded the opportunity for Cabo Xanthinib to treat patients with thyroid, renal, and liver cancer, and have helped tens of thousands of patients in the U.S. in a similar number globally with our partners Ipsen and Cicada. We're so excited about the potential of our work, including the ongoing Cabozantin at typical trials, the growing clinical development program for XL092, and our diverse and rapidly maturing early stage pipeline as we advance in our mission to help cancer patients live longer and recover stronger. I'll close today by thanking everyone at ExoLexus for their efforts in the first quarter and their individual and collective commitment, dedication, and resilience under what were obviously extremely challenging conditions during COVID. As I mentioned in my intro, we're exiting a global pandemic stronger than when it started 14 months ago, and that's a true testament to the quality of the people we have working day in and day out as we discover, develop, and commercialize the next generation of our medicines for cancer patients in need of better and more effective therapies. We look forward to updating you on our progress in the future, and thank you for your continued support and interest in Exalexis. We're happy to now open the call for questions, and Daphne, please proceed.

Thank you. At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Astika Gunwaranding with Truist Securities. Please proceed.

Hi, guys, and definitely thanks for getting my name almost right there. Hi, guys, good to speak to you again, and congrats on the quarter and the strong cargo rebound that we saw. TJ, I was wondering, I know you don't want to give too much detail, but I was wondering if you could maybe share with us which of the first-line competitors you feel like Carbon Evo maybe gained more share than some of the others. And then I got a couple of questions for Kifla.

Yeah, thanks for the question, Astika. And, yeah, we're extremely pleased with the beginnings of the launch. You know, what I guess I'll say is, as I mentioned in my prepared remarks, extremely pleased with the rapid, broad uptake across not only competitive segments, but clinical risk categories, favorable, intermediate, poor, academic, and community. So I won't go into a lot more detail with respect to that and the numbers, but what I will say is as we look at the quarter, We were approved, as I mentioned, in late January. So we basically had two full months on the market, February and March. And if we look at our new patient market share in those two months, we're very pleased that we see a market share in the mid-teens at that point and, you know, vectoring in a good direction exiting the quarter. So we're very pleased with that.

Great. Gisela, I was thinking about this. Tisodimab vidotin is already in the clinic for some of the tumor types that you have outlined in your plan for XP002, but not all of them. Could you tell us, based on tissue factor expression and the higher dosing that you can push with XP002, where do you think you might have an edge over tisodimab? Thanks.

Sure. Thank you for the question. And I think, as I mentioned, we see opportunity for XPO2 and its rational design in that the antibody does not bind in a way that it would interfere with the coagulation cascade, which should hopefully transfer into a favorable safety profile, number one. Number two, tissue factor is pretty broadly expressed. and we intend to evaluate the compound across a variety of tumor types, assessing, of course, expression profiles in the patient population and drive the program forward accordingly as we collect clinical data. So I think we have a broad opportunity and intend to pursue it aggressively.

Hey, Astika, maybe Peter could provide some color commentary here, too.

Yeah, just to add on to what Gisela said, in addition to the novel epitope for the antibody, which has the advantages she outlined, it does contain a next-generation warhead linker construct, which we believe has some advantages over the first-generation constructs. This is one that Zymworks has advanced and developed. And then from a Expression point of view, as Gisela said, tissue factor is fairly broadly expressed. Obviously, we have clinical proof of concept, or there is clinical proof of concept with cervical cancer. But beyond that, we actually presented, or ICONIC presented preclinical data late last year in pancreatic, I think head and neck, gastric cancer, and there were several other solid tumors that we haven't explored preclinically yet. So the opportunity is broad.

Great. Thanks for that, guys.

Your next question comes from the line of Jason with Bank of America.

Hey, guys. Thanks for taking my question. One, just a housekeeping. So when you do update COSMIC 312, I'm wondering if we're actually going to get hazard ratios like we did with the 9ER update. I believe with 9ER there was an issue of materiality and a need to disclose that because it was so important to the business, whereas I wonder with HCC if that's the same situation. And then second question, just on the second paragraph four challenge to Cabo from Teva, it looks like they're certifying on some of the later expiring patents around formulation and method of use. These aren't patents that are being disputed in the MSN case. So just wondering if the reason why is because you chose not to enforce those patents or And the reason I ask is it seems like more IP is getting added to the MSN case. And so just wondering, because it seems like the street's assuming that this product is going to go off of the cliff in 2026. Thanks.

Yeah, thanks for the questions. It's Mike. I'll try to address both of them. So on the first question about the COSMIC 312 data, press release when that finally hits top-line results. Again, our practice is to normally put in some level of data, and I wouldn't want to speculate on what that would be today, but some level of data to provide a framework for the relative activity because it's so material to us. I would argue that 312 is probably as important as a as 9ER is relative to the size of that market and the opportunity there in terms of a relatively nascent opportunity compared to where renal is currently. So, you know, we'll certainly, I think, continue that practice. The details will be defined when we get that data and understand what we've got. Okay? In terms of the... The second ANDA from Teva, I think you covered all the facts pretty well. So, you know, again, as we mentioned in our filings and our press release, that second ANDA came in recently, the paragraph four letter. Again, they're only challenging three Orange Book listed patents that expire in 2031 or later. So this is relatively new news to us. So I certainly wouldn't want to speculate on what they're thinking or what they're doing or how we're thinking about it ourselves or how we might proceed. It's something that we're certainly not surprised by in any shape, manner, or form. As we've said before, we expect these types of challenges to come in when you've got great compounds with great data and certainly growing revenues. We have strong data, strong IP, and it's really great team who are pursuing this very, very aggressively, and we have every intention to continue to defend our patent estate vigorously through all the legal channels that we've got, and we will provide updates as necessary. All right, thank you.

Thanks, Jason.

Your next question comes from the line of Akash Towari with Wolf Research.

Hi, this is Amy Leon for Akash. Thanks so much for taking our questions. So the first question on RCC, it seems like your current guide is baking in around 13 months of durability on treatment. Do you see any sort of upside to this number? Could TFS get better with longer follow-up? And how will COSMIC 313 impact this? And then I have another one in HCC.

Yeah. Hi, Amy. This is PJ. Thanks for the question. You know, I won't comment, you know, specifically on how we are, you know, thinking about modeling duration, but I think if you look at the PFS in the study, you know, it's certainly very strong in patients in these clinical studies of the combinations, and certainly the NIDR study are on therapy for, you know, a year and a half or potentially longer. And I think it's important to remember that, you know, the data as these studies mature and get presented, sometimes the, if not the median durations, the mean or average durations continue to increase over time, but I'll kind of leave it at that. But we're certainly very optimistic about the opportunity for revenue growth, as I mentioned in my prepared remarks, and I think it's the early days for us in the launch, so certainly look forward to getting more and more patients on the regimen and then, you know, refills, reflecting patients benefiting from that for some time to come.

Great, thanks so much for the color. And then on HCC, given that we're not seeing much of a differentiation on safety and efficacy with the early CABO and NEVO combo data from checks made 040, what's the internal expectation on how COSMIC 312 will stack up against Embrave or LEAP 002? and what would you consider as competitive data internally?

Yeah. Hey, it's Mike. Thanks for the question. I think it's really challenging to do any kind of cross-trial comparisons between a global pivotal trial run with two different molecules compared to what we had with 040, which had a doublet and a triplet that were different from Embrave. Not only that, but it was smaller. It was really non-randomized to a control. had a mix of first and second line patients. So I wouldn't draw the same conclusions you are around how similar that data might be for all kinds of reasons. So look, we're very excited about the opportunity. Certainly, when you look at how we designed and enrolled 312 relative to Embrave, populations are very similar. Obviously, Atezo is the same in both. They're relatively contemporaneous trials a lot of similar sites and investigators. The only difference is Cabo versus Bevacizumab and you can look at the single agent activity for those two agents across various tumor types and I think come to your own conclusions about how Cabo might fair out there relative to Bev. So end of the day, you've gotta run the trial and get the data and look at the p-values and the hazard ratios and we'll go off that to really judge our conclusions as we go forward.

Thank you so much.

Thank you.

Your next question comes from the line of Peter Lawson with Barclays.

Hey, guys. This is Waleed on for Peter. Thanks for taking our questions. Just had a question on Cosmic 021. I know you're still waiting to do the analysis there, but when can we potentially see the data, and what are you looking for in that data set to sort of not only support approval but help you provide competitive offering in prostate cancer? And then I have a follow-up.

Kiesel, you want to go ahead, take that one?

Sure, thank you. Thanks for the question. Yeah, I think regarding COSMIC-O2-1, We are certainly very pleased with the progress made in this study. It's a large phase 1B trial. It's been involving really well. We are excited about the data, and as we look at the data, we're seeing various cohorts mature very nicely, and we would expect to begin presenting results across various cohorts later this year and next year. And so with regards to moving forward then in CRPC, likewise here, as I mentioned earlier in the call, we're looking to obtain the BRC, the independent radiology review for cohort six in the next few weeks, a couple of months in the mid-year timeframe. And as mentioned, With outbound, of course, earlier on as well, there's a lot going on in the next couple of months with the planned SNDA filing for Cosmic 311 and also the HCC top-line readout in the second quarter as well, and the CRPC top-line data for Cohort 6 being in the mix there as well. So certainly a lot of important milestones coming up. But we would expect to, of course, announce important data as we have them and obtain them, and that goes for this cohort as well. And then look forward to presenting data in scientific conferences and peer-reviewed journals as well.

Thank you. That's really helpful. And just on your XLO-92, when can we see data from the Phase 1b studies?

Yeah, so XL092 is making good progress, as I mentioned earlier as well. The Phase 1 study and Phase 1B evaluation is moving along. In general, I think, as I mentioned also a little bit earlier, we're building here on a lot of experience and the successful development of carbazontinib. And with that, we feel that the program is importantly de-risked with that experience. We are making progress in the dose escalation for single agent XL-092 and the combination with checkpoint inhibitors, atezolizumab notably. And as we are expecting or have expected from our CARBO experience, we're beginning to see preliminary promising anti-tumor activity in heavily pre-treated phase one patients. And we also have already presented the pharmacokinetic data And we're seeing a safety profile that is consistent with our expectation and knowledge of the pathway. So with that, I think we are very, very focused on driving the program forward and introducing further combinations. As I mentioned on the call a little bit earlier, and we certainly also expect to drive forward the development program towards start of pivotal studies in 2021 data providing. And so, certainly with that, we also will present data on exo-O9-2 alone or in combination when the time comes, but we're laser focused on advancing the development program as the primary priority.

Great. Thank you so much for sending the questions.

Thank you. Your next question comes from the line of Andy Hassi with William Blair.

Great. Thanks for taking my questions, and congratulations on the boil-out quarter. I have two for PJ. Thanks for all the commentaries on the initial trajectory of the COPPA launch. I am interested in knowing, you know, taking a macro view, you mentioned that the TKI market grew 19%. I remember you mentioned about kind of the shrinking market during the, you know, the depth of the COVID-19 pandemic. Can you provide us with some commentary about what you're seeing relative to kind of the diagnosis rate, patient pool, and where we are in the pandemic?

Yeah, Andy, this is PJ. Thanks for the question. I'm certainly happy to provide a little more commentary there. As you mentioned, we did see in Q1, according to the QVIA data, that NRXs for the market basket, as we define it, CISV, grew by 19%. CaboMedix for NRX grew 31% quarter over quarter. So very pleased with that. And as I mentioned, we were the only product in that market basket to grow shares. So excited with regards to that. And as we mentioned, it was driven by the combination launch. So that's great. I do think with regards to kind of what we're seeing and hearing anecdotally from our customers, is uh you know things are obviously with regards to the pandemic it is regional it's varied and things are dynamic and they do change but um you know generally we see um things getting back um you know to to some semblance of normalcy and you know i would expect that as we get um you know deeper into the year that will will kind of continue it's certainly helping us with access to our customers and education of them. And, you know, we're hearing from them that things are, as I mentioned, kind of slowly getting back more to normal. But I think there's still some, you know, some opportunity for that to continue to improve broadly.

Okay. That's helpful. Thank you. And also for Regarding the FDA adcom last week, any potential implications for the second-line HEC market dynamics? I think the panelists recommended pulling off fees over retaining key treaters label in that setting.

Yeah. Thanks for the question again, Andy. It's PJ. Certainly something we were tracking previously. very closely with regards to all of those. You know, obviously won't speculate on what FDA will do there, but what I would say with regards to, you know, Opdivo or even generally monotherapy in HCC, which is, you know, primarily in that second-line setting, as we've talked about for some time now with the Tezo Bev, you know, being approved for about a year now and building kind of that first-line combination market, becoming standard of care there, what we've seen is that shift of IO utilization from, you know, second line monotherapy going to the first line. While that hasn't completed, that shift is kind of already well underway and happening, which opens up more room for single agent TKI utilization in the second line. So I think, you know, if anything, depending on how that plays out or the kind of the coverage there of just you know, might potentially accelerate that a little bit, but I think the market's shifting as is, and obviously we'll see how 312 reads out soon, and, you know, there'll be more potential for that market to dynamically change. And, you know, I think importantly there in HCC, we're seeing and expect to continue to see more patients coming into that, so to speak, first-line funnel with more and more, you know, therapeutic options that are going to be helpful for patients available.

Thanks, CJ. And maybe one kind of straight sheet question for Mike or Peter. I was just wondering, can ExoLexus leverage its chemistry foundation and kind of the newly gained capabilities and biologics to think outside the box, so basically beyond the traditional framework of kind of like an antibody link payload contract for ADC?

Thanks, Andy. That's a great question for Peter.

So I'm going to pass it over to him. Yeah, thanks, Andy. It's a great question, period. And I think your view of it is essentially correct. If you look at the history of ADCs, and we've had, what, 20 years of ADC discovery and development at this point, the vast majority of the payloads that people have used have fallen into broadly three or four classes of mechanisms of action. And it's predominantly been microtubule destabilizing agents of one kind or another, or DNA-damaging type agents, topoisomerase type inhibitors. So I think there's a lot of interest in trying to develop novel payloads. We're starting to see it a little bit. Obviously, there's a number of folks working on immune-stimulatory payloads of various classes. So as you point out, with our kind of 20-plus year history in medicinal chemistry here, It hadn't escaped our notice that this might be an attractive area to explore further. I think there's a lot of opportunity there. I think it would dovetail very well with the collaborations that we established late last year with MBE and Catalan to access their site-specific conjugation technologies. And the ongoing efforts that we have to assemble kind of essentially a library of applications antibodies and binders that would be against attractive targets for ADCs, either through our Invenra collaboration or opportunistically through the collaborations of all the licenses we did with WUSHI late last year and this week with GammaMap. So, great question. Stay tuned on that point and look forward to updating everyone broadly on what we're doing in ADCs going forward. Thank you so much, Peter.

You're welcome, Annie. Thank you.

Your next question comes from the line of Yaron Werber with Kelwin.

Hey, this is Gavon for Yaron. Thanks for taking my question. Just a follow-up to one of the previous questions about CABO. You guys are, you know, obviously making great progress quarter over quarter in first-line renal cell. Could you share what fraction of all NRXs are going to CABO in Q1 compared to Q4? And what little color maybe on what feedback you're getting from physicians or payers as to why they may be sticking with other 1L options, first-line options besides Cabo Abdebo in certain cases as opposed to, you know, embracing 9ER pretty much across the board.

Thank you. Yeah, thanks for the question, Gabe. This is PJ. So I guess first I'll start with the numbers and the data. You know, what we had in Q4 was an NRX, market share of the market basket of 32%. And in Q1, the NRX market share for Cabo Medics was 36%. And the volume growth for Cabo Medics Q1 over Q4 was 31%. And I guess the way I kind of think about that is we're really pleased with that start there, particularly since our approval came in late January, and we're seeing, actually, you mentioned payers. We're seeing really, you know, minimal pushback on the payer side of the data, so sort of clear cut. That's great. So we're seeing great, you know, adoption and policies broadly from a payer perspective. And I think, you know, the physician perceptions, as I mentioned, of the data are really good. And, you know, we're really pleased with that level of education. I think we have continued opportunity to continue to educate really in the community, particularly as things open up more with regards to, you know, optimism around the pandemic. And I think the more we get to get in front of physicians with our database on what we're seeing, we'll continue to make progress there. We're certainly optimistic.

Great. Thank you.

Our next question comes from the line of Michael Schmidt with Guggenheim.

Hey, guys. Thanks for taking my questions. Congrats on the great first quarter. I actually had a couple of pipeline questions as well. First, perhaps on XL092, a mechanistic question here. So it's pretty obvious that the shorter half-life of this molecule relative to cabometics will probably make it easier to dose and manage the toxicity profile. Could you just help us understand how that mechanistically could translate into a potential improved efficacy benefit relative to your experience with carbamatics? And then I had a second question.

Yeah, why don't we, thanks, Michael. It's Mike. Why don't we let Peter take a crack at that, and maybe Gisela can provide some color commentary, too. Go ahead, Peter.

Yeah, so I think the goal with 092, as you correctly stated, was one to maintain the overall target profile of cabozantinib, hitting all the same major targets in pretty much the same ratios, so that we could build off the extensive experience that we have with cabozantinib clinically, both as a single agent and in combination, but to reduce the half-life. So, you know, make some appropriate chemical modifications aimed at doing just that, and happily that has played out well in the clinic. The aim, as you stated, is to provide a way to manage the dosing and site management of side effects as facilely as possible, and a shorter half-life certainly helps you do that. So I would say overall, any time you can optimize your dose and dosing for individual patients, you maximize the chance of providing them with clinical benefit. Great, thank you. Gisela, any thoughts there?

Yeah, I agree with everything Peter said. And perhaps just to add, of course, it's about continued dosing and as patients benefit to maintain dosing for the duration as long as patients derive benefit. The other thing to offer perhaps in addition is one additional spot is, of course, combinability. And there I think facile dose adjustment with a shorter half-life comes in handy. That is perhaps another consideration.

Great, thanks. And then just one on EXA-102. We've noticed a lot more interest now in novel cell cycle targets, for example, such as CDK2 or V1 and others, P53, etc., Just a reminder of where CDK7 sits in here and whether that's a target that is expected to be broadly active or whether inhibition of CDK7 would be preferentially pursued in a certain genetic context or biomarker-positive patient population. Thanks so much.

Yeah, this is Peter. I'd be happy to take that one. Again, you're absolutely right. There's been another uptick in interest in CDKs broadly, and I would say CDK7 specifically. CDK7 fits actually upstream of the classical cell cycle CDKs, such as CDK1 and 2, and is responsible for activating those kinases. It is also upstream of CDK4 and 6, which are obviously the targets for the CICLIP class of approved drugs. So it does play a major role in orchestrating the cell cycle. There is also maybe some role for it as well in regulating the initiation of transcription through its ability to either directly phosphorylate transcription factors or help mediate the assembly of the kind of transcriptional pre-initiation complex. So it plays more than one role, but seems predominantly on the cell cycle side. If you look at the profile of CDK7 inhibitors, including our own, certainly in vitro and in vivo, it's broadly active, as you might expect for something working on the cell cycle. A lot of the indications that are being contemplated do tend to focus more on tumors that have genetic lesions that affect the activity of CDKs, such as RB deletion, for example, or amplifications in various cycling genes. Another obvious place for it is potentially as a treatment in tumors that become resistant to CDK4-6 inhibitors, and CDK7 is upstream of those. So there's a lot of places to go therapeutically, potentially, with a CDK7 inhibitor, and I think that's helping drive a lot of the interest, including our own.

Super. Thanks so much. Very interesting. Early pipeline marching here.

Thank you, Michael. Your next question comes from the line of Jay Olson with Oppenheimer.

Oh, hey. Congrats on all the progress, and thanks for taking the questions. If contact 01 is successful, could you comment on the potential to move CABO plus the TEZO or maybe 092 plus the TEZO into first-line non-small cell lung cancer and Would that depend on PD-1 expression levels or some other biomarker-driven approach?

Yeah, thanks, Dave. Gisela, you want to take that one?

Sure. Thank you, yeah. So just to explain, contact L1, of course, is in the previously treated patient population who have received prior checkpoint inhibitors. and that phase three studies ongoing. We've already presented data from the COSMIC-021 study and have seen encouraging activity for the combination of CARBO and Atezo in this setting in ICI pretreated patients. I think as we're thinking about earlier lines of therapy and perhaps also combinations that could then be relevant for XL092 as we go forward. Certainly, very interested in the taser combination that is ongoing in this space with XL092 and further combinations. And certainly, the work that Genentech Roche is conducting in non-small cell lung cancer combining atezolizumab with the TIGID antibody is of interest and they feel there's some intriguing data and earlier line setting. Whether or not that will be then confined to patients selected by P1, PD-L1 expression, I think that remains to be seen and perhaps there is opportunity when combining with TIGID antibodies TKI to broaden the patient population. So certainly a lot to evaluate, but it's a very interesting space and a lot of opportunity, I think, for EXO-092 and also, of course, for carbazantinib.

Thank you. That's very helpful. And if I could maybe sneak in another question on 092. Have you seen any preclinical data that shows potential synergy between 092 and any of your early stage ADCs or small molecules?

Yeah, that's a great question. That kind of work is actually in progress right now, so I can't comment on it yet, but stay tuned. Okay, great. Thanks for taking the questions.

You bet.

Your next question comes from the line of Kenan McKay with RBC Capital Markets.

Hey, thanks for squeezing me in, and congrats on the quarter. Sort of a qualitative question on the frontline market here. I'm just wondering where you're gaining more traction, whether it's academic or community clinics, and then some of the feedback we've had is from some physicians that, you know, what they appreciate most about the combination is it's potential to induce super, super fast and deep CRs or very, very deep PRs. And as a result of that, they're maybe using it in patients with bulkier tumors. Wanted to hear if that was something that the team was hearing as well or, you know, whether it's just such a broad market too early to say. Thanks again.

Yeah, this is PJ. Thanks for the question. You know, as I mentioned, I think the uptake is really, it has been broad, and the feedback that we've received is that it really is, you know, the data resonating across sort of a variety of clinical, you know, subsets, so to speak, or, you know, if you want to be as specific as defining it as the IMDC risk category. So favorable, intermediate, and poor, I'd say, you know, at this early stage, we're seeing it broadly. and I wouldn't really say differentially based on the early data, but stay tuned. You know, your comment specifically about, say, kind of a symptomatic patient, you know, needing a response, that's something that, you know, generally I think has been a hallmark of CAVO in monotherapy in a later setting, but certainly as physicians began to see the data in 90R, I think that's certainly a place it's thought of to be used. in those types of patients, which is certainly, you know, gratifying. You know, that said, even on the other end of the spectrum, you see us doing really well in the favorable risk category. And, you know, we've just recently gotten NCCM category one recommendations across all those risk groups. I think that will continue to provide momentum for us, particularly in that favorable setting. But, you know, We're gratified. We're seeing uptake across all patient types and hearing from physicians that it's benefiting their patients.

Great. Ken, anything else? Okay, operator, let's take the next question, please.

Okay, your next question comes from the line of Paul Choi with Goldman Sachs.

Hi, thank you. Good afternoon, everyone. And let me also add my congratulations on the quarter. My first question is for Gisela. Just with regard to the contact one and two programs, I know you indicated that both those studies are enrolling, but could you maybe indicate whether some early initial data from early enrolled patients might be possible by later this year? And then I had a follow-up on the financial side for Chris.

Thanks. Yes. On contact one and two and three, for that matter, all of these phase three studies are involving patients globally. And we're pleased with the progress on the studies for sure. But data is not expected to be available this year. These are phase relatively sizable large phase three studies. And, of course, the endpoints are time to event endpoints. depending on the study, PFS and OS or OS itself. So that will take a little bit longer and is to be expected not before 2022. Okay.

Thank you for clarifying that. And then one for Chris. I think in last quarter you highlighted a seven and a half million inventory benefit. I was wondering if you could quantify it for this quarter as well. And then, you know, just given the strong start to the year, you left guidance unchanged. So I was just curious, you know, what was the sort of thinking at least behind not raising the low end of the revenue guidance? Thank you very much.

Hey, Paul. Thanks for the question. So on the inventory side, I mean, we didn't quantify it this time, but it's about 300 units in the $6 million range at our inventory. wholesaler acquisition costs and, you know, about four and a half if you think about it in a net benefit perspective, so, or net detriment to this quarter perspective. And then, and then guidance, yeah, sorry. From a guidance perspective, you know, we're very pleased with where we started the year. We As PJ said, we had about two months in the quarter from a performance perspective. And we're going to continue to monitor it. It's a very dynamic market. There's a lot of competition in the market, and we're going to continue to do it. And it's very early in the launch. So we'll continue to look at it and revisit it in the future quarters.

Thanks for taking our questions.

Of course, Paul.

As a reminder, if you would like to ask a question, press star 1 on your telephone. And your last question comes from the line of Steven Willie with Stifel.

Hey, good afternoon, guys. Thanks for squeezing me in, and congratulations on the quarter. Just a couple quick prostate questions. So I guess at time of the Cohort 6 disclosure and or presentation, will we see some of the additional cohort data that's been embedded within this COSMIC 021 trial design in terms of, I think there's a single agent ATESA, a single agent CAVA cohort?

Just wondering if

if you plan to present that in conjunction with cohort six disclosure. And then just have a quick follow-up.

Yes, Mike, it's probably a little bit too early to opine upon or speculate on how we'll roll all that out. You know, we understand the importance of the data relative to both keeping investors up to date on what's happening, but also relative to a filing. So, So stay tuned. Let's get the VIRC done, and then we'll roll out data at the appropriate time.

Perfect. And I guess in any of the regulatory dialogue you've had with FDA, do you think that a label here is going to be limited to patients with measurable disease at baseline, or do you think that there's an opportunity that you could get a bit of a broader language that would allow you to treat some of these patients that have bone-only disease as well? Thank you.

Yeah, look, I wouldn't want to speculate on the outcome of those discussions that we have, and I wouldn't want to talk about the discussions either. I think it's probably safe to say that Labels usually align with populations that were studied. So I would think about it from that point of view. I think that's probably the safest way to go. But, you know, we'll, again, when we get that far and we're, you know, thinking about, you know, releasing that information, we'll be happy to share that with you at the appropriate time. All right. Thanks and congrats.

Yeah, thanks. Thank you, Steve.

At this time, there are no further questions. And so I will turn the call over to today's host, Susan Hubbard. Ms. Hubbard.

Thank you, Daphne. Thank you, Daphne, and thanks, everybody, for joining us today. Certainly happy to take your follow-up calls with any additional questions you may have after we conclude. Thanks again.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.