Exelixis at Citi’s Biopharma Conference: Strategic Growth and Innovation

On Wednesday, 03 September 2025, Exelixis (NASDAQ:EXEL) presented at Citi’s Biopharma Back to School Conference, outlining a robust growth strategy centered on its flagship product, CABOMETYX, and the development of new therapies. CEO Mike Morrissey highlighted the company’s strategic efforts to expand into new indications and develop next-generation molecules, while also addressing challenges such as resource allocation and competition in the oncology market.

Key Takeaways

• Exelixis plans to leverage CABOMETYX’s success in renal cell carcinoma to drive growth in new indications.
• The company raised its net product revenue guidance to $2.1 billion after a strong first quarter.
• Exelixis is developing zanzalutinib for colorectal cancer and non-clear cell RCC, aiming to build franchise opportunities.
• The discontinuation of the head and neck cancer trial reflects a disciplined approach to resource allocation.
• Exelixis has a strong presence in the RCC market, holding 25% market share in first-line settings and over 45% in second-line and later settings.

Financial Results

• Exelixis initially projected net product revenue of $2 billion, later raising the midpoint to $2.1 billion.
• Gross revenue is expected to range between $2.25 billion and $2.35 billion.
• The company increased its RCC market share by 4 percentage points from Q2 2024 to Q2 2025.

Operational Updates

• CABOMETYX’s market share has grown steadily, tripling revenue over the past four to five years.
• The drug was approved for neuroendocrine tumors (NET) and launched in Q2, with promising early results.
• Zanzalutinib’s STELLAR-303 trial in colorectal cancer showed positive results, while the 305 trial for head and neck cancer was discontinued.

Future Outlook

• Exelixis aims to expand its pipeline with molecules like XB371, targeting toposensitive tumors.
• The company plans to further develop zanzalutinib for colon cancer and explore new indications such as meningioma.
• Exelixis is committed to improving the standard of care for cancer patients through strategic clinical development and commercialization.

Q&A Highlights

• The focus remains on maximizing CABOMETYX’s value through physician education and market understanding.
• Identifying patients progressing on current therapies is crucial in the NET market.
• Exelixis plans to release zanzalutinib data upon acceptance for presentation and publication.

Readers interested in more detailed insights are encouraged to refer to the full transcript below.

Full transcript - Citi’s Biopharma Back to School Conference:

Unidentified speaker: For being here today at the two thousand twenty five Citi Biopharma Conference in Boston. Happy to have with us this afternoon our good friends from Exelixis, Michael. I guess you could just introduce yourself and the company. I’m sure sure anyone listening to this already knows who you are and knows about the company, but

Mike Morrissey, Chief Executive, Exelixis: let’s say it anyway. But it’s great to be here on a just a beautiful day in Boston. Really appreciate the opportunity to come chat with you and and your all your colleagues here today. Yeah. So I’m I’m Mike Morrissey, chief executive at Exelixis.

We’re a cancer, focused commercial company, that really is dedicated in our mission to improving the standard of care in the treatment of cancer for patients with cancer. And we’re excited about having a leading molecule in kidney cancer called CABOMETYX, cabozantinib by its generic name, and have some interesting a lot of great data there and certainly strong commercial platform to be able to get that to patients. The new newest news this year is around the net indication that came online at the ’1, and we launched in q two. And obviously, you know, our story, you know, certainly aspirationally is to go beyond Cabo and to build a pipeline of franchise molecules essentially. You know, the learnings from Cabo in in building that franchise over the last decade, I think has really set us up well to be able to build a multi compound, multi franchise business in the future with zanzalutinib, that’s next molecule up in variety of pivotal trials, as well as in a deep pipeline of both small molecules and biologics.

So we have big goals, big big dreams for the company and being able to take standard of care to the next level for patients and thrilled to be able to talk about that today.

Unidentified speaker: And so in a lot of ways, for years, Exelix, the constant has been cabo, and it’s been growing and growing and kind of growing incrementally, adding new indications over time. And it’s shown a lot of endurance, so to speak. Could you tell us about how it started from COMETRIQ cabozantinib, and, ultimately, how you incrementally grew the franchise and and where things stand today? Mhmm. Because you’re still growing the franchise, but, also, there’s there’s the the intellectual property kind of exploration.

Yeah.

Mike Morrissey, Chief Executive, Exelixis: For sure. Yeah. You know, it’s it’s in some ways, it’s a classic story in the in the biotech business, the the journey to discover, you know, novel, innovative matter in a way that, again, moves the needle for patients. You know, the Cabo story goes back to, you know, the mid two thousands when we asked, I think, number of very simple questions around what drives tumor resistance to anti angiogenic therapy, namely, you know, VEGF modulation. You know, what what what is the what are the key drivers for resistance in tumors?

And if you look at the, you know, at the data at the time with bevacizumab, with some of the small molecule VEGFR targeting TKI, sunitinib, pazopanib, axitinib. There was some really, I think, interesting emerging themes around the idea that tumors will drive redundant pathways to VEGF to get around VEGF inhibition. And those revolve primarily around the RTK, the receptor tyrosine kinase MET and AXL. And the relatively simple, but I think very elegant approach that we, had at the time. The hypothesis was that if we could inhibit VEGF and MET and Axle as the primary growth drivers, for not just the tumor, but also the tumor vasculature, the growth and the, you know, resistance mechanisms, then we would be able to, you know, basically build a better molecule that could both be antitumoral and as well as anti angiogenic.

Along the way, we’ve learned more about cabo and that class of molecules in terms of its impact on a variety of other signaling pathways that are involved in, you know, tumor immunomodulation as well as other other times other types of tumor growth signals that has really packed a lot of punch into that molecule and that scaffold. So that was the that was the original impetus for actually designing the molecule, that we made. You know, we started out looking at the lowest of low hanging fruit. That was medullary thyroid cancer At the time, we had a capsule formulation and that was based upon some very interesting signals we saw even in the first handful of patients in phase one.

It’s a very rare tumor type. We ran a pivotal trial in that. That was clear clear big win from a PFS point of view. And that was after a couple of couple of big failures in prostate cancer. You’ll you’ll recall back in the early twenty twenty ten, eleven time frame, we saw some pretty compelling activity in prostate cancer, both in terms of directly inhibiting tumor growth with, you know, with with with prostate, either primary tumor or metastases, but also very interesting activity in the, you know, in the bone scans, in the bone mets that, you know, post cut prostate cancer normally targets.

So the interesting point is, you know, that didn’t actually work. That we ran two pivotal trials in prostate cancer. Both of those failed. On top of that, you know, we had discovered cabo as part of a collaboration with GSK. They gave it back to us.

They didn’t want it. Then we partnered with BMS based upon some additional data we had in GBM and other tumor types. They did a little bit of work and gave it back to us. So it was, you know, a twice rejected, you know, failed pivotal trial in prostate cancer molecule that, you know, didn’t didn’t look always the best. They had somewhat of a tarnished profile.

And you’ll recall back in the this goes back ancient history in the 2014, 2015 time frame. We shrunk the company down. We focused on, you know, on on one last shot in in in renal cancer. We were down to less than a 100 people. I think we had 80 people in the company that covered basically the RCC trial and then the the minimal g and a that we needed to be able to run the business.

But that worked. Right? The Meteor trial was a was a not only was it a success in RCC, but, you know, the trifecta of winning in overall in overall survival and progression free survival and response rate was the first time a molecule actually did that in in RCC. So it it set in some ways, set a whole new standard for not only small molecules, but at the time, other modalities even like checkpoint inhibitors, which obviously improved survival, didn’t didn’t hit PFS right away. So so we were off and running in the, you know, in the 2015 time frame when that in July 2015 when that meteor trial read out.

And I had that momentum then to move forward and then added indications beyond that in terms of second line liver cancer, differentiated thyroid cancer. And then really most importantly, we collaborated with BMS with divolumab in a study that was called nine CheckMate nine ER that was looking at at cabo plus nivo, versus sunitinib, head to head. And, again, one, across the board in terms of response rate PFS in overall survival. I think the key there is that we looked a little bit we used a little bit lower dose instead of starting at sixty milligrams, started at forty milligrams in that in that combination, and the the impact on quality of life was was significant. We actually had had quality of life benefit as well compared to sunitinib.

So so that that profile was very compelling. You know, we had a leading second line share up until then. I think our revenues in 2019 were in the 700, $750,000,000 range, and we thought that was a great way to then really, you know, double down and and build the business. And over the last, you know, four or five years, revenues have tripled based upon the strength of that data and based upon our ability to, I think, really educate docs on the opportunity in the first line and second line level. So so great great story.

You know, company and the employees showed tremendous resilience. And, you know, this is a this is a game that we play that kind of borders on gotta have the right data, but you never have enough data. You also have to believe in what you’re doing and believe in the the the possibilities of what, you know, small, you know, small datasets can offer in terms of aspirationally trying to, you know, improve the outcome for patients. So so great team efforts. Certainly, you know, navigating COVID and all those challenges were a big part of the early twenties, and here we are today in the, you know, 2025 with with cabo.

You know, the net indication, as I mentioned, is certainly a very important part of the story. I’m sure we’ll talk about that more. And then we have this pipeline with Zanza and other small molecules, other biologics that we’re super excited about. So but cabo cabo is the driver. You know, we have the lens by which, you know, cabo provides insight into us more broadly that we use every day and certainly frames our idea of what success could look like.

Unidentified speaker: So at this point, you know, clearly, you issued guidance this year, dollars 2,250,000,000.00 to $2,350,000,000 Obviously, the driver of that is RCC. How how much room is there left in RCC first in the renal cell carcinoma? And then towards that end, one of the things I think investors have kind of been trying to get their hands around is what you know, what is the net opportunity? Yeah. How significant is it?

Mike Morrissey, Chief Executive, Exelixis: Yeah. So let’s talk about the base business first. Right? Because RCC is a big part of it, but it’s not all of it. You know?

Certainly, the you know, we started the year with a midpoint of guidance for net product revenue, not total revenue, which you mentioned, but net product revenue of of $2,000,000,000. Plus or minus 50 was the range. We had a super strong first quarter, and we raised that midpoint from 2,000,000,000 to 2,100,000,000.0. And that’s majority of the base business, a little bit of net built in there, but it’s the majority of the base business. Know, question is how much more can we grow?

Right? And and as you would imagine, we’ve been getting that question every year, every quarter since, you know, I would say the middle of, you know, 2022. Right? Because if you look at the longitudinal data across most oncology molecules, small molecules, biologics, whatever, in the commercial setting, you normally hit that kind of peak share, peak plateau revenue within four, five, six quarters. That that’s what you normally see.

And, you know, with with cabo in the first line setting, that’s been very different. Right? We have been growing quarter after quarter after quarter. In fact, if you look at q two twenty five versus q two twenty four, we grew four points, in market share, which is is pretty incredible and really just speaks to, I think, the quality of the data, the quality of the team, the the energy and the urgency and the intensity by which we educate physicians. We understand the market dynamics, really well.

We have just phenomenal, analytics in terms of understanding, prescribing trends for cabo, for other molecules, where we’re strong, where we’re weak, and we have you know, we’re we’re a we’re a big, company, so we have this nimble approach to being able to shift priorities and resources really, really quickly. It’s just it’s a conversation between whatever the topic, whatever the part of the organization, me and the, you know, the the the department head and then maybe a small cadre of people and, you know, off we go. So so it’s a phenomenal way to maneuver in a very dynamic environment where, you know, in the RCC space, we’re competing with the big guys. Right? With, you know, with the BMS and with Merck and with Pfizer and with Asai.

The list just goes on and on. So so we need to be at the top of our game every single day, and we have it. And that needs to continue, and that will continue. So so how do we how do we grow in the future? We keep doing what we do what what we’ve been doing, and we keep asking the hard questions, and then we maneuver effectively.

What’s the limit? I don’t I don’t know. I wouldn’t I wouldn’t give you wouldn’t feel comfortable giving you a number because I don’t think there is a limit there. So in the in in the first line setting, you probably have a 25% market share. So there’s room to grow there.

You know, in the second and second plus line setting, we’re probably in the, you know, 45 plus percent market share. So there’s room to grow there. So the question is just how do we, you know, how do we maneuver in those two different opportunities? How do we move more upfront? Because, obviously, we have a much longer duration of therapy and and the and the stacking potential is a real phenomenon here.

Compounding works. Right? And when you talk about, you know, patients being on drug for thirteen, fourteen, fifteen, whatever months. So so that that really drives important benefit for them and for us too. So so that’s the, you know, that’s the focus, and we have a sales team that’s committed, I would argue best in class to making sure that we maximize the value of that option opportunity every single day.

On the net side, you know, net is it’s super interesting for us. You know, we’ve been in that in that space with collaborators. In fact, Jennifer Chan is here at Dana Farber. You know, she ran a phase two study in NET with, you know, handful of 35 or so patients years ago, generated some really interesting phase two data. We saw PFS in the the, you know, fifteen, twenty month range.

That was really compelling and really out of the box from what you would normally see with you know, with a with a with a small molecule, everolimus, cinep, whatever. So that prompted her to work with the Alliance Cooperative Group to run a pivotal trial called Cabinet. Two different actually, two different trials in one run-in one in pancreatic NETs, one in EP or extra pancreatic NETs kind of part of bundled into the same same overall trial. That read out positive for a PFS in both of those quote unquote cohorts. You know, all the filing data has been released.

Public papers have been published. Filings have been done. So and we got approved in that in The US at the end of at the ’1, and I think in The EU right around ASCO, maybe a little bit after ASCO. So so that was actually a really, really good approach where, you know, through a very strong collaboration with our academic colleagues, we’re able to bring, you know, the first new molecule to the next space in ten years. There hasn’t been an approval in that since twenty fifteen, twenty sixteen.

So that’s so that that that that’s pretty exciting too. The opportunity there, we think, is is significant. By our math, if you look at the oral therapy basket, which is basically comprises, envirolimus, sunitinib, and, captem, and you those are all generic now. So you use contemporaneous pricing. You use cabinet type duration.

That basket is about a billion dollars in value. So, you know, we we would like to be able to capture as much of that as we can. And we have the, you know, the mindset and the mandate to go out and do that. So we launched at the very end of q one, had a real strong start to q two. Again, first first quarter is mostly new patient starts, not a lot of refills in in in a couple of months, but that’s gotten off to a great start.

We’re seeing things grow, think, at a pretty good pace in q three. So, you know, we’re off to the races. But, again, using nine ER as an example to go from, you know, launching in basically January ’21 to what we saw, in, you know, in in ’25, you know, that kind of a ramp, it’s it’s been dramatic in some ways, but it’s also been a steady grind to get market share built up and to get patient stacking and those kinds of things. It just really reinforces the kind of value you can bring if you just, stay in there, execute perfectly, have the right team that can engage, and just get the job done. When you talk about the basket of these different oral therapies out there, are there pockets where of preference where each one gets used?

Towards that end, which do you

Unidentified speaker: see one as being a kind of a lower hanging fruit to go after those particular populations versus the other? Or is it much more complicated?

Mike Morrissey, Chief Executive, Exelixis: Yeah. Well, I’m not sure it’s more complicated. I think I think everybody look. Every every, physician, every treater has their own preference based upon personal experience. The feedback that we’re getting, and this is from, again, formal market research, from talking to docs, from, you know, kind of anecdotal feedback is that, you know, people are really excited about Kava.

And and why is that? Number one, the, you know, the cabinet data, you know, with all the caveats across product comparisons, and we should never do that. Everybody does it. And and and and data looks certainly very compelling based upon people’s experiences with, you know, kind of real world data with other other compounds. So so there’s a high level of enthusiasm based upon the candidate data.

It’s been presented a couple times. We had a New England Journal of Medicine paper. So it’s it’s it’s certainly very, been very well documented publicly and very well received. Secondly, you know, Cabo’s been around long enough where a lot of people have used it in their practice already. So by our analysis, about 80% of the current net prescribers have actually written a Cabo script, you know, in the past, you know, six to nine months.

Right? So so there’s there’s a high level of experience with cabo and a real comfort with how to use it, what dose to use, how to how to watch for adverse events, how to manage through that, you know, because it’s been it’s been so well utilized and so successful in other indications, renal cancer, liver cancer, thyroid cancer, and so on. So it’s not a brand new drug, it’s just a new indication. Right? And then finally, and I think really importantly is there’s just a level of interest in, you know, the opportunity for patients.

Every patient who has advanced metastatic NETs. Right? It’s an indolent disease, but they all need therapy. Right? And they’re all on an active therapy.

So the rate limiting step is basically patients progressing on their current therapy. And we’ve been told by, again, market research, talking to docs, you know, kind of anecdotal feedback that, you know, cabo is is is number one on their list. All, you know, all things being equal to try when their patients progress, on their current therapy. So in some ways, rate limiting step is just available patients coming coming up for the next drug. Right?

And the way Cabinet was run, and partly, I think it was just because it took a took a while to enroll. It’s a US only study run by the you know, the guy by US co op by US cooperative group. It enrolled over, I think, about a six, seven year period. So so every possible framework of patient experience in terms of prior therapies, tissue of origin, age, you know, the demographics were probably as wide as it could have been. So so the physicians really have a very good basket of information to choose from based upon how their individual patients progress.

And we probably have data there in some shape and form from cabinets. So all in all, we’re getting off to a great start. We’re super excited. You know, we have a, you know, we have a strong GI team that’s in place that covers thyroid, covers liver, and now covers NET with support from the GU team. And, certainly, you know, as Zanza comes online, again, the first opportunity there is gonna be in GI and CRC.

So if we can double down and build another either part of that GI team or augmented to that to be able to help us get the word out around NETs, so much the better.

Unidentified speaker: With that, we’ll we’ll jump over to Zanza. I’ll I’ll tell you. I I always call Zanza, and I’m thinking Zanza Stark. Go to fan fans out there. Terrible joke.

I apologize, but I had to say it.

Mike Morrissey, Chief Executive, Exelixis: It’s late in the day. Just But I know for

Unidentified speaker: it, man. You’ll just say you’ll you’re gonna hear me refer to it as Zanza, and Okay.

Mike Morrissey, Chief Executive, Exelixis: It sound it sounds very elegant, so just have at it.

Unidentified speaker: So when we talk Zanza, we’ve had some data recently. Could you update us as to you know, this is clearly a a major product. It’s the kind of the next generation of cabo. There’s differences. Actually, before we even get to the data, how’s it different than than cabo?

Mike Morrissey, Chief Executive, Exelixis: Yeah. So so ZANZA was was was designed to phenocopy cabo’s intrinsic inhibitory activity. You know, any any multi targeted molecule, it’s actually really hard to tease out what’s driving the the antitumor, anti vascular kind of pro inflammatory activities when you’re hitting a number of RTKs at the same time. Right? So so we didn’t wanna mess with that because, you know, while we have, I would say, pretty strong hypotheses and pretty strong beliefs about why things are happening, you know, we don’t actually exactly know because it’s a pleiotropic agent across, you know, really every relevant pathway and cell type and, you know, kinda covers the entire tumor microenvironment in a way that is is is potentially good.

So we wanted to keep the inhibitory activities similar between cabo and Zanza. We did that through in vitro assays, through pharmacodynamic assays, approved that early in in the clinical setting as well. So we have a good sense of, you know, being able to, you know, kind of again, reinforce the attributes of cabo that we think are important. The one the one downside from cabo that we’ve heard over the years is that it’s long half life, four four to five day half life in man, Complicates dose reductions, which are in, you know, invariably gonna happen with a VEGFR targeting molecule. That’s true for biologics.

That’s true for small molecules. You know, you have to find the right dose, and you actually have to individually titrate every patient for their best dose based upon, you know, physical characteristics, you know, metabolizing enzymes, you know, any other kind of pre disposition that they might have. So so doing that might involve with cabo, you know, seven to ten plus day hold while the while while the molecule kind of washes out. And then do you restart? Do you move to another molecule, etcetera?

So so very early on, very simple, but again, elegant approach here was to simply introduce a metabolic liability into the cabo scaffold that would basically, we could fine tune the half life. We made a variety of different molecules, and we had a very, a very, I think, clever and, you know, kind of very exhaustive design and SIR analysis to be able to pick the ZANZA modification out that gave us about, you know, one day plus or minus half life. Mhmm. So that that makes potentially makes all those kinds of things much easier to then operate in terms of dose reductions and, you know, adverse event management. So that was the whole plan.

So and we, like you said, we’ve had, I think we’ve had some pretty compelling data over the last couple of years now in kidney cancer, myelotherapy combination with with, say, checkpoint inhibitors like nivolumab and and and RCC, where we see very good activity, very good duration, good response rates, good tolerability, low discount rates, all those kinds of things you wanna see. And then we had some data at ASCO GI earlier this year in in third line plus colorectal cancer, which is the population that we’re studying in STELLAR three zero three that allows us to feel good about, you know, kind of the the overall activity profile and adverse event pro profile in that tumor type. While we were doing the CELVA three zero three study, that first pivotal trial to enroll and to read out in late June where we had had positive top line results in the ITT population against regorafenib, and that was in combination zanzlitinib in combination with atezolizumab versus versus rego head to head. So notable in that it’s the first first successful trial against an active control head to head. That’s been done in this space to my knowledge forever.

Right? There have been there have been four of the pivotal trials that have failed over the last block of time. Two checkpoint WAG one combinations that failed. There was a tezo cobimetinib, so MEK inhibitor trial that failed. And then lenpem versus standard of care failed as well.

So so notable that, you know, you think late line, something here is gonna work. The reality is the bar has been super, super high. And you’ve seen the standard of care increase over time too, which is certainly part of the challenge as as patients get as physicians and patients, you know, have more experience with any standard of care that gets better. So the bar actually doesn’t stay static to where the first approval was, but it actually grows over time. And you’ve seen this in liver cancer and renal cancer and others.

So so it’s a moving target to a certain degree. But we’re thrilled with that and, you know, hoping to have data out to share both in terms of presentation and publication soon. Waiting to, you know, waiting to see when abstracts get submitted and actually, say, when they get accepted, they have been submitted and have a sense on kinda what’s gonna happen in terms of presentations and stuff. So get a lot of questions about that today, and people people wanna know when the day is coming out. And the answer is just stay tuned when we have a accepted abstract that we have details to share.

We’ll be talking about that ASAP. For those particular conference, what are the deadlines of the abstracts? I don’t actually know. It’s a good question.

Yeah. It’s a way above

Unidentified speaker: my pay grade. We can back into time. So there’s also the head and neck. Can you tell us about that experience?

Mike Morrissey, Chief Executive, Exelixis: Yeah. Sure. So we’ve we started three pivotal trials in the last last few years. Right? 303 was in CRC.

304 is in non clear cell. RCC and 305 was in head and neck. 30 four finished enrollment in the second quarter. And based on event rates, we think that’ll read out in the ’26. 305 was in was Zanza plus pembro versus pembro in frontline head and neck cancer.

That was a phase two, three design. We had a gate between phase two and phase three. We hit that gate, and we looked at the data and just didn’t think we were gonna have a competitive profile. And it was really as much of a of a data issue as it was a simple resource allocation issue in the ensuing months over the last, you know, six or so months or so. We have some really, I think, interesting new opportunities in colon cancer, in men and Genoma, potentially others that we think are higher value in terms of their their commercial potential, have little to no competition, whereas head and neck has a lot of emerging competition with other trials and pivotal trials other compounds and pivotal trials.

And the overall, I think, was just a good way to build a franchise in CRC knowing that we had, you know, the colon, first first signal in colon that looked so positive. So, look, it’s it’s a high attrition game. We’re not gonna win every time. It’s okay. You know, we’re still interested in head and neck.

It’s a tough tumor type based upon, you know, how those patients present. Normally, we think we have, the appropriate insights. If we wanna go back, if we choose to go back based upon how we prioritize, indications, we can, if we’re interested in that. But, we’re really, really focused on on on building franchise molecules and and and reinforcing franchises around indications. I think that’s that’s been the success story of Exelixis is doubling down in cabo, finding the winning indications, finding the winning combinations.

So building a franchise within a molecule is is, you know, classic classic way of doing it. The other way is to is to focus on indications. And when you when I think about NET, I think about colorectal cancer. I think about even something as as as un really unstudied as meningioma. You know, those are all areas that we think we can really, you know, play in fields, work in fields that are less less populated with competition.

So some of those, there there’s no existing standard of care. So to be able to understand the biology, understand how Zanza and or other molecules could work in those spaces, I think it’s a really, really important way to go. Right? So think about colon cancer, you know, move up in line, post adjuvant in some of these high risk patients would be a great way to provide real benefit in kind of a maintenance setting post post adjuvant and post surgery. You know, I think about I think about colon, you know, we have a molecule now in in in the clinic, x b three seven one, that is a tissue factor targeting ADC with a topotecan payload.

So that’s specifically designed for for for toposensitive tumor types like non small cell lung cancer, like like, you know, colon cancer. So to be able to think about doing, you know, ZANZA two seven one combinations could be really, really attractive too. Right? So so different ways to, you know, slice and dice things here. But, again, we’re always focused on, you know, multiple shots within building a franchise, whether it be within a molecule hierarchy or across any other axis in terms of the indication.

Unidentified speaker: Now, of course, renal cell has been such a big part of cabo. That’s more that’s been clear cell, and you have nonclear cell going on as well. Can you tell us, you know, more about the differences? I think there’s a tendency by investors to kind of confound renal cell, the clear cell, and the nonclear cell. How are these similar?

How are these different? What’s the what’s the challenge of Yeah. Studying in one population versus the other?

Mike Morrissey, Chief Executive, Exelixis: Well, I certainly, clear cell is the is the is the major histological type of of RCC. You know, seventy five, eighty percent of all kidney cancers are clear cell. There’s nonclear cell is a is a mix of different either genetically defined tumor types or histologically defined tumor types. There, it’s it’s they can be tougher to deal with, tougher to actually impact pharmacologically in terms of actual responses and and and long term impact clinical benefit. What what has happened historically is the two travel together from a regulatory point of view.

Everybody has a label for advanced RCC. So clear nonclear cell just kinda comes along for the ride. Interestingly, there’s never been a randomized pivotal trial in nonclear cell RCC. Right? There’s been a number of single single arm, non randomized studies.

We’ve done one with with with cabo and and atezo as well as, I think, cabo nivo. Other people have done them, but but no one’s ever really invested in looking in terms of running the pivotal trial. So level one evidence doesn’t actually exist. So we’re very excited about the opportunity to be able to, you know, generate generate the appropriate data in a randomized global randomized pivotal trial in what 20 or minus percent of the population in RCC. And if we’re able to generate that level one evidence, we think we’d be in a really strong position to be able to then market that drug post approval.

To this point, given the way

Unidentified speaker: the labels are actually set up, what proportion so all these patients are essentially being treated by drugs that were tested more in

Mike Morrissey, Chief Executive, Exelixis: So clear when

Unidentified speaker: you look at the non clear cell opportunity, three zero four ultimately were successful, is the first thing we’d do is basically pluck the these patients that are being treated with one set of drugs out from a prior label to this Right. Now nonspecific because they’d have to be treated under something that’s more specific. Yeah.

Mike Morrissey, Chief Executive, Exelixis: Yeah. So I think the way to look at it is we would have the evidence, you know, in terms of global randomized pivotal trial to show clear benefit if that was the case in those trials. Right? So so I think it’s a pretty compelling way to then get reimbursed the way to market the drug, having that level one evidence, which no one else really has. Would that allow for a premium pricing over the current?

Yeah, I wouldn’t want to get into that right now, but certainly we’re always thinking about pricing in the IRA, MFN world that we live in. Sure.

Unidentified speaker: And, of course, people always speculate when it comes to Sansa versus Cabo. Let’s do it again. It’s Sansa. They always speculate that one is essentially trying to take over for the other. But, of course, initially, you’re not really studying overlapping indications.

You’re studying different Yeah. Exactly. Yeah. And so where do you see this ultimately going? I I mean, obviously, at the beginning, it’ll be an incremental growth for the whole franchise.

But, eventually, you wanna kind of

Mike Morrissey, Chief Executive, Exelixis: Well, I think the way the way the way we look at it, and and certainly, this has taken a lot of thought going into how we have designed the pivotal trial program for ZANZAR. Right? The three, initial, second three, and then the next wave with post adjuvant meningioma, etcetera, to be able to balance the trade off between building the Zanza franchise but not cannibalizing the cabo franchise at the same time while we have exclusivity. So I think there’s been some very careful analysis. Certainly, I’m not sure even end of the day, we’re gonna have overlapping indications, in terms of, say, indication statements for RCC.

We’ll see how that plays out at the end of the day. But the way they’re the way they’re kind of juxtapositioned and and staged staggered, you know, I would expect if the, you know, if the ZANZA RCC trials read out and are successful and are launched, they’ll be they’ll be fundamentally different in the late twenties, more importantly, early thirties than what Cabo is currently doing today because standard of care will, of course, have evolved. I mean, if we’re doing our jobs as a company and as an industry correctly, I would hope standard of care improves over the next five years, next ten years. Right? And then as we hit kind of terminal velocity from the standpoint of marketing and sales, you know, it’ll be it’ll be past the cabo exclusivity, and we won’t have to worry about that.

If we if we if we cannibalize that, then so be it. It won’t be won’t be a problem. Mhmm. So we’re trying to you know, looking downstream and, again, big error bars, lots of caveats, but we’re we’re certainly modeling, you know, how this could work over the next decade. But thinking about that very carefully in terms of, you know, the nonoverlapping indications doing those quickly and doing those soon, and then some of the potential overlapping indications doing those later when we’re past the cabo LOE in terms of actually commercializing.

Unidentified speaker: Got it. Got it. So we got a couple minutes here left. Freestyle, and you’re good you’re good at freestyle. So what do you wanna talk about that that the street’s missing?

Mike Morrissey, Chief Executive, Exelixis: You know, I think it’s the again, it’s the franchise potential of the company. I think that’s the goal. Look. The street is always focused on the minutiae, and I appreciate that. You know, we spent we spent 2019 we probably had a thousand buy side meetings, hedge fund meetings talking about how, you know, asking the question about how we’re gonna compete in frontline RCC with CaboNevo.

Are we gonna get survival? If you get survival, are you gonna compete with, you know, LenPam and AxiPam and Nevo and Pembrol and Epinevo, blah blah blah. Impossible to answer that question without data. But we were in the spin cycle around around that topic for literally a year. Right?

Which is just the way it goes, and I appreciate that. I’m you know, that’s that’s just the the game that we’re in. So so I I’m I’m all about, you know, kind of playing that game and be able to navigate those discussions knowing that there’s no answer until you get data and until you see the data and you launch and you see how that goes, and then you build that launch over time. So but we are absolutely myopically focused about two things. Everything we do at the end of the day is revolves around how we define success, And the only definition of success that matters to us is improving.

Can we improve the standard of care for patients with cancer? That simple. Any indication, any trial we do, the output has to actually raise the bar Because if we don’t do that, then the chances of us actually moving the needle for patients and for the company in terms of revenues is relatively low. And that’s been the cabo story juxtaposed to the, you know, 50 or a 100 or so molecules that have been approved over the last decade. If you don’t move the needle, you’re not gonna make a difference.

And that’s what we’re focused on. That and then doing it in a franchise setting in either dimension. Franchise in a molecule, franchise in a in in that specific indication, and we gotta pick those indications very carefully. So

Unidentified speaker: that’s it. Excellent. Thank you very much for

Mike Morrissey, Chief Executive, Exelixis: your time. Thank you.

Unidentified speaker: Glad to have you and, you know, chat again soon.

Mike Morrissey, Chief Executive, Exelixis: Okay. I hope so. Alright. Thank you.

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