EXELIXIS, INC. Q4 FY2024 earnings call

• Exelixis had a breakout year in 2024 with momentum in the cabozantinib, zanzalintinib, and pipeline businesses. • Cabozantinib business saw strong performance in Q4 2024 and full year 2024 with ~11% growth in demand, new starts, and revenue. • Progress on cabo NET indication with FDA accepting sNDA for cabozantinib in pNET or epNET indications with a PDUFA date of April 3, 2025. • Zanzalintinib development priorities for 2025 include top-line results from STELLAR-303, STELLAR-304, and STELLAR-305 trials, and initiation of STELLAR-311 trial in NET. • Exelixis IND pipeline is full for the next several years with molecules like XL309, XP010, XL495, and plans to file up to three new INDs for XB628, XB064, and XB371. • Capital allocation includes advancing pipeline, accessing new assets, and share repurchases.

For the fourth quarter and full year 2024, the cabozantinib franchise was a key performer. In the fourth quarter 2024, U.S. cabo franchise net product revenues grew 20% year-over-year to $515 million. Full year 2024 U.S. cabo franchise net product revenues grew 11% to $1.81 billion. Globally, cabo franchise net product revenues were approximately $690 million in the fourth quarter 2024 and $2.5 billion for the full year 2024. Revenue contribution of cabozantinib was significant, driving the company's financial performance during this period.

• Announced 2025 financial guidance in January, with updated net product revenue guidance, including the net opportunity, to be provided post-approval. • Gross to net for the cabozantinib franchise in full year 2025 is expected to be between 29% and 30%.

• Risks related to product commercial success, market competition, regulatory review and processes, clinical trial conduct, compliance with regulatory requirements, dependence on collaboration partners, and costs associated with discovery, product development, business development, and commercialization activities.

Q: Hey, guys. Thanks for taking my question, and congrats on all the progress made here. Mike, just for everyone who's worried about zanzalintinib looking like cabozantinib, the misguided notion that you talked about earlier today, can you -- just to dismiss that a little bit more, could you just talk to us a little bit about, one, the lack of overlap in the approved indications for cabozantinib and where you anticipate zanzalintinib will be? And I think the important one here is, if you've ever seen the payers, I guess, force a substitution with the generic of something that is not the actual generic product? I don't think I've ever seen that happen, but would like to get your thoughts on that.

A: Yeah. Thanks, Ashtika. Look, I don't want to speculate on that level of details. I think the main focus is we are comparing zanzalintinib combinations to individual standards of care for STELLAR-303, STELLAR-305. We certainly plan to do that with STELLAR-304 as well as what we have planned for 311 in the NET area. So, the goal here is to obviously run large global randomized pivotal trials that will allow us to generate positive data if it's there to be able to push those indications forward. So -- and that's the only comparison that comes to us. All the hand-waving between small data sets as a single arm or very small randomized Phase II data sets is very, very challenging. Everybody knows that. We certainly know that, and we're focused on running, executing and reading out these pivotal trials because ultimately, that's what will drive the label-enabling efforts that we need to get zanzalintinib moving forward into more patients in the commercial setting and really helping those patients who need better therapies.

Q: This is Paul on for Michael. Thanks for taking our question. One is on cabozantinib for NET, sort of pending the label discussions and formalization, how are you currently thinking about the launch trajectory and expectations for uptake? Do you see any potential for an initial bolus here given that this is a sort of indolent disease? And then, for zanzalintinib, can you just comment on the emerging safety profile now that we have more data and indications beyond RCC? On balance, what are your current thoughts on the ability to maintain dose intensity with zanzalintinib especially when combining with checkpoint inhibitors? Thank you.

A: PJ, you want to take the first part? Yeah. Thanks for the question, Paul. So, with regards to NET, as Mike mentioned, we are completely launch-ready, and the team is, I would say, very excited and just ready to go, so we can have the opportunity to help appropriate patients with neuroendocrine tumors pending an FDA approval. That said, as we've said previously, we believe that the opportunity is significant. We talked about the fact that in 2025, we look at the NET market. And oral shares within that market, we believe the oral market in 2025 and contemporary pricing dollars is about $1 billion substantial opportunity. And when we think about the CABINET study and the data set, it's a broad data set, really the only of its kind that addresses all sites of origin for NET, all the different grades of the tumor, different SSTR status, et cetera. So, it can really be a choice for any type of NET patient pending approval. We've talked about before to the overlap of customers that we see in terms of customers both that we are calling on currently for our approved on-label indications, as well as prescribers who have already written CABOMETYX is about 80%. So that's significant. So that speaks to really the ability for us to really come out of the gates fast and accelerate the launch trajectory of this. And we hear from market research that physicians are excited about the data, they like the efficacy they see. They understand safety. And when they find out, this is cabozantinib that they're familiar with, it really makes them comfortable in terms of dose reduction and managing that toxicity profile. So, we're really excited and just can't wait to get out there and bring this to patients. The final thing I'd mention here, too, is that the oral therapies we're competing with effectively Sunitinib, Everolimus and [indiscernible] are all generic. So, this will also give us we believe a substantial advantage of share of voice and other aspects of things. So, we're excited for the launch.