Exelixis - Q3 2023
November 1, 2023
Transcript
Operator (participant)
Good day, ladies and gentlemen, and welcome to the Exelixis third quarter 2023 financial results conference call. My name is Gigi, 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, Miss Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please proceed.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Thank you, Gigi, and thank you all for joining us for the Exelixis third quarter 2023 financial results conference call. Joining me on today's call are Mike Morrissey, our President and CEO, Chris Senner, our Chief Financial Officer, P.J. Haley, our Executive Vice President of Commercial, Amy Peterson, our Chief Medical Officer, and Dana Aftab, our Chief Scientific Officer, who will review our progress for the third quarter 2023, and end September 30, 2023. Peter Lamb, our EVP of Scientific Strategy, will join us for the Q&A portion of the call. 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 costs associated with discovery, product development, business development, and commercialization activities. With that, I will turn the call over to Mike.
Michael M. Morrissey (President and CEO)
All right, thank you, Susan, and thanks to everyone for joining us on the call today. Exelixis had a strong and very active third quarter across all components of our business. We're excited to see the cabozantinib franchise continue to grow, both in size and potential scope, while we advance a range of discovery and development programs to build the Exelixis pipeline of the future. Our singular goal is to improve the standard of care for patients with cancer. Key highlights for the third quarter include, first, strong performance of the cabozantinib business, with continued growth in demand and revenue in the U.S. CABOMETYX maintained its status as the leading TKI for RCC. Third quarter 2023, cabo franchise net product revenues were approximately $426 million and approximately $586 million in the U.S. and globally, respectively.
Chris and PJ will update our progress in the quarter and provide additional commentary on our financial and commercial activities. Second, XL's top priority in R&D is to deliver a pipeline of clinically and commercially differentiated medicines for large populations of cancer patients with high unmet medical needs. We'll highlight our integrated strategy spanning discovery, development, and commercialization activities that builds on past and recent Cabozantinib success at our upcoming R&D investor event on December twelfth in New York City. Amy and Dana will highlight our third quarter progress at a high level today, and I'm excited to have them join me and PJ as we dive into the details in December.
Our upcoming R&D day is the first we've had in many years, and we look forward to the opportunity to elaborate more broadly on our strategy to propel the organization forward and serve more patients with cancer, all in our continued efforts to generate sustainable, long-term value for shareholders. Third, business development activities remain a priority as we continue to seek opportunities to access clinical assets, with potential to generate differentiating clinical data in solid tumor indications. In September, Exelixis and Insilico announced an exclusive license agreement granting Exelixis global rights to develop and commercialize XL309, a potential best-in-class small molecule inhibitor of USP1, which has emerged as an important target for synthetic lethality in the context of BRCA-mutated tumors. Fourth, and finally, the second MSN trial took place last week at the U.S. District Court in Delaware.
The case is now submitted, and we don't want to get ahead of the Court by commenting or speculating on any components of the trial or the potential ruling, either today or in the future. We feel very confident in the case we presented last week and the overall strength of our Cabozantinib patent estate. With that, please see our press release issued an hour ago for our third quarter financial results and an extensive list of key corporate highlights achieved in the quarter. I'll now turn the call over to Chris.
Christopher J. Senner (EVP and CFO)
Thanks, Mike. For the third quarter of 2023, the company reported total revenues of approximately $472 million, which included Cabozantinib franchise net product revenues of $426.5 million. CABOMETYX net product revenues were $422.2 million and included approximately $14 million in clinical trial sales. As a reminder, clinical trial sales have historically been choppy between quarters, and we expect this to continue in future quarters. Gross to net for the Cabozantinib franchise in the third quarter of 2023 was 27.8%, which increased slightly when compared to the second quarter of 2023. Based on our gross to net in the first nine months of 2023, we are estimating gross to net will be between 28% and 29% for the full year of 2023.
Our CABOMETYX trade inventory increased by approximately 400 units when compared to the second quarter of 2023. Total revenues also included approximately $45 billion in collaboration revenues, including approximately $38 million of royalties earned from Ipsen and Takeda on their sales of cabozantinib in their respective territories. Our total operating expenses for the third quarter of 2023 were approximately $490 million, compared to $392 million in the second quarter of 2023. The increase in total operating expenses sequentially was primarily driven by higher R&D expenses in the third quarter of 2023, which was primarily related to the $80 million upfront payment associated with in-licensing of XL309. Our SG&A expense declined in Q3 2023 when compared to Q2 2023.
This decline was attributable to lower proxy advisory fees, partially offset by higher stock-based compensation expense. Provision for income taxes for the third quarter of 2023 was approximately $4.8 million, compared to a provision for income taxes of approximately $19.2 million for the second quarter of 2023. The company reported GAAP net income of approximately $1 billion, or 0 cents per share on a fully diluted basis for the third quarter of 2023. Third quarter net income and EPS were impacted by the increase in R&D expense, primarily related to the $80 million upfront payment to Insilico. The company also reported non-GAAP net income of approximately $32 million, or 10 cents per share on a fully diluted basis.
Non-GAAP net income excludes the impact of approximately $31 million of stock-based compensation expense net of the related income tax effect. Cash and investments for the quarter ended September 30, 2023, was approximately $1.9 billion. The level of cash and investments supported our ongoing cash flow from operations, provides Exelixis with the flexibility to invest in internal discovery activities, to pursue external business development opportunities to expand our pipeline, and allows us to return capital to our shareholders through the $550 million share repurchase program we announced in March of this year. During the third quarter of 2023, we repurchased approximately $218 million of Exelixis shares at an average price of $21.08.
Since the commencement of this program, of the share repurchase program, we have repurchased approximately $345 million of Exelixis shares at an average price of $20.35. We remain committed to fully executing on the $550 million share repurchase program this year. And finally, turning to our financial guidance for the full year of 2023. Given where we are in the year, we are tightening our revenue guidance and we are increasing our R&D and SG&A expense guidance. The increase in the R&D expense guidance is to reflect the Insilico deal we announced in September. Please see slide 14 of our Q3 earnings presentation for further detail. I'll now turn the call over to P.J.
P.J. Haley (EVP of Commercial)
Thank you, Chris. The third quarter of 2023 was a strong quarter for the cabozantinib franchise. Team continues to execute at a very high level, which has resulted in CABOMETYX continuing to be the number one prescribed TKI in RCC and second-line HCC. Additionally, CABOMETYX, in combination with nivolumab, remains the number one TKI plus immuno-oncology combination in first-line renal cell carcinoma. In terms of the business, CABOMETYX TRx volume grew 8% year-over-year in Q3 2023 relative to Q3 2022. Furthermore, the business remains strong both in terms of demand and new patient starts. CABOMETYX continued to perform well in Q3 from both a marketplace and competitive perspective. CABOMETYX again led the TKI market basket in TRx share at 38%.
As we have discussed previously, the first-line RCC market is extremely competitive, and Q3 was the fourth full quarter in which CABOMETYX plus nivolumab was the number one prescribed TKI plus immuno-oncology combination in first-line RCC. Positive physician experience with CABOMETYX plus nivolumab continues to be reinforced as we highlight and promote the 44-month long-term follow-up CheckMate 9ER data, with median overall survival for the CABOMETYX plus nivolumab arm, 49.5 months, representing an improvement of 14 months over the comparator arm sunitinib, with a hazard ratio of 0.70. These data fortify the leadership position that CABOMETYX has in the RCC marketplace. Looking forward, we are excited about the positive top-line results for CONTACT-02 in metastatic castration-resistant prostate cancer, as well as the recent data from the CABINET trial in neuroendocrine tumors.
Both studies are in patient populations with significant unmet medical needs, and pending potential regulatory approval will provide the opportunity for continued growth for CABOMETYX in the coming years. At our R&D Day in December, I look forward to further discussing these two potential opportunities for the cabozantinib franchise. Additionally, I'm excited to share at our event a commercial perspective on our emerging pipeline assets. Our experience with CABO informs our strategy and ambition for zanzalintinib, XB002, XL309, and our pipeline... as we focus on bringing drugs to market in areas that will provide significant impact to patients and value to Exelixis. And with that, I'll turn the call over to Amy.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Thanks, P.J. I want to first state how thrilled I am to be here at Exelixis. Our research and clinical pipeline is broad, both in terms of modalities and targets, representing a variety of development opportunities, which, combined with our translational and clinical development capabilities, provide an exciting and high-potential platform for growth. I'm looking forward to bringing it to fruition and sharing progress at our upcoming R&D Day. Today, I will provide a high-level update on our clinical pipeline, with the intent of going into much more detail in December. Let's start with our most mature compound, Cabozantinib. In late August, we announced positive top-line data from not one, but two phase III studies. CONTACT-02, which evaluated Cabozantinib plus atezolizumab in patients with metastatic castration-resistant prostate cancer, or mCRPC, and CABINET, which evaluated cabo in patients with pancreatic or extra-pancreatic neuroendocrine tumors. I'll begin briefly with CONTACT-02.
This is a randomized, open-label study of Cabozantinib plus atezolizumab versus second novel hormonal therapy, or NHT, in patients with mCRPC. This study has multiple primary endpoints of both PFS and OS. PFS is determined by blinded independent central radiology review and per RECIST 1.1. So, for example, progression by PSA only was not considered a PFS event to best inform this endpoint. Eligibility was restricted to patients with measurable disease. That is, bone-only, non-measurable disease was not allowed. In August, we issued a press release noting a statistically significant PFS benefit in favor of cabo-atezo and a trend also favoring cabo-atezo in overall survival. No new safety signals were observed, and adverse events were on par with what is expected from either cabo or atezo monotherapy. Based on feedback from the FDA, we will discuss a potential regulatory submission when the OS results are more mature.
Also in August, we announced positive results from CABINET, a phase III study conducted by the Alliance for Clinical Trials in Oncology. The study evaluated cabozantinib versus placebo in two independently powered cohorts, one in previously treated patients with pancreatic neuroendocrine tumors or pNET, the other in patients with extra-pancreatic neuroendocrine tumors or EPNET. It was really two positive phase III studies in one. Data were recently presented at ESMO by Dr. Jennifer Chan, noting PFS hazard ratio of 0.27 and 0.45 in the pNET and EPNET populations, respectively. In pNET, the median PFS for cabo was 11.4 months versus 3 months for placebo. In EPNET, the median PFS for cabo was 8.5 months versus 3.2 months for placebo.
No new safety signals were identified for Cabozantinib, and we look forward to discussing these results with the FDA once we bring the data in-house. I will now turn to zanzalintinib. Our STELLAR-001 and 002 phase 1b/2 trials are evaluating zanza monotherapy, zanza in combination with PD-1/PD-L1 immune checkpoint inhibition, and also triplet combinations of zanza, anti-PD-1, and CTLA-4 or LAG-3 targeted therapies. As you can see from the slide, we have multiple expansion cohorts in a variety of tumors testing these combinations. Data generated from these cohorts will serve to support expanded development for zanza. Indeed, we previously shared early, yet promising data with zanza monotherapy in patients with clear cell kidney cancer, where compelling and durable responses are being observed in both cabo-naive and cabo-pretreated patients.
These data have been accepted as late-breaking oral abstracts for presentation by Dr. Monty Pal on Friday, November tenth, at the International Kidney Cancer Symposium, taking place in Nashville. Turning now to our registrational studies with zanza, enrollment continues into STELLAR-303, evaluating the combination of zanza plus atezo versus regorafenib in patients with non-MSI-high, non-DMMR, refractory metastatic colorectal cancer. This study was revised to evaluate outcomes first in patients who do not have liver metastases, non-liver met or NLM, followed by an evaluation in the ITT population. The sample size for both NLM and LM patients is capped to ensure adequate number of events in each of these analyses. STELLAR-304 is our Phase III trial, which compares the combination of zanza plus nivolumab to sunitinib in patients with previously untreated metastatic non-clear cell kidney cancer and is now enrolling in multiple countries.
Last but not least, STELLAR-305, our phase II/III trial, which will evaluate zanzalintinib in combination with pembrolizumab versus pembrolizumab alone in patients with untreated PD-L1 positive, advanced or metastatic squamous cell carcinoma of the head and neck, was just posted to clinicaltrials.gov, and we are full gear into site activation mode. Given the emerging favorable activity and tolerability profile of zanzalintinib, we believe this combination of zanzalintinib plus pembrolizumab may result in improved outcomes versus single-agent pembrolizumab and has the potential to offer patients a chemo-free option. We're excited about the emerging data with zanzalintinib as monotherapy and in combination with ICI. This, combined with clinical data generated with cabozantinib, provide compelling rationale to move zanzalintinib into broad development program that will address patients with unmet needs. We will continue to evaluate the treatment landscape to inform the design and initiation of additional pivotal studies for zanzalintinib.
I'll turn now to XB002, our antibody drug conjugate, which targets tissue factor and incorporates a modified auristatin as the payload. We've initiated expansion in multiple cohorts at two different doses, which will allow us to determine the best dose to take forward into registrational studies and combinations, while also fulfilling Project Optimus. Combinations with nivolumab and with bevacizumab are also underway, and data here will serve to inform a broader clinical development program. Finally, I'm very excited about XL309, our recently acquired USP1 inhibitor. We anticipate full transfer of all obligations towards the end of this year and are in the process of assessing how best to aggressively and urgently advance this asset through dose escalation, both as monotherapy and in combination.
We believe this to be a best-in-class molecule that has the potential to not only deepen responses seen with DNA damage, damaging agents, or agents that inhibit DNA damage repair, like PARP inhibitors, but also to broaden the addressable population beyond those who carry a BRCA mutation. In summary, we're advancing a robust pipeline of molecules while maximizing the potential benefit to patients from our flagship asset, CABO, in unmet need indications. I'm optimistic about what we can do for patients who, despite significant advances, still need better treatment options. I'm very much looking forward to sharing more detailed information about our progress and the recently presented data at our R&D Day in December. With that, I'll turn the call over to Dana.
Dana T. Aftab (EVP of Research and Development)
All right, thanks, Amy. I just want to start off by saying how excited I am to be working with Amy as my partner in R&D. I've known her for quite some time, going back to the days when we were working with Genentech on cobimetinib, and having her here on the team now has brought a lot of energy and focus into our organization. We've been working together, preparing for R&D Day next month, and I'm excited about what's in store for that event. So what you'll hear, what you'll hear from me today will be just some brief highlights of what I'm planning to discuss in greater detail next month. In the third quarter, we made solid progress toward our goals of advancing existing development candidates toward IND filings and advancing early discovery programs to development candidate status.
We are on track to file four new INDs next year, three of which will be from existing pre-IND biotherapeutics programs, and one of which will be for XL495, a new small molecule development candidate that we recently added to our pipeline. For our existing preclinical biotherapeutics programs, we are on track with IND-enabling activities and expect to file INDs for three programs next year. The first will be for XB010, our 5T4-targeted antibody-drug conjugate that carries a cytotoxic antitubulin payload, which we expect to file around mid-2024. The second IND will be for XB628, our bispecific antibody that targets PD-L1 along with NKG2A, which is on track for IND filing in the second half of 2024. The third IND will be for XB371, a tissue factor-targeting antibody-drug conjugate that carries a topoisomerase I inhibitor payload.
This program is on track for IND filing in late 2024. So as I mentioned earlier, we recently added XL495 to our pipeline. XL495 is a potent and selective small molecule inhibitor of PKMYT1 that was generated from an internal discovery program. Inhibition of PKMYT1 is synthetically lethal in the context of increased cyclin E levels, which occurs across a wide range of tumors, including ovarian, endometrial, and colorectal. Our molecule was designed to be best in class and is tracking toward IND filing around mid-2024. In addition to these programs, we expect to nominate several more development candidates from our biotherapeutics discovery programs by the end of this year.
We are currently on track to reach our stated goal of up to five new development candidates this year, which, in addition to XL495, will include a monoclonal antibody targeting a novel immune checkpoint pathway and some new antibody drug conjugates. All of these programs represent first or best-in-class approaches and have the potential to meaningfully contribute toward our mission of helping cancer patients recover stronger and live longer. With that, I'll turn the call back over to Mike.
Michael M. Morrissey (President and CEO)
All right, thanks, Dana. As you heard on the call today, Exelixis had a strong third quarter of 2023 and is moving quickly to capitalize on our momentum in the fourth quarter. We're excited to advance all our efforts to help many more cancer patients as we discover and develop our pipeline of the future. We look forward to sharing our latest strategies and science at our R&D Day in December. I'll close by thanking the entire Exelixis team for their collective efforts to support our discovery, development, and commercial activities. The team is highly motivated to achieve our mission to help cancer patients recover stronger and live longer. We drive for results every single day with clear urgency and focus to build on our long history of innovation and collaboration. We look forward to updating you on our progress in the future.
Thank you for your continued support and interest in Exelixis, and we're happy to now open the call for questions.
Operator (participant)
To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. We ask that you please limit yourselves to one question. You are welcome to get back into the queue. One moment for our first question. Your first question comes from the line of Michael Schmidt from Guggenheim Securities.
Michael Schmidt (Senior Biotech Analyst and Senior Managing Director)
Hey, guys. Good afternoon. Thanks for taking my questions, and congrats on, on all the progress. I just had a pipeline question regarding the upcoming STELLAR-001 zanzalintinib data at the kidney conference next week. Could you just help set some expectations here in terms of number of patients, you know, and how many of them will be CABOMETYX or naive? How should we interpret the data coming out of the meeting? Secondly, you mentioned the upcoming R&D Day a few times. Could you just help us again understand sort of what to expect there? In particular, will you disclose any clinical data from some of the New York City clinical stage pipeline products? Thanks so much.
Michael M. Morrissey (President and CEO)
So Amy, take the first one, and we can all opine on the second one. So go ahead.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yeah. Thanks, Michael, for the question. I think we're really excited about the data that continues to emerge from Zanza, especially in the clear cell kidney cancer cohort. There's not much I can give you in the terms of details, simply because the data is embargoed and the presentation is just around the corner, on November tenth. It will be data that is updated around the 32 patients, that receive monotherapy Zanza. So I'm looking forward to going deeper with you on that at R&D Day, but that's about all I can say right now.
Michael M. Morrissey (President and CEO)
Okay. And on the R&D Day side, just again, manage expectations as we talked about, I think, numerous times today. We're gonna focus on strategy and science as the main, the main update, for investors. I wouldn't expect any new, late-breaking, unpublished data. We have a commitment to our investigators to do that first. So you'll see that, throughout, 2024 for the new compounds. We're super excited to frame, our strategy and our tactics in the context of the success we've had with CABO and how we're moving forward with the pipeline. So it'll be a, action-packed day, and we're looking forward to seeing you and everybody there.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Jason Gerberry from Bank of America.
Jason Gerberry (Managing Director and Equity Research Analyst)
Hey, good evening. Thanks for taking my question. Mike, I know you can't talk a lot about the IP with CABO, but my question is more, is there any engagement with MSN as a counterparty regarding settlement, or do you feel, you know, you're operating with a counterparty unwilling to engage in settlement talks? We know that settlements do occur post-trial, in some instances as well. So just curious to the extent you can comment on that dynamic. I appreciate it. Thanks.
Michael M. Morrissey (President and CEO)
Yeah, Jason, thanks for the question. Again, I really can't say a lot here. I'll put it this way. We like talking to people. We have a variety of different collaborators who we work very closely with. It's in our culture, it's in our DNA to be as open and interactive as possible. So that goes here, right? If there's a settlement to be had, we won't be rate-limiting in how we view that. Again, I think we had a really strong week last week. I'm not going to get ahead of the court. They have their job to do.
I was super, and I think the whole team was just super proud about being able to go out there and put the context of the trial, the data, the legalities into context, and, you know, we're, it's now in the hands of the court. So, but you're right, things can happen when they happen, and if there's a settlement opportunity, we'll certainly engage there.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Gregory Renza from RBC Capital Markets.
Gregory Renza (Senior Biotechnology Analyst)
Hey, good evening, Mike and team. Congrats on the progress, and thanks for taking my question. Mike, maybe just a question for Amy. I know, first time hearing from Amy, and Amy, as you've really diving right in to the Exelixis pipeline, and we look forward to the data and the R&D day coming up. Just wanted to give you an opportunity to talk a bit about the opportunities you see here with the pipeline and also perhaps some of the challenges that, you know, you think are ahead of you in order to realize the value that you're talking about in the portfolio, in the pipeline. Thanks very much, and congrats again.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
All right. Well, thanks, Greg, for the question. I appreciate it, and thanks for the welcome. I'm really excited to be here. I think one of the reasons, the main reason I'm excited to be here is because of the pipeline that we, that Exelixis has and the opportunity to, you know, apply my development skills and the company's development skills into bringing these all of these assets into, into the limelight and to fully develop them where they warrant, more development. I'm particularly excited about Zanza. I think the data that is emerging, is demonstrating that it's the best in class, and, you know, again, we'll be able to share more of that, at R&D Day.
And I think our tissue factor ADC is differentiated from the Tivdak molecule in a couple of different ways, most notably in the payload, and so the toxicity profile should be different. So we have opportunities there. And with the USP-1 inhibitor that's just entering clinic, that's a best-in-class asset, we believe. And as I mentioned in the call, the opportunity to not only deepen the responses seen, for example, in combination with PARP inhibition, and so to further improve those patients who might derive benefit with PARP inhibitor, but also to broaden the accessible patient population beyond those with BRCA mutations. So there's a lot of really exciting opportunities for Exelixis in the future. It's hard to focus on any one of them, but I absolutely will be focused on each of them.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Jay Olson from Oppenheimer.
Jay Olson (Managing Director and Senior Analyst)
Oh, hey, congrats on the progress, and thanks for taking the question. For CONTACT-02, can you talk about when the next OS analysis might happen based on your modeling? And then also, can you file the sNDA without OS? And how would you describe clinically meaningful benefits for PFS and OS in this particular setting? And where do you see CABO plus Atezo fitting into the treatment landscape? Thank you.
Michael M. Morrissey (President and CEO)
Okay, so Amy, let's take, let me take the first part of that question, and then maybe P.J. can kind of frame the commercial opportunity at a super high level.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yeah, great. Thanks, Jay. I appreciate the question. So, OS is event-driven, based on current estimates. We believe the final OS would occur sometime in 2024. I'm really not at liberty to talk much more about that. As for clinical meaningfulness of PFS, you know, it's a, it's a totality of the data, and I'm not going to speculate on what a PFS difference has to be, but rather just remind people, the patients that were enrolled into this study represent a very poor prognostic group of patients. These are patients who must have had measurable disease, and that included patients with liver disease, patients with extranodal visceral disease. So a group of patients that otherwise don't have many options available to them.
And, you know, well, it's the totality of the data, so not just improvements in PFS, but also tolerability and accessibility and ease of delivering the therapy. And I think with that, I'll let P.J. talk about the commercial opportunity.
P.J. Haley (EVP of Commercial)
Great. Yeah. Thanks, Amy, and thanks for the question, Jay. I think as Amy highlighted, this is an area of certainly high unmet medical need for patients, so that's really important, and we've heard that from KOLs all along. You know, I think as you think about how this regimen could potentially fit in, right now, obviously, the majority of patients in the first line metastatic castration-resistant prostate setting are getting an NHT. And then beyond that, you've got subsequent NHT, chemo, and obviously, this study addresses, you know, patients relative to a second NHT. So there's that data, but then beyond that, chemo, I think is something that physicians and their patients, we hear consistently, really want to delay in treatment.
So I think a chemo-less option could potentially really help that in this setting. And then also, these are two novel mechanisms of action, potentially, again, for the prostate cancer setting. So I think you know, anytime there's a lot of excitement for new MOAs in a disease setting, and certainly you know, in a setting where there's no broadly available immunotherapy agent, there certainly be a lot of excitement should this get approved for that as well. So I think you know, you would potentially see CABO-Atezo used prior to chemo and you know, across multiple lines of therapy depending on the patient.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Thanks for the question.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Asthika Goonewardene from Truist Securities.
Asthika Goonewardene (Managing Director and Senior Biotech Analyst)
Hi, thank you for taking my question. This is on the line of Asthika from Truist. I have one question regarding about how do you view the impact of the recent approval of belzutifan, which is the HIF-2 alpha inhibitor from Merck. They are trying to launch this drug in second line RCC, where we know the CABO has a very strong presence. So yeah, so I want to ask you, do you expect that this drug would be capture a significant shares of the, you know, market? And, how do you, you know, plan to differentiate CABO from other drugs? Thanks.
Michael M. Morrissey (President and CEO)
Okay, thanks for the question, Amy. P.J., you want to take that one? Thanks.
P.J. Haley (EVP of Commercial)
Yeah. Hi, Jing. Thanks for the question. Assume you're referring to the recently presented Lightspark data at ESMO. So obviously, no approval for that data yet with the HIF inhibitor. And really, I think it's important to realize and contextualize that that study is really in a later line setting in patients who have received IO and a TKI, was head-to-head with everolimus, and didn't have an OS benefit. You know, we've had certainly a lot of discussions already with KOLs at ESMO and beyond about the data. And, you know, what we really see is that having likely competing in very late lines of therapy in RCC setting, predominantly with tivozanib.
We don't see any significant impact with regards to the cabo business generally or our second-line business.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
We'll take the next question, operator. Thank you.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Andy Hsieh from William Blair.
Andy Hsieh (Research Analyst)
Oh, great. Thanks for taking our questions. And Amy, congratulations on your new role, and look forward to working with you. So, first of all, really pleased to see the first positive IO-containing regimen in prostate cancer. So, there's a lot of moving pieces in the field. Just curious if you can give us a sense of what the FDA is looking for pertaining to, to OS, right? I guess if you look at the Novartis PSMA-4, that allows for crossover. Sounds like they want to look for something, along the lines of no detriments there. Is the bar higher for CONTACT-02, just given the no crossover nature? So that's number one. And then, you know, kind of staying within the GU space, this morning, KEYNOTE-564, OS benefit in the adjuvant setting.
Curious about your view on that regarding its impact to the first line of metastatic market, and whether you have plans to kind of navigate through that market evolution. Thank you.
Michael M. Morrissey (President and CEO)
All right. Thanks, Amy. So let's have Amy take the first part or the first question, and then P.J. can talk about adjuvant. Okay, Amy?
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yeah, sure. So I appreciate the question, and the complexity behind it. I can't pretend to say what the agency is actually looking for. What I can say is that it's not inconsistent with the feedback that other companies are getting, and they just want to see some more mature OS data. So I'll keep you posted as that progresses. Stay tuned.
Michael M. Morrissey (President and CEO)
Okay, awesome. P.J.?
P.J. Haley (EVP of Commercial)
Yeah, great. Hey, Andy, how are you doing? Thanks for the question. You know, with regards to the, the KEYNOTE-564 study in the adjuvant setting, as you know, that, that data was presented originally, years ago, and it's been on the market for some time. The original OS hazard ratio, while not mature, was, was quite, impressive, so to speak. So this is really no surprise. I think that, that these data were positive. I think it's important to remember that this sort of high risk, population, as defined by the study, is, is quite small relative to the number, you know, patients who get a nephrectomy in a given year. So we're talking just a, a few thousand patients.
And I think that's already been working its way through the, through the treatment algorithm with regards to those patients re-recurring in the first line setting. So we have a pretty good feel for that. Really haven't seen much of a significant impact to date. You know, what we do hear is patients who, potentially recur while on pembro or relatively shortly after pembro, in the adjuvant setting. You know, many physicians do sort of think of them as, as then refractory, so to speak, to, checkpoint inhibition. And, often then that leads them to, consider a TKI monotherapy in the first line setting, and obviously with CABOSUN and, the totality of our data, we're, we're well positioned for those patients.
You know, I think overall with OS, certainly a few more physicians will prescribe that, but we really don't see, you know, much of a significant impact in the first line setting. Obviously, these things take years to develop, but we've kind of been in it now for a couple of years and pretty comfortable with that analysis.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Great. Thank you, P.J., and thank you, Andy, for the question. Operator, we'll take the next question, please.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Yaron Werber from TD Cowen.
Yaron Werber (Managing Director and Senior Biotechnology Analyst)
Great, thanks for taking my question, and nice job on the case last week. My question has to do, and I know you can't comment on what you think the outcome would be, but can you maybe just comment? The judge did give some specifics on the next steps in terms of the initial briefs, response briefs, and the reply briefs, which are due February twentieth. Do you, maybe just kind of generically, procedurally, can you help us understand the timing, the way you see it a little bit? Like, does that mean that the judge has a certain amount of time after the reply briefs to then render a decision or give a timeline by which he will render a decision? Or just so we understand procedurally how you understand things to be.
P.J. Haley (EVP of Commercial)
Yeah, Yaron, thanks for the question. It's really hard for me to opine upon the nuances and details there. I would refer you back to the transcript to see exactly what he asked for and what he's looking for. To me, it seemed like pretty standard stuff with how this stuff normally works, but I wouldn't want to get into the weeds there and the details. It's just, A, I'm not an expert, and B, it's just, you know, I want to keep it, you know, with what's in the public domain, what's in the transcript, and not really opine further.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Akash Tewari from Jefferies.
Speaker 22
Hi, this is Amy on for Akash. Thanks so much for taking our questions. So just two quick ones on Zanza. Number one, when will we get longer-term durability data on Zanza that we can compare versus cabo? Will we be able to get a sense of this from the upcoming STELLAR-001 data? And then number two, given that both mono and combo efficacy data for Zanza looks generally in line with cabo, we'd love to kind of revisit your internal goals here for Zanza, given its shorter half-life. Is it to replace cabo and show a better and, you know, better safety and efficacy profile, or to expand into new indications? Thanks so much.
Michael M. Morrissey (President and CEO)
Amy?
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yeah, sure. Thanks for the question, Amy. I like your name. So as for the longer durability, I think you'll, you'll, you'll be able to appreciate why it is that we're excited about Zanza when the after the IKCS presentation on November tenth. And if you're not able to see that, then certainly at R&D Day, where I'll go into some more detail. With regard to the XB001 and XB002 cohorts, many of those cohorts are enrolled and the data is maturing. There's a number of different indications that we are assessing for support to our expanded program, our expanded development program. Not only to give support to what we're currently doing and to support, for example, contribution of components as we proceed with regulatory discussions, should any of those trials be positive.
But also support to expand the development of Zanza into new and different indications, and that's where we'll also leverage cabo. So, you know, I can't go into much more detail, but I will be able to probably give you some good examples of why we're pretty bullish on Zanza at this point in time, given what we know about it relative to cabo and with regard to replacing cabo. I'll defer that back to Mike or P.J.
Michael M. Morrissey (President and CEO)
Yeah, I think you covered it pretty well. Again, just as we said previously, the goal here is to use Xanza to expand the indications, the combinations, the lines of therapy, if you will, in cabo-sensitive types of tumors and indications. The goal is to make that opportunity for Xanza as big as possible across the different dimensions that we're talking about here. So it's a very important aspiration that we have because we think we can help a lot more cancer patients who need better therapies across the different lines of therapy, early, late, different combination partners, et cetera.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Silvan Tuerkcan from JMP Securities.
Silvan Tuerkcan (Director and Equity Research Analyst)
Yeah, thank you. Thanks for taking my question. Congrats on the quarter, and Amy, congrats on the new job. I have a quick question. In the press release, it seems like you released that COSMIC-313, so the triplet had a second OS look, which did not meet the threshold for statistical significance. Can you just comment on when the next OS look is and what we can extrapolate from the fact that, you know, the second OS look did not meet the threshold? What are the prospects here, and what are the plans as in, you know, the OS look with respect to filing and engaging with the FDA about these two populations that have different outcomes here in this trial? Thank you so much.
Michael M. Morrissey (President and CEO)
Amy?
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yep. Thanks, Silvan. Thanks, Mike. Thanks, Silvan. So, we did a press release that the, there was an interim that was conducted in the third quarter. Data did not meet the threshold for statistical significance. And so the trial will continue to the next planned analysis, which is anticipated in 2024. Just to remind everybody that these are event-based, and I'm not really able to provide further precision, on that at this point in time, and so I don't really have much more to say around that.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Great. Thank you. Operator, we're happy to take the next question.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Peter Lawson from Barclays.
Peter Lawson (Managing Director and Senior Equity Analyst)
Great. Thanks. Thanks for taking the question. Mike, you mentioned no new data at the R&D Day. Would you include kind of preclinical data around the new pipeline products? And then would you include timelines around data releases for 2024 for the pipeline?
Michael M. Morrissey (President and CEO)
Thanks, Peter, for the question and for digging into the details for the December meeting. Yeah, I was speaking to no new clinical data. You'll certainly see, I think, a lot of preclinical data that Dana will present and use to frame the opportunities for all the upcoming IND candidates and ADC candidates that we've got. That's relatively broad and deep, and, you know, we have a lot to share there. Timelines, again, we'll see how that frames out. Again, we are committed to presenting clinical data as it matures. That is in the eye of the beholder in terms of how that looks from a duration and durability point of view. So stay tuned on that. And, again, we're we have a very.
I think deep presentation that we're pulling together right now, that covers all the aspects of strategically how we, how we view success and how we're going to go about reaching these very aspirational goals for helping improve standard of care for patients with cancer, and then a lot of details and really getting in the weeds on on a variety of different molecules that we're really excited about. So looking forward to seeing you there.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Great, Mike. Thanks. Operator?
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Jeff Hung from Morgan Stanley.
Jeff Hung (Biotechnology Equity Research Analyst)
Thanks for taking my question. Can you talk about what differentiates XL495 from other PKMYT1 inhibitors in development, and what gives you confidence that it can be best in class? You know, is it greater selectivity, potency, lower risk of drug-drug interactions, or something else? Appreciate any color you can provide. Thanks.
Dana T. Aftab (EVP of Research and Development)
Sure. Thanks, thanks for the question, Jeff. This is Dana. You know, so as I mentioned, XL495, we believe to be best in class. We don't say that lightly. We have a, a lot of data to back that up. All I really want to say right now is to stay tuned for R&D Day, which is where we will be presenting a lot more data on this compound. But we did look at the competition and pursued a very solid rationale toward developing something that was best in class, not just a, a second follow-on compound.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Thanks, Dana.
Operator (participant)
Thank you. One moment.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Operator?
Operator (participant)
Yes, one moment for our next question. Our next question comes from the line of Etzer Darout from BMO Capital Markets.
Etzer Darout (Managing Director and Senior Biotechnology Analyst)
Great. Thanks for taking the question. So thank you for laying out sort of the R&D plans for Exelixis. But just wondered if you could comment at all on sort of, you know, the phase 1 assets that you have in development, and maybe for 2024, where we could see potential proof of concept in the clinic with, you know, assets like CBX-12, the ADU-1805 compound, and some of the other assets that you have in phase 1 early clinical trial, I guess, is sort of where we could see potential proof of concept there. Thank you.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Hi, Etzer. Thanks. It's Amy. I'll take that. So we do have some other assets that are partnered, that are in phase 1, and we are actively always looking at the data, and we'll make database decisions on how those progress and move forward. But those are good partnerships with our XB002 that is advancing into its expansion cohorts. I would say, you know, we're in the process of understanding, really, proof of developability. And the way I differentiate proof of concept from proof of developability is, you know, proof of concept, you have a couple of responses, and it's interesting, or you hit a pharmacodynamic marker, and it looks like the drug is doing something to the tissue in the human, but you don't yet know how to move that into a pivotal study.
These expansion cohorts for XB002 are designed to actually inform us if we see a certain amount of activity, how would we move into pivotal studies? And so those expansion cohorts are enrolling when they mature and when we have that data, as you know, it's just dependent on how long it takes for the responses and the durability of the responses. So, you know, we could have some things in 2024. And then for XL the USP1 inhibitor, right? That's just getting started. And as we transfer that in and we go through dose escalation, I think we'll have a better understanding of what we need to see in terms of proof of developability there.
I think we already have a good head start understanding the patient population that is most likely to respond to this sort of an agent, and harnessing that knowledge in terms of our eligibility criteria, will help us understand how we might quickly move into full development with that asset. And I think I'll stop there.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Great, Amy. Thank you. Operator, we'll take the next question.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Chris Shibutani from Goldman Sachs.
Speaker 21
Hi, this is Steven on for Chris. Thank you for taking our questions. Two from us. On CABINET, the data that was presented at ESMO showed quite a clear PFS benefit, though the OS curves didn't separate as much. So I guess in that light, how confident are you that regulators will view that data package as an approvable data set? And then on XL309, recently in-licensed, can you speak to what gives you confidence that that could be a best-in-class asset among competitive USP1 inhibitors? Thank you.
Michael M. Morrissey (President and CEO)
Okay, good. So Amy, why don't you take the CABINET question, and then Dana can speak to 309.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yeah. Thanks for the question, Steven. It's an important question to bring up because the way the study was designed is that crossover was allowed, and the study was unblinded early due to the significant benefit in progression-free survival that was observed, and all patients at that point in time were crossed over. So there's not really an expectation for survival to for us to observe survival. Whether or not that passes the sniff test of the agency will is you know, it's a discussion we'll have. We're pretty optimistic, given that this is such a rare disease and a high unmet need in late lines of setting, where patients really have nothing else available to them.
We're optimistic, but, you know, again, we have yet to have that initial discussion.
Michael M. Morrissey (President and CEO)
Okay, great. Dana, 309?
Dana T. Aftab (EVP of Research and Development)
Yeah, thanks for the questions, Stephen. Regarding 309, so even though that's an in-licensed compound, we actually did quite a bit of experimental work ourselves in our own labs with that molecule. We have quite a data set that supports our statement that we believe it to be best in class. And so similar to what I said about XL495, we're planning to give a lot more detail at R&D Day. So I would just say, stay tuned for the update there, where you'll see a lot more, where you'll get a lot more information on the molecule.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Great. Thanks, Dana.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Joe Catanzaro from Piper Sandler.
Joseph M. Catanzaro (Director and Senior Biotech Equity Research Analyst)
Hey, everybody, thanks for taking my question. Maybe just a quick one from me. So Amy, I know you have some ADC experience in some prior roles. So just wondering how you think about the next-gen Topo I tissue factor ADC that you guys have in the pipeline relative to XB002, and maybe more generally, how you think about auristatin tubulin-based payloads versus topoisomerase-based payloads, and maybe how you develop these two programs sequentially. Thanks.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Hi, Joe. Thanks very much for the question. Thanks for the welcome. I definitely have some experience in ADCs. With regard to the Topo one payload, I think it's actually an opportunity to take a molecule into tumors that both express tissue factor and are sensitive to topoisomerase inhibition. Not all tumors that express tissue factor are sensitive to anti-tubulins like auristatin. Adding a different payload actually allows us to potentially cast a wider net with regard to some of the tumors that we might pursue, and of course, would offer a differentiated toxicity profile. When it comes to the auristatin versus, you know, MMAE, there are certain toxicities that are similar, for example, eye tox, but there are other toxicities that aren't as similar between our payload and what you might expect from Tivdak.
So neuropathy and bleeding is not something that we would expect to see with ours. So the payload is different for our XB002 than what is with Tivdak. We're already starting to have a differentiated toxicity profile. We're excited about the data that, you know, Tivdak has shown, and that offers us an opportunity to think about how we might bring XB002 forward into that space, leveraging our differentiated toxicity profile. So I hope that answered your question.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Great, Amy. Thank you.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Stephen Willey from Stifel.
Stephen Willey (Managing Director and Senior Equity Research Analyst)
Yeah, good afternoon. Thanks for taking my questions, and just a couple quick clinical ones for me. So, on STELLAR-305, I'm just kind of curious. I know Merck announced the LEAP-010 trial didn't hit its endpoint, I guess, a couple of months ago. And just curious how you think about Zanza differentiation relative to Lenvima within the setting of head and neck. And then maybe just a quick follow-up to Joe's question. I know for JEWEL-101, you're now looking at cervical as part of any of the combination expansion cohorts. And I guess just kind of given some of the concern around combining Tivdak with Bev and the overlapping bleeding risks, just kind of curious why that's not on your radar screen right now. Thanks.
Michael M. Morrissey (President and CEO)
Okay, Amy, let's handle maybe the second question first, just to clear up that misconception.
Amy Peterson (EVP of Commercial and Chief Medical Officer)
Yep. Yep. Clear that up. Cervical cancer is in our list of expanded cohorts for JEWEL-101. We are absolutely investigating it. And then with regard to STELLAR-305, what gives us confidence, even though Pem-Len didn't quite hit the mark, is the data that was generated with Cabo-Pem. In the study of 33 patients where we had a 54% response rate and a PFS of 14.6 months, we think that that benchmarks favorably to what Len-Pem showed in their phase 2, which was an ORR of 36, and a PFS of 8.2 months. So we're different. So that was Cabo-Pem.
This is what we're bringing forward is Zanza-Pem, which is what we believe to be a best-in-class and better than what we could have observed with Cabo and already Cabo-Pem in cross-trial comparisons, looks to be better than Pem-Len. Hope that answers it.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Thank you, Amy.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Christopher Liu from Leerink Partners.
Christopher Liu (VP and Equity Research Analyst)
Hey, guys. Thanks for the, thanks for the questions. So you mentioned that during the R&D day, it's going to be focused a lot on the science. Just wondering if there's any color you can give us in terms of, you know, when we can expect to see data for some of these pipeline assets, like the tissue factor targeting ADC, the CDK7, the USP1 that you recently in-licensed. Anything on that? And then in terms of just a quick second question, in terms of business development, are you guys looking at assets that are earlier in the clinical stage, or would you guys consider something later on in the clinical stage as well?
Michael M. Morrissey (President and CEO)
Yeah, thanks for the, thanks for the questions, Chris. It's Mike. I'll answer both questions. Starting with the BD question, first, look, we're, we're very, interested, looking for molecules that are clinical-stage assets, early stage, mid-stage, late stage, that have, the data that help us understand the potential for both clinical and commercial differentiation, right? So that can be early, and that can be late. Again, we have to be, we have to have the right level of conviction that what we're looking at and potentially, either partnering or acquiring, can really move the needle for patients. Because, again, through the, the Cabo lens, that's the only way we're going to be able to build value, in this very, very competitive marketplace.
In terms of R&D day and timelines, getting in the weeds there probably isn't advisable right now. Why don't we handle all that in December? I think it'll be a great, great morning, and looking forward to having everybody there. So again, we can frame the science with the strategy, with the details to help everybody see where we're going and, you know, how we're going to be able to meet these really large aspirational goals to help patients with cancer.
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Thank you, Mike.
Operator (participant)
Thank you. At this time, there are no further questions, and so I will turn the call over to today's host, Susan Hubbard. Ms. Hubbard?
Susan T. Hubbard (EVP of Public Affairs and Investor Relations)
Yeah, thank you, and thanks everybody for joining us today. Certainly, if you have any follow-up questions, don't hesitate to reach out to me or Murad. We'll get back to you right away.
Operator (participant)
This concludes today's conference call. Thank you for participating. You may now disconnect.