Exelixis' CEO Presents at 25th Annual Piper Jaffray Healthcare Conference (Transcript)

Dec. 3.13 | About: Exelixis, Inc. (EXEL)

Exelixis, Inc. (NASDAQ:EXEL)

25th Annual Piper Jaffray Healthcare Conference Transcript

December 3, 2013 10:30 AM ET

Executives

Mike Morrissey - Chief Executive Officer

Charles Butler - Head, IR and Corporate Communications

Analysts

Ted Tenthoff - Piper Jaffray

Ted Tenthoff - Piper Jaffray

Thanks everybody. We’ll get started with the next presenting company Exelixis. My name is Ted Tenthoff. I’m from the Senior Biotech Analyst here at Piper Jaffray, and before I begin, I’m required to point out certain disclosures regarding the relationship between Exelixis and Piper Jaffray, which are located at the back of the room and also at the registration desk.

So Exelixis as you probably know is developing cabozantinib which is a MET, VEGFR2 inhibitor for several types of cancer. The company has actually gained approval. I think, it was right around this time last year, I think in this week last year to sell COMETRIQ in medullary thyroid cancer. And most importantly, we will get data from the Phase 3 COMET studies in castration-resistant prostate cancer sometime next year.

Here to update us on the story is CEO, Mike Morrissey; and also Charles Butler, who heads up IR and Corporate Communications. And I think I am going to hand it over quickly to Charles to walk through the…

Charles Butler

Make lot of us happy here quickly. During the course of this presentation we’ll be making forward-looking statements regarding future events or the future performance of the company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results of course, could differ materially. We refer you to the documents that Exelixis' files from time to time with the SEC, and in particular the company’s quarterly report 10-Q filed on October 30, 2013.

These documents contain and identify, under the heading Risk Factors, important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including without limitation, the availability of data at the reference times, the risks and uncertainties related to the initiation, conduct, and results of clinical trials, risk related to the commercialization of COMETRIQ, degree of market acceptance of and reimbursements for COMETRIQ, risks and uncertainties related to regulatory approval processes and compliance with regulatory requirements.

Ted Tenthoff - Piper Jaffray

Awesome. Thank you, Charles.

Charles Butler

Now you are happy now.

Ted Tenthoff - Piper Jaffray

So I was saying just other conferences last year, the FDA approved COMETRIQ for medullary thyroid cancer. Sales have been really a very, very pleasant surprise in this indication. So tell us about some of the current marketing efforts, tell us about this disease indication and what’s driving the success?

Mike Morrissey

Okay. Good morning, everybody. So COMETRIQ again was launched in January of this year. We are excited to be able to have our first home grown compound that we discovered, we developed and now we are commercializing for the company. Obviously, we have big ambitions for that beyond MTC and currently, we have five ongoing pivotal trials to understand the scope potentially both therapeutically and commercially.

So like ongoing in terms of the MTC indication, it’s a small indication, micro niche, nano niche. We have done a lot of market research over the last year or so. We understand it pretty well. I think the advertised incidence was about 4% to 5% of off thyroid cancer, by our work, it appears to be much lower than that. So we see it between 1% to 2% and there is probably in the U.S. between 500 and 700 drug eligible patients for both first line and second line therapy.

So if you assume that a patient will only get a drug once, not first line, but then second line and vice versa, so it’s again. We are talking about hundreds of patients. So relatively small but it’s one that we think we have covered pretty well.

We have a -- I would say right sized effort in terms of both sales and marketing. We have 15 reps now out in the field, really working with MTC treaters to help them understand the drug, the adverse event profile, the efficacy based on the label indication.

So we are off to a good start. Obviously, this is just helping us build the foundation. I think what’s important for us is to be able to learn as a company how to commercialize the drug and I think we’ve done it over the last year. I think that will pay off dramatically if we are successful in prostate cancer, renal cancer, liver cancer event. We want to be able to be sprinting when that happens, so lot to do.

Ted Tenthoff - Piper Jaffray

Mike, one of the things you guys have learned is that probably a little bit of a surprise versus what your initial expectations were is that MTCs actually be treating a little bit more in the community than maybe you would have anticipated outside the University Hospitals. So how far are we into penetration of this 500 to 700 patients and what’s your opinion in here?

Mike Morrissey

So in terms of on-market research is that we feel that we are in the 80% range in terms of market penetration for the drug. We talked about this on our Q3 earnings call. So we have pretty good coverage in terms of prescribing physicians in both academia and the community payor coverage as well. We’ve got the vast majority of private, public government payors involved here. So we feel we have that market covered fairly well. Certainly with other drugs in the market in terms of vandetanib is approved for MTC, sorafenib is used to off label.

There is other drugs in this space, so again it’s never going to be a large commercially viable indication but it is one that we think is important kind of get going for us in terms of how we are going to be successful going forward. In terms of Europe, we have a deal with Sobi, Swedish Orphan Biovitrum to do the Named Patient Use Program in Europe and rest of the world and they will be our sales and marketing partner, should we get approval in Europe as well up to the end of 2015 only for MTC.

So we’ve maintain the right to sell COMETRIQ broadly, globally across indications outside of MTC and certainly having that 2015 ended for that is very important to us that will correlate well with them. We would expect to possibly be getting traction in terms of the prostate indications as well in Europe, so lots of thing going on there.

Ted Tenthoff - Piper Jaffray

So you touched on prostate and obviously the larger indication here is prostate cancer. You’ve completed the enrollment just recently the phase 3 COMET-1 trial. Walk us through to the design of this study and when should we be expecting data?

Mike Morrissey

So we have two pivotal trials going for metastatic CRPC. COMET-1 has a primary endpoint of overall survival. COMET-2 is around a pain palliation endpoint. Together we think the opportunity exists to really cover a very broad cut of what the disease -- how the disease manifest itself in late-stage patients with metastatic CRPC.

The prostate cancer tumor, if you will, locally the metastasize in most patients with the bone that bone disease will become dominant over time driving a variety of different sequela including bone pain which makes the patients more immobile, drives their ultimate comorbidities and ultimately their death.

So our view is having a program that covers both survival in one trial and pain palliation in another. It’s a very good way to potentially capture what we’ve seen and we could picture that what we have seen in Phase 2 around a variety of different endpoints for the drug. And we have done several Phase 2 trials now looking at 250 plus patients. So we’ve got a pretty good profile that we understand how the drug works.

At least in Phase 2 and now the job is now to approve that in Phase 3. In terms of COMET trials themselves, we are looking at a population that is really, I would say -- I would say formally third line. So it is the population that post both chemotherapy and either abiraterone or enzalutamide in either sequence.

So when we design COMET-1 and COMET-2, we expected both abiraterone and enzalutamide to be successful. And if we chemo space that’s happened now, certainly abi is doing quite well prechemo, I would imagine enzalutamide would do as we’re going forward.

So we’re looking formally at a third line setting. It’s a large growing population. Unfortunately with all these new therapies that are available today, no man with metastatic disease is being cured. Everybody progresses and there is a very important unmet medical need as patients progress through these new hormonal therapies, through the either old or new chemotherapies, through the different radiotherapies to have a new drug or new drugs that will help them.

So both trials look at -- again that third line population, we’ve announced on Monday that we’re looking in the prechemo space in combination now with abi as well. So we certainly have again ambitions to move up, a larger patient populations. We think the biology makes sense, certainly the Phase 1 data from Dana Farber looks good. So lots going on there as well.

Ted Tenthoff - Piper Jaffray

So just to be clear, both COMET-1 and COMET-2 are necessary to file the NDA, correct?

Mike Morrissey

I think both COMET-1 and COMET-2 are necessary to have the optimal label to commercialize the drug and what’s obviously in dynamic and competitive space. I think our take from a regulatory point of view is that certainly success with COMET-1 for overall survival would be enough to file by itself. Certainly having COMET-1 and COMET-2 being successful would make that filing ultimately the commercial opportunity much more -- give us much more upside.

Ted Tenthoff - Piper Jaffray

Okay. Fantastic. And if there are any questions, please raise your hand. So we started to touch on the importance of this activity in bone disease. And I think you are right, I mean thankfully for old men and their families, the prostate cancer has been area of really frankly tremendous therapeutic success over the last two to four years. However, at the end stage, it still really is a skeletal disease…

Mike Morrissey

Yeah.

Ted Tenthoff - Piper Jaffray

… and a painful skeletal death and I think that is one of really really key factors of Cabozantinib. We just saw that there is a lot of interest in this space, there acquired, it’s been I think $2.4 billion maybe for Alpharadin which was just approved and launched. So there is clearly a lot of opportunity here. Tell us about that final stage setting a little bit more about the competitive setting there?

Mike Morrissey

Yeah. Yeah. It’s -- as you mentioned and I talked about before this is a disease that is predominantly focused on the bone, right. The vast majority 90 plus percent of men who have metastatic disease have bone predominant disease and that bone disease drives their morbidity and their mortality.

It’s horrible as it’s been described to me it is the worst pain a man can feel from the standpoint of going through that progression in their disease. Narcotics are effective to a degree in attenuating that pain, but again at -- at the -- really at the most optimal narcotic doses pain relief is not complete.

So we see this and I think all the feedback that we have gotten from the [Community of Care Health] is that the profiles that we have seen in Phase 2 around extending progressing free survival, resolving bone scans, reducing the pain using, again validated pain instruments, seen narcotics decrease, seen bone biomarkers improve, seen CTCs drop, the profile I think is one that -- we think is very attractive and has driven us into invest the time and shareholders money to be able to prove that and to try we can push that data with and overall survival signal in Phase 3.

So in terms of the competitive dynamics here, I would frame it little bit differently, I think cabo is not competing with the other drugs, but it is very complementary to those drugs. If you look at the history of prostate cancer, therapies, classically you have monotherapies, you have chemotherapies, you have radiotherapies, and those three classes of drugs have been the mainstay in prostate cancer for the last 30 plus years. If we are successful, Cabozantinib would be I think the first really new class of molecules that would able to again impart benefit to patients with metastatic advance prostate cancer.

So, I mean, that’s the goal. I think mechanistically the fact that we modulate both bone disease, as well as visceral disease, nodal disease, brain disease as we have seen across the profile of cabo in Phase 2 is very attractive. So again, Cabozantinib is proven anti-tumor compound, the question is how broad that will look, how can we prove that in other pivotal trials, but certainly the bone component is very important one.

Ted Tenthoff - Piper Jaffray

What is the outcome of this, yes.

Question-and-Answer Session

Unidentified Analyst

(Inaudible)

Ted Tenthoff - Piper Jaffray

So the question was, Algeta stop the Phase 3 study based on OS endpoint early, should we read anything into if COMET runs full term?

Mike Morrissey

So, I would say, just to be clear so our [SIMCA] trial COUGAR 301, AFFIRM all under post-chemo space, all read out at the interim, right. So we have an interim analysis as well in COMET-1. I would say you can look at the interim data when it comes out, as it is what it is. We’ll tell you if it works, we’ll tell you if it does not work and we are going to keep going. What’s important for us is to show success in terms of the actual stats and rejecting the note, after that if we do it the interim correct, it needs to go all the way through the end, that’s okay too, so.

Ted Tenthoff - Piper Jaffray

Can you remind us about that interim that gives you (inaudible)?

Mike Morrissey

We haven’t said much about it. We haven’t given any stats on that and we haven’t given any more precise timing on that. So we have guided for 2014 that we expect topline data for both COMET-1and COMET-2. We have given no more precise guidance on when that will happen. We have given no order that we expect. We are keeping that pretty low profile. We are getting no credit for guessing right and we get beat up for guessing wrong. So, 2014 is it and that’s the plan going forward so.

Ted Tenthoff - Piper Jaffray

So, one of the top places of event, 387 events for that studies that triggers it when you completed enrollment plan?

Mike Morrissey

So we announced that we have met the enrolment goal at the end of September, okay. And we talked about on our Q3 call that we added, enrolled approximately 900 patients from January 2013 to that press release. So, you can use that as a reasonable vector for enrolments, once we have enough of a critical mass of sites up to enroll patients.

Ted Tenthoff - Piper Jaffray

Okay. Awesome. So one of the early concerns with cabozantinib in the prostate cancer setting was the higher 100 mg dose and really through a lot of work with Matt Smith you guys were able to explore these dose reductions where you dramatically improved tolerability, particularly on the fatigue side, but really retained that lower efficacy side. Maybe you can just touch on that for a moment and remind us on kind of what those lower efficacy timing?

Mike Morrissey

Yes, it’s a great point. So, I think one of the big naps about cabozantinib historically has been its adverse end profile and its tolerability profile is challenging and we have gotten that feedback, I would say cross indication. So, I think part of the challenge in the oncology setting is to find, not too much finding the active dose but finding the optimal dose.

And you can do that I think well once you have a sensitive tumor type where you can ask the dose response question in a meaningful sort of way. And we did that with Matthew Smith at Mass. General using bone scan response as a rapid readout to give us some idea about that dose response and I think as Ted pointed out, the initial Phase 2 work was done at 100 milligrams daily. Most of those patients dose reduced down to 60 and that was their more or less stable dose. A fraction of those reduced on 40, which Matt has shown in IST to be almost as active as 60.

If you look at the average dose intensity in Phase 2, it’s around 55 mg to 60 mg anyway. So we have used that 60 milligram dose as a starting dose in all of our pivotal trials for prostate cancer, for renal cancer, for liver cancer and we are seeing good overall behavior and tolerability there. But it's nice to have a lower dose that is almost as active and that’s been shown now in Phase 2 as well so.

Unidentified Analyst

Absolutely. So, I am going to move on from prostate cancer unless there is any other questions. I was very impressed, ASCO two years ago by the activity cabo showed in both liver and kidney cancer. And I’m not surprised to see this with the mechanism of action here in terms of targeting that. But remind us about some of that data. You have subsequently started the Phase 3 METEOR study and also the Phase 3 CELESTIAL study, whoever is named in these, gets up on this in my view. I love the meeting. Walk us with…

Mike Morrissey

I was vetoed but that’s fine, that’s what I know.

Unidentified Analyst

Walk us through some of the activity that you’ve seen outside for our states here and how these trials are setting up. Because they really sets up for carba to be a potential blockbuster beyond, just beyond (inaudible)?

Mike Morrissey

Yes, our view here has always been that the broad activity we’ve seen in Phase 2, where we’ve seen objective resist responses in 15-plus tumor types to date, really frames the opportunity as one that carba could be a franchise player in the oncology space in similar vein in as what you saw with (inaudible).

So now we have to prove that obviously and that takes a lot of locking and tackling and cash to get done but that’s the ambition that we have. And that’s why we’re focused the company on this single asset.

We know liver -- the biology is very strong around the -- I would say, dual role that both the MET pathway and the VEGF pathway plays in driving the development and the survival of those different tumor types. Again we had data at ASCO in 2011, that was I think, pretty encouraging from the standpoint of in the renal and that kind of small single arm, not randomized population, so all the caveats that go with that.

We saw a PFS value in a very late line population, that was approximately three fold longer than what's been seen normally, say for mTOR or sorafenib in the second line. So that was very encouraging, certainly got a lot of people -- a lot of people’s attention. Our response rate was about 30% there, which again in patients with third, fourth, fifth line therapies was quite compelling. Small data set but one that we thought was important enough based upon the biology that we knew about, which actually drove the discovery of Cabozantinib back in 2002 and 2003 was worth going forward in the process.

So, that’s up and going. It’s called median. It’s a second line pivotal trial in our CC patients after they filled another VEGF targeting molecule. Its up and running, its running well. I like the temporal aspects of CRPC reading out in ‘14 and potentially medially in ‘15. Those are both important large GU Oncology indications. If we’re successful on the COMET and we have a sales force for prostate cancer that would be large and motivated having median come out. Within a matter of months after that would be a very strong statement, but putting as stake in the ground about the important role that carba can play in GU oncology.

So median for me is a very, very important priority, the team back home knows that with COMET-1 not being fully enrolled, it’s our number one enrollment priority for 2014. Its one that I’m focused on and the team is focused on heavily because if we can condense the time it takes to go from a positive COMET readout to a positive readout, that’s again from a commercial point of view that’s meaningful in terms of having the filing happen and giving out that with two large indications.

The liver -- similar state, again that is intimately involved in the development of the survival of the proliferation of liver cancer based upon a variety of preclinical data. We have nice Phase 2 data against small single arm non randomized data back at ASCO couple of years ago, which is encouraging and we started CELESTIAL in the fall. Again, that will take longer. It’s just -- it’s a more of bureaucratic challenge to get sites up in Asia. But I think that could readout in the ‘17 timeframe or ‘16 timeframe, which we think will be very attractive as well so.

Ted Tenthoff - Piper Jaffray

So with a minute or so that we have left, I want to touch on a compound that’s been kind of giving a little bit more attention, which is XL518, a MEK inhibitor partnered with Roche, Genentech. And they have been progressing this is in combination with the BRAF inhibitor, Zelboraf. So tell us what the latest is there and what you retained economics on 518?

Mike Morrissey

So, XL518 in their parlance it’s GDC-0973. Its generic name is now called Cobimetinib. So cobi for short is in a pivotal trial in first line metastatic melanoma patients in combination with Zelboraf. Again, Zelboraf, the initiated enrollments in early this year and we expect based upon their guidance, they have both topline data and if successful have that filed in 2014.

So that’s call the coBRIM study. It’s in the area of -- I would say a pretty high level of interest between the data that they’ve generated and had at ASMO in the fall. Again, Phase 1b data, the objective response rate was almost 85%, so very powerful, a tumor activity similar to what GSK had seen with their combination, BRAF MEK program.

So that trial is going, we have a profit share with them and we just opt to get it now on the co-promote. So the economics I think are very attractive. I’m very excited about that compound from the standpoint of what else they are doing with it. They have announced a number of additional trials on top of combining cobi with their AKT inhibitor. With their PI3K inhibitor, they have announced three new Phase 1b combinations, including one with MetMab, one with dual specific HER1, HER3 antibody as well as their PD-L1 molecule, which has some pretty good preclinical data supporting.

So, a lot going on there, again, we have a profit share based upon that sort of -- their economics are very strong and certainly would love to have a second compound in our bags going co-promote.

Ted Tenthoff - Piper Jaffray

Well, fantastic. I appreciate you guys taking time to join us today. Mike, happy holidays and looking forward to a great 2014.

Mike Morrissey

All the best. Thank you.

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