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Exelixis, Inc. (NASDAQ:EXEL)

Analyst Day

December 01, 2011, 09:30 a.m. ET

Executives

Mike Morrissey, PhD - President and CEO

Gisela Schwab, M.D. - EVP and CMO

Scott Garland - EVP and CCO

Charles Butler - Vice President, Investor Relations and Corporate Communications

Matthew Smith M.D., Ph.D. - Professor of Medicine and Director of the Genitourinary Malignancies Program at the Massachusetts General Hospital Cancer Center

Dan George, M.D. - Director of Genitourinary Medical Oncology and Director of the Prostate Clinic, Duke University Medical Center

Howard Scher, M.D. - Chief of the Genitourinary Oncology Service, the Sidney Kimmel Center for Urologic and Prostate Cancers at Memorial Sloan-Kettering Cancer Center

Ethan Basch, M.D. - Associate Attending Physician at Memorial Sloan-Kettering Cancer Center

Steven Sherman, M.D. - Chair and Naguib Samaan Distinguished Professor in Endocrinology and Medical Director, Endocrine Multidisciplinary Center at MD Anderson Cancer Center

Analysts

Eric Schmidt - Cowen & Company

Terence Flynn - Goldman Sachs

Jeremy Joseph - Lazard Capital Markets

Charles Butler

Thanks everyone for coming to the Exelixis’ Annual R&D Day. Before we get to the program and a brief introduction from Mike, let me just read the forward-looking statements.

During the course this presentation we will be making forward-looking statements regarding future events and future performance of the company, actually events or results of course, could differ materially. We are referring to the documents that Exelixis filed from time to time with the Securities and Exchange Commission, specifically the company’s most recent Form 10-Q filed October 27, 2011. These documents contain identify under the heading risks factors, important factors that could cause actual results to differ materially from those contained in these forward-looking statements, including risks related to the potential theory of cabozantinib, that demonstrates safety and efficacy in clinical testing. Exelixis has ability to conduct clinical trials of cabozantinib sufficient to achieve a positive completion, their completion, the sufficiency of Exelixis capital and other resources and the uncertainty of the FDA review and approval process.

So, with that our clinic introduction I will turn it over to Mike.

Mike Morrissey, PhD

All right. Good morning, everybody. Thanks for joining us today. I’m really happy to see you all here. 2011 has been a very busy, productive eventful year for us and I think we are all excited to be able to take some time today along with some very distinguished colleagues and KOLs to share with you the latest data on our lead compound, cabozantinib, talk about some of the key issues that we faced in 2011 and moving forward at the 2012, and be able to really provide some new insight and perspective on where we are going in the future.

Here is our agenda for today. I’m going to give a very, very brief intro just a couple of minutes and then we will get into the bias program. We have three different panels today with five different academic collaborators. And the first panel will be with Dr. Matthew Smith and Dr. Dan George, from Mass General and Duke, respectively. They are both very busy today, and we are happy to have them here, because they need to be in different states for different meetings, giving different presentation this afternoon. So, we have them for the next hour or so, they will each give a brief tentative presentation and then we will have Q&A with them after that.

Local KOLs Doctors Howard Scher, Ethan Basch from Sloan-Kettering will then do the same thing, have a brief presentation as well as and have a Q&A which Gisela Schwab will moderate. After Steve Sherman, one of our key partners and collaborators in the thyroid cancer area will present on caboz activity and MTC and DTC. After that we will have a brief break for lunch and then Gisela and Scott Garland, our new Head of Commercial will provide some perspective on the development and commercial opportunities for caboz going forward. And then we will wrap up the day at about 1:30 or so with management Q&A.

So, what I want to do is just highlight some key topics that will talk about today, you should keep an eye on relative to the data, the discussions, the Q&A, really breaking the four different topics. The first is looking at our prostate cancer data that we have been able to accumulate over the last 18 months. We are seeing very clear signs of clinical differentiations in this indication.

We have enrolled about 200 patients between randomized discontinuation trial but nonrandomized suspension code of that, and Matthew’s ISP in the last 18 months since we saw in the first indexed patients with a very dramatic bone scan response from the University of Michigan. We have been studying this very carefully, we can see this very general profile of received bone scan reduction, pain alleviation, reduction or elimination of narcotics along with a very dramatic bone scan response that drives a very unique profile. And our challenge opportunity going forward is to transform this clinical differentiation into commercial differentiation. And that’s a key theme that you will hear about today several times in terms of how we are going to move forward with pivotal trials that generate the data that we need the global label that will allow us to commercially differentiate cabo in the face of other compounds coming on the scene.

We have a lot of other data with cabo that we have talked about this year, certainly ASCO was a big meeting for us in June in terms of other activities. Again as you heard us say before, we have seen RECIST objective was sponsored to-date in 12 or 13 tumor types. We have seen metastatic lesions in nodal disease and visceral disease and bone disease and CNS disease our strength. So, very unique profile in terms of the depth and breadth of activity we have seen across indications across compartments where metastatic lesions can be found.

So, we hope to be able to profile this compound further, as many of you have seen, we announced that we signed a CRADA with CTEP to be able to do a variety of additional trials and new indications to be able to profile caboz further and Gisela will speak to that as we go forward today.

In terms of cabo, again we owned this compound 100% and we have the opportunity to leverage cabo and other assets to continue to generate non-diluted funding to keep the operation moving forward to building value with cabo as we develop this compound further.

And again on the standpoint of the overall near-term value driver we have really over the last year, again focused exclusively on cabozantinib, we stopped all additional Exelixis funded work with other compounds on discovery and development. We truly are the cabo-only company and we will continue to very carefully use our cash repurchase to be able to drive value in the near-term and in the long-term for both patients and shareholders.

So, that’s the high level view of the company and where we are going in 2012, I want to move forward here rapidly and to give both Matthew and Dan a chance to present and have take your questions before they go.

So, with that I will turn the podium over to Matthew and we will start the program. So, good morning.

Matthew Smith M.D., Ph.D.

Good morning. I will give you little bit of my back that convenience monitor almost impossible to see today. Over the next few minutes I’d like to summarize some of the older data about cabozantinib, older by that I mean in last 18 months as Michael said, and some very new data from our investigators sponsored trial that provides further evidence of activity of cabozantinib including lower dose.

More than most any other solid tumor bone metastases are major problem in prostate cancer. Bone metastases are major cause of morbidity and mortality in men with this disease and most men with fatal prostate cancer die what could really be termed as scalable death. There is a strong rationale for targeting MET and VEGF receptors in metastatic prostate cancer. MET is highly expressed in bone metastases, osteoblasts and osteoclasts express MET and VEGF receptors and response to the corresponding ligands HGF and VEGF. HGF and VEGF appear to direct cross-talk between tumor cells, osteoblasts, and osteoclasts.

These are data that were presented at ASCO from the randomized discontinuation trial showing clear evidence of a direct anti-tumor affect in men with metastatic castration-resistant prostate cancer. And as you will recall from the design of that trial, all of the patients required measurable soft tissue diseases for study entry to very dramatic waterfall plot showing the best response in measureable soft tissue disease in the metastatic castration-resisting cohort. In this study the starting dose of 100 milligrams it's about three-quarters of the patients had improvement in sites of measureable disease and you can see some of these patients had very dramatic improvement.

As you heard many times before, these improvements did not correlate with changes in PSA following treatment. And that’s been a consistent observation; most strikingly though, among men with bone metastases at baseline there was a high rate of dramatic improvements in bone scans. These are some illustrative cases baseline and week 12 bone scans showing a dramatic reduction in bone scan uptake in each of these patients they had a partial response and corresponding pain improvement, you will also note that many of these patients had been extensively pretreated including our prior treatment with docetaxel.

This slide summarizes the effects on pain in narcotics use, there were 83 patients with bone metastases and bone pain at baseline; 56 of those patients or 67% had pain improvement at week six or week 12. 67 patients required narcotics at baseline and 47 or 70% of those patients had pain improvement at week six or 12. 55 patients were evaluable for changes in narcotics use and more than half of those wither decreased or discontinue to use the narcotics following treatment with cabozantinib. So, not only did you see this dramatic bone scan improvement but you had corresponding improvements in pain and reductions in narcotic use.

Cabozantinib has dramatic effect on biochemical markers of bone turnover, these are waterfall plot for serum total alkaline phosphatase on the left and markers of osteoblast activity and plasma CTx on the right the marker of osteoclast activity. If someone who have spent a good part of my career developing bone targeted therapy in advanced caners has a very dramatic effect and would really compete very well with of the best of our existing bone targeted therapies. You will also note that we see these dramatic effects including patients who had prior bisphosphonate exposure. So, these are patients who despite ongoing bisphosphonate treatment have high level improvements in markers of bone turnover.

This slide shows the relationship between bone scan resolution and improvements and other clinical parameters. So, in yellow are shown the patients who had partial or complete resolution of bone uptick and then in gray are patients who had stable disease or progressive disease as their best bone scan response. Compared to those who did not respond by bone scan, bone scan responding patients were more likely to have target lesion progression to be free of progression at six months. Patients who had a bone scan response were also more likely to have pain improvement, decreased narcotic use and reduction in CTx again a marker of osteoclast activity.

Like other receptor tyrosine kinase inhibitors, cabozantinib has some side effects and in the randomized discontinuation trial about one-half of patients required one or more dose reduction by week 12 because of adverse effect. Recognizing that in the very high rate of bone scan responses, we were interested to understand the activity of cabozantinib and tolerability of cabozantinib at lower doses and to do that we initiated an investigator-sponsored trial, this use the certain design adaptive design. So, there are three dose levels, we start at the middle dose and then depending on the activity observed at the middle we either go up and down in dose. So, there is three doses, 60, 40 and 20 milligrams, starting at middle, these are the bone scan responses in the first 11 patients treated in the initial cohort at 40 milligram.

Very importantly in this investigator-sponsored trial, we used a prospectively defined definition of bone scan response using central review of bone scans in the computer assisted quantitative measurement by MedQIA. As you see here all of the patients had improvements in bone lesion area, 10 of the 11 patients met criteria for response with greater than 30% improvement in bone lesion area and again at 40 milligram. Those results prompted us to look at lower dose, we saw less activity at 20 milligrams and they are now withstanding the cohort at 40 milligrams and as of yesterday accrued the last patient to that study.

Here are some examples of the bone scan changes at 40 milligram. If you look at the lower right hand corner you can make it out from the back, these are the quantitative measurements of improvements in bone lesion area at week 6 it's minus 78% in the first subject, complete resolution of disease in the middle subject and a 97% improvement in bone lesion area in the third subject shown on the right.

Now with a word about this method of bone scan assessment, again this is done by company called MedQIA, its computer assisted, and its objective highly reproducible and quantifiable. We are very intrigue by this again impressed with its utility in evaluation in investigator-sponsored trial, but of course, we are starting at, we will require prospective clinical validation and it's our intention to do that in subsequent larger study.

So, I’d like to conclude with a couple of key points based on these observation, cabozantinib is broadly and highly active anti-cancer compound. In my view the activity in prostate cancer is very compelling. It has a distinct pattern of activity that differentiate it from anti-cancer agents either approved for prostate cancer or in development. Most notably it has rapid and potent palliation of symptoms related to bone metastases and is very dramatic improvement in bone scans as you have seen. Based on the results from our investigator-sponsored trial, it's clear to me that the drug retains efficacy and is better tolerated at lower dose. I didn’t take too much time to expand on that latter point, but notably no one has required a dose reduction at 40 milligram.

The bone scan effect that we are seeing and the other effects in bone, in my opinion are sufficient to convert survival benefit and this really and the results of these studies have been inform the design of phase 3 trial. The exploratory endpoint of bone scan response offers the potential for early surrogate marker of clinical response to therapy, very quick pharmacodynamic marker and I’d submit marker of clinical activity to changes we are seeing are six weeks and it is our intention to future studies to even look at earlier time point.

The pattern of activity that we are seeing here is distinct from activity of other agents and we will inform the design of phase 3 studies as you all heard and we will hear about in this meeting our plans to do phase 3 study focusing on pain, the so called 306 study and the study processed on overall survival, the 307 study. Thank you.

Gisela Schwab, M.D.

Thank you very much, Matthew. I’d like to introduce Dr. Daniel George at this point and he is the Head of Medical Oncology for Genitourinary Medical Oncology at Duke Medical Center, and he will speak about the evolving landscape and prostate cancer treatment.

Dan George, M.D.

Thank you, Gisela. Again a slide up here and so, sort of pleasure to speak to you today. From my prospective I have been involved in working with this agent in the 203 study, which we saw an update with at ASCO. And I have been involved in a number of pivotal trial and prostate cancer over the last few years. And here to really talk to you today about these dynamic treatment landscape and what the challenges are for drug development in this context.

So, over the course of the last two years we have seen really a dramatic change in our treatment options both present and emerging now for prostate cancer, patients and all of them based upon overall survival benefits and you can here historically in 2004 the results of docetaxel showing a 2.9 month improvement in median survival. And over the course of really from 2009 to 2011 now, we have seen a series of agents that have also pushed the envelope of overall survival with significant hazard ratios. What I think is really unique about this field is that almost all of these represent different mechanisms of action as cabozantinib.

And I think the real opportunity potentially the challenge here is now, how do we incorporate all of these desperate therapeutic options in the patients with the right sequence, is there a role for future combinations and how can we really maximize the overall survival for our patients using this augmentory and going forward.

Well, I think to do that, we are going to have to understand prostate cancer particularly castrate-resistance prostate cancer better. And probably our best clue is, to how to begin to personalize some of those treatment decisions will be around prognostic factors in risk driver. And there is a long history of identifying prognostic factors in patients with castration-resistant prostate cancer both biomarkers, clinical markers, radiographic markers and tumor factors all had shown independent significance in multivariate models of one study or another.

One that was done by colleague at Duke into Armstrong, this new TAX 327 data that really that first study I mentioned in 2004 that led to the approval of docetaxel prednisone as a standard for patients with metastatic castration-resistant prostate cancer. It’s this model here which is a multivariate model was not necessarily nomogram but looking at a number of factors and identifying five factors that sell out to be independently consistently significant in that multivariate model for overall survival.

And I’ll point them out to you because I think this is kind of give us a clue as to where we are going to prostate cancer, who can be treated with some of the standard therapies today successfully and perhaps where our unmet needs are, what are the population of patients that really are suboptimally treated with the [arm interim] we have today. And I think there are things that we are all concerned about in clinical practice, patients with visceral metastatic disease to grew liver metastases. Significant pain and I think the pain not necessarily is a clinical sign but a biologic sign of this disease. And that was really our second most significant finding there. The presence of anemia and we sometime discount this because we see a lot of anemia in these patients, but this was actually a very important prognostic sign in these patients. Bone scan progression, disease on bone scan not necessarily symptomatic just progression in it of itself is significant. And then prior estimates being used which is something that was historical at the time is really probably somewhat [articulated] at this point.

But if you look at these factors and you pull these together depending on whether there are zero factors, one, two or four factors, you can see a significant difference in the overall outcome of the patients based upon that trial. And in particular if you look at the patients that have two factors and more we can see really significantly decreased survivals, really half of what you see if you have less than two factors.

So, to me that is the risk stratification that we are going to need to go forward to understand what our unmet needs are and really to help enrich the patients that are likely to benefit from novel agent effect. And really impact specifically on some of these prognostic factors.

So, I want to talk about VEGF receptor, VEGF as a target in prostate cancer, and so I think its controversial today particularly based upon some of the data that’s emerged over the last year. And I think it's one that’s really critical to this agent. And certainly I think we are all very much intrigue by the ability to target CMAT in this biology, but I don’t want to forget the fact that this is also a VEGF receptor inhibitor and I think that’s going to be an important piece to the success of this agent. VEGF has prognostic significant castration-resistant prostate cancer like in many cancers. It involve both with PDGF and preclinical models of angiogenesis and certainly those patients with soft tissue disease which we are seeing more and more of now with a natural history of this disease changing. I think this is going to become a more [domain] biology. And then ultimately angiogenesis maybe regulated to some extent to angio receptor biology and actually the effect of androgen therapy.

So, there have been agents that have target VEGF and VEGF receptor in prostate cancer presented in the last year or two, and this was the phase 3 study of Sunitinib versus placebo in patients with metastatic castrate-resistant disease following docetaxel. And you can see that slide where I apologize for the blue, but basically I want to point out to the fact that, at the end of the day here there was no difference in overall survival but there was a statistically significant difference in progression free survival and statistically significant difference in soft tissue objective response.

So, Sunitinib is not cabozantinib, these are different drugs, but if you look at some of these parameters, we may end up seeing results that are somewhat in line with what we might see with cabozantinib. But a very key fundamental difference between this drug and cabozantinib with what we are seeing today is the effect on the reduction of pain. And in this study Sunitinib prednisone really had no statistically significant effect on pain in this population, despite the fact that it did have a delay in disease progression and it did have some of these objective response.

So, I think there is a fundamental difference, not all of these TKIs are the same, and I think this was really an important marker that to some extent we are going to need to move in order to change the outcome of these patients particularly in the post-docetaxel study.

This was the other study that was presented two years ago at ASCO and is in press now in JCO, this is a study of docetaxel, chemotherapy with or without bevacizumab. And I will point this out to you as well the survival curve here not unlike what we see with breast cancer, we see about 0.7 hazard ratio for PFS similar to what we have seen in breast cancer which recently lost its FDA approval for bevacizumab in that disease. This never got an FDA approval in prostate cancer for the simple reason we didn’t see the overall survival effect that we have seen now with many other agents. But again we saw PSA responses, we saw objective for these responses. Net biology here targeting VEGF is just wasn’t potent enough by itself.

These are following on context with dose attacks, but what was interesting in this study was when we did our forethought of some group analysis and this is a large study 1000 patient filed. We see they were several subgroups here when there was a statistically significant by comp in this intervals shift and benefit to the VEGF inhibition in combination with chemotherapy. And particularly viewing the patients with poor prognostic factors patients with anemia greater than or worse than the median; patients with elevated alk phos the bone turnover marker; and patients with elevated LDH another variant significant prognostic factor in this disease.

All of those subgroups showing statistically significant improvement in survival with the addition of bevacizumab, suggesting that perhaps not for the entire population but for the subgroup of patients with particularly aggressive biology that using agents that target some of these underlying pathway perhaps the loner or perhaps even better in combination with other targeted agents or biology like C-Met could have a benefit.

So, I think those two studies suggest to me that open the door or at least leave the door opened for VEGF targeted strategy in prostate cancer, if we can smart about which populations will likely benefit. So, what are the unmet needs in these disease, I’d say those patients who have exhausted standard therapy options and I would include now into that non- histologies docetaxel chemotherapy but some of our secondary hormonal targeted therapies including abiraterone and maybe [Met invasion] in the future.

Patients with poor instinct is particularly those that we have outlined by these prognostic factors, this were met pain, progression on bone scan. Our patients with varying histologies we don’t talk about this much, but we do select overtime an increasing phenotype of small cell or neuroendocrine phenotypes in prostate cancer. And many of these patients with visceral disease will harbor some different histologies to underlying biology of which may be less androgen receptor dependent biology. So, recognizing that as another important piece. And I think our hypothesis going forward is that targeting both VEGF receptor and C-Met are potential beneficial therapeutic targets in this disease.

So, I want to end with a case, one of our cases from the study from the 203 that we have had now on study for a four months. And I think to me it represented or perhaps a one of those unmet needs. This is a patients of ours, he was 57 years old, when he was originally diagnosed with prostate cancer back in 1988. And just to give you a flavor now, 23 year history of this disease. Not uncommon in the patients we are seeing more and more now. This patient actually was in a watchful waiting program, here he actually was a pharmaceutical executive. And its PSA climbed up over 10, underwent surgery at Johns Hopkins by famous surgeon there and had evidence of T3 disease with positive margins. Not surprisingly his disease recurred but at a slow pace and is watched for a number of years, had salvage radiation therapy, we put on a trial there at Hopkins with Celecoxib with no real clear evidence of PSA response. Obviously, went on some peripheral engine blockade with proscar/casodex with possible spine met, when we progressed on that was started on Lupron in 2006, after just one year we had nadir only to 2.0 within another year as PSA started to rise. He was put on some bisphosphonate therapy and he came to see it's due.

We treated him on a number of clinical trials, we treated him with this agent tasquinimod versus placebo is on that study for almost a year before developing some neuropathy and progression on his bone scan. His PSA jumped up to 137 and he has put on our Cougar 302 study. At that time the PSA dropped to 11 and pretty sure he got abiraterone, but he remains blinded on that study. We was on again for about a year and his PSA jumped up again now with new bone met and that’s when he started on chemotherapy. At this point he was 80 years old.

On chemotherapy he had difficult time not surprisingly he is up to about five cycles of therapy, developed again some significant neuropathy, had some problems with growing fatigue and ended up coming off that for five cycles with [grade 3] fatigue. And shortly after coming off, his PSA jumped up to 600, he developed increasing bone pain, fatigue and anorexia. He felt worse not better coming off of this chemotherapy and at that point in time, we started him on the cabozantinib study. Interestingly within a very short window of time, within the first month, I want to say even within probably two weeks he started noticing pain relief and was off of vicodin within a month, was off of bone pain met.

He went in with some fatigue, he maintained that fatigue, he had some diarrhea. The fatigue increased and we ended up dose reducing and down to 60 milligram. At the six week point bone scan had significantly improved, he had almost the complete response, I apologize, I don’t have that for you, but I think Matthew will show you some great examples of that.

Again sort of fatigue with dose reduced him down and we restarted on 40 milligrams, he is doing much better. So, I think finding the right dose for this drug is going to be critical, I think as Matthew has alluded to. Recognizing a population of patients with really chronic disease have been through a number of prior therapies will be important, but here is patient failure from progression falling abiraterone, chemotherapy other targeted agents. I think it's showing a clear demonstrable benefit by both PSA by bone scan and by symptomatic improvement.

So, to me this is sort of one of, I think the areas of unmet needs. It's certainly one of the areas to some extent both the 306 and 307 study will be addressing. I think to a large extent to what extent these kinds of responses with pain and bone scan, I’m going to translate into overall survival is an unknown at this point. But I believe based upon the prognostic factors we have seen by what we have seen correlating with bone pain response and other agents such as docetaxel and overall survival. But there is a legitimate reason why we should be positive about those kinds of findings in these patients. And I will say that, despite all of the other agents we have studied in this field, this is still a unique drug, this is not another VEGF inhibitor. It's just doing something we haven’t seen before. For me it's really, it's certainly exciting from a scientific standpoint from a clinical standpoint, I think we are also very excited that more patients like this can get a real benefit.

So, with that I will stop and we can open it up for questions to both of us. Thank you.

Gisela Schwab, M.D.

Thank you very much. It is I think 10:30 and you need to rush to the airport. I’d like to thank both our speakers very much for their very wonderful presentations and a good discussion. And we will move to the next panel. Thank you. And safe travels.

So, I’d like to introduce Dr. Howard Scher and Dr. Ethan Basch, is from Memorial Sloan-Kettering Cancer Center, both will again give a short presentations. Dr. Howard Scher will begin and speak about end points and prostate cancer beyond its survival. And how cabozantinib fits into the treating paradigms; and Dr. Ethan Basch will later on speak about patient reported outcomes and (inaudible).

Howard Scher, M.D.

Thank you very much to and I’m going to share some thought and really to review what’s been an absolutely amazing two years in prostate cancer field. Having I have been in this field almost 30 years. We have never seen this type of progress and what it’s really telling us have an understanding of disease biology is really translating into clinical benefits for patients. In the past we would typically look at chemotherapy (inaudible), but now we are seeing early responses in our phase 1 trial and this is maybe reflects the dox therapy or understanding of the disease is now translating into us selecting as clinician investigators drugs that we feel will clearly benefit patients.

So, as you heard from Dr. George earlier, the landscape has changed quite dramatically. In 2004 we had only one drug that actually showed a survival benefit but you start looking at where these drugs are positioned in terms of the treatment of what was previously the first line standard docetaxel. We have the approval of Provenge in a pre-chemotherapy asymptomatic population. The TROPIC for Cabazitaxel was post-chemotherapy population. Some of them had symptoms, this was a comparative trial with mitoxantrone and prednisone which was the previous standard for retaliation of pain in the absence of a survival benefit.

The Cougar 301 study which I attribute to the co-chair with Dr. de Bono. Again was a post-docetaxel population based on the understanding that impact AR signaling was a continued driver of growth in this patient population. This trial at the interim showed a 0.64 hazard ratio, finally about 0.75.

ALSYMPCA trial was operating and again included as mentioned both pre and post-chemotherapy patients, all of them had symptoms prior to treatment. This convert of survival benefit as reported by Chris Parker recently and Oliver Sartor.

And again on my 18 year old twin’s birthday we had the pleasure of curing the unblinded analysis of the Medivation trial, which also showed a survival benefit in a post-chemotherapy population. This trial was through placebo as appose to the Cougar trial which had prednisone as a comparator.

Now if you start mining these drugs up again we used docetaxel sort of a benchmark as a previous standard, Provenge in a pre-chemo therapy, abiraterone post-chemotherapy. Abiraterone included a cohort of patients these are non-accrued yet and the Medivation trial in a post-chemotherapy population. And serious issues are, how do we understand which drug to give first, what the optimal combination and how that sequencing agents. And these are questions which we will be addressing.

But I think the most important lessons from these trials is that we are starting to learn that there are many ways to target the malignant process which can translate into clinical benefit. This is the updated review by Dr. Hanahan and Weinberg, outlining what would they previously call the hallmark in cancer. We used to think of using primarily cytotoxic agents to kill cells, but we are learning and if we target for example, AR signaling as we saw with Medivation and (inaudible) that we can confer survival benefit.

We heard about biologic strategies program and in the myeloma population anti-CO activity for conferring its survival benefit with prostate cancer trials ongoing. Anti-inflammatory agents are now playing a role and in the bottom you see lessons now with digesting link which has mono therapy has converted survival benefit, but we are seeing dramatic responses with the two inhibitor both FGF and C-Met as we move into the topic of today.

The important thing is that if we were using the traditional outcomes, the resistant criteria, we would likely meet the benefit of many of these agents and probably discard them as ineffective. So, if we think about how we have to assess these agents, we really require a different paradigm. So, if you break down the drug that are approved around 2004 the FDA challenged us to come up with new metrics for clinical trial development in castration-resistant disease, which was in NODAC in March of 2005 and culminated in the release of what we call the prostate cancer working group criteria which focus less on the measurement of response in trying to distinguish a 49% versus 51% shrinkage but thinking of outlining your trial objectives with a clinical benefit for patients.

So, you think about prolongation of life as delay or prevention or death from disease. There are now four agents that are approved with this indication. Previously there was a the delay or prevention of skeletal related events. First with zoledronic acid and more recently with denosumab, and if we think about control, relief or elimination of pain as a clinical benefit, regular pharmaceutical have an indication again until operating out of survival benefit. But the first trial that achieved this as a systemic cytotoxic agent was mitoxantrone and prednisone approved for retaliation of pain, the trails have not shown survival benefits, but notably there have been no regulatory approvals based on a change in PSA, tumor regressions or clearly a times progressions end point radiographically. But our view that clearly the survival is a very important benefit but not the only clinical benefit particularly for a patient with severe symptomatic pain.

So, targeting in the bone microenvironment, first with the zoledronic acid, and other bisphosphonate and has shown that one can converse in clinical benefit, but most of the agents alone have not spared well, so in red we have highlighted agents that have either not shown any clinical benefit or wanted to have trial and failure of survival. And some of these issue related to trial design, but again as monotherapy these agents are not keen to show an effect whereas with the bone seeking radiopharmaceuticals we have seen clinical benefit, alleviation of pain and a survival benefit, denosumab again compared with zoledronic acid showed to be superior in terms of reduction in skeletal related event.

There is a trial looking at dasatinib which showed dramatic effects on bone turnover, minimal changes in PSA. This is in a phase 3 trial in combination with docetaxel, there is also which are anticipated but who is really was with the cabozantinib that we first saw for the first time dramatic changes in bone scan again as shown earlier. And these type of changes really unprecedented. In fact when I saw for the first time in a teleconference, they said I have to find out what this drug actually does.

But the interesting part there, this wasn’t enough in fact there was dramatic pain relief documented. We have been working with the drug directly now since February and it is in fact the case scenario experience as well. Dramatic improvements in bone scan with the associated significant palliation.

As our experience has evolved in several months they were clearly that there were several hospital scenarios that one can think about. We knew there were potential issues in terms of the tolerance of the 100 milligram dose and there were also some issues with what was the clinical significance of the bone scan, were there other factors that were going along with it. So, using (inaudible) strategic planning group we thought about different hospitals what we call scenarios in a cone of possible futures.

So, if we think about the issue that needed to be addressed before we take into a larger scale trial, first what was the question in terms of toxicity of the 100 milligram dose in relation to the release of pain? What is the clinical significance of the bone scan tracers, there are some questions this is simply a change in tracer uptake which may not be associated with a “clinical benefit”. Where there are other parameters that which make you feel more comfortable to what the significant of the changes actually meant and obviously there is an issue in terms of regulatory approval of this strategy which Dr. Basch will be talking about in a moment.

So, when we first started, we had the issue where we were seeing significant improvements of pain, but there also were issues in terms of the toxicity and tolerance of the 100 milligram dose. But as we have seen from Dr. Smith, we know that now that the 60 and 40 milligram dose have similar effects on bone, we have been treating patients now with 60 milligrams as well. And this is a completely different drug that tolerance is now well within the realm that can be used in a large scale study.

Were there effects on other disease parameters that will make you feel more comfortable that is clinically significant. So, we have seen the effects on bone turnover markers which agents that excludes that effect primarily portion of the this component of the malignant process, have clearly translated into clinical benefit in terms of reductions in skeletal related events and in some cases palliation of pain, but we have also been measuring circulating tumor cells on these patient population and seeing significant declines in these parameter as well. And as been shown with cytotoxic drugs and as we reported with abiraterone at ASCO a significant difference circulating tumor cells conversions from unfavorable to favorable accounts in favor of the drug relative to placebo. And again this is now a biomarker that in itself is on a regulatory path to be qualified as a potential surrogate for survival.

Again looking at patients as Dr. Basch reported early weeks ago, we did see significant new improvements in pain. And we also saw patients discounting narcotics, which is extremely rare in a patient population who become depended on narcotics for palliation of symptoms.

So, we look at here we are now in terms of our scenarios, we have now shown and yet we can still achieve significant pain benefit at the same time we have reduced the toxicity to what is clearly a different drug that can be given on a chronic basis safely. So, we remain very optimistic for the upcoming trial which you will hear more about from a regulatory perspective from Dr. Basch.

Gisela Schwab, M.D.

Thank you so much. Dr. Basch is going to speak about 306 and (inaudible) consideration. Thank you.

Ethan Basch, M.D.

Good morning, New York. I didn’t felt like I left the country this morning, I have to reach back to my high school friends just to get their actions up to the second floor. So, thank you for the invitation, and the departure from the daily norm.

I’m going to be speaking a bit about pain end points, and perhaps more broadly symptomatic end points in the U.S. regulatory contact. Specifically, as it pertains to plan pain palliation trial. And historic I just wanted to point that pain is common in metastatic cancer some prostate cancer as Dan worth pointed out this morning, we increasingly see this patient population in the academic setting, but it turns out that when we look across the population patients with metastases to bone more than half of them have ongoing what we classify as clinically significant pain which defined as a pain score greater than or equal to 4 out of 10 on a zero to 10 numerical rating scale. Despite narcotic analgesic so these patients have clinically meaningful pain despite narcotics and this therefore, really can be defined as an unmet medical need as they presume we have been optimized on analgesic.

Moreover, I also as pointed out in the prior panel, the prevalence in the vary of pain in our patients is often not recognized by us, by practitioners and clinical investigators. And this has been demonstrated in multiple head-to-head comparison these patients versus clinician reporting of symptoms in oncology.

Now pain palliation given that pain is prevalent and this is an unmet medical need, contain palliation service basis for contemporary U.S. drug approval or labeling claim. Well as we think about the regulatory standard in the United States for how a drug can be approved or labeled it is an improvement in how the patient survive feels or functions, then although we as investigators and regulators in the United States have for the most part focused on survival in the surrogate, this latter part feels or functions is an essential case of how we evaluate drug and can serve as a criterion for approval or labeling.

In fact just last week a drug was approved by oncology in the United States to myelofibrosis may stays upon a multi symptom measure that showed a tight correlation with radiographic improvement. And that multi symptom measure getting through pain as one of its component. And I will be glad to speak about that in greater detail with facts of interest.

Also notably claims of symptomatic benefits are common outside of oncology probably around 30% U.S. drug labels over the past five years have included symptomatic benefit within the labeling claim, within the clinical study section. So, certainly FDA is not only comfortable with these sorts of end points, but in fact it's very supportive of them.

And then the final things to note is that pain has commonly been studied in pivotal trials in metastatic castrate-resistant prostate cancer including docetax, abiraterone, cabazitaxel and more recently Medivation, but not with high level of rigor that FDA preferred. We actually have been involved with the design of the pain end points for most of these pivotal trials and the goal was not necessarily a label but more to characterize the symptomatic profile [as we thought].

So, what are the criteria used in the United States for evaluating symptomatic benefits. Well in fact the FDA has issued two guidance’s in the past few years that speak directly to what the FDA thinks about, the principle that considers when evaluating symptomatic end points. And the first was the guidance for industry in late 2009 around a design and implementation of patient-reported outcome, which may have a set of methodological principles we hope for the design, the measures themselves regarding the measurement properties like validity, reliability, sensitivity to change. And the second guidance more recently on qualification both for biomarkers and patient reported outcomes allowing for a predevelopment qualification measurement tools used for towards labeling.

So, within the context of these guidance documents and what we know about the thinking of FDA in the United States and also to some extent EMA and Europe. What are the challenges that are specific to designing and being successful with the pain primary or key secondary end point in oncology specifically.

I’m going to lay out these three and I’m going to point these out because in a couple of moments and later slides we are going to address each of these within the context of the planned phase 3 trial. So, give a sense of how we consider each of these.

So, the first is the pain analgesic must be rigorously measured. The second is that it's potential to conduct pre-phase 3 pilot work in order to understand not only the pain profile of the population but also the performance of the tools that are planned for use in the phase 3. And the third, include a group of three methodological barriers that are classically looked at by FDA and to lesser extent by EMA but they do consider them as well. And I’m going to mention these actually specifically now.

So, first is that narcotic must be optimized prior to enrollment, right. Because in order for this to be an unmet medical need we have to feel confident, that patients have reached maximal pain control, and analgesic regiment without the side effects of those analgesic being overly converse some for the patient, because if the patient is not optimized, by optimize I don’t mean maximize I mean optimize, right. Because they could go to a higher dose but it might be overly symptomatic for them. It's necessary for the patient to e optimized because then we can be sure that the product that we are using is getting an additive benefit on top of narcotics, so that what we are not doing is simply approving a toxic analgesic but actually a product that through its mechanism is giving additive benefit on top of maximum or optimized narcotic analgesia.

The second point here is that we must compensate in new design for possible bias and patient pain reporting due to invert and unblinding by toxicity. And this is a plenty of concern of FDA. And what I mean by this is that when a product is administered to a patient that has toxicities that are clear to both the patient and practitioner which arm the patient has been signed to. The patient practitioner unblinded the treatment allocation this may bias their feeling about how the patient is doing, and it has been shown outside of oncology for example, with an acupuncture trial the unblinding treatment allocation leads patients to bias their reporting around pain. Some people call it the placebo effect and so, it needs to be demonstrated that we are overcoming the potential source of bias in the setting of the trial that maybe inadvertently unblinded.

The third is that it's necessary to employ strategies to minimize missing data, and the study of oncology as patients become ill they may become less prone to self report. And since all of these information is self reported y patients the patients become too ill to self report their pain experience we may find an excessive amount of missing data not at random as we say, right. We are missing data from [set of] patients and in fact those are the patients who self report we care the most about and it's necessary to try to open from that problem.

So, our planed phase 3 trial as I suspect everybody in this room is aware is looking at Xl184 versus mitoxantrone/ prednisone, I’m glad also to speak about the choice of comparator in greater details about the entries, I’m not going to address that statistically here.

The population we are looking at is post-docetaxel as well as post-abiraterone with clinically meaningful pain at baseline, with the primary end point of clinically meaningful pain response of out increased narcotic analgesic use, which is durable or of sick leave period with secondary end points of overall survival in radiographic response.

Now within this trial how is it plan to address the three items that I outlined on this prior slide. So, first challenge is the rigorous management of pain in analgesia. The approach plans within the trial is highly rigorous as in keeping with current FDA thinking and is in keeping with approaches that have previously being advocated and supported by FDA. This approach involve daily reporting of pain and narcotic use for seven day period at certain key time points during the trial including of course, the week six and week 12 key time point.

The second issue is around the subsidy of doing pre-pivotal trial a pilot work. And this has been done quite extensively within the non-randomized expansion with the same target population as planned in the phase 3 and there are couple of striking findings from the pilot some of which were alluded to by Matthew earlier today.

The first is a compliance with self reporting with excellence. Right. In this NRE study in which we did not use the level of reminders that we planned within the phase 3, notwithstanding the lack of these reminders compliance is greater than 90%. This bodes well for that third issue of missing data that I alluded to.

The second striking finding also that was noted earlier is the high level of pain intensity response, approximately 50% in patients with clinically meaningful pain at baseline and this was durable without increasing analgesic use. And I should just note for a moment that if we look at the TROPIC trial which is the registration trial for Cabazitaxel, the mitoxantrone pain response. In the control arm was under 8%. And I’d also further note that the method used to measure pain in that trail was substantially less rigorous than the one that we planned to employ in this trial and therefore, my guess would be that the rate of pain response in mitoxantrone will be even lower in the planed phase 3 we are seeing in TROPIC.

The final point I will make about the NRE data are that the benefits we are seeing regardless of prior lines of therapy. This is just another [data] shown and I won’t label that, but just to walk you through that. Each individual column shows patient pain response of the different weeks of study, week 3, 6, 12 and 18. Each individual blue dot or data point represents the pain response from baseline of an individual patient at that key time point. And so if you look at each individual column those dot represent all of the patients who are valuable at that time point for pain. The red line across the middle shows the line of a 30% decrease in pain which is part of the primary responder definition in the phase 3.

And so, if you look at each of these time points, what you see is if you look below the red line, all of those blue data points show that patients who had a greater than or equal to 30% improvement in their pain compared to baseline. And as you can see as I alluded to on the prior trial is around 50% of the patient.

Regarding the third challenge around methodological issues, there are rigorous plans to address each of these. And I’m going to touch on these briefly, because they actually I suspect will be coming [toward end] down the road when we analyze the study.

The process around narcotic optimization at baseline and we have employed a model in which we will be using the NCCN guidelines which are widely accepted and validated guidelines for analgesic optimization in clinical practice. And those will be employed at baseline in order to make sure that our patients have been optimized with an investigator sign off that the patient indeed has been optimized prior to randomization.

The second issue of overcoming the bias of inadvertent unblinding, classically there are two approaches to demonstrating that we have overcome this potential source of bias. The first is to show a larger [TAX size]. We certainly expect to see given the early evidence of pain response of this product compared to what we already know about mitoxantrone.

The second method for overcoming this source of bias is by finding its tight association between pain response and other measures of tumor response, which in this case would either be biomarkers or radiographic response. And already within the NRE we have seen a very tight association between pain response and radiographic response. So, we expect that this will be clearly demonstrated in our planned trail.

The third issue as minimization of missing data, we also expect to have good success with both because we saw high levels of compliance in the NRE cohort and also because we will employing multiple measures for real-time monitoring of patient reporting compliance with a built-in backup data collection mechanism in which we recap patient in near real-time remind them to report if they haven’t done so.

In conclusion, we see compelling data from phase 2 suggesting pain response and reducing analgesic use with this product. In phase 3 we have designed this trial in keeping with the principles and current thinking of both the FDA, EMA and other regulatory authorities. And symptomatic benefits meet the criteria for drug approval and labeling if the methodological barriers that I have outlined are overcome and if we see no accompanying decrement in survival. Thank you.

Gisela Schwab, M.D.

Other questions, if not I would like to thank our presenters for excellent presentation and a great discussion. Thank you.

So, now I’d like to switch gears and invite Dr. Steven Sherman, who is heading the Endocrinology Department at MD Anderson Cancer Center. Up to the podium and receive event of the emerging world, cabozantinib and thyroid cancer.

Steven Sherman, M.D.

Well, thank you very much it's a pleasure to have this opportunity to talk about thyroid cancer today. If our previous speakers were excited about the changes in their field over the last five years, five years ago probably none of you would have heard of thyroid cancer that’s how much have changed in the last few years.

But to give some brief background, thyroid cancer is now the fifth most common malignancy being diagnosed in women in the United States about 70% of all cases are in women. So, also the most rapidly increasing incidence cancer with the frequency of diagnosis in women increasing about 6 to 7% per year. In men, this is not one of the more common malignancies, but there is some evidence that it can be a more aggressive disease in men.

What’s not as well recognized is the frequency or the prevalence of the disease not just as the incidence is rising. But there are now about as many patients alive in the United States with thyroid cancer as those with lung cancer, numbers are virtually identical. And part of this high prevalence despite a lower incidence in lung cancer is the long survival that most patients tend to enjoy with the disease. It's now one of the more common survivorship malignancies.

Now there are two types of thyroid cancer in general, those that come from the cells that are responsible for normal thyroid function, making thyroid hormone, yield differentiated thyroid cancer, parafollicular and follicular, they are typically called. There are also neuroendocrine malignancies and medullary thyroid cancer that form. And we will be talking about these as two separate cancers because the biology is quite different, the response to therapy but both are clearly of interest for cabozantinib.

Differentiated thyroid cancer is really what’s driving the increase incidence of this disease and now about almost 95% of all thyroid cancers are differentiated thyroid cancer and about 2.5% represent medullary. So, if we try to break down the prevalence, it's about 11,000 cases of medullary and about 420,000 for differentiated.

If we look at the patient to get into trouble, patients who have advanced metastatic medullary cancer stage, distant metastases at presentation, the median survival is only about three years. Many of these patients, however, the distant metastases are identified during long-term follow-up and aren’t necessarily evidenced or diagnosed at initial diagnosis, part of that due to the difficulty of radiologic identification of small volume distant metastases. Nonetheless, by the time it's radiographically evidenced, we are looking at a median survival of only about three years.

In differentiated cancer, because some of the treatment options have been a little bit different and better. The median survival for patients presenting with stage 4 disease those are distant metastases over the age of 45 are diagnosed, age playing an important factor here. But the median survival is only about six years. Most patients show different cancer are presenting with stage 1 or stage 2 disease were in fact the long-term survival, it's excellence and the impact of any particular therapeutic intervention has in reality have been difficult to demonstrate. Or patients with advanced disease and diagnosis this can certainly be problematic.

Despite the general sense, that most patients with thyroid cancer live long enough to die from something else, in fact mortality rate are increasing in thyroid cancer and they are increasing by a small amount but this is in clear contrast to the declining mortality rate for virtually every other solid tumor other than liver cancer and part of that maybe that up until recently there has been virtually nothing being done with regard to exploring new therapeutic options for patients with advanced in metastases thyroid cancer.

In differentiated cancer we have the advantage of being able to use radioactive iodine and this is actually the original molecular targeted therapy introduced for treating metastatic differentiated cancer in the 1940. And this is an example of a patient with lung metastases that don’t show up on a chest x-ray or CAT scan, or virtually any other imaging technique other than radioactive iodine imaging. This kind of patient with diffuse micronodular metastatic disease at a young age can be cured of disease by radioactive iodine. The problem is that we are recognizing that he majority of patients with distant metastases in fact don’t respond to radioactive iodine, and may not have uptake that look for that previous scan.

If you have uptake with lung metastases within your survival is 75%, but in the absence of radioactive iodine uptake it's only about 25%. This is a very important prognostic indicator the ability to detect it. Radioactive iodine uptake is frequently seen in bone metastases, but clinical remission despite iodine uptake is in fact quite uncommon and only about 8%. So, it's very different in fact to treat bone metastases disease when it occurs.

So, what about the use of chemotherapy in 60s or 70s, this has been explored predecessors of my institution reported the first large experience with using chemotherapy. And since that time now nearly 40 years ago, many different cytotoxic agents individually and in combination have been proposed to be potentially effective in not even clinical trials in small k-series. Dr. [Rubesen] with or without this platinum has been explored in larger cooperative group studies.

This slide though shows the complete list of drug that have been proven to prolong survival or progression free survival, prior to 2011. Zero FDA approved effective agents, Dr. [Rubesen] is approved but has never actually been demonstrated in an appropriately done trial to be effective.

Yes, chemotherapy is being used in this disease. Based on our thyroid cancer registry program here in the United States, that I have the privilege to lead, we find that about 1.5% of patients with differentiated cancer and surprisingly 15% of patients with medullary thyroid cancer do get treated or have been treated with cytotoxic chemotherapy despite the lack of effective agents being demonstrated. And if we extrapolate those numbers to the SEER database of prevalent, we find probably about 8500 patients currently alive with thyroid cancer have probably been treated with chemotherapy.

So, that would be the pool of patients potentially to treat and probably even larger given the number of patients who probably don’t get treated because of the lack of demonstrated efficacy. So, what is the approach that we can consider in patients with metastatic disease, radioactive iodine and thyroid hormone suppression therapy in differentiated thyroid cancer as mentioned, cytotoxic chemotherapy and [palliation] intervention are really what we have had. What has been introduced in the last number of years, just as in other malignancies is a role of targeted agents either targeting oncogenic pathways and mutations, or targeting angiogenesis in this disease.

With regard to oncogenisis, the tyrosine kinase receptor RET is very relevant especially in medullary thyroid cancers. There are two types of medullary, there is a familial or inherited form which accounts for about 20% of disease and virtually every one of those familial cases is accounted for by a germline mutation in the Ret proto-oncogene. And there are variety of those mutations that occur.

In sporadic medullary cancer, non- familial, about 50% of cases has somatic mutations of RET as well. So, this turns out to be a very important oncogenic kinase in medullary thyroid cancer and therefore, potentially attractive target.

The other avenue of course, a very important in thyroid cancer both medullary and differentiated is angiogenesis as you are familiar with for other entity. And so if we try to put these together in understanding the signaling pathways of interest in treating medullary thyroid cancer, we have a RET itself which is upstream of the classic map or signaling pathway as well as the PI3 kinase pathway and I think we are having trouble with the pointer.

Recently identified just this year is that maybe as maybe as many as 40% of patients with sporadic medullary cancer also have somatic mutations of RAF. So, these pathways really become a quite critical in treating medullary cancer, but you will notice that also upstream from this post to EGF receptor and C-Met. So, a wide variety of kinases seem to be quite relevant as well as the angiogenesis stimulated by VEGF.

In differentiated thyroid cancer, we have three key oncogenic pathway kinases. There is a translocation of RET study seen in differentiated cancer called RET/PTC. This turns out to be although very attractive as a potential target rather uncommon in patients with advanced disease, but mutations in RAF and DRAF being quite critical in advanced differentiated cancer. We see amplification and over expression of C-Met fairly frequently in papillary cancers also modifications in fibroblast growth factor receptor and the angiogenesis pathways. But also VEGF receptors turn out to be often be present in differentiated cancer cell, so there may be an auto stimulus or a loop when VEGF is accretive.

So, these become the kinases of interest in treatment and a wide variety of multikinase inhibitors in coding cabozantinib, have now been studied in differentiated and for medullary cancer. The common signal being anti-angiogenic many of them also being active against RET and then some being active against some of these other kinases. And what I will try to do is give you a quick overview of where the clinical field is at this point and the role of cabozantinib.

So, if we look at medullary cancer the recent approval of vandetanib, which targets RET and VEGF receptors and also at high dosing. The EGF receptor in the phase 2 trial, patients with inherited medullary cancer who all had germline RET mutation reported last year. We see about nearly 40% unconfirmed partial response rate in that trial. And that led to a large randomized phase 3 trial of vandetanib versus placebo, important study to understand what they did and didn’t show. This trial enrolled patients who had metastatic medullary thyroid cancer, did not require evidence of progressive disease at entry. A very important consideration because many patients with metastatic thyroid cancer will often have indolent slowly progressing disease, where the indication or the need for therapy is not quite clear at this point. So, they did not require progression which almost all of the studies now do.

The other was that if patients progressed their treatment was on unblinded and if they were on placebo they could crossover and receive vandetanib subsequently in an open label treatment. So, this was a crossover available trial as well.

In the data just published and that we are used to justify the approval of vandetanib and medullary cancer progression free survival improved from 19 months in the placebo arm to 30 month with vandetanib or hazard ratio of about 0.46. So, this points out that there was a large population of patients in this trial who had relatively indolent disease because the median PFS in the placebo was as long as 19 month. Nonetheless, they did meet the target for success of the trial.

The survival data have not yet being published but we are presented at the FDA when the hearing was last December, as we can see there was no survival advantage seen yet as of that point, the data still being immature in terms of the total number of event occurred.

Side effects were a significant component of the FDA focus in the hearing in ODAC last year, more than 55% of patients treated with vandetanib had grade 3 or 4 adverse event. And there was a lot debate about the cardiac risk. According to the way the protocol was written only about 8% of patients who had significant QT prolongation, but the FDA focused on a different approach to QT correction in this and risk [which will start] therefore. And according to the FDA independent review more than a third of patients had [ETG] abnormalities on vandetanib that qualified for a great four prolongation. And as a result of this level of concern about toxicity and lack of clarity from the trial as to which patient actually could benefit from treatment.

The FDA approved the drug with two important caveat; one was that despite the design of the phase 3 trial patients had to have demonstration of progressive disease in order to be started on the treatment. And the second was a tightly regulated REMS program required by the FDA particularly because of concern about potential cardiac risk.

So, with that as the background that now being the one FDA approved drug proven in a randomized trial to improve progression free survival. What then would be the role for cabozantinib? It is a very potent RET inhibitor VEGFR inhibitor, but differently from vandetanib has this significant activity against C-Met.

Now because of the preclinical information about caboz activity, at MD Anderson, we actually began to enroll a large number of medullary thyroid cancer patients in the phase 1 trial, those being done at our institution, patients with advanced progressive and symptomatic disease with an early indication of activity, the trial was modified with an expansion cohort, and nearly 40 patients with medullary cancer were enrolled in the phase 1 trial, impressive as we think about the relatively limited prevalence of the disease. Nonetheless, almost very exciting was the confirmed partial response of about 29% more than 30% reduction seen in 49% and stable disease for more than six months in this advanced disease cohort of 41% of patients.

And so on the basis of the phase 1 trial, some additional data not included in the publication, but shown last year at the International Thyroid Congress. The response rate appears to be similar to what the patients have been pretreated with other TKIs including vandetanib or not. And this is an example of what we saw as a clinical response in one of the patients. After four months of therapy, this gentlemen with extensive previous cytotoxic chemotherapy regimen had a very significant response of disease that was compressing to their way.

So, on the basis of this phase 1, the FDA approved moving directly to a phase 3 randomized trial versus placebo require, this study was designed to require demonstration of aggressive progression of disease over defined time period for entry. And if patients progressed, no unblinding occurred and patients could go on to receive other therapies but they could not crossover to receive cabo if they were on placebo.

So, this study was designed and power to try to also address survival issue not just progression free survival, but the primary end point and the discussion with FDA about an approval end point would be improvement in progression free survival. Despite what was the very rigorous design for the trial, it did succeed in enrollment, 315 patients with the target to have a 90% power to detect their 75% improvement in PFS. And enrollment was completed earlier this year. And the top level results were released a little over month ago.

The progression free survival in this trial with a much more rigorous requirement for aggressive disease upon entry improved from four month to 11.2 months, and a hazard ratio of 1.28, a highly significant response better than what had been projected. And I think the design of the trial clearly showed a very different cohort of patients were recruited than what the vandetanib study saw given the rapid growth that we are seeing in the placebo group. And we expect it's a full set of results which are currently under analysis will be presented at a major medical meeting sometime later in 2012.

So, that’s the landscape right now in medullary cancer. In differentiated thyroid cancer the drug that’s been of leading interest and one of the first one studied was sorafenib in series of phase 2 trials, sorafenib having activity against RET/PTC and VEGFR and probably some weak activity against BRAF in various models of differentiated thyroid cancer. Two phase 2 trial published, showing about a 15 to 25% partial response rate that with longer treatment patients who initially have stable disease make along eventually after one to two years to qualify for partial response. And so the most updated data of 38% partial response rate reported from the University of Pennsylvania and ASCO this year.

And so, on the basis of these phase 2 studies a randomized phase 3 sorafenib is currently underway, this is fully enrolled and this sorafenib randomized against placebo in patients with progressive disease at entry, but with an option for crossover if they progress on placebo. And I think probably sometime in 2012, we may get to hear some of the results from the study.

There have been a number of other agents under study including Sunitinib and (inaudible), but kind of the next level of responses are being seen with two other agents, one of them is lenvatinib, which I have been able to work with. Lenvatinib is known as E7080, a very potent RET/PTC and VEGFR inhibitor, but also inhibits the fibroblast growth factor. And similar to cabo in the phase 1 trial at our institution, we began to enroll patients with differentiated thyroid cancer because of the non-roll of FGFR to be proliferative in this disease.

And the results from a phase 2 study I presented at ASCO earlier this year with a nearly 60% partial response rate in technetium with progressive differentiated thyroid cancer at entry. And the median time to response was at the first response measurement at 8 weeks, very little difference where the patients have been previously treated with anti- angiogenic therapy and a higher response rate significant predictor of response in the presence of a RAF mutation in the tumor specimen. And this now just started into a phase 3 trail.

Cabo is something that we were interested as well at the phase 1 level in differentiated, we had one patient with papillary and one patient with follicular at our institution that we enrolled in the phase 1 study again because of the anti- angiogenic role and the possible role for C-Met.

And we did see in the follicular cancer patient, this was a patient who only had bone metastases and therefore was not measurable by RECIST, but the patient had evidence of a bone scan response and improvement in his narcotic requirement. And so based on both the biology and that limited experience, working with Exelixis, we participated in a phase 1 drug, drug interaction trail which Exelixis needed for FDA portfolio. But this study was designed to recruit a cohort of patient with progressive differentiated thyroid cancer. My colleague Maria Cabanillas reported that at the ATA, American Thyroid Association meeting last month. So, there were about 15 patients with differentiated cancer in this trial, the response rate confirmed response rate was 53% in this cohort and another 40% had stable disease as their best response. And most of these patients had been previously treated with other TKIs particularly sorafenib or Sunitinib.

This is one example of a symptomatic benefit, patient with growing disease that was encasing his lung, was shortness of breath and performance status impairment and after 60 days of treatment one can see from the back of the room a significant tumor shrinkage. And perhaps more importantly complete resolution of the patient symptoms of activity restriction.

What was of interest to us was this patient who had metastases on the skull, and when she came back for follow-up at nine weeks of therapy there was barely any palpable disease present and this was of course confirmed radiographically as well. So, a very significant clinical and radiographic bone response, something that we really had great deal of difficulty seeing with any other TKI in patients with bone metastases, which is one of the most common pathways of progression when patients are treated with anti- angiogenic drugs currently.

So, what then is the outlook now for cabo in thyroid cancer? We take this disease in the medullary thyroid cancer. Certainly strong potent activity has been demonstrated in the phase 3 trial for the primary end point of progression free survival and the data are now being analyzed for all of the other end point including adverse event, but clearly in patients with growing progressive disease there are strong activity and improvement in progression free survival that exceeded our expectations. And the company is expecting a registration submission to the FDA in 2012 as has been announced before.

In differentiated thyroid cancer, I think the potential is also quite significant although we are much earlier in the clinical trial course here. Significant activity is suggested in the phase 1 drug, drug interaction study, even in patients with bone metastases and I’d say that certainly further study is warranted and a number of options are now available for that, and changing my hat as the chair of the International Thyroid Oncology Group which is a nascent clinical trials program that is underway. We are looking and responding to the recent solicitation from CTEP for a clinical trial and differentiated thyroid cancer at least at the phase 2 level.

And at that I’d like to thank you and we will take questions.

Gisela Schwab, M.D.

Thank you so much, Steve. Great presentation. Thank you for the discussion. I think we break for lunch at this point.

Charles Butler

So, we are going to go ahead and start the afternoon session, probably about an hour, we are going to start off with the commercial and development overview from Scott Garland and then we will have management Q&A session.

Scott Garland

Thanks Charles. So, as Charles said, I’m Scott Garland, I’m the new Head of Commercial Exelixis. Just a thought what I’d do today is first outline the key theme for our presentation for the afternoon. The first is and you have heard this a lot this morning, but we will reiterate it this afternoon, cabo has a unique clinical profile that we think allows to strongly differentiate it in the marketplace.

Our plans for our CRPC development and maximize the probability of getting the drug to market as quickly as possible with the greatest degree of commercial differentiation. The EXAM data which you heard briefly mentioned earlier establishes cabo as an anti-cancer agent with PSA improvement.

And then lastly we plan on leveraging our collaboration with CTEP as well as our internal ISTs etcetera to move beyond MTC and prostate cancer and you will be hearing more from Gisela about that later on in the presentation.

So, what I thought I’d do is really try to summarize what you heard this morning from the thought leader and then turn that into what I think are the positing attributes for cabo in the marketplace. So, the first, you have seen it hundred times, this is a bone scan response data. This is what get people really excited about this drug, we were excited about this drug, (inaudible). So, clearly that I think is a show stopper in terms of attributes to caboz in differentiated marketplace, but it doesn’t end there. Cabo also has demonstrated anti-tumor activity, you heard this earlier today that actually affects underlying biology of the disease and that’s really important in terms of commercial differentiation.

The other piece is that it has dramatic pain response and we will talk about [symptoms], earlier today we will talk about it more the important of arrogant pain improvement in the CRPC space relative oncology in general.

And then tolerability of the lower dose, you heard from Dr. Smith, cabo has been able to demonstrate efficacy, but at an improved toxicity profile at a lower dose. And so our belief is that when you take all of those attributes and combine them, you get a drug that’s unlike any other drug in the marketplace, that’s unique and that’s commercially differential.

Now I was [at sales] about 20 years ago, I had a Division Manager way back then, he used to always [count on me] and have the important of translating product features and benefits, and so taking his advice I thought I’d do the same, because ultimately in the marketplace what’s important is how those features translate in something that’s meaningful for patients and providers.

So, clearly the anti-tumor activity hopefully that will translate into an overall survival benefit, we will see that when the results of the trial read out. A rapid and profound pain response, important in terms of improving quality of life, but equally important and I think you heard this earlier is the opportunity to reduce or even eliminate narcotic utilization. If you forget sometimes that narcotics have side effects like constipation and cognitive issues and (inaudible) market research talk about the idea of wanting to spare patients from narcotic, and I think cabo offers that potential with its pain improvement.

And then we talked a little bit about this earlier, but we will bring this up later on in Gisela’s presentation. There is a relationship between pain improvement and corresponding improvement in overall survival.

The bone scan response, it's worth pointing out something, we hear this a lot when to talk to physicians about this in market research. They like drugs that they know are working. And one of the nice things about a bone scan is that you can show it to a patient in clinic and say, look, you actually have a response. And I think we forget sometimes the motional element that’s involved in cancer care. And the clinic demonstrable signs of activity are very important and cabo offers that in terms of its response to bone scan.

Our low dose efficacy clearly should translate hopefully translate into improved tolerability. And then finally, it's an oral drug, it's easy to administer, there is no logistical hassles, there are no special handling (inaudible) associated cabo. And I feel very confident that we have a very strong position for cabo in the marketplace.

Just a quick look at the metastatic cancer or actions of the overall prostate cancer marketplace. So, you can see what we have done here, we broke it up into metastatic and non-metastatic clearly our initial focus is on the metastatic space. What I have done here is put the number of patients on top of each bar chart and then separated it out by symptomatic and asymptomatic. And you can see roughly 46 hours in patients in the metastatic symptomatic space, that’s a large market opportunity. When you consider that the vast majority of those patients have bone involvement and the majority of those patients upward the 60% are going to have clinically significant pain. We are looking at a market opportunity in prostate cancer for cabo that is meaningful and significant.

So, we heard a lot this morning about the rapidly evolving landscape in prostate cancer and I think it's important for us to articulate how we see cabo fitting in, in this changing environment. So, what you see here are the drugs that are currently approved in prostate cancer and obviously all of them have demonstrated an overall survival improvement. And clearly what’s happening is in a very short order is other drugs are beginning to demonstrate an OS improvements. So, you have got, the reduction of [AVI, Alleviation] compound which we talked about it earlier and then obviously also operating.

So, the metastatic post-docetaxel state is getting crowded, it's getting more and more crowded. On top of that we have the potential for denosumab to be approved in the non-metastatic states for bone met prevention.

Now I think it's likely and if you talk to thought leaders I think they will concur that the hormonal agents will move into earlier lines of therapy, that’s I think where most people see them going and they have clinical trials in this space. So, my belief is that the post-docetaxel metastatic space will get less crowded if those agents move up into earlier lines of therapy. SO, in essence our initial market entry will be in a space against the two compounds there, cabazi and alpharadin and I feel like we can see well against those compounds.

So, I mentioned that’s where our initial indication will be, but we don’t want to stop there, we want to continue developing the drug both in the front line setting as well as in the asymptomatic patient population combination of hormones that’s I think very intriguing opportunity and we will be talking little bit about that more later. And then obviously there is a longer term potential of developing this in the bone met prevention space.

So, much as it may this morning about how many drugs have been approved or will get approved in the prostate cancer space based on overall survival. And so what I’m showing here is a pretty clear in that, overall survival in our opinion has become table state, it's the entry to the dance. And so clearly 307, we are positive, it allows us to demonstrate an overall survival benefit, but that in it of itself I believe is not enough to get through differentiation. The 306 trial the opportunity to actually have a pain label is what we will really differentiate us in the marketplace. And I think it's worth considering these trials together. Each one in isolation, I think you missed the broader picture of what we are trying to do, but when you put the two together as a package and think about an overall survival benefit coupled with the quality of life for pain benefit. That’s what make cabozantinib unique and that’s what will allow us to win the marketplace.

I won’t spend much time here, there was a lot of discussion this morning about pain being a major issue in prostate cancer, so, clearly the problem patients complain of pain quite a bit. We went out and ask physician this is from our market research conducted with about 55 prostate cancer treating oncologist and asked them what was most important in terms of their treatment objectives in prostate cancer and as you can see here overall survival obviously with the top pain improvement was very high on their list as well. It's interesting there were some questions earlier today about what level of pain improvement do you think you are going to need to show regulatory success?

It's worth pointing out that what’s needed for regulatory success is not always the same as what’s needed for market success. Physicians in the clinic don’t take a lot of effort to quantify pain, they don’t do a BPI score and poor grade to understand what the patients pain is they literally watch patients come in as how we said earlier, and they can tell one of the patients in pain. So, that’s quantitative aspects of what I think are important from a regulatory perspective but not so much though from a commercial perspective. And our ability to demonstrate pain improvement I think is going to be very important for them.

In addition, it's worth pointing out that they also mentioned things like stabilization of bone metastases and an ability to have a reduction in soft tissue. So, again I think cabo performs very, very well on these attributes.

So, that’s an overall picture of our view of the prostate cancer in marketplace and then the key element for us now is to take our understanding of what makes cabozantinib unique and what will make it successful and translate that into a development plan that will get us where we need to go.

And with that I’m going to turn over to Gisela, who will cover the rest of the presentation.

Gisela Schwab, M.D.

Thank you, Scott. So, as Scott indicated there certainly is an opportunity to commercially differentiate cabozantinib, given the product characteristics that you heard about earlier today and that I will also reiterate to some degree in my presentation.

This designed a comprehensive development plan that addresses both cabozantinib’s ability to extent life, address a quantity of life as well as the quality of life. And that is the ability of cabozantinib to relief a pain and reduce and discontinue narcotics in patients with CRPC and the relevance effect certainly has been investigated this morning.

So, that said we are planning to initiate shortly the 306 study which is designed to address a pain relief as the primary end point in patients with CRPC was progressed following docetaxel and abiraterone therapy. And we are on-track to initiate that study in 2011 before year-end. And almost concurrently with that trial we are also planning to initiate this 307 study which is intended to address the overall survival as the primary end point in patients with CRPC which progressed following docetaxel and abiraterone, and we are finalizing details around this study, lists the intends to initiate that study in the first half of 2012.

Later on we are also intending to evaluate cabozantinib ability to delay the formation of bone metastases, address bone metastases to free survival. At the bottom of the slide you see the 308 study, this obviously is very large commercial opportunity and the design of such study will be importantly informed by the regulatory review that will occur in the first half of 2012 in the context of the denosumab review in the 147 study.

So, I think with the plan we have outlined and that I will walk you through in more detail, we certainly have the opportunity to develop cabozantinib in a fully differentiated compound with commercial opportunity.

So, I’m going to walk you through the elements and design aspects of this study as well as why we believe we will succeed in this study. And I’d like to start by discussing the dose that we are taking forward into these two phase 3 studies. And this morning already there was some debate around dosing session that lower dosage have shown activity as has been presented at the recent EORTC meeting. I’d like to walk you through our rationale, we are choosing the 60 milligram daily dose to go forward into these two pivotal trials.

We have generated a large amount of data with a 100 milligram daily dosing, starting dose and we have seen and we have presented as we have seen at the recent ASCO meeting a very high rate of bone scan resolution and other measures of clinical benefit that look very convincing. However, we are seeing a 50% of patients requiring dose reductions during the first 12 weeks.

Now that led to further evaluation of lower dosage in the context of a dose ranging study that Matthew Smith described to you a little bit earlier today. And in that study a 40 milligram daily dosing and 20 milligram daily dosing have been evaluated with the end point of bone scan resolution as the primary read out of activity. And what has been shown and Matthew shown that again today is that a very high rate of bone scan resolution was observed at the 40 milligram dose level. And at the same time no dose reduction was necessary in the drug that was tolerated. 20 milligram showed some bone scan resolution, however, much less pronounced in the 40 milligram dose level. And so we are seeing a dose response relationship with respect to this very sensitive read out of bone scan resolution for cabozantinib.

So, we said we have a 40 milligram as a pivotal low is effective still, we also have significant experience with a 60 milligram daily dosing and that is derived from the dose reduction was in the RDT and non-randomized expansion cord in CRPC, where we have seen that 50% of patients within about a 30 days reduced to the next lower dose level from a 100 milligram that is 60 milligram daily dosing. And we are seeing that patients reduced to 60 milligram. We are able to maintain their pain response and also other measures of benefit throughout the dosing period and further dose reductions in these patients were very infrequent.

So, with that we have decided to move forward with the 60 milligram dose level as a well tolerated dose level that is active, and that allows if dose reduction should occur, it allows for patients to reduce to a dose level of 40 milligram that is still showing activity. So, that’s the rationale to why we are moving forward with the 60 milligram dose level into both of these trials.

Now let me walk you through why we think that cabozantinib growth succeed in the pivotal studies in particular the overall survival study. You have seen, number one profound anti-tumor activity to-date, we have seen that progression free survival has been meaningfully affected in two different indications. Dr. Sherman earlier on showed you at the top line data from the MTC study the phase 3 trial for which we have recorded top line results late October 2011, where we have seen a very market near tripling of the progressing free survival and comparing cabozantinib versus placebo and that results was highly statistically significant with an HR of 0.28.

We have seen earlier in the year and presented at ASCO in a smaller cohort of patients derived from the randomized discontinuation trial in prostate cancer a very market delta between the placebo arm and the cabozantinib arm and that was six weeks versus 21 weeks in terms of progression free survival for in favor of cabozantinib. And again here the HR was 0.13. So, highly statistically significant although [upward] in this much smaller cohort of patients. So, think of this our use for profound anti-tumor activity.

Secondly, we have seen reductions in circulating tumor cells, and Dr. Scher spoke earlier about the fact that reduction in circulating tumor cells in prostate cancer predict for improved overall survival. I will show you in a minute preliminary data that support the cabozantinib indeed reduces circulating tumor cells in most patients with CRPC and this is data derived from the on-going non-randomized extension cohort in CRPC.

And thirdly, we know and that has been published, the pain improvement in prostate cancer patients also predict for improved overall survival. And as you have seen as various locations today already, we have seen clinically meaningful improvement in pain and their product reduction with cabozantinib in CRPC patients and I will walk you through that data again.

So, let me start with the circulating tumor cells, and this is a little bit complicated, and this is data that Howard Scher referred to earlier on today. The publication by Han de Bono from 2008, and is based on over 200 patients, 230 patients with metastatic prostate cancer and he analyzed, the group analyzed this patient population is based on in subsequent time point through our treatment for the presence of circulating tumor cells in the peripheral blood. And here you see the patients broken out for those patients who had the beginning, so a baseline more than 5 circulating tumor cells per 7.5 [milli dose] blood, and that line is shown in red and you see their survival is very short. And these patients throughout the trial all point in time had more than 5 circulating tumor cells in the peripheral blood.

You search engines the survival of this patient population the median is little bit more than six months. So, a very short survival. When you focus on the green line on this slide, you search engines the patient who at baseline and at all subsequent time point had less than 5 circulating tumor cells. And you see that these patients with respect to overall survival do markedly better. So, they have a median overall survival in excess of 20 months.

Now interestingly patients who had higher circulating tumor cells at baseline and then convert it on treatment with chemotherapy to less than 5 circulating tumor cells and those patients represented in the blue line, these patients do almost as well as the patients who from the against though have low circulating tumor cells. So, it appears the patients who convert too low circulating tumor cells in fact do very well in terms of overall survival.

Now data from almost that results were published in 2008 is represented here and that is little bit faint, but I hope you can see it. They took a different approach in that they shows a cut off of a decrease of greater than or 30% in the number of circulating tumor cells comparing baseline to subsequent assessment in patients who had greater than 5 circulating tumor cells at baseline. And you see that those patients in the heavier line who had a decrease of greater than 30% in this circulating tumor cells indeed again did much greater than those patients who have no decrease or not that level of decrease in this circulating tumor cells as shown in the lighter grey line. So, circulating tumor cells seem to predict for overall survival and reduction in circulating tumor cells we used to predict for overall survival in CRPC.

Now let me show you some preliminary data from our non-randomized extension cohort in prostate cancer patient that is current ongoing. This is data derived from 42 patients who had greater than or equal to 5 circulating tumor cells at baseline when entering the study. Let me draw you attention to the number of circulating tumor cells that these patients had that was a median of 63 circulating tumor cells [drawn] in this patient population with a wide range between 6 and 1659 cells. And that indicate that this is a very advanced patient population as we know that higher numbers of circulating tumor cells are found with more metastatic spread in particular metastatic spread to the bone.

Now when you look at the cut off a decrease of circulating tumor cells on treatment to greater than 30% decrease comparing to baseline, you search engines that 93% or 39 of the 42 patients treated with cabozantinib had indeed a decrease of greater than 30% in circulating tumor cells. And when you look at the conversion rate of patients who from greater than 5 circulating tumor cells convert to 5 circulating tumor cells or less than 5 circulating tumor cells, you see that 43% of patients achieved that conversion. So, certainly there is a profound effect of cabozantinib on circulating tumor cells as indicated by this preliminary data.

Now let me talk a little bit about pain response and how that predict for improved overall survival in CRPC. You are all familiar with the TAX 327 study, the study that was the life interest study for Taxotere and that study was designed as a three arm study comparing Mitoxantrone/Prednisone or MP to Taxotere given on a weekly basis and you indicated its D1P. And the third arm in fact the winning arm was Taxotere given on every three week basis combined with Prednisone and that’s indicated here as D3P.

Now what we see here is derived from a publication from Berthold, they used to look back on this study and analyze the study. Looking at patients who had moderate to severe pain at baseline and that was a relatively sizeable number of 350 or so patients. And first the number of patients who had pain response on study versus those patients who did not achieve a pain response on study. And here you see a plotted the median and that’s 95% confident interval in the grey bars for those patients who did not achieve a pain response versus in the white bars for those patients who achieved the pain response on study.

What you can see is clearly in each case and on all arms in fact and for the overall population, the patients who had a pain response did better with respect to the duration of survival their median survival was marketed longer and when you focus on the winning arm here, the Taxotere given every three weeks arm, you see that the delta is large. In fact patients with the pain response lived on average is six months longer than those patients who were non-responders. So, it appears that a pain response the positive predictor for overall survival.

So, let me switch to the cabozantinib data on with regard to pain in metastatic prostate cancer and this is the data and you have seen this plot now multiple times today. This is data that was presented at the EORTC-AACR-NCI meeting in San Francisco just a couple of weeks ago. And again it is data based upon the non-randomized extension cohort. And this data represent 29 patients who had moderate to severe pain that was not sufficiently controlled by narcotics, and you see the pain was measured using the brief pain inventory tool, that measures pain on a merit scale from zero to 10, where 10 being the worst pain imaginable. And patients are being asked to everyday out of 7 days in a row record their worse pain in the preceding 24 hours. Than the 7 days results averaged and the baseline 7 days are compared to subsequent collections that occurred every three weeks thereafter.

So, what we see here though is the baseline average worse pain shown in this little numbers atop just above the bars, that indicate how much decrease in terms of pain has been observed and what you see is that clearly all patients have an average worse pain at baseline in excess of 4 which is the indicator of moderate pain approved t BPI, the brief pain inventory.

And what you also see is that the majority that is 28 or 29 patients have downward pointing bars, and that is their pain improved at one of those three week assessment that was followed at the baseline assessment. And in fact the majority of patients had greater than 30% improvement in their pain which is understood to be a clinically meaningful improvement in pain.

And lastly you see that these bars are color coded differently, and this color coding as you see at the bottom is indicating prior therapy of these patients, either prior docetaxel alone or prior docetaxel plus abiraterone and/or Cabazitaxel. So, it's a heavily pretreated patient population, some of whom also had prior radionuclide therapy and we see regardless of prior treatment an improvement in pain.

Now looking at this pain information in more detail. We have seen that the majority of patients are seeing improvement as I just mentioned. We also saw that many patients had rapid onset of pain improvement even at week three at the first assessment first baseline. And we are seeing a median risk pain reduction of 46%and 48% of patients had durable pain improvement of greater than or equal to 30%. Now durable pain improvement indicates patients who had greater than or 30% decrease at one measure at week six and subsequent to that a six weeks or greater that pain improvement was confirmed. So, that a long duration of pain improvement was observed in 48% of patients.

Now importantly you heard about the issues with narcotic medication that makes patients sleepy, constipated and sometimes confused in elderly people. And here we are seeing in the context of this pain improvement that 56% of patients could decrease the narcotic dose and 26% of those patients could discontinue all narcotic medication. It's just something that is really not often seen in patients with severe cancer pain.

In addition the pain elevation appears to correlate with other measures of improvement of sleep and also the ability of conducting activities of daily events. So, clearly what I have shown you is that cabozantinib has effect on the tumor itself with respect to extending progression free survival that has effect on pain, and this has effect on circulating tumor cells. So, these observations make us optimistic in terms of two pivotal trial that I will now describe to you in more detail.

The 306 study is a randomized study that effect in patients with metastatic CRPC with bone metastases who have moderate to severe pain as measured by the brief pain inventory so greater than 4 BPI. And these patients have previously received and [failed] docetaxel and abiraterone or MDB3100. Patients are randomized in a one-to-one fashion to cabozantinib or Mitoxantrone/Prednisone. A total of 246 patients are planned to be enrolled and the primary end point is durable pain response with secondary end points including bone scan response and overall survival.

Here you see more detail on the trial design the primary end point of pain response is defined as a greater than or equal to 30% decrease in pain that you are seeing at week sixth and confirm six week later at week 12. And we are assuming for the purposes of sizing this study a pain response on the Mitoxantrone/Prednisone arm of 8% and a pain response on the cabozantinib arm of Prednisone or equal to 25%. And I just told you that in the NRE cohort we observed a much greater confirmed pain response of 48%. So, these are the assumptions around the sizing of the trial obviously, cabozantinib could exceed the 25%.

With respect to the secondary endpoints bone scan response will be assist by a central independent radiology facility, and overall survival is another secondary end point with the primary goal of showing no decrement in this study. Obviously it's relatively small study with 246 patients. So, this study is not powered to show ultimately a smaller improvement in overall survival but it occurred the trial were positive. It could show an overall survival benefit being powered at 80% detect a 50% improvement assuming an underlying overall survival on the Mitoxantrone/Prednisone arm of seven months.

Now the 307 trial is a second pivotal study that is set in a similar patient population post-docetaxel and post-abiraterone and MDV3100. We are not limiting prior treatments in this patient population, patients who will have metastatic CRPC and therefore bone metastases. Patients are going to be randomized two-to-one as to cabozantinib versus Prednisone. And the total of 960 patients are intended to be enrolled. Primary end point is overall survival and bone scan response as assist by IRF is a secondary end point.

Here are further details on the trial design, again we are assuming seven months overall survival on the Prednisone arm. This is derived from the Cougar 301 study where the time from end of treatment to the median overall survival was seven months, and the patients were treated for an average of eight months and the median overall survival was 15 months in that study.

It's 90% powered to take a 25% reduction in the risk of death and 578 events will be required for the primary analysis, our planning is single interim analysis in this study two-third of (inaudible) testing achieved.

I spoke about the secondary end point of bone scan response. This certainly is a large study in multi center study we are intending to involve up to 200 international sites, and are intending to initiate that study in the first half of 2012. We are hoping to accrue that study very fast for the participation of many sites.

Now let me switch briefly to indications other than CRPC just to reiterate the data that Dr. Sherman shared earlier on today. This had a positive phase 3 study in medullary thyroid cancer that neck is primary end point of progression free survival. This was agreed upon primary end point under an SPA. And the study it showed four months progression free survival on the placebo arm compared to an 11.2 months progression free survival on cabozantinib. So, almost three fold increase in progression free survival in favor of cabozantinib that was highly statistically significant, it was an HR 0.28 and they are very small piece.

We are now preparing to initiate enrolling NDA submission, we have our pre-NDA meeting later in December with the FDA. And provided there is a green light in intending to move forward with the submission of preclinical module to start the NDA filing that will be followed by the CMNC module and intend to complete the package with the filing of the clinical module in the first half of 2012. We are also planning to present the data in upcoming medical conference in 2012 in more detail.

And I will hand the podium over to Scott, to speak briefly about the commercial aspects.

Scott Garland

Thank you, Gisela. So, clearly we are excited about the magnitude of benefit that was demonstrated from the EXAM trial. We mentioned earlier that MTC is a small niche indication and therefore, our commercial efforts to support it will be lean and will scalable at the size of the market opportunity. So, overall we view this commercial effort as a stage show. Very small we opt with MTC and then moving to a much larger much more traditional commercial focus when we move into the, if we move into the prostate cancer space. So, that’s just a very quick overview of some (inaudible). Back to Gisela.

Gisela Schwab, M.D.

Thank you. So, just to wrap up, I’d like to speak a little bit more about opportunities beyond MTC and CRPC. As was mentioned earlier on by Mike, we have seen activity now in 12 out of 13 tumor types evaluated with research response as shown in a variety of different solid tumor types including the tumor types listed on this slide, ovarian cancer, metastatic melanoma, HCC, breast and non-small cell lung cancer etcetera. I think clearly we are seeing the dual activity of soft tissue, visceral responses and bone scan resolution in prostate cancer but not limited to prostate cancer, we have seen this now in breast cancer, melanoma, thyroid cancer as well as renal cell cancer.

So, clearly cabozantinib is a broadly active compound and it deserves to be evaluated more broadly than in this two indications which is why we are pursued and are pursuing additional investigated initiated studies and very recently has entered into a collaboration with the NCI CTEP that is quite broad and allows for further evaluation of cabozantinib across multiple tumor types.

So, this planned expansion of the cabozantinib development plan really leverages the ISC efforts investigated responsive trials and the CTEP collaboration and is intended to be resulting in a comprehensive evaluation of multiple aspects. One, it gives us the opportunity to look further into the mechanism of action of bone effects in CRPC and non-CRPC indication. Two, we will have the opportunity in phase 1b study to combine cabozantinib with hormonal agents, targeted agents as well as chemotherapy. Three, we will have the opportunity to perform further signal search in indications that we have not evaluated at this stage with cabozantinib. And number four, and importantly it gives us the opportunity to move into robust phase 2 study in indications where we have already seen activity.

So, in a little bit more detail you search engines here that we are already pursuing in some of the investigating initiated study mechanism of action evaluation that includes [CRO] tumor and bone biopsies, bone biomarkers and different imaging modality. There are also intending in terms of the combination studies to evaluate cabozantinib with abiraterone and MDV3100 in CRPC, but also in other indications with hormonal agents, aromatase inhibitors and key therapeutic agents and targeted agents such as the PI3K inhibitor.

We have plans from individual investigators with respect to investigate initiated studies to evaluate multiple myeloma and the interim bladder cancer, neuroendocrine tumors, pancreatic cancer, and neurofibroma. And we hope to move forward into randomized phase 2 studies in HCC, DTC, differentiated thyroid cancer, but also in other indications including breast cancer and ovarian cancer and into a robust phase 2 evaluation in myeloma, RCC, renal cell cancer and sarcoma. The scope of the CTEP collaboration is up to 20 active studies clinical trials per year. So, it's rather large collaboration and was mentioned earlier on today the [remark] solicitation letter has already been released by CTEP to many sites in the U.S. and beyond. In the scope of our investigated initiative trial program is 30 plus active studies.

So, let me close our presentation with the planned data and news flow for 2012, where there are number of important presentations that we are planning for 2012. We have spoken about MTC and the fact that the EXAM phase 3 study will be presented in 2012 likely in the second quarter. We have certainly important uptick in CRPC from the RDT study for the follow-up from the NRE study data points that I have touched on earlier on. And Dr. Smith, dose ranging study will further mature itself and will likely be presented also in Q2 2012. And other indications such as ovarian cancer, breast cancer, hepatoma, multiple myeloma and renal cell cancer presentations are expected in 2012 as well. So, quite an active the program in 2012 with respect to conferences.

And so in closing then I think as we are advancing cabozantinib in 2012, we have the opportunity now to file our first NDA to be exciting in the first half of 2012. We are initiating two pivotal studies in prostate cancer and we are pushing the development plan beyond MTC and prostate cancer through the IST program and our CTEP collaboration. And with that I think we have the opportunity to develop cabozantinib into a fully differentiated commercial success.

With that I’d like to hand over to Mike for wrap up and then Q&A.

Mike Morrissey, PhD

Thank you, Gisela. Thanks Scott as well. I’ll start by thanking all of our guest speakers today. It's I think a great opportunity that we have to have these five gentlemen join us today. I’d say in a broader scale there are the people that we work very closely with on a day-to-day week-by-week basis to look at data, talk about new opportunities, plan trials, execute trials, and we have been very pleased and certainly impressed with breadth of support we have gotten from our KOLs and academic collaborators to help move the program forward. So, please again thank me or join me again in thanking those Steve and the others who are here today to help us present the data and in some perspective cabo as it goes forward. So, thanks again guys.

All right, so I won’t go through this again. I think we have covered all of the key points in at the morning, again I think as has been discussed by our guests and by our certainly Gisela and Scott, the overall focus for us moving forward is to build upon the existing strong clinical differentiation that we have in prostate cancer with 306 and 307 and transform that into commercial differentiation. It's important to offer us with the 306 and 307 trial. I was very pleased that we had chance to talk in little more detail and color about the CTEP collaboration and we have a lots of interest in pursuing other indications those the routine activity and either phase 1 or early phase 2 notwithstanding that and building upon that as we go forward in terms of other opportunities that we see with cabo as the depth and breadth of activity we have seen so far. It's certainly very interesting and it's hopefully we will be able to continue to build upon that going forward as we built out the label for cabo as we go forward.

So, we will open up now the discussion up for Q&A, and I have the whole management team with me on the stage to be able to answer your questions (inaudible) and we will go through those questions and hopefully have a good dialogue. So, please.

Question-and-Answer Session

Gisela Schwab, M.D.

Thank you so much Daniel. I’ll start with a few questions here at the podium and then open up to questions for the audience. May be to begin with you both touched on that in your presentations already, but what in your minds are the key differentiating features of cabozantinib compared to other available therapy of course, CRPC?

Matthew Smith M.D., Ph.D.

You know sometimes there is a drug looking for a problem and other time there is problem looking for a drug. In this case I mean the activity that we are seeing in the phase 2 experience really fundamentally address some of the major and most common clinical problems in advanced prostate cancer. Patients with fatal prostate cancer die of bone metastases, they typically die with pain and they have lived for many months or even years with bone pain. So, the activity here with traumatic bone scan improvements corresponding prompt dramatic improvements in pain really addresses some of the most common clinical problems of advanced disease. The drug also has shown some other activities that was perceived as a beneficial in this setting, Dan touched on some of these. We didn’t talked a lot about the data that cabozantinib tend to increase hemoglobin and anemia as a common often symptomatic feature of the disease. So, the whole entire pattern of activity that we are seeing address many of that, most common and important clinical problems. And I think also suggest success in phase 3.

Dan George, M.D.

I’d just add that, you know as a researcher we like to be scientific about what we do with drugs and targets, but there is a good deal of luck that goes into drug development as well and in drug discovery. And I think the finding that we have seen here on bone scan is unprecedented. And I say this humbly, I’m not sure any of us can really say for sure, what we are seeing and why we are seeing it. But I think is when we say unprecedented, to me this reminds me of the pet scan changes we saw with just with Gleevec, with some of the other things that have help to reshape and help us to understand biology more. I think this agent is going to help enlighten us regarding what the underlying biology of prostate cancer. This is not solely a prostate cancer drug, we are studying this on ovarian cancer at Duke, to tell you my colleagues there are overwhelmingly impressed with the results we are seeing in heavily pretreated patients. We have seen, I think Mike mentioned 12 out of 13 tumor types that they have seen evidence of objective response. I mean this is a broadly active agent, but in prostate cancer it's doing something fairly unique and I think to what extent that’s ultimately going to help us understand how to incorporate this. Not just at the end of this disease lifecycle, but potentially an earlier settings as well down the road. So, clearly from a commercial development standpoint that’s where they need to focus, but this is a unique agent in this field, and one we have never seen before. It is far, far from another TKI.

Gisela Schwab, M.D.

Okay. Thank you. And now both of you spoke about the plan to put studies briefly. And in view of those study they initiated, what gives you confidence that cabozantinib may succeed in this pivotal studies and particularly overall survival study?

Matthew Smith M.D., Ph.D.

Sure. So, I think there is a few things. One is the high proportion of patients who benefit. I mean there are many drugs, some of that have succeeded some otherwise that have dramatic benefit, but in a smaller proportion of patients as you saw for example from our IFT 10 of 11 patients that had just 40 milligrams had these dramatic bone scan response at week six. So, there is dramatic responses in a high proportion of patients, we didn’t touched on it too much, but these effects are quite durable, they are accompanied by their clinical benefit including pain. So, this to me is very attractive set of observations. And suggest that there will be successful overall survival benefit in phase 3.

Dan talked about or made the comparison to Sunitinib and bevacizumab and did that in a very elegant way, but I want to expand on that just for a moment to say, this is not Sunitinib. Our group who did one of the phase 2 trial and my colleague led the phase 3 trial of Sunitinib. And so we had a lot of local experience with the drug. For example, the rate of bone scan improvements, we had big back and looked at others, is very low with that drug, nothing at all like this. We have a long interesting bone biology, we looked at biochemical markers, the bone turnover, there is a trivial effect on bone turnover markers with that drug. So, it's really like night and day. The assay they share VEGF in addition but the major distinction is met and I take that to be the explanation for the dramatic differences in clinical and translational results of those two drugs.

Dan George, M.D.

Yes, I’d add in terms of the overall survival, goal with this study. I think you really have to get to the question of what a patient is dying of, and what a patients group prostate cancer dying, but we can impact on that, then we can impact on overall survival. So, clearly these patients have a large burden of disease by the time they get to this point, that they carried with them, but what’s the tipping point and I’d say that we have probably underappreciated the degree that pain plays overall in the tipping of these patients. And it's not simply a pain score, it's what that all carries with it; the use of narcotics, the effects and the consequences of that narcotic use, immobility on these patients, the decrease in performance status that ultimately this is sort of the beginning of the end to the patients.

And I think to the extent that we can turn that clock back with an agent as Matthew said, we need reliably and pretty quickly. And so not so much just the bone scan but the fact that we are seeing that bone scan change and we are seeing the pain improvement corresponding with that at a fairly quick interval. And to do it in a biologic way. This is not an analgesic, this is not necessarily an anti-inflammatory. This is targeting the underlying biology of that metastases and in a way that’s really novel. I think those are the reasons why we are very, very excited about the opportunity for these results these phase 2 results to translate into phase 3 results.

Gisela Schwab, M.D.

Thank you so much. Maybe just fast forward for a moment, assuming cabozantinib comes to market and what’s the profile that you both have described already. With so many new compounds are being available for CRPC, how well positioned choosing a compound for a given patient. And what is the line of therapy will remain in that choice.

Dan George, M.D.

Well, I think that’s going to be work in progress. I mean I would say that I tell patients today I’m treating prostate cancer castrate-resistant prostate cancer different this year than I did last year. And I will almost certainly treat it different next year. And I like to think that we are data based, we are evidenced based clinicians, but at the end of the day mostly what we are seeing here is data that’s developed in parallel. We have very little comparative effective analysis in prostate cancer. So, to a large extent we are going to be left with physician bias with our own experience with these agents and to some extent with the rationale for how these terms are working. I think by having an agent like cabozantinib that really targets not just a survival advantage but underlying how it will benefit, particularly this onset and development and progression of pain, is going to really differentiate it in class.

I think it's going to give us the opportunity particularly with the patients that we are recognizing and I’d say this is an education opportunity for the field. I probably done a lousy job of recognizing patient reported pain in our field. In to a large extent if you are going to see greater efforts in understanding just how big the problem this is for our population and really discerning that earlier. So, I think being able to identify patients early on with pain and perhaps follow a different sequence of therapies for that population of patients or prognostic factors that predict for a shorter survival and a greater on set of those kinds of complications could also influence the sequence of therapies we choose in the future. But I think right now we are really lacking data in this area and I think a lot of this is going to be kind of based on secondary analysis.

Gisela Schwab, M.D.

Matt, do you have anything to add?

Matthew Smith M.D., Ph.D.

Yes, there has certainly been major progress in the field but it's worth noting that there are major unmet medical needs. I think one of the most important advances in recent year for example is being the development of abiraterone. But if you look at the phase 3 trial the median treatment duration was a matter of many months. So, we are taking the can down the road, but we still have patients who have progressed the disease. We try to think about cabozantinib is that we already have early evidence of activity in highly refractory patients, there are many examples of dramatic responses in patients who had prior docetaxel and abiraterone in both the non-randomized extension as well as investors sponsored trial. So, we already know that, in very highly refractory patients this drug retains the activity that is far from clear yet with other drugs in development.

Gisela Schwab, M.D.

Okay. Thanks. Maybe just one last question from me, the bone scan responses highlighted by both of you and Matthew and Dan, spoke about the [TAX VEGF] there is an tend to validate bone scan response in larger study. What is the implication for that for future development of cabozantinib and maybe other drugs in prostate cancer?

Matthew Smith M.D., Ph.D.

Michael said this at the beginning it was really a key observation about 18 months ago, first patient with this dramatic bone scan response, who have learned a lot since that time you have seen its very correlations with other clinical outcomes with translational outcome. And the process has been advanced by the development of an automated system, a quantitative system, so, that we can anywhere reproducible manner report bone scan changes and define bone scan response. I think that will be important in a variety of ways. I mean it is worth noting that most patients have bone scan responses, I get to via matter of identifying the small proportion of patients who don’t appear to be benefiting early. So, that will be a major advance in the clinical management of patients going forward, but I think from a drug development point of view it's very attractive, it's for example being instrumental and our ability to look at lower dose.

Dan George, M.D.

I think it's, and I mentioned this, so I think it's a little bit humble in sometimes when you have an agent that does something that was unexpected and try to rationalize why that is. If you actually go back and look and say what are bone scans actually measuring, you know the dogma has been that we are measuring the osteoblastic activity in prostate cancer, but there has really being very little studies that has actually proven, that’s actually what we are seeing there. This technetium uptick to what extent this, there were other cells in that tumor micro environment effected other tumor cells that could be taking on more bone environment other stromal cells, (inaudible) of phenotypes of prostate cancer and what have you.

I think we are recognizing that maybe what we have been following in prostate cancer all along is not what we think it is. And seeing these changes on bone scan, I think it's going to help us begin to understand that of tumor micro environment a lot better, validating to what extent these changes really correspond with clinical outcomes including survival not just pain relief, I think it will be really critical as Matthew said it's not always directly related to pain and many of these changes aren’t associated with pain even at baseline. So, understanding the differences that we see there, but seeing such a reproducible consistent effect in a disease that we know biologically is extremely heterogeneous. When you look at it genetically, proteomic profiles or whatever, I think it's fascinating and it really does suggest that this is an effect that could really change our understanding of the disease, the paradigm of how we treat it, and really ultimately how this could translate into other cancer settings.

Gisela Schwab, M.D.

Thank you. So, I’d like to open the floor for questions from the audience.

Eric Schmidt - Cowen & Company

Thanks. It's Eric Schmidt from Cowen. Dr. George, you mentioned that there are lot more therapies out there today for prostate cancer. How do you think it will be do you think challenging to enroll the study 306 in the post chemo setting, and maintain the quality and integrity of that trial in the way in which we built.

And then a couple of questions for Dr. Smith. I think you had more inside experience with caboz and probably for a longer duration of dosing. Do you sense anecdotally, I know this is not a fair question, but do you think anecdotally you truly are seeing patients live longer on this drug who you license expected this to come to disease already. And then second question for you Dr. Smith is, in terms of the 40 milligram dose experience that you presented, do you think that does was well enough tolerated to move it earlier stage outside of the stage 4 setting into pre-bone met patients. Thanks.

Dan George, M.D.

I’ll go first and I will leave it to Matthew to answer those other questions, but regarding 306 and accrual, I mean I think anytime you start a file and a setting that’s novel, lets state we are going to see now a novel setting just because of the newer agents that are on the market, these are challenge. But I can tell you that we are seeing a different in the referral patterns at academic institutions like Duke, where now we are seeing patient stats as Matthew said, to take the can down the road, that being on abiraterone, they have been on docetaxel. They are little less inclined to want to pursue over chemotherapy I will say that, and I think the control arm is a bit of a challenge here at the end of the day though.

These are patients that are desperate to really continue the quality of life that they have been able to maintain now longer than perhaps they thought. And for those patients I think this is a very attractive trial. It's not a huge study, I mean its a couple hundred patients. So, I think that although I think it's going be a challenge for type I think we do have these patients and the question is, are they willing to come to us and go on the study. I think at least that my institution I don’t anticipate a problem. I don’t know, I can’t speak for some of the community sides or other groups, but I think we will be able to accrue. Matthew?

Matthew Smith M.D., Ph.D.

I’m reluctant to answer on fair questions, so standby what I said, my impression from the larger dataset and from the many patients I have personally treated is that activity of the drug is sufficient to convert a survival benefit. So, I really do believe that, and I can elaborate more if you like. Regarding the tolerability of the 40 milligram dose to be fair this is a work in progress. We as of Tuesday accrued 35 patients or so to the trial. The first patient was accrued in about June, so we do not have long-term experience with the drug, but in the period of exposure that I’m describing, the drug is well tolerated, substantially better tolerated than the 100 milligram dose. There are some patients who record no side effects, something we certainly don’t see at a 100 milligrams. And the pattern of side effects we are seeing in those who do report adverse effect is similar to that at 100 milligram dose but less severe.

In the most objective way to describe that as we reported last month, there were no patients who require dose reductions, which is the major finding. And that sets a fair early term comparison because the landmark so to speak from their randomized discontinuation trial was at least half the patients or approximately half the patients required one or more dose reductions by week 12. So, we required no dose reductions by week 12. And so except that today I think it is quite [possible] that the dose that could be tolerated long-term and might be attractive in other settings including earlier staged disease for such clinical scenarios as metastases [preventionist] has been discussing on their settings.

Gisela Schwab, M.D.

Thank you. Other questions in the back.

Unidentified Analyst

Yes, can you talk a little bit about the difference between what is your experience is with alpharadin and this drug and then when you might use cabo, when you might use alpharadin. And then potentially what you might have to see in the phase 3 to kind of lean or shift your preference one way or the other.

Dan George, M.D.

In full disclosure I have not used alpharadin. So, I’m basing it strictly on the data that we have seen as largely developed ex-U.S. but I’d say that it's an interesting compound, it's a different type. It's a completely different strategy to me, it's a liquid form of radiation therapy which I think can be very [positive] but it's not treating the underlying biology systemically. And to the extent that these patients have more than just bone marrow involvement, I think we have got to recognize that there is, it is going to be a subtotal therapy. That said, and clearly there was a survival advantage seen with the agent in selected patients based on their bone scan findings and what not. I think there will be definitely a role for that agent in prostate cancer, I don’t think it's going to be necessarily for the patient that has more widespread disease.

So, I think of an agent like this that really treats the entire underlying biology and particularly one where we see such a homogenous response in bone scan. As potentially being a real greater asset to the patients to a broader patient population. At the end of the day, I think where we will be five years from now is not going to be a sequential approach of six or seven or eight agents. I think we are going to find synergistic combinations and strategies. And I think we are going to have to do that in a comparative manner. But I don’t necessarily see these as head-to-head competitors from that perspective. In fact, they may actually be synergistic at some point in time. So, we won’t see that drug here in the U.S. probably for another year or more and I think it's going to be a little bit of a slow uptick figuring out where that fits in.

Matthew Smith M.D., Ph.D.

So, historically where your pharmaceuticals have been used it's palliative treatment for advanced prostate cancer. So, the very late stage disease, it's a remarkably small market in the United States, it's the tiny market, you will shock to hear the data about that recently. So, the question really becomes would the approval of alpharadin, with the alpharadin data substantially change that, such that we brought uptick at such therapy. And in my opinion it remains to be seen, I’m struck by the positive overall survival benefit we served in the trial.

I do have concerns about the patient population that we studied and this might again in my opinion represents some regulator challenges, these were patients who had prior docetaxel who were not candidate for docetaxel. U.S. regulators might have a problem with that at later point, we shall see. So, it really in those patients who became randomized so I’d say, so what I’d submit in the United States less than standard therapy versus alpharadin. And there was overall survival benefit seen. To their credit study did to understand that report, there was a survival benefit in subsets regardless of prior docetaxel exposure. So, perhaps that will not be an issue in the long run.

But I think whether it's a regulatory issue or not will affect investigators with interpretation of that. Their potential rollout challenges with this drug I mean again historically, neucro medicine positions administer radiopharmaceuticals that’s done in the context of major medical standards or large community hospitals whether this could be rollout to broader practice again remains to be seen, will depend on issues of enthusiasm about the data, reimbursement other standard issues.

The clear benefit to older radiopharmaceuticals which of course, not else matter but data matter matters was a pain improvement. And I was surprised that in the first publication of the data, they reported no pain data, which to me would have been the logical and only important and the most important secondary endpoint. So, that’s just something I’m staying tune to see and that may speak some to your question to how that might be discriminated from cabozantinib where at least in phase 2 we are already seeing substantial improvements in pain.

Unidentified Analyst

(Question Inaudible) where does technetium deposit in the bone specifically in what metrics does it adhere to and [I propose that], do you that do you think that there is a sequencing problem, when you think of that alpharadin and cabo, because of what cabo might be just about the bone scan.

Matthew Smith M.D., Ph.D.

It's a very interesting question and there are some nice older data, I can get you the reference offline if you would like. That look at that very question is using microradiography. And it appears that technetium accumulate at the mineralization front in bone. So, osteoblasts laid down near bone they become osteoid and then osteoid is secondarily mineralized. At the front of mineralization appears to be where technetium accumulates. So, going back to our historical perception was that bone cancer measuring osteoblasts activity. I think that’s consistent with that.

So, that additional information speaks directly to your question. There would be sequencing issues, so you would not want to administer concurrently administer cabozantinib and a drug that target decisive new bone formation, because cabozantinib is turning off the pathologic process. The effects of cabozantinib as you have seen in our earlier presentations is a reversible effect. There would be no problem doing it in the other order, but you wouldn’t want to concurrently give cabozantinib and a drug that accumulates in bone by that specific mechanism. But there would be no particular reason to do so.

Dan George, M.D.

I can just add to that point. I think one of the really interesting opportunities going forward will be, what is the condition that cabozantinib creates in bone that now may make prostate cancer more susceptible to therapy. I mean what are the other targets in the setting of this loss of technetium uptick that, what is that condition if you will for potential modality to other strategies. I think there is a huge opportunity there that may emerge in the future. That would be again unique to this drug. Something we don’t see anything else. I dare to say this might be a different class, I know we call it a nib, like other nibs and not to make the point this is not Sunitinib. So, the extent of this can create different biology, we might think of this as a different class in that setting.

Terence Flynn - Goldman Sachs

Terence Flynn, Goldman. The first question I had was regarding the 306 trial. If you think about the improvement on pain, you guys want to see, maybe you start using this drug once it becomes commercial. Can you talk about that, and what you want to see for the primary endpoint from the 306 trial? And then on 307, when you think about the typical patient that you’d likely enroll in that study, can you just give us some idea of what that patient would like in terms of the patient you target your enrollment study. Thanks.

Matthew Smith M.D., Ph.D.

So, regarding the 306, I suggest we put that question off to the next session, because Dr. Scher and Basch will be up here. So, it will be great opportunity to address that. And I’m glad you asked that question because it's a point I’d like to make. The pattern of activities that we have already seen suggest that the patient most likely to benefit will be similar to bone only or bone dominant disease, which conveniently is the most common form of advanced prostate cancer. So, the selection here is that of the most typical prostate cancer patient. And that’s convenient in many ways in growth facilitate accrual. It's very different than say other drugs that might require molecular selection in other cancers. This is phenotypic selection which again corresponds in most typical form of the disease so that should facilitate enrollment of the trial.

Gisela Schwab, M.D.

Thank you very much folks for excellent presentation. I’d like again to offer in the discussion and with a few questions from the podium here, and then open it up for the audience.

Maybe just to start really very basic in the clinic, with the description of the patient who is suffering from pain due to bone metastases. I think it will be very useful to maybe paint the picture a little bit, what these patients are suffering from and what the limitations of narcotic management are? Howard would you?

Howard Scher, M.D.

Okay. It’s kind of interesting because one of the easiest assessments we have is just looking at how fast the patient walks from the lab if you will or the waiting area into the room. So, a typical patient who comes in is walking extremely slowly is very fatigue. When he finally gets into the room, he is typically sitting back, because he is quite tired. So, to tell you that he is fatigued, he may tell you that he doesn’t hurt all of that much, but when you question him, you say are you getting out of the house? The answer is no, and his wife will tell you that he is taking narcotics, constipated and sleeping most of the day.

Often patients will come to you and trying to look their best I’m not sure why, but these are very, very devoted in men. You try to push the narcotics and they get more constipated, they are confused. They can’t do simple activities like read or concentrate which is obviously a major problem. And we see somebody in whom you have effectively treated without narcotic. I mean without just adding more narcotics.

The first thing (inaudible) is they are walking briskly into the room, sitting up straight and you are actually having a meaningful conversation. So, what’s been very unique about what are our extremes with cabo is that it's almost like a switch, it just turns and you have a different person. And you hear that not only from the patient but from the family they can now engage in activities and they essentially go outside, they are sleeping better.

And I have the privilege of actually serving on the FDA panel where the approval of mitoxantrone was essentially happened. And what was very impressive there was although the degree of pain where we have seen that trial was relatively modest. There were the other domains of benefit that were consistent, patients were sleeping better, they were less constipated because they were no longer taking narcotics, so it all fit. And maybe Ethan can comment on some of these additional domains. We have been looking at it, someone who is experienced career looking at response measures, we are looking at the other objective measures like when you see a bone scan get better. And there is pain relief and makes you feel better to relevant. And that’s really what’s the most important factor here.

Ethan Basch, M.D.

I don’t have that much to add to Howards comment, I maybe add two others. The first is that when we the survey looking at the prevalence and severity of pain in this population, we see that pain is very highly correlated with many other symptoms and measures of functional ability. So, patients who have pain note substantial decrements in their daily activities. They note [feet] disturbance and those who are narcotics note a substantial burden related to the adverse effect of narcotic analgesics. And so, this is from the patients themselves who are telling us that both the pain of disease and the adverse effects related to the treatment pain have a real impact on their day-to-day lives.

The other comments I will make is that even though this has a major, this is a major burden for our patients who view his clinicians and investigators certainly recognize it. We clearly under recognize it and the prevalence of this difficulty is much greater than we often recognize clinically.

Howard Scher, M.D.

You may want to comment on the survey we did two years ago growth or population?

Ethan Basch, M.D.

So, a couple of years ago, we conducted a multi-center survey within the prostate cancer consortium which is a Department of Defense funded consortium for conducting early phase research in prostate cancer which will be one of the mechanisms for conducting this planned trial and after which (inaudible) is a coordinating center, and in the survey we found that again more than half the patients had with castrate-resistant disease bone had clinically meaningful pain which substantially impacted on all these other domains including a sleep, enjoyment of life, conduct daily activities, ability to take care of oneself functional status.

Gisela Schwab, M.D.

Now both of you have been instrumental in the design of this 306 study and Ethan you described this study very nicely, could you maybe both comment as to what gives you confident that 306 will succeed. And also what the implications us and no agreement letter under the SPA process might be?

Ethan Basch, M.D.

Sure, so two part question. So, I think it's indisputable that mutations are out there and I feel confident from the results we have seen in the prior development work that we will see a dramatic pain response associated with radiographic response. And this enthusiasm shared by our collaborators have participating institutions in this trial. So, I feel very confident that this study will accrue and be successful. As best as I can project it's somewhat we know are today.

Maybe I will let Dr. Scher a comment on the feasibility issue first and then we can come back to this thought question.

Howard Scher, M.D.

Again this is a clearly unmet need in our patient population, it's much more prevalence, and as we I will say our pre-phase 3 work in terms of how do you assess this end point and we become much more aware of how significant a problem it is. Again having participated in both the abiraterone trial, as well as the Medivation trial, again we did see pain palliation in patients, but the trial was asking a different primary question in terms of survival and we were not doing the pain assessments to this degree. Again if you think you got 150 sites that can be very challenging particularly if it's done multi-nationally and you have the whole issue of having even take the assessment tools into different languages.

But again when you start looking at it very closely, this degree of pain relief is unprecedented and again I believe the trial is designed as a sufficient cushion. It's a very conservative so that this will go out in a favorable fashion. It all fits, you see the bone scan improvements, you see pain palliations, you see a different person when they respond.

Ethan Basch, M.D.

And there is also wide spread investigator in patients enthusiasm about product itself. Regarding the question of the [file] agreement. In general and also to this product I think there will be two questions that regulators are looking at the time of review and that is as I alluded to in my slide, inadvertent unblinding potentially bias in patient reporting. And the second is actually there are concerns about toxicity, and with regard to pain palliation study there will be concerns that although there maybe pain palliation the burden of toxicities may counterbalance those benefits. And neither of those issues are one that one can come to in agreements about upfront. Agreements usually about study these INDs, two issues, will always be a review issues.

And so my first answer to the question is that, regardless of its partners [file] agreement, these are going to be the considerations at the forefront of the U.S. regulators mind when the trial comes forward. And I feel confident that the larger TAX size that we are likely to see will open from the question of inadvertent unblinding, and that the decrease dose will put to rest concerns about toxicity.

Now in general regarding [SPA ] agreements and in those [file] agreements, we really don’t see a strong relationship with ultimate approval or labeling, there are many sponsors that don’t even take the step. For this particularly trial there is an interest to engage the FDA in order to answer specific questions about design and in fact all of these questions were answered satisfactory. So, that we can feel confident in the design of its study, personally I’m not bother if you speak to leadership in FDA, they don’t really tend to make that bigger deal about these things, they often scratch their head and say, well we wonder why everybody else is making such a big deal about an agreement or no agreement. And it's often unclear what the exact thinking is behind decision, but the long and short of it is that, at the end of day efficacy is efficacy and if the drug is a winner it's going to be a winner it's not going to shine through, the signal will be clear. And it will be a relevant as to whether there is agreement upfront or not.

Howard Scher, M.D.

I think the key issue here will be the execution of the study. And with any new biomarker, (inaudible) in the contemporary era. Have you gone through all of the steps to truly qualify from an analytical point of view or analytically validate the measures that will be using. If you look back over the last five years really since Ethan has joined our group, specifically in a prostate cancer population, all of those components have been satisfied.

There will be a training issue for the staff involved, but again the centers that have been offered the opportunity to participate are experienced, they have interest in the compound, we have seen the result, again I’m very optimistic that this will be successful.

Gisela Schwab, M.D.

Thank you. So, I’d to open the discussion now to the audience.

Unidentified Analyst

Dr. Basch, in your discussion of pain and the trial design of 306, you kept referring to the rigorous that are needed here and the fact that the FDA doesn’t want to approve a toxic analgesic?

Ethan Basch, M.D.

Can you speak up a little bit?

Unidentified Analyst

Sorry, you kept referring to all of those the rigorous that are required in designing the trial and in fact the FDA is not interested in moving a toxic analgesic. Do the FDA never I guess hear the voice of some (inaudible) we heard from today who think that this benefit is obviously a biological one as a lot anti-tumor activity as so much more in terms of driving the pain reductions as been an analgesic might. And I’m trying to reconcile the stringent trial design characteristics that you [might put it waste] with the fact that this drug is exerting its anti-pain properties through again a very different mechanism in the toxic analgesic point.

Ethan Basch, M.D.

Well I can’t remind, I can’t reflect on the level of understanding that may or may not have been there, except that my global observation would be that if there was a more complete understanding of the profile of the product perhaps thinking would have been different. And one can only think down the road when the studies are mature and presented when more eyes look at the data and there is a level of greater scrutiny again by more individuals those issues that you noted will be more prominent and come to life.

Unidentified Analyst

I guess you also Dr. Basch mentioned a threshold above and beyond which you thought the results will be so clear in convincing justify approval. Wondering if you either of you could provide your thoughts on the threshold in pain response that would be clear to the FDA?

Ethan Basch, M.D.

Some of you may know I worked as what we call guest worker the FDA for about seven years, those involve on the other side of these, and I say now what I said then which is, it's a review issue.

Howard Scher, M.D.

Again we are getting back to biomarkers and all of the regulatory guidance in terms of qualification. There is certain component is it plausible, so if you think about the understanding of biology and what’s being learned about the post-tumor interactions in bone and how to interrupt that process and how that can be clinically meaningful. When you see a what looks like a standalone change in a bone scan and you see palliation pain at the same time when you search engines declines in bone turnover markers. And you are seeing changes in circulating tumor cells. Again it’s all you can say loops are closed. So, this is not a isolated effect, I think one of the other, this reminds me a little bit, to show you how long we have been at this. We used to admit patients for platinum therapy for three days who can control nausea. And is a very good history in oncology, if something works we will figure out how to use it.

And what you are seeing now with the interest in the compound is how rapidly the information is coming in. As soon as a signal is identified in the prostate cancer population, which admittedly was a surprise. When you talk to my colleagues in Michigan, they thought they have the scans mixed up. When the community starts to see this, people gravitate to think that work, we are doctors, we want to make our patients feel better. So, when you start seeing the evolution of the data in terms of the dose, the safety profile at a lower dose with similar efficacy, obviously this experienced and has to be expanded. But things have gone on so quickly, the same thing with bone scan. The ability to actually quantitatively assess bone is really in its infancy.

MedQIA was actually referenced radiology group for Cougar 301. And when initially the tools to assess bone quantitatively didn’t exist they do now. And that actual bone scan assessment is undergoing an independent qualification through a separate regulatory path. So, when we design a working group criteria, we focused on primarily of worsening in bone, because we didn’t see drugs that actually made a favorable change even with hormonal therapy which arguably works in over 70 to 80% of patients. It can take up for two years for a bone scan to show to normalized. When you eliminated most of the tumor.

So, again we are in totally new territory, so I think you are seeing with the rapid evolution of the data and the rapid accrual to the trials. There is a multi-center general belief that this really works. And that’s why we are working so hard to bring it totally.

Ethan Basch, M.D.

I’d just add actually to that to in response to the part to your question. You are rally asking what [TAX size] would we need to see in order to feel really confident than for regulators to feel really confident in the efficacy of the product and that the efficacy that the benefit that way that risk to the arm. And I’d say (inaudible) and don’t quote me on specific numbers because there are very rounding, but there are really two ways to when we think about pain or symptomatic benefit to think about use the level of response we would see.

The first is the level of response that the individual patient level, right, which is the amount of pain improvement from baseline. And for our primary responder criteria and we take as the definition to be a 30% improvement from baseline, because this is actually been demonstrated in many population that represented clinically meaningful improvement.

However, one can certainly see a greater than 30% improvement and we have seen in many patients taking this drug at substantially greater than 30% improvement. So, one of the most regulators they will be looking for is in fact that we see a very large effect at the individual patient level, perhaps at the level of 50% or greater improvement of pain. Again there is no reason to pick 50% in over and the other number anything greater than 30% is considered clinically meaningful, but that view is a compelling sort of number to speak.

The other way that we think about a level of response is the proportion of patients who meet the responder criteria, right. So, that’s number of patients or the proportion of patients in each arm, experienced that 30% or greater improvement in pain compared to baseline. And again we have powered our study in order to measure a certain delta between mitoxantrone and XL184, but we could see a much greater difference between the two arms both because mitoxantrone level of response is lower than we project and because the cabo level response is greater.

And if we see a large delta for example 25, 30% difference between arms again taking that number out of the air because it's a review issue, [we think it stop]. At the time review that may serve this compelling evidence of efficacy overcoming those other concerns.

Now regarding the second part of your question about risk benefit, of course, this is something that is struggled with on the regulatory side all the time. And in this study we will be using multiple measures of symptomatic toxicities so that we will be able to actually get a sense of that risk benefit and we will be doing that in two different ways. The first is by using a credit patient report and measures being developed by the NCI, from the [pro-CTCEA], if the patient reported version of the standard in toxicity criteria that the NCI employs in all of its trial, that are used essentially across oncology trial. So, we will have patient’s views on all of the various toxicities that will have good sense of those. And again we are confident with the lower dose of cabo that we will see lower levels of patients reporting toxicities.

The second is that there is a single items that’s actually asking patients for their overall sensitive value of the drug. At the end of the study these are measures that have been used to some extent within the class of group mechanism, again sponsored by the NCI, saying, Mr. Jones, if you have taken the drug you come to the end of the study, was it worth to you, would you do it again, would you recommend it to somebody else. In order to get single metric in the patient perspective of the overall value of that treatment and this assessment is very compelling for example to a member of a panel that might be advising about the overall value of the product. So, these are all the ways that we are thinking about for making the case again in the setting of a trial design that’s little bit novel to the people who are we looking at the results.

Gisela Schwab, M.D.

Thank you. Other questions.

Unidentified Analyst

So, I have three general questions, please. First is, if you could comment on what is the mechanism of pain palliation is, whether this is just the function of (inaudible). Second question, could you comment on whether there is evidence or any concerns that the duration of benefit will be different at a lower dose. And what’s the mechanism of breakthrough if you have speculation. And finally, Dr. Scher, you mentioned circulating tumor cells and I wonder if you can comment on what technique you are using, what you consider meaningful and when you think it might be validated clinically.

Ethan Basch, M.D.

It's not edema, I mean this is not a reduction of edema, you will not see reductions in bone turnover as you do, and corresponding effects on circulating tumor cells. This is clearly altering the microenvironment whether this is migration, release of cells it's not entirely clear.

Unidentified Analyst

(Question Inaudible).

Ethan Basch, M.D.

Yes, I’m not sure exactly you mean, we could argue about cytokine release and infection on immune cells that are causing local symptoms, are we factoring endothelial which has been associated with pain. I think all of these are parameters that will ultimately be assessed.

In terms of circulating tumor cells, following the initial clearance of the test in prostate cancer in 2007, based on similar data that were shown in colorectal and breast cancer. We were specifically told by FDA to come back with the drug etcetera, was abiraterone, (inaudible) phase 2 trials where interestingly enough using the FDA cleared Veridex technology which despite all of the new technologies that are out there is the only one that’s currently cleared for use in the regulatory context.

Interestingly enough in the same patient population, we saw the great same frequency of unfavorable accounts which is now greater than 5 versus less than 5, which were shown to be prognostic both pre and post treatment. We showed it was identical conversion rate from unfavorable to favorable. And on that basis we built it into the Cougar 301 study.

As we reported in ASCO in a very early analysis there was suggestion of elimination of the treatment effect accounting for the CTC biomarker. Right now we are in the midst of the (inaudible) analysis which is again shall we say it's early to try to do it, and looking at in the patients individual patient level and a trial level. We submitted a briefing last year into FDA describing how we reduce the data that Cougar 301 trial will be the exploratory study to generate a post treatment biomarker which will likely include CTCs and other parameters with simple LDH.

That measure will in fact be used in the Medivation trial which just hits its end point, which also has circulating tumor cells embedded. This will be a measure that will be included in the 306, 307 studies. Again are interested in this is that as a measure that can give an early signal that you will ultimately predict your survival benefit.

So, it is on a regulatory path, we again I can’t say when the bone analysis of the Cougar trial will be finished, but the Medivation trial having both hit their end points is certainly very encouraging for this. And I can tell you there are interaction with FDA have been extremely, I want to be more than (inaudible) surely cooperative, because they have a shared interest in this being successful as well.

Unidentified Analyst

(Question Inaudible).

Howard Scher, M.D.

To your first two questions, I actually think that Matthew Smith would probably be the ideal person [who is much involved]. I don’t know what the mechanism of pain response is for [Viscotek]. We have limited understanding of the mechanism of pain and this disease in general. What we do know is that we have seen modest to moderate pain responses accompanying other products that have cytotoxic effects on disease set with docetaxel.

Regarding duration, that is an evolving story, we saw some data presented in the prior session about the 60 milligram dose at Dana-Farber we have no reason to think that the durability would be any different at this dose. But we will see.

Jeremy Joseph - Lazard Capital Markets

Jeremy Joseph speaking on behalf of Ryan Martins from Lazard Capital Markets. I was wondering if we would see an overall survival rate out of the EXAM trial, especially given PSA dataset that we have seen I don’t know if FDA will preclude this or not given the crossover?

Steven Sherman, M.D.

I actually didn’t catch all of the questions.

Jeremy Joseph - Lazard Capital Markets

Yes, I was wondering if we would still see an overall survival readout from the EXAM trial, I mean we have seen a PSA benefit and consider the FDA will probably have a crossover just wondering if we will still that.

Steven Sherman, M.D.

So, right now the analysis is underway and so I don’t really have access to data to share with you regarding overall survival. I think we expect that it's going to take time for the data to mature, many of the patients are still on trial, and the patients are being followed for survival event. The design of the study was certainly such that we intended to be able to impact the survival advantage if one potentially is there although of a fairly large magnitude.

Unidentified Analyst

(Inaudible) if you want to comment on the toxicity and tolerability profile of cabo relative to vandetanib and whether some of the discussion that we heard on vandetanib at the FDA panel is also relevant to cabozantinib.

Steven Sherman, M.D.

So, we don’t have the AE data from the phase 3 trial to share at this point from the experience that I have had personally and what we are seeing in the phase 1 study, I don’t think we have any reason to think that the toxicity profile in the thyroid patients is different than that which you are familiar with for other tumor types. With vandetanib, now that is out and approved, there certainly are different toxicity than cabo patients because of the different receptor profile I think. And so, the EGF receptor activity creates a therapeutic cutaneous toxicity for patients which can sometimes be difficult, patients getting significant sun burn with 15 minutes of sun exposure for example. But I think the data from other studies with cabo would suggest that the QT issues should not be a prominent problem for this drug. But again we will wait to see the full profile data from the phase 3 study and then certainly we have to see what the FDA’s take on it is. I think from reading the transcript of the ODAC hearing for vandetanib, I think there were some level of surprise at the level of concern FDA had about some of the toxicity.

Unidentified Analyst

Thanks. Just wondered what percentage of the patients in your practice would need the entry criteria that were used in EXAM, but (inaudible).

Steven Sherman, M.D.

So, what percentage of patients in routine clinical practice would meet the entry criteria. I think we are probably looking at on the order of 10%. I think what has changed because up until a few years ago none of these agents were available that were zero clinical trials in thyroid cancer, there was no option for treating metastatic disease. In fact, endocrinologist who are primary providers of these patients tended to take a very indolent approach towards imaging. And CAT scans were not necessarily used very frequently if at all. So, I suspect that the traditional data about the frequency of (inaudible) metastatic disease greatly underestimated the actual prevalence, because in fact patients weren’t been imaged. Now that there are options and patients are coming out of the wood work for clinical trials and for treatment option, I think now we are beginning to see probably a much different profile of disease. It's not that the disease have changed, but now these patients are being imaged and more aggressively followed. So, we are finding a lot more disease than we used to.

Unidentified Analyst

(Question Inaudible).

Steven Sherman, M.D.

So, with regard to the dosing, I think in the trial, in the phase 3 study again I don’t have the data at this time to say. From the phase 1 study, chronically most of the patients certainly moved down to under 100 milligrams, and in the DTC study, again the patients although they started at high dose quickly moved down to 75 milligrams as a maintenance. And there actually we seem to do fairly well.

So, it was an aggressive dose reduction strategy to find dose that patient is tolerated. With regard to the breakdown of incidence, so right now what appear that the incidence of the disease for medullary is probably about 2.5 to 3% of the total incidence cases at thyroid cancer. For differentiated cancer, it is probably 95%, when you actually go to SEER data there are number of cases that are not well defined as to what their subtype is. And that accounts for a few percent that’s missing. So, basically the breakdown is medullary 2.5, differentiated thyroid cancer at least 95%, and [prostate] cancer is only fortunately about 1% of cases.

Unidentified Analyst

(Question Inaudible).

Steven Sherman, M.D.

So, the life expectancy for patients with differentiated cancer overall is near normal. And that’s because at least 60 to 70% of patients present with stage 1 or 2 disease where the mortality is extremely low. And these are patients for whom therapeutic is zero discussion about a role for systemic therapy, because the current approaches of surgery with or without radioactive iodine seem to be quite appropriate. In fact most of the debate is how little treatment do they actually need at all. A lot of the incidence growth is in small papillary thyroid cancer that their (inaudible), where in fact one can, there are some margin and so whether they require any treatment. However, when you look at the incidence curves for the large tumors greater than 4 centimeters, and the invasive one, the data suggest that the incidence that is also increasing. So, it's not just purely the (inaudible) and perhaps insignificant papillary cancers that are contributing to the growth.

Unidentified Analyst

(Question Inaudible).

Steven Sherman, M.D.

For medullary thyroid cancer the median survival for most patients is greater than 20 years, who present with localized disease either within (inaudible) or regional metastatic within the neck. However, many of those patients do eventually go on to show evidence for metastatic disease. There isn’t a single number that I can give you that captures the entire spread of the disease. The other is for familial disease, now actually because of the availability of germline testing, patients can actually be cured before they ever develop the malignancies. So, surgery before the age of five is actually preventing the cancer from development.

Eric Schmidt - Cowen & Company

So, couple of additional questions on the CTEP collaboration, could you talk about funding for the collaboration and also the prioritization of studies, decision making rights, things like that. And at one point you were also involved in the discussions with the other cooperative group around ovarian cancer, is that still a possibility?

Mike Morrissey, PhD

So, the question was in the context of CTEP collaboration, Gisela, in the context of CTEP collaboration how will that work, cabo studies be prioritized, and then need additional color we can talk about relative to ovarian and cooperative group work.

Gisela Schwab, M.D.

Sure. So, for the CTEP collaboration we have a broad crater as I said in the extent offer 20 active studies per year before in total of five years. And the way that will be administered is that we have a joint [issuing] committee and certainly there will be joint decision making. In the process Exelixis has a retail right we suspect to studies being admitted basically to the program. After that CTEP is administering these studies from the regulatory perspective, it's holding the [Indiscernible] etcetera.

In terms of the ovarian cancer question and the cooperative group it work. Ovarian cancer I think alongside with other indications has met a lot of interest in the CTEP process of evaluating cabozantinib and so, our expectation is that further evaluation ovarian cancer will be part of the CTEP evaluation.

Eric Schmidt - Cowen & Company

On CTEP financially how much is funded, where that is coming from.

Gisela Schwab, M.D.

The funding from our end is minimal, so there is a minimal fees of $20,000 or so per study per year involved from Exelixis perspective. The funding itself is coming from the NCI for the CTEP study.

Unidentified Analyst

Two quick questions, the first one on the clinical trial side, just wondering that NRE study is enrollment completed in that study yet, and what’s the total expected size and then can you comment on what other data beyond bone scan response you are expecting to collect and maybe present next year. What we see from that study. And then on the spend front, going back to Eric’s question, just the thinking about R&D next year, obviously the 307 study targeting to be a big driver the spend, but what other, I mean how should we think about that I guess may be help us frame some of these to think about (inaudible) to next year. Thanks.

Mike Morrissey, PhD

Gisela, why don’t you answer the question first on the NRE and Scott to talk about 307.

Gisela Schwab, M.D.

So, the NRE study for CRP for prostate cancer has completed enrollment to the 100 milligram dose level with 93 patients enrolled. And we are enrolling an additional cohort at a lower dose level of 40 milligram as we speak and that’s intending to enroll about 50 patients. So, in terms of the data points to be published, I think clearly bone scan response is [100] it fits centrally using the cat technology at MedQIA that was spoken about earlier today, but there is also central imaging being conducted on other measures for (inaudible).

We are collecting importantly the pain data that showed you is [natural] of today exactly like we are intending to collect it in 306 study and that is using is in IVRS system where patients basically punch in on a daily basis what their pain level is. They also keep diaries and their narcotic medications so very strong evaluation on pain, they are collecting CTC, they are collecting bone markers and so it's a very comprehensive evaluation of that patient population. And just to remind you the patient population itself is a very advanced patient population that has received prior docetaxel and proportion of patients also Cabazitaxel, and they could have received prior abiraterone as well.

Scott Garland

And in terms of the financial question, as we typically do we provide detailed financial guidance for next year on our Q4 earnings call early next year. I can give you some directional guidance with regard to operating expense and that is I do not expect our operating expense to increase next year. There is really two reasons for that. One is, in 2011 we still had a lot of restructuring activities ongoing which now essentially completed, and next year for the first time really we will see the full financial benefit of the transition to the cabo only company. And then secondly, as 306 and 307 beginning to ramp up, 301 the EXAM trial and MTC, [MCRD key] study 203 will start to ramp down in the later part of next year. And that’s really why our operating expenses are certainly not going to increase.

Mike Morrissey, PhD

A bit more color on the NRE cohort, I think important consequence of that study is to really start to build the prospective correlations between bone scan and clinical benefit. We certainly have some associations from the RDT at ASCO and (inaudible) presentation back in June that was retrospective, and obviously wasn’t controlled per IRF etcetera. So, we view the NRE as a very important opportunities to start to lay the foundation for the relevance of a bone scan from a broad clinical point of view and I think we are excited to have that cohort enrolled rapidly and hope we will have a good update for you at ASCO.

Unidentified Analyst

Two questions on 306 and 307, your expectations with visceral METs to be excluded. And then in terms of the timeline for the data the 307, should we think about the Cougar 301 trial as a rough approximation for when we will see overall survival. And then on the commercial front for MCC, I’m not entirely clear what the expectations are for the on label patient population?

Gisela Schwab, M.D.

So, with respect to your first question regarding 306 and 307 and visceral metastases, the intention is to exclude patients with liver metastases continue to work and some of the population by themselves we are not excluding pulmonary metastases or other soft tissue metastases. With regard to the timeline of enrollment for 307, I think we are certainly looking at enrolling this study as quickly as you can and hope to model this out there Cougar 301, and so that would result in a very rapid time to rebuild obviously.

Scott Garland

And with respect to the MTC patient numbers, I would say it's about less than a 1000 it's sort of where we are thinking at right now. So, pretty small market opportunity.

Unidentified Analyst

Can you discuss your rationale for measuring the pain response at week six and 12 versus longer duration time points that you considered in the past.

Gisela Schwab, M.D.

Well, the important of measuring a reasonably early timeframe at week six is obviously we would like to see a pain effect as soon as possible. And durable effect and six week certainly is considered a durable effect. So, also remember that many of the patients showing Mitoxantrone/Prednisone show a progressive disease earlier than week 12. So, obviously we want to capture their information as much as possible as the relevant time point. And so week six and 12 are assume to be the best time point to address all of these aspects.

Unidentified Analyst

And while the systemic dose has been shown to, it obviously have a pain response, can you maybe discuss a bit about how it could be effective as a starting dose compared to the 100 mig dose?

Gisela Schwab, M.D.

So, we have evaluated quite a good number of patients on 60 milligram dosing. As I alluded to earlier on, 50% of the patients on 100 milligram test being reduced to 260 milligrams and the median time to dose reduction was above 30 days. So, we have that body of data and we see a maintenance of pain response in the vast majority of patients that have been dose reduced.

Unidentified Analyst

This question is for Mr. Garland. You have some good market research slides in here that show that full oncologist on the importance of pain as a treatment goal. I was wondering if you have done any similar surveys where you ask patients the same question?

Scott Garland

Yes, we actually just completed some research asking patients about pain and it was a very consistent in terms of their reaction. I think probably even more in the minds of patients the aspect of pain, overall survival of the population statistic and you can’t tell a patient the overall survival improved today. But you can and make them feel that their pain has got better. So, when you hear directly from patients they are actually more interested in pain. And in some cases they will trade off and improvement in quality of life for improvement in survival in other words they live shorter but they feel better. And I think that’s some of the key aspects we are getting on a market research for that.

Mike Morrissey, PhD

Okay, I think we have covered all of the issues today. Thanks again for your time and your interest and certainly your questions and we will have a quick wrap up and (inaudible) thanks again. I appreciate it.

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