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Executives

Charles Butler – Vice President, Investor Relations and Corporate Communications

Analysts

Robyn Karnauskas – Deutsche Bank Securities, Inc.

Exelixis, Inc. (EXEL) Deutsche Bank Securities Annual Health Care Conference Call May 8, 2012 4:50 PM ET

Robyn Karnauskas – Deutsche Bank Securities, Inc.

My name is Robyn Karnauskas; I am the DB biotech analyst. And thank you for staying late this afternoon. Next, we have Exelixis and presenting we have Charles Butler. For those of you who are listening on the webcast, we are incorporating a website that you can ask questions anonymously and I’ll read them, its yorn.com/hc and that’s just the internet or there is also an app.

With that, I’ll turn over to Charles.

Charles Butler

Thanks, Robyn. My name Charles Butler, I’m the Vice President of Investor Relations for Exelixis and I’ll be representing the management team today. And before we get into the presentation, let me just read our forward-looking statement.

During the course of this presentation, we will be making forward-looking statements regarding the future events or the future performance of the company. Actual events or results, of course, could differ materially. We refer you to the Risk Factors section of our most recent Form 10-Q filed with the Securities and Exchange Commission on May 3, 2012.

For a description of the risk factors that could cause actual results to differ materially from those contained in any forward-looking statements including risk related to the potential failure of cabozantinib to demonstrate safety and efficacy in clinical testing, Exelixis’ ability to conduct clinical trials of cabozantinib sufficient to achieve a positive completion and the sufficiency of Exelixis’ capital and other resources and the uncertainty of the FDA review and approval process.

So, with that introduction, I’ll start to the main presentation. As many of you know, Exelixis made the decision about two years ago to focus the company exclusively on cabozantinib. And we did so and the thought behind that was driven by one main thing and that’s the kind of the unique activity profile that we saw with cabo.

And over the few years of development, what we’ve noticed is that cabo has activity in all the key compartments, demonstrated clear activity in all the key compartments for cancer, whether it’d be the brain causing a CNS barrier, where it’d be the bone, metastasis to the bone and soft tissue in visceral. And there is – this has shown activity where other drugs haven’t seen.

Cabo is a dual inhibitor of MET and VGEF. And the activity profile seems to be unique to compounds that just inhibit MET or even compounds that just inhibit VGEF. And so with that, we decided to focus our efforts around cabo in the whole company – the vast majority of our resource is dedicated to the development of cabozantinib.

To date, we have seen objective tumor responses in 12 of 13 tumor types, including what’s probably most striking to date is a bone – resolution of bone scan, bone lesions by bone scan in multiple tumor types, but in particular prostate cancer, where that has also been correlated to clear signs of clinical benefit where those data were presented last year at ASCO. And over the last few years, we’ve also gained a lot of experience in dosing cabozantinib. And in doing so, we’ve increasingly got a good feel for the – a way to maximize activity while maximizing tolerability and activity at lower doses than we originally started a few years ago.

And so to date, the activity really breaks out into three main areas, there is a unique activity that we have seen in prostate cancer, there is also the activity we’ve seen in resolving bone metastasis in various tumor types beyond prostate cancer, including renal cell, including breast cancer and other tumor types as well, and then there is activity in just soft tissue, visceral lesion as well as CNS, as I mentioned before.

And to date, we have a vast amount of experience in dosing cabo in over 1,200 patients, 1,200 patients to date and growing. And the question for us is, how do we as a pre-commercial development company, effectively develop cabo on what is limited resources for a company like ours, but how we do it in such a way it actually maximize the broad activity that we’re seeing and really – and really help us to one, prioritize our investment for the best opportunities there are for the drug going forward.

And our development program kind of falls into three main areas. One is our internal efforts and that’s primarily focused around the – our initial NDA filing in medullary thyroid cancer as well as our Phase 3 program in prostate cancer. And then the second area is our investigator sponsored trials, which are trial programs where Exelixis essentially just provides drugs to clinicians to run trials in various areas. And I’ll talk about these in a moment.

Last week, we announced our collaboration with CTEP, where we announced initial 13 trials. And this collaboration covers up to 20 active trials per year at a cost of only $20,000 per trial per year to Exelixis. So I think anyone – by anyone’s estimation that would be a very inexpensive way to really blow out and expand the development program. And so what that results in is a pretty wide development program.

We have three Phase 3 trials with the EXAM trial in medullary thyroid cancer dwindling down and the two pivotal trials in prostate cancer are on the – those are – one was initiated in December and the second one we’ll initiate later this quarter. And those are really picking up steam as enrollment picks up in those two trials.

And then from a Phase 2 perspective, we have approximately 20 trials running in Phase 2. Some of those – many of those randomized trials, many single-arm trials, but just the broad effort also in Phase 1 as well that we just couldn’t do without the investigator-sponsored trial program as well as the CRADA collaboration. So this provides us a way to really expand, as you can see here, the clinical development efforts well beyond that mean that we could do independently with our own resources.

So let’s talk about each of the areas individually for a moment, first is medullary thyroid cancer. We released top line data on Q4 of last year where cabozantinib demonstrated nearly a threefold increase, improvement in progression-free survival over placebo with a hazard ratio of 2.8, so a highly statistically significant outcome there. Those data – that full dataset will be presented in a oral presentation at ASCO later – early next month, I should say.

We’ve been in the process of submitting our NDA file on a rolling basis. We plan to complete that submission later this quarter and it’s our plan also to request for a priority review. And if that priority review is accepted, we would expect a decision by the FDA by the end of the year and that would be our first New Drug Application and potentially our first indication for cabozantinib. And as you might expect, we’re also preparing to submit the manuscript to a high profile journal sometime this year as well.

And the next big kind of area for our internal effort is focus around prostate cancer and we have two pivotal trials planned for the prostate cancer, metastatic castration-resistant prostate cancer, COMET-1, which is our overall survival trial, and then COMET-2 which is our trial, second pivotal trial focused on the pain palliation and narcotic reduction. We believe the combination of the COMETs will allow us to develop a profile for cabozantinib that is unique and differentiated in the prostate cancer space.

I mean I think it's fair to say that the progress in prostate cancer has been pretty remarkable over the last few years, with many approved agents. And many of those agents are providing great benefit to patients. We – although those agents have provided great benefit, we think there is still room for additional agents with a unique profile.

While we hope to demonstrate OS benefit like the other agents, we believe we can go beyond that when you include pain palliation, narcotic reduction, bone scan response. These are areas (inaudible) think they provide a unique activity profile compared to the other agents, but it also acts in key compartments of the disease in a metastatic setting, especially the bone metastasis and the associated pain that comes with those in a metastatic setting. So we think our program has the potential to really differentiate cabo in the prostate cancer market space.

I’ll turn to our IST program, so our IST program has helped us to do a couple of things, it helped us do additional work in prostate cancer in parallel to our efforts around the pivotal trial program and the randomized discontinuation study, as well as explore other areas of interest for cabo.

One study where we reported initial data late last year and we will update this year at ASCO is a low-dose study run by Dr. Matthew Smith at Mass General here in Boston. That study is investigating starting doses of cabo at 40 milligrams and 20 milligrams, using bone scan response as the initial sign of activity, but then following out for other market of activity as well. These data are critically important to our prostate cancer program for two reasons. One, it’s helping us qualify the initial starting dose for the COMET trials, but it also potentially facilitate our ability to move into earlier lines of therapy in prostate cancer as well as in combination.

And in terms of combination studies, we recently announced two combination studies with cabo and one is with Abiraterone and the second is with Taxotere. We also are in discussions to do a combination study with MDV3100 and these trials are critically important for us to move beyond the metastatic or I guess move before the metastatic study into earlier lines of therapy as well.

And we also have ISTs looking at various other areas; one in particular is looking at bone mets associated with hormone receptor-positive breast cancer. And so turning back to the CRADA that we had announced last week with NCI, so we announced the initial 13 trials. Again, we can go up to 20 trials per year, the initial raster 13 were announced last week and there are several trials – several randomized Phase 2 trials announced. There is a first-line RCC study of cabo versus sunitinib. There is a second-line HCC study of cabo versus placebo in patients who have already been treated with sorafenib.

And then looking at lung cancer, an EGFR wild-type lung cancer, cabo versus erlotinib and cabo versus cabo plus erlotinib as well, as well as our study in ovarian cancer. So we think these studies are crucial. These are areas where we’ve seen unique activity for cabo, but these randomized Phase 2s, each will be 100 to 150 patients. The data from these trials will help us prioritize and rationalize investments in kind of the next wave of pivotal studies for cabo. There are also additional Phase 2s as part of this program DTC, ocular melanoma to mention a couple, as well as earlier stage Phase 1 studies. So this is a really important program for us in a very cost efficient way, as I mentioned, for us to really expand the clinical trial program for cabo.

Shifting gears slightly to our partnered asset, as many of you know, our history has been the large discovery operation as well as early stage clinical development. At its peak, we were generating three to four INDs a year and many of those compounds are partnered out to various clients. And as those compounds are often partnered out at either Phase 1 or late pre-clinical stage, many of those assets are starting to mature. And as they start to mature, the financial impact and value creation impact for us becomes pretty substantial.

To mention a couple of them, there’s a MEK compound with Genentech, which is being looked – is looked in combination with their PI3K inhibitor as well as their agent for melanoma. That compound – coincidentally we have a profit share on a sliding scale from 30% to 50% based on sales. There is also the PI3K program with Sanofi, where we have two PI3K specific compound, PI3K plus MTOR compound, and that’s in a total of 15 different Phase 2 trials there. And there are others, but these are just to name of few. As these assets continue to mature, I think they come increasingly into focus in terms of added value for the Exelixis and cabo story, or Exelixis story I should say.

ASCO is a few weeks away. We are preparing internally for what we hope to be an exciting ASCO, we have nine presentations. And we are pretty excited and pleased, that’s nine presentations on cabo in various different tumor types. For those nine presentations or all presentations, I’ve mentioned the EXAM study that will be presented in a oral session as well as new data from the non-randomized extension cohort.

Over the past couple of years, we’ve presented data from the randomized discontinuation part of the study, but then last year we opened up a non-randomized extension cohort in prostate cancer, where we looked at all – where we will be looking at all of the key parameters for clinical benefit in a prospective fashion whether that’d be bone scan, bone scan response, PFS benefit, CTC count and all the other key markers, pain palliation, narcotic reduction and so forth. These will be looked at in a prospective fashion. This will be our kind of initial holistic presentation of this data. There are additional oral presentations in HCC and RCC as well.

And then we have for post-discussion presentations in breast cancer, melanoma and again the low dose IST study that I mentioned in prostate cancer as well as RDT, non-small lung cancer, RDT cohort and a poster and differentiated thyroid. So I think from our perspective and I think just from objective point of view, this is impressive roster of presentations at ASCO for a single compound across so many tumor types. So we’re excited to present those data in the coming weeks.

We will also be holding an Investor Briefing that will be held Monday night, where we have, we believe, important roster speakers including Jose Baselga and Matt Smith from here at Mass General; General Dr. Karim Fizazi and Daniel George who will talk about the prostate cancer data as well as Patrick Schöffski and Steve Sherman who will discuss data in MTC area as well.

And so with that, I’d just kind of turn to my last slide. We have been working kind of diligently at Exelixis to, one, transform the company to a company focused on cabozantinib, which we think we’ve done successfully, and then make sure that we have a development program that is, one, cost efficient, but also allows us to explore all the potential opportunities for cabo across many different tumor types. And I think with the announcement of our IST program and our CRADA program, we’ve done that.

We also – we are in a fairly good financial position. We ended the first quarter with about $330 million in cash that will allow us to continue the development going forward in an aggressive way. And we’re looking forward to our first NDA filing later this quarter and if we do get a priority review decision later this year, which we think is an important event for not only cabo, but for Exelixis as a company as well.

Question-and-Answer Session

[No Q&A session for this event]

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