GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - EXELIXIS INC

Financial Performance:

• Cabo revenue grew 13% in Q3 volume, demonstrating continued market share gains in both Renal Cell Carcinoma (RCC) and Neuroendocrine Tumors (NETs).
• The company expects R&D spending to remain flat at approximately $1 billion annually.
• Balance sheet is debt-free, allowing for flexibility in potential external leverage for business development.
• Cabo settlements with ANDA filers have reduced generic entry ambiguity, though 505(b)(2) alternatives remain a minor risk.

Guidance and Future Outlook:

• Transitioning strategy from "Cabo as the TKI of choice in the 2020s" to "Zanza as the TKI of choice in the 2030s."
• Zanza's STELA-303 (colorectal cancer) FDA review extended to March 3rd pending additional data analysis.
• STELA-304 (RCC) readout guidance pushed to Q1, driven by event count timelines rather than data quality concerns.
• Future pipeline expansion relies on "Wave Two" studies, prioritizing opportunities with high commercial probability and clear unmet needs.

Business Segments and Product Lines:

• Cabo: Maintains position as #1 TKI in RCC; NETs launched in early lifecycle showing strong initial share; commercial focus remains on hyper-focused prescriber targeting and community outreach.
• Zanza (STELA-303): Met overall survival endpoints in full population for colorectal cancer (CRC); consistent efficacy observed across subgroups including non-liver metastatic patients.
• Zanza (STELA-316): Phase 2/3 adjuvant CRC study targeting MRD-positive patients with high recurrence risk; potential market sizing estimated at 12,000–13,000 patients.
• Zanza (RCC): Multiple studies planned including LightSpark 033 (first-line post-adjuvant), LightSpark 034 (second-line vs. belzutifan), and Wave Two studies for frontline metastatic settings.
• New Indications: NETs (STELA-311 vs. everolimus) and Meningioma (accelerated approval potential); Meningioma target leverages Cabo's efficacy signals in slow-growing tumors.
• Wave Two: Exploring lung cancer (bladder cancer post-Padsevir/Padcev) and other tumor types based on strong Phase 2 signals and commercial viability.

Market and Competitive Landscape:

• RCC: Shifting treatment paradigm as patients increasingly receive adjuvant pembrolizumab; Zanza positioned to treat post-checkpoint and frontline metastatic patients.
• Competition: Belzutifan now approved in adjuvant clear cell RCC with pembro; Zanza aims to define the "2030s" standard of care against evolving IO/HIF/TKI sequences.
• Market Dynamics: Success of Zanza depends on robust data to establish non-505(b)(2) comparability and guideline inclusion for new entrants; historical lack of success for 505(b)(2) products without robust clinical data noted.
• Unmet Need: High demand in MRD-positive CRC (currently "watch and wait") and meningioma (few treatment options).

Risks and Challenges:

• FDA Timing: STELA-303 review delay introduces uncertainty on near-term approval; STELA-304 delayed to Q1 due to event rate counting.
• Generic/Alternative Threats: Potential 505(b)(2) products could impact market share, though currently viewed as having low commercial adoption without robust data.
• Clinical Hypothesis: Original hypothesis for liver metastasis subgroups in STELA-303 was not borne out; company reassures efficacy is consistent regardless of liver status.
• Competitive Setbacks: Failure of Merck's LightSpark 12 (triplet therapy) creates opportunity but also highlights the volatility of combination strategies in the space.
• Capital Allocation: Balancing $1B R&D spend, external innovation (M&A), and share buybacks requires disciplined capital management.

Management Commentary and Tone:

• Tone: Highly confident and execution-focused; management describes the current phase as a "fun" and "meaningful time" for the company.
• Strategy: Emphasizes discipline in running the company "like a business and not a biotech," prioritizing efficient expense management and high-probability trials.
• Market Position: Management expresses pride in Cabo's longevity and excitement for Zanza's breadth of opportunities across multiple tumor types.
• Investor Relations: Reaffirmed commitment to shareholder returns via buybacks while maintaining strong R&D investment and exploring external growth.

Analyst Questions and Answers:

• Q: What drives Cabo growth? A: Continued commercial execution, targeting low-prescribing pockets, and expanding NETs market share.
• Q: How do 505(b)(2) products impact Cabo? A: Minimal impact expected historically without robust data; company continues to protect IP and maximize patient value.
• Q: Will STELA-303 liver subgroup miss affect approval? A: No; consistent benefit in ITT population overrides the specific subgroup hypothesis failure.
• Q: Why the delay in STELA-304? A: Purely event-count driven; approaching clinical cutoff for PFS analysis.
• Q: Is Zanza a replacement for Cabo? A: Yes, strategically, aiming to replace Cabo as the standard TKI in the 2030s while Cabo matures.
• Q: How to prioritize Wave Two? A: Based on commercial viability and clear patient unmet needs (e.g., bladder cancer post-Padsevir).
• Q: Impact of Belzutifan adjuvant approval? A: Creates complex sequencing questions; Zanza aims to solve treatment gaps in later lines and adjuvant/post-adjuvant spaces.

Other Key Points:

• Capital Allocation: Three-pronged approach: Internal R&D ($1B flat), External Innovation (BD/M&A), and Shareholder-friendly Buybacks.
• Meningioma Strategy: Leveraging indolent patient population for potential longer treatment duration and significant revenue opportunity.
  Diagnostic Synergy: STELA-316 leverages Natera's Signatera/MRD testing data to identify high-risk patient populations for early intervention.
• Company Culture: Reiterated "execution" across all pillars (Cabo, Zanza, internal portfolio, and business development) as the core theme.