GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - EXELIXIS INC

Explicit Guidance:

• R&D Spend: Management expects internal R&D investment to remain flat at approximately $1 billion annually going forward, supporting the ramp-up of additional Phase 3 studies next year and beyond.
• Capital Allocation: No specific numerical guidance provided for share buybacks; however, management confirms the strategy to continue share repurchases alongside R&D and M&A, leveraging a debt-free balance sheet with no mutual exclusivity between these buckets.

Business-Segment Outlook:

• CABO (Current Franchise): Continued commercial execution expected to drive market share gains in Renal Cell Carcinoma (RCC) and Neuroendocrine Tumors (NETs); growth rates cited at 13% volume in Q3.
• ZANZA (Future Franchise): Positioning as the "TKI of choice for the 2030s," with a pipeline targeting expansion beyond the 2020s CABO dominance.
• NETS Segment: Aim to establish Zanza as the standard TKI for NET patients, following a "wave one" strategy similar to CABO.
• Meningioma: Viewed as a high-potential, unmet need market with indolent tumors potentially supporting longer treatment durations and significant revenue opportunity; pursuit of an accelerated approval pathway is anticipated.
• Bladder Cancer: Phase 2 study ongoing; potential pivotal study initiation contingent on positive data, targeting the post-PADSEV/Pembro treatment landscape.

Market and Competitive Outlook:

• RCC (Clear Cell): Strategic shift anticipated where CABO is "TKI of choice in the 2020s" and Zanza becomes "TKI of choice in the 2030s."
• Frontline RCC: Opportunity identified to define Zanza as the standard in the frontline metastatic setting ("LightSpark 033" and "Wave Two" studies) following the failure of the triplet regimen (LightSpark 12) and the establishment of PADSEV as first-line standard.
• Adjuvant Space: Management anticipates ongoing complexity and sequencing questions in the adjuvant setting (post-Pembro) regarding the added benefit of Belzutifan, which may drive patients to Zanza in the metastatic setting.
• Generic/505(b)(2) Competition: Management expects minimal impact from 505(b)(2) products due to lack of AB ratings, non-substitutability, and absence of robust clinical data; views normal generics as largely settled via litigation.
• Lung Cancer: Identified as a potential "Wave Two" opportunity, prioritized based on commercial fit and high probability of success in establishing Zanza as a new standard of care.

Macro / Industry Outlook:

• Diagnostic-Driven Landscape: Anticipates a structural shift in the colorectal cancer (CRC) market driven by the adoption of MRD (Minimal Residual Disease) testing, creating a new treatment paradigm for high-risk, MRD-positive patients.
• Oncology Standards: Expectation that Zanza will be integrated into evolving treatment sequences (e.g., post-Pembro, post-IO/HIF, post-PADSEV) as current standards evolve toward immunotherapy combinations.

Strategic Initiatives:

• Regulatory Milestones (Zanza):
  • CRC (Stella 303): FDA review extended to March 3rd (early next year); high confidence in approval for the chemo-free option.
  • RCC (Stella 304): PFS primary endpoint data readout expected in 1Q of next year; timing driven by event rates rather than operational delays.
• Clinical Trial Pipeline Expansion:
  • Stella 316 (Adjuvant CRC): Phase 2/3 study targeting MRD-positive patients to delay disease-free survival (DFS) loss; potential sizing of 12,000–13,000 patients contingent on Signatera/MRD testing uptake.
  • Wave Two Studies: Active development in non-clear cell RCC, clear cell RCC (frontline and second-line), and potential bladder cancer pivotal studies.
• Capital Structure: Maintain debt-free status to enable potential leverage for external M&A (Business Development) while funding internal R&D and share buybacks.

Risks and Headwinds to Outlook:

• Regulatory Timing: FDA review timelines are subject to data requests and event rate counting (e.g., Stella 304 delay to 1Q); no specific guarantees provided beyond current guidance.
• Clinical Hypothesis Validation: In Stella 303, the original hypothesis regarding "non-liver metastatic" subgroups was not borne out, though ITT data remains consistent; market uptake may depend on broader data interpretation.
• Competitive Landscape Evolution: Future adoption of Zanza depends on the success of pivotal trials against evolving standards (e.g., PADSEV in bladder, new combos in RCC) and the ability to demonstrate superiority in sequential therapy settings.
• Adoption Barriers: Potential market confusion or resistance regarding treatment sequencing in the adjuvant/metastatic interface (e.g., Belzutifan vs. Zanza).

Management Tone on the Future:

• Confidence Level: High; described as a "fun time" and "meaningful time" with excitement regarding the "emerging second franchise."
• Strategic Clarity: Emphasis on "executing" the bridge from CABO to Zanza, characterizing the company as "hyper-focused" and efficient ("run like a business").
• Financial Health: Repeated emphasis on a strong balance sheet, zero debt, and the ability to simultaneously fund R&D, M&A, and shareholder returns.
• Market Positioning: Confident assertion of Zanza's future dominance, framing the current period as a transition to "TKI of choice in the 2030s."

Miscellaneous:

• Study Specifics: Stella 304 uses PFS as the co-primary endpoint alongside response rate; analysis triggered by hitting a specific number of events.
• Partnership Context: Mention of collaboration with Merck regarding the adjuvant CRC study (Stella 316) and Natera's Signatera data driving the MRD strategy.