Stifel 2026 Healthcare Conference - EXELIXIS INC

And glad to have with us to kick off the afternoon sessions, we have Andrew Peters from Exalexis. Andrew, thanks for joining us. Thanks for having us. Any opening statements you want to make before we jump into Q&A? Yeah. Thanks for the invite. Great meetings today. Been really fun kind of engaging with investors. As always, going to be making some forward-looking statements today. So please see relevant disclosures around risks in our business and SEC filings. Right now is a really exciting time for Exalexis. We're kind of at that transition point as our next franchise, our second franchise, Zanzalit Nib, is, you know, we have a PDUFA date in March of next year, early March of Next Year. We're kind of seeing that transition from single product company with Cabo to multi-franchise company with Kabo and Zanza, and then kind of off to the races from there. So just really excited, full speed ahead on just the commercial execution, clinical execution, and dann everything we're doing from both a kind of early pipeline perspective. And then really the last thing I'd say that, you know, surprising to some is this dynamic or through line that always is at X-Lexus is we run the company like a business and not a biotech. And so it's about execution. It's about discipline. It's About Prioritization. So all of that just is really good time at Xlexus right now. Okay, perfect. Let's jump into Zanza. I'll probably spend most of my time on this. So you just extended the top line disclosure for Stellar 304. This is the phase three study in non-clear cell renal cancer that is now expected to happen first quarter of next year. Can you just talk about kind of how you're thinking about this delayed event accrual and, you know, what investors should expect to see in a press release when you guys communicate this this top line data? Yeah. I mean, simply put, we're tracking events as they come in real time. And as we kind of see the accumulation of events moving towards a certain number of events, provide clinical cutoff, clean the data, top line. When we saw a clinical cut off based on the event rates going to happen closer to year end. That's why we guided to first quarter. So kind of simple is event rates coming in a little slower as we kind of triangulated what that was expecting. That was kind of what drove the timing. In terms of the press release, what's not going to be in there? Honestly, I don't know. I haven't written a press release yet. In the past, we've included a lot of data. In the past, we've included just some kind of top line. There's a lot of sausage making, as you can appreciate, in terms of what gets shared and how around medical conferences and all of that. But, you know, our goal, our hope is to generate as robust of a data set as we can, get that filed, and get into patients as soon as we Can. Okay. I know we saw updated phase two NEVO-CAVO data in non-clear cell at ASCO this past year, or this year, actually. I think frontline response rate somewhere in kind of the mid-40% range. PFS was 11 months. Maybe that trend's a bit higher when you exclude some of the second-line patients. But how do you think about those as as as kind of relevant efficacy benchmarks that you need to clear in order to commercially differentiate Zanza from Cabo and in this setting specifically? Yeah, I mean, that's that's kind of the eternal debate is in biotech is how doyou kind of compare apples and oranges, single arm, single center phase to the large global randomized phase threes? You know, that's really the challenge and is really actually the reason why we started 304 in the first place is kind of by, you know, for a variety of reasons, all drugs with labels in RCC have those inclusive or exclusive of non-clear cells, so a clear cell and a non-clean cell. So there's actually never been a large global randomized study in this space. And so we thought what we had a chance to do with 304 is really plant a flag in the ground and define with level one evidence a standard of care. And so what that does is, you know, right now patients are treated really in a hodgepodge of different therapies. And so use is somewhat driven by guidelines, which, again, are driven by kind of single arm on randomized data, which are complicated in the single center, the sort of patients that are enrolled. So there's just a lot of dynamics that go into it. And so what we have a chance to do is establish with level one evidence with large randomized phase three data to go in and kind of define the standard of care. So I think it's probably less useful to look at small end data sets or data sets where perhaps a skew of patients, favorable, intermediate, all of those sorts of dynamics. It's just hard to compare smaller studies to large global randomized studies. Okay. You just pointed out the lack of specificity that exists between non-clear cell and clear cell with regards to frontline labeling today. would you think that there's the potential for a similar phenomenon to play out here from a labeling perspective for Nevo Zanza? Yeah, I mean, honestly, it's probably too early to speculate on something like that. We'll have to see the data first and really let the data kind of show us what we're looking at. Okay. Just maybe sticking with RCC, you know, we saw the LightSpark 011 and 012 data. at the ESMO meeting a couple of weeks ago, um, would be curious, you know, if, if there was anything incremental in, in, in those presentations that you found to be of interest specifically as it pertains to, you know how you're thinking about Cabo sustainability in the second line setting and how you're now trying to position Zanza via the light spark studies, Oh three and Oh three, four. Yeah. I mean, you Know, certainly I think the light Spark 12 data showed us that, you know, the door is the door in kind of the de novo metastatic frontline space is wide open. You know, so we've talked about this. We're anticipating kind of a second wave of ZANZA trials to start shortly. And one of those will almost certainly be in kind of that frontline metastastic space. And so Light Spark 12, you Know, we think there's a real opportunity there. We're going to, you know, take those learnings, take the learnings from our own experience, say with Plasma 313, and then try and understand and let the biology drive what are the appropriate combinations, orthogonal mechanisms, et cetera, to kind of drive that confidence in a successful frontline study. As it relates to LightSpark 11, you know, didn't really hear a whole lot new at ESMO. You know, obviously, with the label, we had known that, you know, positive on PFS, lacking a statistically significant survival advantage. And really, that's one of the dynamics that we kept hearing. You now, in oncology, there's this, you know,, everlasting discussion or debate around, is it better to combine or sequence? And, you now, that certainly the case here. If you look at, say, monotherapy, TKIs, you know, Cabo. In that second line, you'll get, say, you know, 10, 11 months PFS. And monotherapy, Belzutifan, you're going to get kind of five, six months. So actually, if you're sequencing therapies, that absolute PFS is probably actually a little bit longer than what you would expect with that combination, and you don't have that additive tox of the doublet where, you know, almost half of those patients were discontinuing one of the two drugs anyway. The other dynamic that we've talked about kind of that comes up in our conversations with prescribers is this idea that if, you know, some patients ultimately will get LEN bells in that second line, what it likely means is they wouldn't have gotten LEN PEM in the first line setting. And so that opens the door again to driving, continuing to drive share for Cabo Nevo in the front line. And, you know, as we have long talked about, you know, that's one of the dynamics that we've been driving for since 9ER came out, just because that frontline opportunity from a duration perspective, from the number of patients perspective, is just larger. And so it's actually kind of, you know, playing out that way so far. So I know there was also a trials in progress poster that you guys presented at ESMO for LightSpark 34. Or, you know, it showed the Zanza dose that you're using in that trial is now 60 megs, right, which is lower than the 100 meg dose that you used in the first tranche study. So is this a dose that reflects optimization with Belzodifan specifically? Or should we expect to now kind of see you guys pursue lower Zanza doses across kind of the remaining phase three stellar trials that you're looking to? Yeah, so kind of broadly speaking, I think we optimize the Zanza dose or the dose of any agent that we're looking at for the indication, the combination, and the line of therapy. You know, it's a playbook that we and others have used, certainly kind of what we did with Cabo. And so, you know, as you look at combination partner and, you know, in the background, we're constantly evaluating, you know, exposure response and all of that stuff, that ultimately drives that decision. So I'd say there's not kind of one set dose going forward. It's how do we optimize it to run a successful study that maximizes the clinical benefit risk for patients? And, you know, as an example that I always give is, again, kind of the lessons learned in the, you know, the CABO lens, as we went from second line to first line in RCC, we lowered the dose. You know, probably took a little bit off the top in terms of efficacy, but because those are earlier line patients, that overall tolerability quality of life dynamic was really important. So, say, apply that to something like colorectal cancer, where, you know, we looked at 100 in 303. These are late-line patients where efficacy is kind of the paramount driver of decision-making. And then you contrast that with a study like Stellar 316, which is looking at that post-definitive therapy, post-adjuvant space, where again, kind of that clinical benefit-risk dynamic is just a little bit differently, you know, much earlier line patients versus much later line patients. So you'd imagine we'd look at a lower dose of ZANSA there, presuming, you know, we have comfort in a lot of that exposure response work, target coverage, you know distribution, all of that, which we've continued to generate data in the background. Okay. I know the phase one dose escalation data that we've seen, I guess both as a single agent with zanza and also in combination with the tezo we there wasn't a 60 mig dose that was specified in that in that schema so just like is there anything that you can say regarding kind of what that 60 mig dose means in terms of pk pd implications or you know the level of target coverage that you're able uh to achieve maybe relative to like standard kaba dosing yeah So, you know, kind of short answer is we're very comfortable with that dose, all the kind of exposure response coverage. You know, what we've published so far on, you Know, I think he's 40 and 60, 80 or 40, 80, whatever, whatever you mentioned, we've generated a lot of data subsequent to that, including with 60. And so we have a lot Of information that we're using to inform these decisions. Okay. Maybe we can shift gears to colorectal. And, you know, you've got Zanza, Tezzo, that combo in front of FDA. This is seeking approval in third-line plus patients. the PDUFA was extended to accommodate an agency request for more data. So maybe you can just kind of, you know, speak to the company's broader level of confidence in the regulatory path forward and, you know. Broader labeling prospects as it pertains to both liver med and non-liver med patients. Yeah, I mean, you Know, we're excited about the data. It's anytime you can show a survival advantage against the standard of care, you know, is something to be especially excited about. Our conversations with prescribers and KOLs kind of echo that sentiment with the potential ability to have a treatment option for patients that's chemo-free, checkpoint-containing, you know active across pretty much every subgroup, including patients who had seen prior Avastin. And those are the sorts of things that, you know, we hope to commercially differentiate when we eventually launch. You know, as it relates to kind of conversations with regulators, you Know, for obvious reasons, we're not going to get into specifics there. But, you Now, what I'd say is your question on, you Know, subgroups and liver met non liver met historically when labels have been limited to kind of subgroup analysis. I tend to think of examples like the PARPs, where you had a single subgroup driving the effect size across a broader population. What the 303 data show is that's in fact not the case. You basically similarly are broadly active across every one of those subgroups if you look kind of at the forest plots. The liverment, non-liverment delineation on primary endpoint was really kind of informed on empiric kind of post hoc data of some prior studies that we've seen, we kind of have since figured out that's probably much less biologically relevant than we had thought, given that, you know, we essentially won on ITT and it wasn't driven by any single subgroup. So that breadth of data is certainly something that we're focusing on and excited to talk to patients and prescribers about. Okay. And then just what's your perspective on the commercial opportunity that a broad label could potentially unlock here? I know you kind of referenced it a little bit earlier, but where do you see Zanza, Tezzo gaining share versus some of the other kind of third line established standard of care regimens, like the Sunlight Regiment, for instance? Yeah, so I think it's interesting. Colorectal is kind of a unique or, I don't want to say one-off, but it's a somewhat different dynamic than some other tumor types in that it's a pretty substantially community-based prescriber and patient community. And so what that functionally means is that utilization is probably more split than it may seem. I think we've said in the past, it's about a third sunlight, a third TKIs, and a third kind of broader chemo. And that total market opportunity, looking at number of patients, duration, contemporary pricing, et cetera, is about a billion five. And so given that broad activity across all of the different subpopulations, our goal is to take share from each of those groups. It's not to compete against one or sub one. We're going to be aggressive. We're gonna be effective at taking share kind of across the board and really maximizing the potential there. And I think one of the other things to kind of keep in mind around that CRC indication or that CRCs franchise is that's when our approach strategically on continuing to invest in CRC really can pay dividends. You know, one of the things that we've observed at, you know, ad boards or conferences like in ASCO, when we're having a conversation with a prescriber around 303, they're equally interested in 316. And similarly, someone who's like, oh, this 316 study seems particularly innovative, Zans is not really on my radar, tell me about what you've learned in 303. that kind of echo chamber is something that is really building. And we want to kind of lay that foundation in colorectal cancer, not only for Zanza, but everything else that we're doing at Exalexis. So we want To ultimately build towards an RCC franchise, a net franchise, a CRC franchise, and kind of be thought leaders across all of them. Okay. Maybe we can talk about 316 for a minute. Again, this is the phase three study looking at Zanza, I think, in combination with PEM as well as a couple of different arms, but it's an MRD-positive disease following the adjuvant chemo. And I guess the totality of clinical data that we've seen in this space, right, would suggest that MRD guided de-escalation of therapy in this setting is validated. But none of the clinical data that we've seen today would suggest that MRD-guided treatment intensification has led to better outcomes. So how do you just think about what we've seeing thus far from a data perspective and how you're kind of hoping to change that historical narrative? Yeah, I think that's one of the things I'm most excited about and most proud of what we're doing at ExoLexus is to kind of be on that cutting edge right now. The MRD positivity is actually a relatively new technology. And so when we saw the first top line readout of 303 and got that understanding that colorectal was going to be a sensitive tumor type for Zanza, we kind of sat down and it's like, okay, how do we continue to invest there? At the same time, this Signatera test, the data that shows this absolutely incredibly wide difference between MRD negative and MRD positive patients, the Kappel-Meier curves on DFS are just frankly striking. It showed that, as you said, if you're MRD-negative, you're pretty confident your tumor is not going to recur. However, unfortunately, for that 20% or so of patients who are MRD positive, you're at a very, very high risk of your cancer returning on the order of probably six months or so. And so that's really the selected population that we're targeting is those patients who have a very high likelihood of relapse that we've shown positive survival data in a much more heavily pre-treated population. You layer on, say, contemporary data sets from, say like the INVIGOR study in bladder cancer, which take a conceptually similar approach, and that kind of further adds to layer on there. So as I mentioned before, it was really this idea of can we take a tumor type that we know is sensitive to ZANZA, compare it to kind of current standard which is WATCH and RAID, functionally placebo, and then interrogate whether Zanza alone or Zanza in combination with Pembroke can help delay that DFS period so the patients can live longer without their tumor returning. So it's that idea that we think the biology tells us that sensitive tumor type, you know, the data tell us that this is a sort of approach that can work in other areas. And we're kind of at the cutting edge here. And, you know, candidly speaking, coming back to this idea of running the business like running the X-Luxus like a business, not a biotech, as we sat down and thought about how do we continue to invest in CRC, certainly there are opportunities to look earlier and earlier and, you know, frontline triplet combos or whatever they are. But from that return math perspective, the cost, the time, the PTS of doing something like that relative to a 316 where you're randomizing against placebo, you know, that's the sort of opportunity that we really want to move quickly with. And so that's why we're excited to be kind of first there. Okay. And to be fair, I know a lot of the data that's been generated on this MRD-guided treatment intensification front has been kind of really just chemotherapy, right? Yeah, I mean, I think it's just exactly that. And, you know, there's obviously a lot of nuance with kind of the population we're looking at is that post-definitive therapy group where they've kind of completed treatment and all that. So but yeah, it's it's certainly something that I'm excited about and we're proud of to kind of be first here. OK. Maybe another kind of question related to the trial itself. Like, I think the history of data that we have for oral TKIs when used as maintenance. Right. There's a suggestion, you know, that compliance and persistency has been a challenge and sometimes a rate limiting in a lot of those studies. is there anything that you're doing or perhaps can do in either stellar 316 or some of the other trials where you're looking at maintenance now like in lung for instance to really kind of make sure that this compliance and persistency issue doesn't become impactful on the data side yeah i mean i i think you you hit it perfectly like obviously there's been positive data even in rcc for SUTENT adjuvant that never really went anywhere because of the tolerability. So it's certainly something we're focused a lot on, and I think it comes back to kind of your earlier questions around appropriate dose as we move earlier on. And then I think it also comes down to this is kind of the idealized version of a TKI here, where the shorter half-life that Zanza has not only kind of allows that secret sauce, so to speak, from kinase inhibition coverage, and it's not just VEGF, but it's the MET, the AXL, the MER, some of those TAM kinases that can be synergistic with the immune system and checkpoint inhibition, all of that stuff. But it's also the user friendliness of that shorter half-life, which allows for titratability, shorter dose holds, all of those things that can allow patients to stay on drug longer that I think we hope to ultimately translate to clinical benefit. Okay. I know you guys have a kind of expanding stellar development footprint. Can't really cover all of it, but is there anything that you'd like to kind of specifically highlight just before we kind of leave Zanza, leave stellar? Yeah, I mean, you know, the excitement that you'll hear from us around Zanza is kind of twofold. You know, obviously excited about the launch in CRC, the upcoming data for 304. But it's that kind of totality of opportunity. You know. We take each individual indication and study, and we think that they're optimized studies to be successful. But in totality, have the potential to be much larger than Cabo. So then you layer on that wave two of opportunities where we're looking at similarly well-designed large market indication trials where you're taking that opportunity set of ZANZA and increasing it substantially. So the way that I think about it is one of the questions that we got asked two, three years ago was how are you going to replace Cabo in 2031? You know, we've said not only do we think ZANZA can replace CABA, but we can grow it from there. The seven pivotal studies that we've outlined have, you know, 5 billion plus in total opportunity. Apply some sort of reasonable PTS to each of those. We think they're well-designed studies. They should be, you Know, high PTS studies. You get some sort Of opportunity set for ZANSA. If we double the number of studies, and again, if we maintain that they're similarly well-designed, we're increasing that opportunity set for ZANZA. We're doing it in a cost-efficient way by continuing to like this model of working with clinical collaborators where we can pay for half of the studies, which allow us to do twice as much with the same amount of capital. That's the sort of opportunity that we look forward to with ZANза, and we want to continue to do. So it's about, you know, taking each of those opportunities individually, but the totality of the opportunity set is really kind of what gets us excited as well. So I know Cabo sales are obviously, you Know, growing well, you've got another four years of exclusivity there that you just talked about four plus, but I guess as you think about, kind of the post-LOE transition from Cabo to Zanza, what's your level of confidence as you kind of look at the timing of things now that you're going to be able to kind of smooth that transition out in the absence of a sales trough? And I guess, how much of a strategic priority is it internally to ensure that there isn't a revenue gap there in 2031 that needs to be filled? And You know, is that something that kind of guides your view of the world from a business development perspective? You know. I'd say there's a bunch of things there. I mean, obviously, it's going to be about commercial execution, clinical execution, and data. So, if the commercial execution. The clinical execution. And those cadence of readouts kind of continues to go. That's going inform the shape of that Zanza revenue trajectory. As it relates to kind of our strategic need for another product, I think the answer is yes and yes and yes. We have a high strategic desire and priority to bring in that third franchise, not necessarily because of that transition from Cabo de Zanza, but because the way we recognize and can truly take advantage of the scale that we've built, not only commercially, but on the development side, is bring in that third franchise. Can that come from our internal portfolio? Yes. Can it come externally as well? Also, yes. So we're going to continue to kind of invest and be opportunistic on both. But, you know, we believe that the way we get to that next big inflection point as a company is with that third enterprise. And so what we also want to do in the backdrop is be appropriate stewards and shepherds of shareholder capital. And we recognize that there's no faster path to value destruction than bad BD or M&A. We want to be aggressive and opportunistic, but also not do things that could hamper us from an opportunity set in the future or an investment opportunity in the feature. And so we have a high strategic desire, but also a really thick filter to make sure that next product that we bring in is one that we have conviction in from the biology perspective and I think importantly conviction in the commercial side. What I think surprises a lot of folks about XLX is the area that we spend the most time in and diligence and understanding these opportunities is probably more on the commercial side because the reality of our business is it's tough to develop drugs. it's even tougher to develop drugs that are successful commercially. Me too drugs, you know, drugs that launch after the standard of care just generally don't really do well. And so we want to make sure that we're able to define and generate a data set that leaves the opportunity to be a new standard of care in a market size, in a Market opportunity that's sufficient that we can kind of continue to grow. So big strategic desire. But similarly, we want to make sure we're cautious with how we allocate capital. OK. And maybe just lastly, you kind of talked about the external and potential internal opportunities there. The pipeline's been like a little bit of a work in progress for the last five years or so. How are you thinking about kind of the current version of the pipeline? And, you know, what should we expect to learn from some of these earlier stage opportunities over the say? next 12 months or so? Yeah. I mean, it's really about generating a data set that allows us to answer the question, are we going to start a pivotal study? Are we going to kill the program? Prioritization and kind of being somewhat ruthless about that dynamic is probably at the core of what we do and what we do best. And so if something doesn't look like it's going to make the cut from a differentiated opportunity in a large market indication, we'll just cut bait and start to invest in the next thing. And so really, the next decision points are going to be, is this going to move into a pivotal study or not? And if it moves into a Pivotal Study, do we think it'll be successful? And, if successful, will it generate meaningful revenue for us? If the answer to all of those is no, we will just invest in the next and the next. And, so, that's kind of how we view the overall internal pipeline is, is can we generate a data set quickly enough and robustly enough to get an idea of what that profile looks like to either invest in that next expensive phase of the process or just cut bait and move on to the next thing. All right. I think we'll leave it there. I know you've got a flight to catch. So thank you, Andrew. Thank you. Thanks, everyone.