Exelixis Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 13, 2025
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Operator

Day, ladies and gentlemen, and welcome to the Exelixis First Quarter twenty twenty five Financial Results Conference Call. My name is Towanda, and I will be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host for today, Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations.

Operator

Please proceed.

Susan Hubbard
Susan Hubbard
EVP, Public Affairs and IR at Exelixis

Thank you, Towanda, and thank you all for joining us for the Exelixis First Quarter twenty twenty five Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO Chris Senner, our Chief Financial Officer PJ Haley, our Executive Vice President of Commercial Amy Peterson, our Chief Medical Officer and Dana Aftab, our Chief Scientific Officer, who will review our progress for the first quarter twenty twenty five ended 03/31/2025. During the call today, we will refer to financial measures not calculated according to generally accepted accounting principles. Please refer to today's press release, which is posted on our website, for an explanation of our reasons for using such non GAAP measures, as well as tables deriving these measures from our GAAP results. During the course of this presentation, we will be making forward looking statements regarding future events and the future performance of the company.

Susan Hubbard
Susan Hubbard
EVP, Public Affairs and IR at Exelixis

This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial, and strategic matters, and government drug pricing policies and initiatives. Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC, which under the heading Risk Factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitation risks and uncertainties related to product commercial success, market competition, regulatory review and approval processes, conducting clinical trials, compliance with applicable regulatory requirements, our dependence on collaboration partners, and the level of costs associated with discovery, product development, business development, and commercialization activities. And with that, I'd like to turn the call over to Mike.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. Exeluxis had a strong first quarter, highlighted by significant progress and momentum across all components of our business. We continue to execute on our strategy to build a multi compound, multi franchise oncology enterprise. We expect 2025 to be a very busy and highly productive time for the company.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

I think it's safe to say that we have reached another critical inflection point in recent ExoX's history, and we're energized to take things to the next level as we move forward into the second quarter and beyond. As we've discussed previously, we have a singular focus on improving the standard of care for patients with cancer. Our future success in achieving this goal will enable Exelixis to help many more cancer patients and ultimately solidify our leadership position through innovation and execution. We're pleased to see accelerating growth of The U. S.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Cabo franchise in the first quarter, both in terms of absolute revenue and relative growth compared to the competition, which reflects cabo status as the leading TKI for RCC. We anticipate seeing additional upside with new indications in neuroendocrine tumors, where we secured regulatory approval at the March. Key highlights for the first quarter include: first, we saw a strong performance of the cabozantinib U. S. Business with continued growth in demand, new starts and revenue.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

First quarter twenty twenty five U. S. Cabo franchise net product revenues grew 36% year over year to $513,000,000 compared to $378,000,000 in the first quarter twenty twenty four. Global Cabo franchise net product revenues generated by Exelixis and its partners were approximately $680,000,000 in the first quarter twenty twenty five compared to $559,000,000 in the first quarter twenty twenty four. Given the strong momentum of CABOMETYX in the first quarter, we're increasing our 2025 full year financial guidance for net product revenues and total revenues by 100,000,000 Second, on top of our strong financial and commercial performance, the highlight of the quarter was The U.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

S. Regulatory approval of CABOMETYX in both P NET and EP NET ahead of our assigned PDUFA date of 04/03/2025. Our commercial team was ready to execute our detailed launch plan, and we were out in the field within hours of approval. PJ will provide more information and commentary about our first quarter commercial dynamics and the net launch in his prepared remarks. We plan to evaluate further updates to our 2025 financial guidance as we build momentum on the net launch and gain further clarity on additional revenue opportunities for 2025.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Third, it's mission critical for us to advance new molecules from our pipeline into full development and ultimately onto the market to excel in our mission to help cancer patients recover stronger and live longer. We're excited to advance ZANZA to the center stage in 2025 as our next oncology franchise opportunity. Important anticipated ZANZA data milestones from pivotal trials in the second half of twenty twenty five include top line results from STELLAR-three zero three in colorectal cancer and STELLAR-three zero four in non clear cell RCC, and a decision to advance the Phase III portion of STELLAR-three zero five in head and neck cancer, all pending event rates for each trial. In addition, we expect to initiate the STELT-three 11 trial of ZANZA in NET in the first half of twenty twenty five and anticipate Merck will initiate two RCC studies evaluating ZANZA plus balsutafan this year. Fourth, as we highlighted recently, our Exelixis IND pipeline is coming into focus with a range of new and potentially differentiated molecules heading into and through early clinical evaluation.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

The goal of these efforts isn't to build a big pipeline, it's to carefully and quickly evaluate new clinical assets and identify the winners for advancement into full development as top investment priorities. Early development of XL-three zero nine continues to be a main focus as both the monotherapy and in combination with PARP inhibitors to deepen and prolong responses. Dose escalation with XB010 continues to advance quickly. We're making good progress on our goal to file up to three new INDs in 2025. XB628 recently entered the clinic, and we remain on track for IND submissions for XB064 and XB371 this year.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Finally, in regard to capital allocation, we're excited about the trajectory of our business and have the balance sheet and expect the cash flow to advance our pipeline priorities, access new high conviction assets and continue to repurchase shares when we believe they are undervalued. Business development activities continue in earnest and are focused on late stage assets in the GU GI space. Back end loaded pay for success transactions that tuck nicely into our existing and potential future oncology franchise remain a top priority. As always, we're focused on doing the right deals for the right assets at the right valuations. So with that, please see our press release issued an hour ago for our first quarter twenty twenty five financial results and an extensive list of key corporate milestones achieved in the quarter.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

And I'll now turn the call over to Chris.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Thanks Mike. For the

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

first quarter of twenty twenty five, the company reported total revenues of approximately $555,000,000 which included cabozantinib franchise net product revenues of $513,300,000 CABOMETYX net product revenues were $510,900,000 and included approximately $12,000,000 in clinical trial sales. As a continued reminder, clinical trial sales have historically been choppy between quarters and we expect this to continue into the future. Gross to net for the cabozantinib franchise in the first quarter of twenty twenty five was 28.9, which is higher than the gross to net we experienced in the fourth quarter of twenty twenty four. This increase in gross to net deductions in the first quarter of twenty twenty five is primarily related to higher PHS and 340B volumes in the quarter. As previously disclosed, Exelixis is qualified as a specified small manufacturer for the phase in period, which requires Exelixis to pay a 1% discount in 2025 on all Medicare Part D sales and is included in our gross to net estimates for the year.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Our inventory at the end of the first quarter twenty twenty five was approximately two weeks on hand, which was down slightly when compared to the fourth quarter twenty twenty four. Because of this relatively flat inventory dynamic between fourth quarter twenty twenty four and first quarter twenty twenty five, we experienced little inventory destocking in the first quarter twenty twenty five. Total revenues also included approximately $42,000,000 in collaboration revenues, which includes approximately $36,700,000 in royalties earned from our partners Ipsen and Takeda on their sales of cabozantinib in their respective territories. Our total operating expenses for the first quarter of twenty twenty five approximately $369,000,000 compared to $4.00 $4,000,000 in the fourth quarter of twenty twenty four. The sequential decline in these operating expenses was primarily driven by lower clinical trial costs, manufacturing costs for drug development candidates, and licensing costs.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

These lower R and D costs were offset by higher general and administrative costs in the first quarter twenty twenty five. Provision for income taxes for the first quarter twenty twenty five was approximately $46,100,000 compared to a provision for income taxes of approximately $44,900,000 for the fourth quarter of twenty twenty four. The company reported GAAP net income of approximately $159,600,000 or $0.57 per share basic and $0.55 per share diluted for the first quarter of twenty twenty five. The company also reported a non GAAP net income of approximately $179,600,000 or $0.64 per share basic and $0.62 per share diluted. Non GAAP net income excludes the impact of approximately $20,000,000 of stock based compensation expense net of the related income tax effect.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Cash and marketable securities for the quarter ended 03/31/2025 was approximately $1,650,000,000 During the first quarter twenty twenty five, we repurchased approximately $289,000,000 of the company's shares, resulting in the retirement of approximately $8,000,000 of the company's shares at an average price per share of $35.83

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

As of the end of

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

the first quarter of twenty twenty five, we had approximately $5,500,000 remaining under the $500,000,000 stock repurchase plan authorized by the company's board in August 2024. In February 2025, the board authorized an additional $500,000,000 stock repurchase plan that expires at the end of twenty twenty five. We have been purchasing shares under the February 2025 plan during the second quarter. Now turning to our net product revenue and total revenue financial guidance for the full year 2025. We're increasing our net product and total revenue guidance, giving CABOMETYX strong performance in the first quarter and our expectations of continued strong performance throughout 2025.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

We're increasing our net product revenue guidance to $2,050,000,000 to $2,150,000,000 which increases the midpoint of our net product revenue guidance range by $100,000,000 when compared to our previously provided net product revenue guidance. We are also making a corresponding increase to our total revenue guidance, which is now $2,250,000,000 to $2,350,000,000 And finally, regarding the impact of tariffs on our business. As we said previously, our IP for both cabozantinib and enzalutinib is domiciled in The EU. And as of now, we are projecting minimal exposure on our U. S.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Cabozantinib business. Our cost of goods sold is approximately 4% of net product revenue, and three of those four percentage points is a royalty owed to a third party. The vast majority of cabozantinib finished product for U. S. Distribution is manufactured in Canada and any potential tariff impact on the remaining 1% would be de minimis to the overall business.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

With that, I'll turn

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

the call over to PJ.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Thank you, Chris. As Mike highlighted, the CABOMETYX business was very strong in the first quarter of twenty twenty five. Importantly, CABOMETYX received approvals in neuroendocrine tumors on March 26. CABO grew in terms of revenue, demand, and new patient starts, and notably performed well relative to the competition.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

The team continued to execute at an extremely high level, and this has resulted in CABOMETYX continuing to be the number one prescribed TKI in renal cell carcinoma, as well as the number one TKI plus IO combination in first line RCC. The commercial team is executing the launch in NETs with great urgency and with the goal to rapidly establish CABOMETYX as a small molecule market leader in the NET space. We are pleased that prescribers are responding positively to the data and are excited to have a new therapy to address the unmet need in neuroendocrine tumors as we look to build on the strong momentum of the CABOMETYX business. The prescription data in the TKI market basket of cabo, lenvatinib, axitinib, sunitinib, and pazopanib, weighs the strength of cabo relative to the competition. Looking at the TRx comparison, Q1 twenty twenty four to Q1 twenty twenty five, CABOMETYX grew four share points from 40% to 44%.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Importantly, CABO is the only product in the market basket to grow market share. CABOMETYX TRx volume grew 18% in this time period, outpacing the growth rate of the market by 10 percentage points. This was the only product that grew at a rate greater than the market. The CheckMate 9ER five year follow-up data presented at GUASCO in February has been resonating very well with prescribers in the RCC space. These data help our team continue to drive differentiation from the competition in the first line RCC market.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Turning to new prescriptions, or NRx. CABOMETYX had even stronger data trends. CABOMETYX NRx share in the TKI market basket went from 38% in Q1 twenty twenty four to 43% in Q1 twenty twenty five. This share gain is even more impressive as every other product in the market basket lost share in the same time period. NRx volume for CABOMETYX grew 27% year over year.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

We believe this strength in new prescriptions, which outpaces the total prescription growth of 18%, is an indicator that the business is well positioned to continue the strong momentum going forward. Furthermore, the new indications in NETs will add to the current momentum of the business. We are thrilled that CABOMETYX is approved for appropriate patients in neuroendocrine tumors. As we have discussed previously, we see this as a compelling commercial opportunity for Exelixis and the CABOMETYX brand. Based upon market research, we believe that there will be approximately 9,000 drug treated patients in the second and third lines in The US in 2025.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

This is expected to grow to approximately 11,000 by 02/1930. Our research also indicates that the majority of the second and third line patients receive oral small molecules as their standard of care. Furthermore, as we have previously discussed, the oral market opportunity in 2025 is forecasted to be approximately $1,000,000,000 in The US. Recall that the target net physician universe has significant overlap with legacy CABOMETYX prescribers. We believe that this overlap, coupled with our sales team's deep relationships, would accelerate access and promotional opportunities, and we are pleased to see this come to fruition as our team called on more than 70% of the 3,500 net prescriber net physician targets in the first three weeks post approval.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

As we have previously discussed, the CABNET study uniquely positions CABOMETYX across patient and tumor characteristics, including patients with neuroendocrine tumors arising in the pancreas, GI tract, and lung across all tumor grades from one to three, functional status, SSTR status, and those who have received prior treatment with Lutathera. The unique study population led to strong and broad NCCN guideline recommendations for CABOMETYX as a preferred or recommended option regardless of site of origin or tumor grade for patients who had received prior therapy. We're pleased with the CABOMETYX label, which will allow physicians to prescribe CABOMETYX to a wide range of NET patients who have received prior therapy. Importantly, this approval makes CABOMETYX the first and only systemic treatment that is FDA approved for previously treated NET regardless of site of origin or patient's functional status. Team had been launch ready for some time prior to approval and literally hit the ground sprinting when CABO received the NET indications.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

The CABOMETYX data and messages are resonating well and prescriber reception has been extremely positive and confirmatory of the unmet medical need in the neuroendocrine tumor space. Our core promotional assets were deployed within days, if not hours, of approval, including personal promotional pieces, the website, targeted non personal digital and social media tactics, peer to peer education, as well as patient and allied healthcare professional educational materials. Teams mobilized and are already working to quickly establish CABOMETYX as a new standard of care for second and third line NET patients. We are also pleased that the indication is providing us great access to customers, so we were able to discuss both the cabinet data as well as the RCC CheckMate 9ER five year follow-up data for relevant physicians.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

We

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

are excited by this opportunity to serve NET patients and our enthusiasm is matched by physicians excitement to have a new and effective option for their patients. In general, prescribers see CABOMETYX as a more favorable choice versus current small molecule therapies. Additionally, the competition in the oral segment of the net market are all generic therapies, which puts CABOMETYX at a significant advantage with a full commercial organization in support of a launch. All of this taken together drives our conviction that the net market will be a substantial opportunity for the CABOMETYX business. With that, I will turn

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

the call over to Amy.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Thank you, PJ. Everyone at Exelixis shares your excitement around the recent approval of cabozantinib in patients with either pancreatic or extrapancreatic neuroendocrine tumors. This approval came approximately one week prior to the PDUFA date, thanks to the team interacting seamlessly with the FDA and the Alliance Cooperative Group. With this major accomplishment now behind us, the Cabinet team is able to shift focus towards helping our partner Ipsen obtain ex U.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

S. Approvals. As a reminder, this application was chosen for Project Orbis, an FDA initiative that can facilitate approvals in participating countries around the globe. Looking ahead, 2025 is shaping up to be a very big year, not just for cabozantinib, but also for zanzolitinib, given the breadth of data readouts and pivotal trial initiations anticipated. First, I want to remind you of why we are optimistic about zanzalutinib's potential to become a best in class VEGFR TKI.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

While ZANZA's target profile is similar to cabo's, its half life is much shorter, enabling faster recovery from treatment related adverse events with dose modifications and possibly favoring tumor accumulation over plasma concentration, as was observed in nonclinical models and presented at AACR last year. Either of these qualities could result in an improved therapeutic index for zanzalutinib. In terms of pivotal data readouts, the first trial we anticipate data from is STELLAR-three zero three. This Phase III study compares the combination of zanzalutinib plus atezolizumab to regorafenib in patients who have received multiple prior therapies for their advanced colorectal cancer. The trial is designed to assess outcomes in the population of patients without liver metastases, referred to as NLM, and in the intent to treat or ITT population.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

At ASCO GI in January of this year, we presented encouraging clinical data from the STELLAR-one expansion colorectal cohorts evaluating ZANZA with or without Atezo. As seen in STELLAR-one and frankly in all other colorectal trials, patients without liver metastases tend to live longer than those with liver metastases regardless of treatment intervention. We announced completion of enrollment in STELLAR-three zero three in the second quarter of last year. Given the maturity of follow-up time and the intent to treat population, we anticipate being able to perform the overall survival analysis in the ITT simultaneous with the overall survival analysis in the non liver MET population. We have amended the statistical analysis plan to dual primary endpoints in NLM and ITT, and top line data remains on track for the second half of twenty twenty five, events pending.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

STELLAR-three zero four is our pivotal study evaluating the combination of zanzolitinib plus nivolumab versus sunitinib in patients who have not yet received systemic therapy for their locally advanced or metastatic non clear cell renal cell carcinoma. The primary endpoints in this study are progression free survival as assessed by blinded independent central radiology and objective response rates by RECIST. We expect to wrap up enrollment this quarter and anticipate data in the second half of twenty twenty five, again events pending. Also in the second half of twenty twenty five, we expect the Phase III gono go decision for STELLAR-three zero five, our Phase IIIII study comparing zanzalutinib plus pembrolizumab to placebo plus pembrolizumab in patients who have not yet received systemic therapy for their advanced PD L1 expressing squamous cell carcinoma of the head and neck. Merck is supplying pembrolizumab for this trial as part of our collaboration agreement.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

As for new trial starts, STELLAR-three 11, our pivotal study comparing zanzolitinib to everolimus as a first oral therapy in patients with neuroendocrine tumors is on track to initiate this quarter. And Merck is making steady progress with their Phase II and Phase III studies in clear cell renal cell carcinoma, with anticipated starts in the second half of twenty twenty five. Finally, we are proud to have numerous presentations at ASCO twenty twenty five, including three involving ZANZA. As you can imagine, we're excited about ZANZA's potential and expect 2025 to be a very data rich year. I'll leave you with that and turn the call over to Dana.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

Thanks, Amy, and good afternoon, everyone. Today, I'm giving a brief update on our recent progress toward IND filings and advancing new compounds to development candidate status. And I'll close with an update on the XL495 program. On the IND front, we've continued to make good progress on all of our pre IND programs, and we are on track to file up to three this year.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

As you saw in the press release,

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

we filed the IND for XB-six twenty eight in the first quarter of this year, and the Phase I trial is now open and recruiting. XB628 is a bispecific antibody that targets NpG2A and PD L1, two separate immune checkpoint proteins that tumors use to overcome innate and adaptive antitumor immune responses. And because PD L1 is expressed on tumor cells, while NKG2A is expressed on natural killer or NK cells, XB628 potentially can also act as an NK cell engager for tumors. As we demonstrated in our presentation last month at AACR, in preclinical models, XB628 causes tumor cells and NK cells to co localize, resulting in tumor cell kill that is substantially higher than that seen with a combination of two monoclonals that separately target NKG2A and PD L1. As a first in class molecule with an innovative mechanism of action, XB628 has created a lot of excitement with principal investigators of the Phase I trial.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

So we're looking forward to efficient execution of this study. The second IND we expect to file this year is for XB-three 71, our tissue factor targeting ADC that carries a tocoisomerase inhibitor payload. Our presentation last month at AACR showed some very compelling preclinical data demonstrating deep and durable regression of human colorectal, lung, and pancreatic xenograft tumors in mice after a single dose of XB371, underscoring the significant potential for this molecule to address unmet need. Our IND enabling activities for XB371 will wrap up soon, and we expect to file the IND and initiate the Phase I study later this year. The third IND we expect to file this year will be for XB064, our monoclonal antibody that targets ILT2.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

Our IND enabling activities for XB-sixty four are progressing on schedule to support filing an IND later this year. In terms of new development candidates, we have some exciting new programs progressing toward DC nomination, including some innovative small molecules and antibody drug conjugates. And I look forward to sharing more details about those programs at the R and D Day event we're planning for later this year. And finally, we've decided to discontinue the development program for XL495. Following enrollment in several cohorts in the dose escalation phase of the Phase I study, we encountered drug related toxicities, which we believe are due to on target off tumor effects of the drug inhibiting PKMIT1 in normal tissues.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

A clear signal to us that the therapeutic index is too low to support further development of the compound. We're in a high attrition business, and this decision enables us to refocus our resources on advancing our next wave of promising development candidates into and through clinical studies. And with that, I'll turn the call back over to Mike.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

All right, thanks Dana. I'll wrap up here by thanking the entire Exelixis team for our strong start in the first quarter of twenty twenty five. I want to commend everyone for their individual and collective urgency and resilience as we advance our discovery, development and commercial priorities. 2025 is already shaping up to be another important year for the business and the patients we hope to serve, now and in the future. We're never satisfied or content with the status quo, and we look to make every hour count as we excel on our mission to help cancer patients recover stronger and live longer.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We look forward to updating you on our progress in the future. Thank you for your continued support and interest in Exelixis. And we're happy to now open the call for questions.

Operator

Thank you. Your line is open.

Michael Schmidt
Senior Managing Director, Equity Research at Guggenheim Partners

Hey, guys. Good afternoon. Thanks for taking our questions and congrats on a great first quarter result here. So 1Q sales were obviously very strong in terms of growth over last year. Could you just help us understand a little bit better what's been driving cabo growth at this point?

Michael Schmidt
Senior Managing Director, Equity Research at Guggenheim Partners

And obviously, neuroendocrine was approved at the end of 1Q. You see some contribution from that prior to approval already? And secondly, could you just provide some more color about the launch in neuroendocrine tumors and sort of expectations for the early trajectory there throughout the rest of the year? Thanks so much.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

All right, thanks Michael. PJ, why don't you start and then Chris and I can provide some color commentary afterwards as needed. Go ahead.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Okay. Thanks for the question, Michael. Yeah, as you mentioned, we're we had a strong quarter of results. We're very pleased with the progress we've made. As you look at the business in terms of demand and TRx, we grew significantly in terms of market share from 40% to 44%.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

And on absolute level, the volume grew 18% year over year. Similarly, NRx, we grew share from 38% to 43% in terms of new prescription share in our TKI market basket and even had a more substantial growth on absolute terms of 27%. And both of those were the only product to grow share. So performing really well relative to the competition. In terms of our business, the majority of this is being driven by RCC and in particular frontline RCC in terms of the combination of cabo with nivo.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

As I mentioned in my prepared remarks, we had updated data presented at GU ASCO in terms of CheckMate 9ER and the five year follow-up data. That's been resonating really well with physicians and really continues to position us in a way that differentiates us from the competition, which we're pleased with. So now a little bit in terms of net. What I'll say is we only promote on label. There was a little bit of net utilization we saw prior to approval.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

But as I mentioned, the approval came or approvals came on March 26. So very early days in terms of the launch. But what I can tell you is that the feedback we're getting is really positive from prescribers. The team was literally sprinting out of the gate across all tactics and really all channels. So we're really pleased with the momentum there in NET.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

And we think, as I mentioned, it's a really substantial opportunity, but obviously really early days here and we'll be excited to continue to report updates on that as the launch progresses and we get throughout the year.

Operator

Thank you. Please

Operator

stand by for our next question. Our next question comes from the line of Ashtika Gumwarden with Truist. Your line is open.

Asthika Goonewardene
Asthika Goonewardene
Analyst at Truist Securities

Hey, guys. Thanks for taking my questions. And I'll echo the congratulations on some pretty rockstar performance in Q1 here and the guidance raise. I want to add on to Michael's question just to get a little bit more of the dynamics on the net launch. Did you

Asthika Goonewardene
Asthika Goonewardene
Analyst at Truist Securities

guys see a bolus effect or do

Asthika Goonewardene
Asthika Goonewardene
Analyst at Truist Securities

you guys anticipating a bolus effect here in the early days of launch at net? And then when do you and if so, when do kind of expect it to kind of stabilize to give you a more accurate run rate in terms acceleration and uptake? And then second, if I may, when you modify the statistical analysis for STELLAR-three zero three to do it from instead of doing sequentially from non liver met to ITT and do it more as a dual primary endpoint for both those groups. Does that help in any way with the alpha spend or maybe the hazard ratio you need to meet statistical significance?

Asthika Goonewardene
Asthika Goonewardene
Analyst at Truist Securities

Thanks.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

All right, thanks, Ashtika. PJ, real quick on NETs and then we'll go over to the three zero three.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Yeah, thanks for the question, Ashtika. What I'll say is obviously very early days in the NET launch, as I mentioned, we're very excited about it. We'll

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

continue

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

to see the trends as we move forward. I mean, these patients are advanced in their disease with neuroendocrine tumors, necessarily expecting to see a bolus there. As I mentioned, great prescriber excitement about the drug. We're seeing new prescriptions out of the gate and just looking forward to tracking that going forward.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Great.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Amy?

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Sure, thanks Ashka. So just quickly, with regard to changing the endpoint, just to reset for a second. STELLAR-three zero three is a very large global clinical phase three pivotal study. And the trial was designed to allow us to assess outcomes in the population of patients without liver mets referred to as NLM and in the ITT population.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

As you know, we completed enrollment about a year ago. And Mike has said many times, we're in the business of generating p values and positive outcomes for patients. And we continuously evaluate our studies and make modifications necessary to ensure we achieve the maximum success for those patients. So given that we completed enrollment about a year ago, then the relative maturity of events in the liver met population really suggested to us that it's best to move the ITT analysis from sequential to dual, because of the really significant potential value as a positive outcome would help a much larger patient population. So it really wasn't about, p values or hazard ratios or alpha.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Sean Lawman with Morgan Stanley. Your line is open.

Sean Laaman
Sean Laaman
Analyst at Morgan Stanley

Good afternoon, Mike and team. Great set of results. Maybe just sort of contextualize what seasonality we can expect for Cabo for the year. I think the beat on Street was around $50,000,000 on revenue and the raise is about $100,000,000 on revenue. Maybe just to give us some context around that, please.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Sure. Chris,

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

you want to start with that?

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

I'll add Thanks, Sean. So the seasonality, I think that we've seen in the past where we saw higher gross to in the first quarter and lower gross to net progressing throughout the year is gone because of our specified small manufacturer designation. So, the 1% is across all Medicare patients throughout the year. So that creates some stability in the gross to net.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

We're still projecting gross to net to be in the 29% to 30% range like I talked about last quarter. And this year, we also didn't have an inventory dynamic like we've had in past years where we had higher inventory coming out of Q4 and and a destocking in Q1. So we didn't see that either. From a gross to net perspective, we see some stability there in that 29 to 30% range, and we didn't have the inventory dynamics that we've seen in the past.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Gregory Renza with RBC. Your line is open.

Analyst

Hi. Thanks so much for taking our question. This is Scott on for Greg. Just a quick question on the

Analyst

full year's 2025 guidance. Could you confirm if the $100,000,000 increase in terms of where does that come from and how much of the contribution of that amount come from net? And related questions, when do you anticipate having a clarity on the potential of net to include into the full year 2025 guidance? Thanks so much.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yes. Thanks for the question. Yes. Just talking about the guidance raise, I think it's safe to say the biggest part of that is in the RCC based business. It's a little bit of net in there, but the majority of it is based on the strength of the base business in the first quarter.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We're tracking net very closely, obviously, as well as for the whole business because that's what we do. And as we feel like we've got momentum there, certainly coming out of the launch and great performance so far. So don't want to give you guidance. I'm giving you a different guidance later, but we're tracking that closely. And when we think it's the right time with the right level of confidence, we will talk about that in the future.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Silvan Turkin with Citizens. Your line is open.

Silvan Türkcan
Managing Director at Citizens JMP

Thank you so much for taking my question and congrats on this stellar quarter. I just wanted to ask a more general question on your BD appetite. Can you just maybe talk about specifically the scenario for Exelixis and maybe by extrapolation to some of your peers, how does the current environment influence your BD plans? Are you currently on hold? Are you looking?

Silvan Türkcan
Managing Director at Citizens JMP

Are there certain roadblocks that need to get away for you to pull the trigger here? Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yeah, thanks for the question. As I said in my prepared remarks, we're definitely open for business on the BD side. We're focused on high conviction assets that fit into our franchise framework within GU and GI oncology, where we believe we have the opportunity to convert differentiating clinical data into commercial success. That's the CABO story. That's the lens with which we look at all opportunities internally and externally.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

That, quite frankly, isn't is the same, hasn't changed, and will continue to be the same going forward. We're not looking to buy on the cheap, right? We're not looking to buy assets that we have or we see as being very risky, but they're cheap, so it might make sense. That's not how we look at it. We're a high science.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We want to make sure we can move the needle for patients. And the dynamic that we've observed and learned and been able to be successful with cabo is that if you can move the needle for patients, if you can improve standard of care, you can commercialize that asset very, very productively. So that's the goal. So as I've said on previous calls, we've burned many a haystack. We've got a few needles that we're looking at right now.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We're hoping to transact. Maybe we do, maybe we don't. It's all about the right assets at the right time and the right valuation. But we've got a great team across the BD and financial sectors within legal, within commercial, within discovery and development. So we've got a full court press here to be able to figure out what makes the most sense for us and then really how to do that in a practical way that can build value for patients and for shareholders.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Jawan Weber with TD Cowen. Your line is open.

Yaron Werber
Managing Director, Senior Biotechnology Analyst at Cowen and Company

Great. Congratulations again. It's really a terrific showing. So I have maybe two interrelated questions. One is just a little housekeeping.

Yaron Werber
Managing Director, Senior Biotechnology Analyst at Cowen and Company

If you could just remind us Part D redesign, how much of an impact did it have this quarter, if any? And what percentage of your business is Medicare facing versus commercial? And then sort of the more meaty question is, it's clearly, Mike, it sounds like you're waiting for the uptake in NET and you're saying it's a billion dollar opportunity. How much of that billion is sort of first line versus second or third line for small molecules? I mean, sounds like you're aiming and you're intending and you should probably raise guidance again.

Yaron Werber
Managing Director, Senior Biotechnology Analyst at Cowen and Company

Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yeah. So Chris, why don't you take care of the housekeeping and then PJ can address some of the kind of overall market dynamics for NET as we see it currently. Go ahead, Chris.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Hi, Rowan, it's Chris. So from a Medicare Part D redesign perspective, if you look at a quarter Q4 versus Q1, we didn't see a big dynamic there, big change in the amount of Medicare reimbursements we had to make. If you look at it versus Q1 last year, a larger there's a bigger difference there. We had some benefit towards us in Q1 this year. Now from a split between commercial business and Medicare Part D business, it's about equal when you look at the two compared to one another from a patient and payer mix perspective.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Yeah, and as far as net goes, like I mentioned, we view this as a substantial opportunity. The billion dollars is across all lines of therapy. That said, in terms of second and third line, that is where small molecules make up the majority of utilization. And we think there's substantial opportunity there. Even looking at other another therapy in the market, for example, if you look at Lutathera's recent revenue, if you look at their last quarter's revenue given at a run rate, that's at $560,000,000 annualized.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

So again, we're very excited by this opportunity. When it comes to the small molecule market, we're the only, you know, branded molecule out there with, you know, a substantial and experienced team behind this, and we're really excited about the ability to help patients and move the business forward.

Operator

Thank you. Our next question comes from the line of Chai Fong with Bank of America Securities. Your line is open.

Chi Fong
Chi Fong
VP - Equity Research at Bank of America Merrill Lynch

Hey, guys. This is Chi on for Jason. Thanks for taking our question. I have a question on capital allocation. Mike, I've asked you this question early in the year before, and I'm going to ask you again.

Chi Fong
Chi Fong
VP - Equity Research at Bank of America Merrill Lynch

I'm curious about your philosophy in terms of the buyback program. Obviously, you guys have consistently been buying back since 2023. I think roughly high single digit percentage of outstanding shares, if I count correctly, I think annual, maybe like $500,000,000 at least, give or take. So I'm just curious, if share price remain current existing level or even if Cabo sales increase, what's your philosophy on share buyback versus reinvesting capital into R and D or business development? Thanks so much.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yes. Thank you for the question. Look, again, as we talked about previously reiterated in prepared remarks today, with our balance sheet and effective free cash flows, we think we can allocate capital effectively around investing in the internal pipeline, doing the appropriate thoughtful and pragmatic BD and still buying back shares when we think the shares are undervalued relative to where we think it can go. So I think that's the right approach. How we do that, how we emphasize one over the other will be situationally dependent.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

I think by my math, we bought back about 19%, twenty % of our outstanding float over the last couple of years. We've done that at significantly lower prices than where the stock is trading at today. So that's a make a good move from an investment point of We like investing in ourselves, right? Again, in the context of how we view quality, how we view assets that can move the needle for patients and shareholders, we think ExoXis is a great place to put that money. So that's how we're going to continue to operate.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We're data dependent, we're data driven, so we'll see how that goes in the future. But again, having the cash flows that we've got and the balance sheet that we have gives us the ultimate optionality, and we like that going forward.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Akash Tewari with Jefferies. Your line is open.

Akash Tewari
Akash Tewari
Managing Director at Jefferies

Hey, thanks so much. So, it sounds like you're gonna have a go or no go decision on your head and neck study with Merck at the end of the year. What do you wanna see on event rates to justify moving forward with that, trial? Then also, when we think about the PD-one VEGF bispecific class, there's a lot of similarities to kind of the pitch on ZANZA. You hit VEGF, but you have a wider therapeutic window.

Akash Tewari
Akash Tewari
Managing Director at Jefferies

Have you thought about acquiring one of those assets for RCC in head and neck, given your partner Merck already has the Lenovo asset? Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Okay, so why don't you Amy take the head and neck question and I'll come back on the BD CycleFest.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Okay, yeah, thanks Akash for the question. So I did mention in the prepared remarks that we are anticipating to have sufficient number of events in order for the IDMC to review and enable a gono go to Phase III. We don't typically talk about what those events are. And so, I'm just waiting for the data to mature so that we can have the call and get the decision, but that's about really all I can say.

Akash Tewari
Akash Tewari
Managing Director at Jefferies

Okay, thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yeah, on the BD side, look, we look at everything with a pretty careful eye. We really like being in the bispecific space. And certainly 06/28 is a good example of that, that we think the potential combination with ZANZA gives us really good coverage on the PD L1 side, on the VEGF side, and then bringing in NK cells as well. So how you slice and dice those opportunities, you have to be really thoughtful and really careful. Obviously, there's a lot of PD L1 VEGF targeting bispecifics right now.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

We don't see a lot of differentiation in that area. And certainly there's key data waiting to be disclosed around certainly, say, the survival data in the non small cell lung cancer trials. So we're looking at everything. We consider everything. Again, we have a, I think, unique perspective on how to build value, and we're going to continue to execute on that as we go forward.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Derek Archila with Wells Fargo. Your line is open.

Yanan Zhu
Yanan Zhu
Analyst at Wells Fargo

Hi, this is Yvonne on for Derek. Thanks for taking our question and congrats on the quarter. A quick one from us. Can you help set expectations a bit on the non clear cell renal cell carcinoma study? And what have we seen here from cunatunase in this patient population?

Yanan Zhu
Yanan Zhu
Analyst at Wells Fargo

Thanks.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Jamey, you want to take that?

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Yeah, sure. So with regard to setting expectations, this is I think a very exciting study for us. One, it is a study in kidney cancer. It's the first phase three that's ever been run-in the smaller population in kidney cancer. And so having a positive outcome, we think would really benefit patients who have been otherwise lumped into the category of clear cell kidney cancer.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

The best benchmark that we have is probably with Sutent, that's what we're going up against. So this is a study that is looking at nivolumab plus zanzolitinib versus sunitinib. We know that cabo has beaten sunitinib in a head to head, CABO nivo beat sunitinib and we think that ZANZA is better than CABO. And so CABO nivo against sunitinib we think has a very high probability of success here. The PFS that is most commonly quoted for sunitinib in non clear cell space is about five to six months.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Andy Hsieh with William Blair. Your line is open.

Andy Hsieh
Research Analyst at William Blair

Thanks for taking our questions. Congratulations on the beat and raise. Two quick ones for us. Just going back to the three zero three statistical analysis change. I'm curious about the definition.

Andy Hsieh
Research Analyst at William Blair

So dual versus co primary endpoints, can you declare victory with this win in either endpoint? So that's part one. Part two, so the alpha spend, so do you need 0.025 then for success on just one of the two endpoint if that's the scenario? And that was captivated by Dana's commentary about the induced proximity mechanism for 06/28. Saw several of the presentations looking at kind of dual kind of bispecific ADCs and dual payloads.

Andy Hsieh
Research Analyst at William Blair

Curious about your thoughts on expanding on your tool kits to explore that opportunity. Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Thanks, Andy. We've addressed three zero three questions several times. So let's start with Dana on the six twenty eight and the kind of strategy there, and then we'll go to Abe real fast for a wrap up on 03/2003. Go ahead.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

Sure. So just to reiterate, XB628 presentation at AACR was our first sort of data dump on that compound at a scientific conference. And we showed quite a few data points. But I think that the key one that you're referencing, Andy, is the one showing the ability of the molecule to co localize NK cells with tumor cells. And then critically, that translated to a much higher sort of level of NK mediated cytotoxicity against those tumor cells in an in vitro assay compared to monospecific antibodies hitting each checkpoint individually.

Dana Aftab
Dana Aftab
Executive VP of Discovery and Translational Research & Chief Scientific Officer at Exelixis

So, yeah, obviously we're very excited about this molecule based on its ability to potentially impact or address unmet need across all of our key therapeutic areas including GU and GI oncology and in colorectal cancer. In combination with drugs like zanzalutinib and other drugs. When it comes to other types of technologies that you kind of hinted at in terms of multi payloads and things like that, We're of course very interested in those types of technologies. And what I would just say at this point is stay tuned for more information that we plan to kind of bring out from behind the curtain at the R and D Day event later this year, where we're planning to really go into a lot more of our strategy for the future of our discovery pipeline. Awesome, thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Amy?

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Yep, just real quickly. So you were right, Andy, in that a co primary requires both be positive in order for the study to be positive. Dual primary means either one can be positive for the study to be positive. However, it does not necessitate equal split of alpha.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Andrew Berens with Leerink Partners. Your line is open.

Eitan Armon
Equity Research Associate at Leerink Partners

Hi, good afternoon. This is the Ethan on for Andy. Congrats on the quarter and thanks for taking our question. Just two quick ones. On 03/2003, can you remind us what ZANZET, TESO has demonstrated in the ITT and how do you expect the control arm to perform?

Eitan Armon
Equity Research Associate at Leerink Partners

And then maybe on 03/2004, will we get an interim OS as part of the second half updates? Just curious, we need do you anticipate needing OS data in order to file? Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Amy?

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Yes, sure. So thanks for the question. I'll remind everybody of the data that we presented in STELLAR-one, which was ZANZA plus atezolizumab in patients with colorectal cancer. The eligibility criteria were pretty similar to that for 03/2003 with the exception that everybody had to be RAS wild type on STELLAR-one.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

But there what we saw was median OS with ZANZA ATEZA of eleven point seven months in the ITT population, and it was eighteen point five months in the non liver met patient population. And of course that study is still ongoing with additional follow-up and we'll update, those, as possible. That bodes well when you consider in non these are cross trial comparisons, the benchmark of regorafenib that we know from the RCAD database, from the Phase III studies and other competitors is really in the ITT patient population somewhere between six to eight months.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Jay Olson with OpCo. Your line is open.

Analyst

Hi, this is Sean on the line for Jay. Thanks for taking the question. Congrats on the quarter. Maybe two questions from us. First, going back to the early launch of CABO and Match.

Analyst

I'm wondering if you can maybe describe the characteristics of those early adopters, for example, like the number of prior line of therapy and also their tumor location. And secondly, on 03/2009, I'm wondering if you can provide some color on the data to be presented this year, whether that will include both single agent and also combination data. Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Yes. PJ, why don't you start with the net? Not sure we can answer that question effectively, but go ahead.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Mean, guess what I can say is qualitatively similar to the data set of cabinet and the label being very broad. You know, what we're hearing generally is, you know, excitement to utilize the drug and utilization in a very broad manner regardless of sort of tumor location, you know, patient grade line of therapy, etcetera. So I think, you know, just a lot of excitement to have a drug that physicians can use kind of broadly across the neuroendocrine tumor space. But it's safe to say that in the commercial setting,

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

we don't get a lot of details on the patients that are getting the drug, unlike in the trial itself.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Correct, yeah, yeah, just qualitative.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Three zero nine real fast, Amy? Yeah, sure, Jay. Really excited about XL-three zero nine. This is our small molecule USP one inhibitor. We are in dose escalation both as monotherapy and in combination with PARP inhibition.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

We will be happy to share the data publicly once we have a complete data set.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Ash Verma with UBS. Your line is open.

Ashwani Verma
Ashwani Verma
Executive Director - SMID Biotech & Biopharma at UBS Group

Hey. Thanks for taking my question. So I wanted to understand, like, the net launch dynamic a little bit. If you can elaborate on where you expect the uptake to come from. Is it from the peanut setting?

Ashwani Verma
Ashwani Verma
Executive Director - SMID Biotech & Biopharma at UBS Group

And is there any difference between like, this being used before or after or should we think about the competition with? Thanks.

P.J. Haley
P.J. Haley
EVP, Commercial at Exelixis

Yeah, again, I would just say, early days in terms of the launch setting and our expectation. And what we're kind of hearing from customers is that given the data are broad and this data set is unique in that sense and utilized across sites of origin, lines of therapy, etcetera. That's what we're hearing as well as that's the fact that our expectation is that it'll be broadly utilized across that. And we're aiming to be the small molecule leader in the space within our indication.

Operator

Thank you. Please stand by for our next question. Our next question comes from the line of Peter Lawson with Barclays. Your line is open.

Peter Lawson
Peter Lawson
Analyst at Barclays Capital

Great. Thank you so much. Thanks for taking the question. Congratulations on the quarter. Just on the quarter, I don't think you mentioned about clinical trial sales, if you could talk about that.

Peter Lawson
Peter Lawson
Analyst at Barclays Capital

And then, how are you going to think about pricing power, considering your position in RCC? Thank you.

Michael Morrissey
Michael Morrissey
CEO, President & Director at Exelixis

Chris, go ahead.

Christopher Senner
Christopher Senner
Executive VP & CFO at Exelixis

Peter, we did talk about clinical trial sales in the prepared remarks section. We had about $12,000,000 in the quarter.

Peter Lawson
Peter Lawson
Analyst at Barclays Capital

Our

Operator

next question comes from the line of Sudan Loganathan with Stephens. Your line is open.

Felix Ampomah
Senior Associate at Stephens Inc

Hi. This is Felix Ampumar for Sudan Loganathan. Congrats on the quarter. I have a quick question regarding ZELLA-three eleven in the next indication that will be initiated by first half twenty twenty five. Given the approval of cabo for the same indication, how does that change the bound for success for the STELLAR-three next trial?

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

Thanks, Felix. I'll try and answer this quickly. This is a study that is going up against everolimus. This will be zanzolitinib versus everolimus as a first oral therapy in patients who have progressed on their SSA. So it's a slightly different space.

Amy Peterson
Amy Peterson
Executive VP, Product Development & Medical Affairs and Chief Medical Officer at Exelixis

All of the KOLs, we have a global steering committee and we've been talking globally with thought leaders around really the world. They're all very excited about this option and the trial. So at this point in time, we're not that concerned about competing with CABA.

Operator

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to your host, Ms. Susan Hubbard.

Susan Hubbard
Susan Hubbard
EVP, Public Affairs and IR at Exelixis

Thank you, Tawanda, and thank you all for joining us today. We certainly welcome your follow-up calls with any additional questions you may have.

Operator

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Susan Hubbard
      Susan Hubbard
      EVP, Public Affairs and IR
    • Michael Morrissey
      Michael Morrissey
      CEO, President & Director
    • Christopher Senner
      Christopher Senner
      Executive VP & CFO
    • P.J. Haley
      P.J. Haley
      EVP, Commercial
    • Amy Peterson
      Amy Peterson
      Executive VP, Product Development & Medical Affairs and Chief Medical Officer
    • Dana Aftab
      Dana Aftab
      Executive VP of Discovery and Translational Research & Chief Scientific Officer
Analysts
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Key Takeaways

  • Exelixis delivered a strong first-quarter performance for its cabozantinib franchise, with U.S. net product revenues up 36% year-over-year to $513 million and global revenues reaching $680 million, prompting a $100 million raise in full-year 2025 guidance.
  • The U.S. FDA approval of CABOMETYX in both pancreatic and extrapancreatic neuroendocrine tumors ahead of the PDUFA date enabled an immediate launch, with early prescriber feedback and new prescription share gains indicating positive momentum.
  • Pipeline advancement centered on ZANZA (zanzalutinib), with pivotal STELLAR-303 (colorectal cancer) and STELLAR-304 (non-clear cell RCC) data expected in H2 2025, a go/no-go decision for STELLAR-305 (head and neck cancer), and initiation of the NET study STELLAR-311 this year alongside Merck-sponsored RCC trials.
  • The IND pipeline is progressing rapidly, with XB628 (NKG2A/PD-L1 bispecific) now in Phase I recruitment and plans to file INDs for XB371 (TF-targeting ADC) and XB064 (ILT2 antibody) by year-end, targeting three new INDs in 2025.
  • Financial discipline remains a priority, supported by $1.65 billion in cash, $289 million in Q1 share repurchases and a total $1 billion buyback authorization, while maintaining flexibility to invest in high-conviction BD and R&D opportunities.
AI Generated. May Contain Errors.
Earnings Conference Call
Exelixis Q1 2025
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