Exelixis, Inc. Stock

Good morning, everyone. I'm Sean Laaman, Head of U.S. Mid-cap Biotech Equity Research here at Morgan Stanley, and welcome to our Global Healthcare Conference.

Before we begin, just to make you aware of some important disclosures for those disclosures, please visit the Morgan Stanley disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative.

For this session, we have the pleasure of hosting Exelixis and their President and CEO, Mike Morrissey. Thank you for your time and pleasure to host you.

Yes. It's great to be back. Big invite. Yes. Before I begin, let me just remind -- do my safe harbor. I'll be making forward-looking statements today. So please see our SEC filings for a description of the risks that we face in our business.

Okay. Thank you, Mike.

Thank you.

And you'd be actively involved in this first one, I believe. So how is the rise of China-originated innovation changing your competitive positioning, if at all, in your R&D and BD playbook?

That is a great way to start the dialogue, and we could probably spend 33 minutes on that topic all by itself. First, let me say, again, it's great to be here. I really appreciate the -- and really value the relationship we have with Morgan Stanley on the research side, on the banking side. It's just been just great. So good to see you guys do for us.

So let's talk about China. And it's really a question of, at least in my mind, innovation first, and how you maximize the value of innovation, how you access innovation, how you pay, how you value innovation, right, all across the board. No surprise, I think, to me and to us that there's lots going on in that space. If you go back even 10, 15 years, there were the top 2 or 3 checkpoint inhibitors and then there were another 40 being discovered and developed in China.

So that -- I would say that region, that country certainly is investing a lot in biotech right now. There's lots of movement inside China in terms of BD, ex-China, in terms of U.S. companies and European companies accessing that.

We look at that very closely. I guess our focus is more on novelty than fast followers than kind of me-toos. And there's a lot of all those. So question is really how do you parse the risk/reward equation? How do you look at data preferably asymmetrically in terms of what we have in our pipeline, where we're hoping to move our pipeline.

We have adopted this multiproduct, multi-franchise approach. I mean cabo is a great example of that from the standpoint of a compound that has been looked at in tens, if not more pivotal trials, has label with 8 indications. So we're trying to complement that with zanza and the full pipeline. Sources of innovation, whether we look to buy, to partner or to collaborate is really important for us. So I think collaborative opportunities make the most sense. But we're open for business and looking very clearly at trying to expand our portfolio of franchises that could certainly include assets ex U.S. outside of the company.

Yes. Fantastic. Thank you, Mike. Next question on the macro side. So are you implementing AI across your business? And if so, can you point to an area where it's changed decision, cost out, even a POS?

So it's another great question on the macro side. A lot of companies are kind of opening the floodgates in terms of kind of the -- on the expense side to embrace AI and kind of an uncontrolled kind of do everything at once framework. That's not how we're operating. So from my point of view and what we've done, I think, within our business units and within our IT infrastructure is really ask the question, where do we have highly curated, very valuable data? Because from our point of view, certainly, what I believe in is that AI, if you've got the right data is a very good way then to be able to understand the value of that data, maximize the utility of that data, analyze that data both faster, but also maybe more deep in the process, right?

So we've -- again, we've got decades of data. And certainly, if you think about what we've got within discovery, first of all, but also maybe more importantly, within development, but critically in commercial, we have very, very deep data sets of longitudinal curated data that we've invested a lot of time and a lot of money in terms of kind of building on and maintaining the depth and quality.

So we're using AI. Chris and I, we prioritize for the team kind of where we see the biggest potential impact of AI on our existing kind of data sets, data analysis, data utilization. And then the team we have can execute very quickly. So I don't think we're spending a lot of money, but I think we're doing the right level of investments and the right focusing in terms of priorities to maximize impact. And I can tell you that some of the things, especially in the commercial world where we're already strong, I think this has the ability and the opportunity to make us even stronger.

But it's all around speed, quality and security because those two -- those -- the speed and quality by themselves are great, but if you can't do it in a secure fashion as we've seen kind of the more public examples, it can be a real problem. So I think those three kind of pillars are driving us forward, but in a very controlled kind of prioritized manner.

Got you. Thank you, Mike. And last question before we dig into some Exelixis specifics. But which policy variable is it FDA, Medicare negotiation, MFN, tariff or global pricing matters most to your economics? And what have you changed, if anything, because of any of those?

I guess I would answer yes to all of those. Yes. I mean that's the bucket list of kind of topics and risks that the whole industry is facing and certainly us as a very important commercial concern are dealing with on a daily basis. The playing field is shifting. It's very dynamic. I think the way we look at it is there's today, there's tomorrow, and there's the future. And you want to be really careful how you navigate today so you don't complicate what you might do or could do tomorrow and what might happen in the future.

And for us, I mean the time lines are basically real time today versus even after the midterms in '26. The time between '26 -- midterms and '26, it's just a few months from now. And then the next kind of election cycle and then new administration in '28 and then '28 to say, maybe even '30 -- early 30s. And I think the dynamics here are super, super important, and nobody has a crystal ball into what could happen even a couple of months from now or even early '27.

So we're a -- we've got great team. We've got a super strong team in D.C. I'm in D.C. a lot, on the Hill a lot talking to members about things that are important to the industry, things that are important to us in terms of whether it would be pricing, whether it be regulatory issues, whether it be external innovation and competitive threats, all those things.

I would say from an industry point of view, certainly, pricing, the whole MFN issue are top of mind for us. Lots of noise in that system right now. I'm not sure how much content is there. Maybe we find out in '27, maybe we don't, depending upon who's controlling what within Congress. But I think it's just so important for everybody to look at the landscape as it's just not today because there's so many other moving pieces that could impact our industry and our ability to deliver really novel medicines to patients in the out years, depending upon how this gets played in the short term. So stay tuned. It's going to be a wild couple of years for sure.

Thank you, Mike. Now to get on specifically to Exelixis and cabo. So solid growth at Q2, but kind of macro kind of not, like how do you think about the growth of the core cabo franchise before zanza takes over? Are you managing the two as deliberate handoff or letting them run independently in overlapping settings?

Yes. So the base business with cabo continues to be really strong. Pleased to take a step to look back where we were literally 10 years ago when we launched cabo and the amount of flack we got in terms of how we may or may not be able to compete in the solid tumor oncology setting with another TKI versus kind of where we are today. I mean, the run rate based on our Q2 '26 numbers is north of $3 billion a year globally. So it's a major drug.

And certainly, we've had a big part of that in terms of how we've focused our clinical and regulatory and commercial efforts to grow the number of patients we serve and to use as a kind of a foundational platform for how we build zanza. So adding NET on was a super important next step for us relative to building the franchise. It's growing a little bit shallower rate than we thought it would, and that's okay. It doesn't really impact our view on what -- if you use the pharmacokinetic terminology, what Cmax could be, right? It's just going to take a little bit longer to get there, and that's fine. Team is doing great. And I think the effort is really understanding that this is a little bit different patient population than what you normally see with metastatic solid tumor opportunities.

Zanza, following up beyond that, look, we've got the opportunity to build a durable second franchise that we think could exceed the cabo opportunity, maybe by several fold if we're successful with first wave and now we can get about the second wave of pivotal trials. It's one that continues to really get us excited. And the opportunities are broad and deep. And our job is to parse the risk and capitalize on the opportunity for success and make sure that we're serving as many patients we can across lines of therapies, across combinations, across different histologies as we can.

So lots to do there. It really plays into how we view building value through franchises. And we talked about at our R&D Day last year. Cabo is first. We think zanza is going to be a great second act, if you will, and there's more on the way with the pipeline, opportunities externally to be able to build this multi-franchise view of success for the business as a whole.

Sure. Thanks, Mike. And just to touch on some recent patent news. So how do you think about the cabo exclusivity runway out to the federal court decision with MSN? And on Handa capsule, how are you thinking about potential entry in any competitive pressures on cabo? From our understanding that the product is non-AB related and not substitutable at the pharmacy.

Yes, yes. So look, any successful drug like cabo is going to get challenged. It's part of your -- our job is to be on the offense in terms of adding indications, adding -- making sure we're delivering on growth Q-over-Q, year-over-year and making sure that we're operating at a very high level of expectations for the team.

On the other hand, we have to play -- have a strong defense, right, from the standpoint of making sure that we're doing the right work from a patent point of view, from a legal point of view to be able to maximize the value within the time frame that we've got. So as you know, we've settled with several generics for an entry date of January 1, 2031. Those that haven't, we're litigating with, again, the appellate decision that recently came out was very strongly supportive of our approach. And there's other trials planned to continue to reinforce.

I don't want to speak to those right now, obviously, but we're certainly going to continue to do the appropriate level of investment and prepping to make sure that we can maximize our chance of success there across all challenges. 505(b)(2)s, I won't mention any names, but again, we're not too concerned about that. As you mentioned in your question, history would tell you that those have a tough time of competing without additional data. Best example of a success with a 505(b)(2) is the Abraxane example where Abraxis ran pivotal trials. They went into large patient populations, did the right work to be able to frame the opportunity. Outside of making those big investments, it's really hard for all the obvious reasons to be able to see erosion or penetration.

So look, we have to be worried about everything. We think about everything. We track everything. We're not too concerned about that. We've got to keep our eye on the ball in terms of the cabo base business, growing that, maximizing the value of zanza and then pushing the pipeline forward. So that's more than enough to occupy my time for sure.

For sure. So maybe moving on to some zanza questions, super important for the long-term future of Exelixis. And we're anticipating the metastatic colorectal cancer launch, and that's been pushed back by three months. So just for those that might not be on top of the news, why the pushback? And does it change in any way, shape or form how you're thinking about the launch and your allocation of resources to do that?

Yes. So again, we had an 8-K Friday morning, basically resetting the PDUFA to March 3. I can't add more than what was in the 8-K. So I'd certainly refer you and listeners back to that. It's just the way it is and hasn't diminished our interest or confidence in the opportunity. We are essentially launch ready right now.

As you know, we talked about this earlier in the year, we added out the full complement of reps to our GI sales team late last year, early this year to kind of pick up the slack on the net side in anticipation of kind of getting that to a level where at the appropriate time, we could then kind of move full force into the CRC based on the 303 data. That's still the plan. We just have an extra quarter to do it, which is fine.

It's a really important first launch for us. Obviously, we got to get through the regulatory steps, and we're committed to doing that. I still find a very reassuring feedback in our market research. The 303 data plays really well in market research, especially in the community. The juxtaposition between what we did in 303 and what we're planning to do with 316, the post definitive therapy kind of maintenance approach almost from the standpoint of using the Natera technology to identify high-risk patients.

303 and 316 play together really well. We talk to investigators about one and they bring up the other and vice versa. So we're -- again, we're all about building franchises across multiple dimensions and certainly going into CRC with zanza across several different lines of therapy with the opportunity to bring in other molecules, other combinations, maybe earlier lines of therapy could be really attractive. So we're -- when we choose to go into an indication, we go all in, and we're certainly very excited about being able to hopefully move the needle here for patients.

Definitely. And zanza has been framed as -- its edge is a differentiated kinase inhibition profile versus other TKI-IO combinations. In practical terms, what is an IO containing regimen win in third-line plus MSS colorectal, which has been seen that's historically cold to immunotherapy. And what are you hearing from KOLs?

Yes. Yes. So it's certainly -- it's the exception to the rule, right? There have been 5 recent trials using Checkpoint kind of platform therapies for third line plus non-MSI high CRC. Four of those have failed. Only one that worked was STELLAR-303 with zanza and atezo.

So the zanza scaffold, certainly based on some of the cabo data we generated in the past, but also recent data with zanza really reinforces the idea that zanza has the ability to impact all the key cell types in the tumor microenvironment, tumor vasculature, important immune cells, both on the positive side, inhibiting or inducing the positive CD8-positive T cells and then impacting the negative regulators as well.

So it's a full really approach -- full holistic approach in the tumor microenvironment. So the fact that we saw a win in the ITT population and in the liver met population, I think, is pretty compelling. It's the first step. When you think about winning in a late-line heavily diseased burdened population and then you think about 316 where you're looking to basically go after tumor that you can't actually see -- can't visualize radiographically, it's a pretty compelling connection from one to the other.

So lots of enthusiasm there, but data speaks for itself, and we're certainly very excited. And we're really motivated by the feedback we're getting. Most of the patients with late-line CRC are treated in the community, and they feel somewhat shut out or foreclosed from Checkpoints based upon their -- the vast majority of these patients with their genotype.

So to be able to, at the appropriate time, bring this option to physicians and the patients is just the most rewarding. And that's why we do this work, right? And we're super excited to be able to get in that space, maybe a little bit later than we had hoped, but that's fine. We'll get there soon enough, and we'll be ready to go.

Sure. And I think you framed that third-line CRC plus setting is about 23,000 patients, $1.5 billion opportunity. I understand there's significant overlap with the current cabo prescribing base. Can you give us a bit more granularity on your launch prep and maybe some idea how you expect the launch curve to look?

Yes. So look, we launch really well. We -- the effort we have, and it's now really enabled by AI. I can't go into the details from a competitive point of view, but it is absolutely fascinating to me if you've got the right data. And the data, again, I won't elaborate on, but it's data that has been curated and is really prime for picking, if you will.

Look, we have the ability to really maneuver here very quickly. So we see this as an opportunity to really reestablish in a brand-new therapeutic area for us, our dominance when we choose to go into an indication. So the combined sales, marketing and analytics team is really working as one to be able to not go off independently, but to go in a very consolidated aligned fashion in a way that will help us win and help us reach more patients. So I'm thrilled with the progress I've seen there and the launch prep that's in place, and we're really excited about being able to get out there.

Fantastic. Moving on to zanza and RCC. I'm particularly fascinated by the STELLAR-304 and the strategy around here in NCC and cabo in CC and just the bleeding around that strategy over time. But I guess to talk about specifics, how are you thinking about the sunitinib control? And what are you hoping to see on efficacy and tolerability against other IO/TKI benchmarks such as cabo...

Yes. So unfortunately, non-clear cell RCC is just understudied. 304 is the first global randomized pivotal trial that's being done in this space. So the data for control arms, the data for potential experimental arms is all limited just by a lack of investigation, lack of investment in this population. So we're -- there's lots of IST data, Phase I data. It's old, it's new, it's historical, it's caveats, all over the place.

So it's actually challenging to actually look at and pick a number, if you will, for a control arm or experimental arm. We want the best data possible. We think we've got the right combination and certainly excited about being able to do a study that arguably should have been done years ago. But again, we do the hard stuff because that's how you win for patients is how you generate Level 1 evidence that you can get into compendia, you can, I think, really effectively market once you get approved.

So yes, it's the small piece of a big story. Obviously, we have major player existing with cabo and RCC, as you mentioned, with how we view building upon that. We want to have a new standard of care in the 2030s for all elements of RCC, certainly with 304, the 2 studies we're doing with zanza and belzutifan with Merck, super excited about those. Great partner, great compound. Belz is doing great out of the block. So to be able to be part of building on that story makes a lot of sense. We are -- and I am personally very scientifically and I would say, clinically interested in asking a different question frontline. As you know, LITESPARK-012 did not work. So the question is -- my interpretation, and again, I haven't seen the data that will come out at ESMO in a few weeks, but doubling down on the VEGF pathway may not be the most productive way to go here.

So we're asking some very fundamental questions around can we craft clinical collaborations where we combine zanza with the appropriately designed and characterized bispecifics that involve unique MOAs. One end has got to be a Checkpoint because we know that's important. The other end has to have an impact potentially on the RCC and maybe CRC tumor biology, but it can't overlap with, say, VEGF because we know kind of what that gives us in the setting, right?

So -- but that's an area where we've been doing a lot of work from a BD kind of exploratory point of view about what's out there. There's lots of assets out there with bispecifics that have a second handle that's unique that gives us a different MOA hook that we're excited about exploring. So -- but again, we want to dominate all aspects of that histology with the appropriate combinations and the opportunity to really extend duration of treatment, duration of action because that's how you bring the maximum value to patients.

Wonderful. We're still on 304, so looking forward to receiving the data. But if we look back, zanza and nivo showed 63% in one line clear cell in STELLAR-002. If STELLAR-304 does land well in the harder non-clear cell population, how are you thinking about read-through to the larger clear cell opportunity?

Yes. Well, that will be defined by the data that we're looking at, right? So how those connect we can speculate on that. I'd rather just run the experiment and get the data and then operate from there. So I'm not a big modeler. I'd rather just generate the data.

Certainly, the opportunity with the Merck trials that we're doing, talked about first-line opportunities in terms of how we're going to kind of survey what's possible. I think that's how you make big breakthroughs by asking the question differently. We're just orthogonal thinkers. And I think that asymmetry of thought then translated into action has made us successful so far, and we'll continue to do that.

Sure. I have a competitive question here on zanza in RCC. So Moderna and Merck neoantigen therapy hit in adjuvant melanoma with an RCC readout due 2H '26, '27, positions zanza as a TKI partner of choice in RCC into the 2030s. If a cancer vaccine starts showing activity in kidney cancer, is that a threat to the TKI plus IO backbone or a combination partner zanza...

I think it's -- yes, great question. No, I think it's a combination partner for sure. We have an active IST with Dana-Farber looking at the Dana-Farber Peptide Vaccine Program that they had science, I think, a year or so ago that Tony Choueiri and Catherine Wu kind of ran and discovered and published. So looking to add zanza on top of that, number one.

But again, thinking about this orthogonal modality approach in terms of frontline, maybe it's zanza plus a checkpoint plus a cancer vaccine, too. I mean the key -- the home run for us would be to move that from adjuvant to metastatic, right? And that's a big ask just from a tumor burden point of view. But the question is, could a molecule like zanza with such a rapid onset of action causes rapid tumor -- that has rapid tumoricidal activity can release antigens very effectively, could that be the kind of a spark plug you need that.

So again, important question that you can only really answer clinically. But again, we're taking a very broad look at how to be able to impact that frontline space. And I think PCVs in some shape, manner or form could be a very important part of that.

Moving on to zanza and NET and STELLAR-311. If that wins, right, how much of that is expanding the NET opportunity versus transitioning existing cabo patients to zanza?

I think it's more the former than the latter. Again, the CABINET study was done against placebo. 311 is going head-to-head against everolimus. So I think if you can beat existing standard of care, that has a big impact on the ability, not only for regulatory success, but then for making it truly the #1 choice across the continuum.

So again, that's -- it's a great study. We're enrolling globally. We are -- I'm super pleased with enrollment. We're way ahead of schedule right now. So that's a good sign in terms of level of interest. And I would say, in general, the clinical team is just cranking right now. The meningioma study 201 is enrolling rapidly, lots of interest there. We have a Phase II in bladder cancer post-PADCEV-pembro, where there's basically nothing for patients when they progress. That's enrolling really fast as well.

So I'm real pleased as a metric of execution and success, seeing physicians and investigators put patients on trials that they're interested in is a really important sign, and we're seeing a lot of that right now.

Great. Thanks, Mike. I want to allow some time for the early-stage pipeline. So you've got four Phase I programs, all moving towards go/no-go decisions. So do you have a view or can you provide a view which reaches a decision first? And what's the bar for advancing? And how disciplined will you be about stopping the ones that don't?

Yes. Well, we're very -- look, we're very data-driven. We have to be. We're scientists first and foremost, and getting to a fast no-go is always beneficial from a, I would say, a pure financial point of view, but also just more satisfying. You don't want to pull the trigger too early and leave something -- leave potential value on the sidelines. So we navigate that pretty well. But no, we're very effective at killing programs that don't need to go on.

I would say that the timing of advancement is purely based on how we see the franchise potential of these molecules developing, whether that's monotherapy, whether that's in combination, whether that's early line, late line across different tumor types. You got to find the right dose, you got to expand to kind of look for signals and then ask the question around combination approaches.

So a lot going on there right now. We're super diligent in terms of kind of running all these different parts of the ground. Our ADC, our small molecule, our bispecific approaches are all really attractive. And now having the opportunity to, on a selective basis, combine with zanza, right, would be even more attractive. So we don't need to go out and partner with a clinical collaboration for ADC or for a bispecific when we've got our own molecules in-house, too. So keeping that all together is actually a really good way to go.

So -- but look, it comes down to franchises, right? So do we have another franchise molecule in our early pipeline? Potentially. And our job is to find that as quickly as possible and then invest appropriately. But there's external sources, too, that we're looking at very, very clearly and constantly. So -- but again, that's the model is to build a pipeline of franchises that will allow us to build value, outsized value for patients and for shareholders.

Sure. Beyond those Phase I programs and the 2 planned INDs, how are you thinking about balancing capital resources between internal innovation versus BD activities?

Yes. So that's -- I mean, I would say capital allocation is always based on data. So I think we're agnostic and really don't think about it from the standpoint of where did the molecule originate from? It's what's the data that we either have or need to have to be able to get to a crisp go/no-go decision. And if it's go, then how do we go faster and broader to be able to build these franchises.

And I think zanza is a good example of that, where we had hints of activity. We went into the first couple of pivotal trials that developed into the first wave of 7 that are all going now. And the next handful, probably 6 to 8 are kind of lined up to go as well. So it's just -- it's allowing the team to ask the right questions around what's novel, what's kind of in line, what's kind of on the fringes. But that's -- again, value is created when you ask the question properly and then you execute well. And I think we've been able to do that over the last few years really well.

So we've got a lot of interest there. And certainly, the early-stage pipeline, the INDs kind of pipeline, those -- many of those molecules fail, and that's fine. As long as we have good matter that we're moving forward and investing in. We just need a small number of winners. We don't need a big pipeline of unknowns. I think that's the way we look at it, right?

Wonderful. Well, we're just out of time. It's probably a perfect place to...

All right. Thanks again...

Great to see you. Thanks Mike.

With Exelixis, and I'm pleased to be joined by company's CFO, Chris Senner; and Andrew Peters, Head of Strategy and IR. Thanks for joining us, gentlemen. Exelixis, I think, really exemplifies the paradigm of pipeline and products.

You've got a solidly growing franchise in CABOMETYX, an emerging one with zanzalintinib. With that, perhaps I can get you guys to start with some high-level comments around Exelixis' top priorities on both parts of the business this year and throughout 2027.

Yes. Thanks for the intro and the invite. Just as a reminder, before I get started, please -- we're going to be making some forward-looking statements today. So please see relevant disclosures around risks to our business in regulatory filings. So yes, I'm glad you kind of highlighted CABO as a pipeline of product or however you framed it.

It's really the way that we see our business. It's kind of through this lens of franchises. And we think about franchises as kind of like the core operating kind of through line of the company, and it's really across 3 dimensions. Kind of the first is exactly what you said for a product like CABO and then hopefully, zanza, expanding into multiple indications, kind of that breadth, that stacking of revenue opportunities to really help patients.

And then similarly, kind of that second dynamic is around indications. So we're market leaders in RCC. We're market leaders in NETs. We want to build CABO there, build zanza there, add pipeline products, potentially add external assets that we can bring in through business development. And so kind of build product-wise and then build indication verticals.

And then kind of the last one is just around modalities. So obviously, zanza and CABO on the small molecule side, if you look at our pipeline, either 371, our tissue factor ADC or 628, our novel kind of next-gen IO bispecific, it's that sort of like can we build out the breadth of modality as well. And so over the last several years, we've really kind of transformed the company with the success of CABO to really invest in all of those areas.

And I think now is an important time and an interesting and exciting time at Exelixis, where we're starting to kind of branch out into that second franchise, potentially the third franchise, the fourth franchise, the fifth franchise. That's kind of how we see the growth and the evolution of the company over time.

Okay. Got it. So let's pick up on CABOMETYX. Among the VEGF TKI class, it's seeing steadily increasing share each quarter. And presumably, this is from increasing depth within RCC. Can you talk a little bit about what's driving market share and how durable this growth trend could be, particularly in view of some potential headwinds emerging. And I guess what I'm thinking of there is really the potential expected approval of the LITESPARK-011 regimen.

All right. Yes. So, like you mentioned, like CABO's market share has been increasing. If you look at it year-over-year, Q2 '26 versus Q2 '25, we grew 2 market share points from 45% to 47%. So we've been growing steadily over the last several years. And that -- we feel that's a very durable franchise, particularly from an RCC perspective.

It's been -- we've continued to see growth in RCC, which we kind of call the base business. And then we're seeing growth from the NET business also that is driving revenue. So both of those together are really propelling the revenue forward as we look at the guidance for this year and as we look at beyond this year into 2030.

Yes. I mean I think it's kind of a truism in biopharma that really 2 things drive adoption, data and the team. And I think those are things that we're continuing to kind of emphasize and hammer home. On the data side, we're always generating new data to kind of underscore that best-in-class kind of TKI of choice, so to speak, profile for CABO.

And then on the NET side, we continue to do things like earlier this year, we increased the size of kind of the NET sales force in part to kind of add to the breadth and depth of penetration in that segment, but then also to kind of be launch-ready for zanza given the overlap between NET and CRC. So it's kind of those sorts of things that I think it's really the core part of what we do is that execution.

On the NET side or in the NET indication, can you talk about sort of where CABO is today in terms of second-line market penetration? And how large of a contributor penetration of the NET segment could be for the CABO franchise overall?

Yes. So yes, as we talked about on the last call, we are seeing about a 45% new patient share as we looked at during the second quarter. So a significant inroads into the NETs market from a new patient perspective. What we haven't seen yet is the stacking of those patients, and we expect that to happen as we continue out through '26 and '27 and '28 because this is a very indolent tumor type.

And so therefore, the expectation is many of those patients will be on drug for a long time. And therefore, that stacking will drive the revenue. Now we haven't said exactly like what a number would be, but I think the TAM is about $1 billion at contemporary pricing today. And so we're trying to capture every market share point possible in that -- in the NET indication and then drive the revenue from there. But it will be a contributor -- a significant contributor in our growth going between now and 2030.

Okay. Okay. That share estimate, right, that 45% new to new patient share. I guess that's of therapies that are oral therapies in second line, I guess. But I guess within that class, I guess, how penetrated, I guess, what is the percent uptake, I guess, in second-line NETs overall?

Yes. I mean it's -- NETs is an interesting dynamic. We talked a little bit about this on the last quarter. Unlike many other -- or NETs is a little bit different than a lot of other tumor types, given kind of the more indolent disease and just how patients are managed kind of on a day-to-day basis.

And so because of that, there's at this point in the launch, there's probably a little bit of a difference, say, between like market share and new patient market share. So what PJ talked about and kind of this dynamic is really imagine a lung cancer patient comes in for a scan every 3 months and determines how their disease is going. Is the tumor growing, okay, they stop responding, switch on to a new therapy.

NETs because the tumors tend to grow a little bit slower, the scan interval can be longer for many patients. And so instead of coming in every 3 months, maybe you're coming in every 6 or 9 months. Similarly, if the scan does show disease progression or something like that, again, because the tumor is much more slow growing oftentimes, the conversation with the oncologists could be something like, well, maybe take a break from therapy as you're coming off of your prior anticancer therapy before coming on to CABO.

So there's this temporal dynamic around when that actual new start occurs. But as Chris talked about before, kind of that encouraging data point that we're seeing is increasingly and growing when those patients do switch on a new therapy, more often, it's becoming CABO. And that's really kind of what's driving our enthusiasm, our excitement around where we're going because as that new patient share translates to kind of overall market share at a steady state, kind of that destination, so to speak, is looking really good.

And real-world duration on therapy, is that sort of lining up once on CABO, right, real-world duration on therapy in NETs, is that lining up with expectations?

Yes. It's probably still a little bit early to kind of be definitive around that. We've been approved a little over a year now. And so kind of triangulating -- you just need a more mature profile because the early patients may or may not be representative of kind of the steady-state patient population. So -- but we're pleased with the launch overall.

Okay. All right. Great. So shifting to zanzalintinib. You have an approval decision approaching in the third-line metastatic or third-line plus metastatic colorectal segment. And you talked about third-line colorectal being a $1.5 billion -- at least a $1.5 billion opportunity here in the U.S. Can you talk a little bit about sort of the duration of therapy assumptions underlying this outlook and sort of what depth of market penetration or market share do you anticipate for zanza?

Yes. I mean it's tough to kind of speculate on any of that until we get to market. But I think the data set that we've presented is reasonably representative of kind of how we think about the market opportunity. Third-line plus CRC is still kind of what we view as a high unmet need area. And all of the market research that we've done supports kind of this enthusiasm in the marketplace among clinicians, patients, et cetera.

The profile of the combination, the checkpoint containing dynamic, chemo-free option, all of these things are kind of building this excitement. The other thing I'd highlight just kind of as we're on the topic of CRC is one of the dynamics we're seeing right now is this kind of echo chamber building excitement around zanza in the disease in general.

I mentioned kind of our franchise approach earlier. So we have a second Phase III study up and running in CRC called STELLAR-316, and that's kind of the post-adjuvant or post-definitive therapy population.

And so what we're finding is as clinicians are learning more about zanza, say, from 303 ahead of the launch, they're hearing about 316 and are getting excited about it because we really are kind of on the cutting edge there in defining this opportunity. And similarly, as docs are kind of getting familiar with 316 in this new space, they're starting to hear about zanza in the third-line plus setting and kind of getting ahead of launch.

And so there's this kind of back and forth, this echo chamber that I mentioned before that I think is driving a lot of awareness and enthusiasm for zanza in CRC.

Can you speak to how clinicians and payers as well perceive the relative clinical profiles or clinical positioning of zanza plus atezo versus fruquintinib, if I'm saying that right, fruquintinib for FRUZAQLA in the third-line CRC setting.

Yes. I mean just from a profile perspective, all the things that I mentioned before are certainly attractive. Our label, the patient population -- or potential label patient population we studied are certainly a little bit different there. I think their data are kind of a later line population monotherapy versus doublet.

So a little bit of an apples and oranges comparison. What we found is market share kind of in that third line plus segment is a little bit more fragmented than I think people appreciate. It's about third SUNLIGHT regimen, and a third TKIs and a third kind of a smattering of chemos.

And that's in part driven by, again, CRC is a little different than other tumor types, and it's perhaps a little more community oriented. And so there's certainly the academics who are driving certain treatment decisions, and then there's the community folks who drive certain others.

Our goal from a launch perspective is to capture share points from all of those categories. So we're not necessarily at the outset targeting any one prescriber pattern or anything like that. We think the profile of zanza/atezo certainly lends itself to kind of the totality of patients.

Okay. Okay. Let's pick up on STELLAR-304 where you're expected to read out some data in non-clear cell RCC. I guess on the readout itself, like what should investors prepare for in terms of the scope of that top line readout? Presumably, you'll report on PFS, but are you also testing for perhaps interim OS benefit within this window?

Great question. I don't think we've written the press release. So I reserve the right to change whatever is in this. So yes, I mean, it's kind of statement of the obvious. At the -- I mean, per protocol at the time of the PFS analysis, there will be an interim OS look. Just I don't know how mature that's going to be, it's -- I can't speculate on that.

But our goal ultimately is to deliver as strong of a data set as we possibly can to kind of plant that flag in the ground and define a new standard of care in nccRCC. For background, it's kind of a little bit of an oddity of an indication in oncology where the population has never been studied, but for kind of -- I don't even know the exact reasons, all of the drugs that are approved in RCC are approved for both clear cell and non-clear cell.

So it's not like everything is off-label use. Everything is actually on label, but utilization is driven not by any pivotal trial data. It's kind of more interpretation of single center, small single-arm trials, that sort of thing that inform treatment decisions.

And we all know the challenges of interpreting these kind of small end studies or single center studies or it's just hard to kind of really make definitive conclusions given the limitations of these data. So what 304 is the first large randomized pivotal study done in this segment to establish with Level 1 evidence a standard of care.

So that's what our goal is with 304. And kind of coming back to your question, our goal is to just really generate as robust of a data set as we possibly can.

Assuming that's the case, can you talk a little bit about from a commercial standpoint, the level of market prep preparation sort of establishing treatment pathways, et cetera, that you think is needed to support a launch in non-clear cell, just given what you noted here, right, just the lack of a true standard of care today?

Yes. I mean, obviously, we have a lot of experience in RCC generally. So I think we're -- from either a CABO or zanza perspective, I think we're ready -- we're definitely ready to go, and we've got all the relationships we need, both from a physician perspective and a payer perspective that allows us to be successful if the data is positive and we have potential approval.

So we're excited for the opportunity if it comes about and looking forward to being able to go out there and capture as much market share in the non-clear cell RCC market as possible. As Andrew was talking about, it's not -- it's a fragmented market right now, and we'll have the first basically Phase III trial that will read out.

And if that's positive, that will give us a lot of as Andrew was talking about earlier, from a successful company perspective, data allows you to be successful. That data is positive and allow us to be successful in the non-clear cell RCC market.

Yes. And that's really kind of the strategic logic, so to speak, of the franchise model, where we're kind of the market leaders in RCC as we layer on new indications, new products in that space, our commercial organization, our relationships across the organization in RCC, we're certainly going to leverage.

And so that's kind of the best way to think about it, either with zanza non-clear cell or the 033 and 034 studies that Merck is running as our partner. It's kind of that franchise benefit, franchise strength that's driving a lot of that.

Okay. I guess, coming back to clear cell RCC, and I'm thinking about the LITESPARK-033 trial. Can you just speak to the market opportunity that's in scope here, which is the post checkpoint adjuvant frontline setting? Is there sort of an easy way to frame the size of that market opportunity relative to frontline untreated RCC?

Yes. I mean I think the best way to think about it is more how are patients treated in 2026 versus how will they be treated in 2031 or 2030. The evolution of the patient journey in RCC over time. And so what the pembro data in adjuvant, especially the overall survival advantage showed is that for eligible patients, this really should be the standard of care.

Patients live longer if they get KEYTRUDA in the adjuvant space. And so it opens up the question, well, as more and more patients get adjuvant therapy with KEYTRUDA earlier, what actually is the standard of care there. And so that green space is expected to grow over time and LITESPARK-033 is positioned to basically be the first study to answer that question.

So again, it's kind of an example of Exelixis kind of leading the way, so to speak, in defining a new standard of care, where right now, it's just kind of done by inference or guess or CABO used. A lot of things are used more by assumptions or guesses around, well, it's probably going to be active, but there's no real data to suggest it.

And so the way we think about the market is more around an evolution over time because the number of patients treated with adjuvant pembro today is probably going to be very different than it's going to be treated in the future. And so that's kind of the dynamic that we like to think about. It's not are we generating a data set today or are we generating a data set to be the standard of care at some point in the future when we're kind of thinking about those markets.

Right, right, right. Okay. All right. And just from an operational standpoint on LITESPARK-33 [LITESPARK-033], just how is enrollment in that study tracking against expectation? Is there a rough sense of when you might be able to report on the primary endpoint?

Yes. I mean good news for us is this is a Merck study. So there's no better oncology drug developer in the world. And so we love having them as a partner. And so it's one of the benefits -- one of the great benefits that we have of working with them is operationally, there's just no better team. And from an execution perspective, we're very, very happy.

Okay. All right. Hopefully, we'll let you speak to the market side -- the market opportunity for LITESPARK-34 [ LITESPARK-034 ] there. I mean this is another Merck run study, but in the second-line clear cell RCC setting. I guess there, I imagine sort of the thinking going into that study is and along the same lines for 33. But from a sizing standpoint, can -- how are you thinking about sort of the size of that market opportunity in second line plus RCC?

Yes. Maybe just I'll frame it a little bit differently. A couple of years ago, we kind of framed or gave guidance around this is what success looks like for zanza if we were successful in all of the studies that were ongoing at the time. Said about zanza, a $5 billion TAM, 45% of that was GI, 45% was GU and 10% was a head and neck study that we had running at the time.

And so that 45% of the $5 billion, that was across the 3 RCC studies. So non-clear cell, 033 and 034. So that's kind of a good sense of how we see the RCC or GU opportunity right now. What I'd say also, just to add to that, is subsequent to that, we kind of transitioned from 305 and head and neck given the kind of emerging and growing competitive profiles of that space and really said that our incremental investment dollar is much better spent with meningioma, which is a pivotal study we have up and running, and then the 316 study, which I mentioned earlier as well.

And so those 3 studies, we think collectively those 2 studies collectively are probably about 3x the size of how we viewed head and neck. But the other dynamic here is we're not done with zanza. Kind of the first wave is out and ongoing, and it's a proud accomplishment, say, that we have these 7 pivotal studies up and running.

But as we look to the next wave of zanza, certainly something like frontline RCC is now wide open. So you mentioned other LITESPARK studies. So LITESPARK-012 was actually unsuccessful earlier this year. And so what that future standard of care in frontline metastatic RCC looks like is kind of an open question.

And so that's where we're being very careful in understanding how zanza can play a role there. What are the modalities, what are the targets, what are the combinations that the biology show us will be successful kind of in that space. What are the lessons learned from our prior studies? What are the lessons learned from other contemporary studies as well. So that's kind of how we're thinking about it. And then that wave 2 is going to lean into the RCC component, the GU component, but there's lots of other areas where we're expected to go. So kind of stay tuned there.

Just thinking about, again, the LITESPARK regimen, I guess, -- it's set up in a way where it does create optionality for Merck, right, in some ways. And it could end up being an alternate TKI combination with belzu where it's expected to -- or is and expected to use further with LENVIMA. I guess how should we think about the relative profiles or the tolerability profiles of zanza versus lenvatinib when combined with Blez's? And are there other aspects to zanza's profile that you think where you see it favoring or see it being the favored combo agent versus LENVIMA?

Yes, certainly. I mean, I think we view zanza as kind of a best-in-class TKI. Its profile certainly lends itself to that sort of moniker. So if you think about, say, even the comparisons between CABO and LENVIMA we're the #1 TKI, both as a monotherapy as well as in combination with IO and the data we've generated with CABO kind of support that.

Zanza then kind of improves upon, so to speak, the overall profile of CABO and that it -- really the core insight around what we were hoping to do with zanza, both proactively and then fortuitously in how the data got generated is really CABO's long half-life can be somewhat of a complication from a patient management perspective.

And so zanza takes that core CABO scaffold. We engineered in kind of a metabolic liability to impact its PK. So it's much more user-friendly from a dose titration perspective, AE management perspective, tissue distribution perspective. And so all of those things that support kind of this best-in-class profile right now for CABO, we think then layer on with zanza with a more user-friendly, somewhat gentler TKI.

All of those things as you move towards multidrug, multi-modality combinations support that. And so that's why we're looking at it with belz, looking at it with all sorts of checkpoints. And then even we have some cohorts open looking at it, say, with docetaxel. And so if we're successful on that front, then the door opens up to a whole host of either docetaxel combinations or even something like an ADC combination, given the profile we think zanza has with them.

Okay. Okay. Maybe just coming back to NETs, the NET market here, where you're also developing zanza in the frontline setting. This is in the STELLAR-311 trial. I think you actually provided some update on the -- on your last call just in that you're seeing faster-than-expected enrollment into that study.

I guess how should we think about just the kinetics of the dynamic when it comes to patient treatment in that setting compared with what you described earlier in the second-line plus setting where there's kind of some interim between taking up treatment. I guess speaking to perhaps what you think the pace of uptake might be in the frontline NET setting, if successful there.

I think it's probably something we're still teasing out. The data will certainly help inform that. But I would just note kind of the differences between, say, the CABINET-based adoption or label for CABO and the population we're studying for zanza is it's kind of that first oral option. So given that first oral option, you're not switching necessarily from everolimus to CABO. And so some of those dynamics are probably less relevant. But we'll still see that more indolent nature of NET probably impacting something. I think overall, the point being we view NET as a large and very kind of underserved population. And it's one that from a franchise perspective, Exelixis is increasingly investing in, whether it's kind of through the zanza programs or some of our earlier-stage programs, NETs is going to be a franchise that we're a market leader in.

We're going to continue to be a market leader in because we think there's a real opportunity there and unmet need.

Okay. Okay. And I guess if we just kind of step back and take a look at everything that's going on, right, you have ongoing late-stage development here with zanza in addition to potential new product launch. How should we think about operating margins in 2027 and perhaps going forward?

Yes. So I mean, if you think about what we've said, we -- our expectation is to keep R&D expense in that $1 billion range for the foreseeable future or less. And that helps us continue to -- as revenue grows, continue to increase -- potentially increase operating margin. We've built out -- as Andrew was talking about earlier, we built out the sales force earlier this year.

So that's in our guidance for this year, and it's in our run rate. And we have all the -- basically have all the launch expenses we need for zanza. And so we think that operating margins based on continued revenue growth, both for CABO and potentially for zanza and keeping R&D expense in that $1 billion range allows us to continue to have healthy operating margins.

We do throw off a lot of cash. And so we're constantly looking at capital allocation and looking at investing in R&D, in potential BD deals and in share buyback. And so Andrew and I talk about this all the time. We're constantly looking at BD deals out in the market, and we're currently in the process of executing on a $750 million share repurchase program. Through the second quarter, we have purchased about $2.9 billion worth of shares starting in the second quarter of '23 through the second quarter of '26.

So that's been an important part of our capital allocation. And the way we look at capital allocation, too, is we don't look at a mutually exclusive between R&D expense, BD or share repurchase. They're all important, and we look at them altogether. So...

One final question here. Our colleagues in tech are also running a conference this week, and so I'm kind of asking this on their behalf and thinking of their world. But it is a question that comes up or a theme that comes up in our space quite a bit, right, or just in general, which is really about just the use of AI or AI-driven technology and the extent it might be having an impact on your business. How is Exelixis today making use of AI-enabled tools within the organization? And how do you measure its impact?

Yes. So for AI, IT reports up through me, but AI is really driven by the business and the implementation is done by the -- in combination with the business and the technology team. We're using it a lot in commercial right now. It's been -- we've built that over the last several years, we've enhanced the way we're collecting data.

And so we have this really robust data warehouse, commercial data warehouse that allows us to do deep insight. And actually, we've put tools in place that reps can do -- instead of just having canned reports that come out, reps actually can go in, type in their prompt and get, okay, who should I detail? Like who -- when was the last time? Whose prescription patterns have changed? And that kind of AI is actually very useful at the rep level, and that's enhancing how we go about detailing doctors. From an R&D expense perspective or R&D perspective, we have it both in the discovery organization. We use tools.

We've used some kind of off-the-shelf tools in the development side. They haven't been as helpful as we would hope. So we're actually developing our own tools. And so allowing us to do things faster, more efficiently because that time is very important. So we're using it in R&D. We're using in commercial.

And then from a G&A perspective, we're trying to use it everywhere we can, both in finance and in legal and other parts of the organization so that I've challenged my team, my finance team to basically not grow as we grow and utilize AI to do that and utilize AI to be more efficient.

So we're using it in all different parts of the organization, and I think it's having a very positive impact on Exelixis, and we think it's going to have a bigger impact going forward.

Okay. All right. Great. I think we'll have to leave it there for time. Thanks so much, Chris and Andrew. Thank you.

Thank you.

Great. So welcome to the next session. My name is Eva Fortea. I'm one of the biotech analysts here at Wells. We have with us today, Andrew Peters, SVP Strategy; and Chris Senner, CFO of Exelixis. Thanks so much for being with us today.

Yes. Thank you for the invite.

Great. So maybe we can just start our chat with kind of lay of the land, last 12 months, next 12 months for Exelixis.

Yes, I can start, and Andrew can kick in. So yes, we continue to -- currently in 2026, we're in the process of we launched the NET indication last year. We're continuing that process of penetrating the market from a NET indication perspective and also from an RCC perspective. And then the development of zanza continues to be at the forefront of what we do. So it's a big part of what the company is -- as we look into 2027, it's a big part of what our expectations for the outlook for the company.

Yes. So just kind of to add on that, and just as a reminder, Chris and I are going to be making forward-looking statements today. So please see relevant risks or relevant disclosures around risks to our business.

But I think Chris kind of said it well in that 2026 is this interesting transition period for the company as we're continuing to execute, grow cabo and really use that kind of financial success that we have with our base cabo business to then invest in zanza not only kind of ahead of our potential launch in colorectal cancer later this year, but also kind of expand the breadth of that development so that as we kind of exit the decade in 2031, kind of the LOE of cabo, that handoff to not only replace that cabo revenue, but growing it is really kind of the focus of the company.

And then either between our early-stage pipeline or being opportunistic around business development, enable that third, that fourth, that fifth program so that we can really scale as a company. And that's really kind of what we're focused on is kind of maximizing the value of cabo, while really starting to invest in a really important time in the zanza franchise and then kind of being opportunistic in investing appropriately within our own internal program, looking externally and then again, making sure that we're doing the right thing for our shareholders and looking towards things like share buybacks as well. So really exciting time at Exelixis.

Great. So maybe let's start talking a little bit about the cabo franchise, and it's been incredibly successful. How should we be thinking about growth from here?

Yes. I mean from an overall cabo franchise perspective, we set out a $3 billion, what success could look like number. And we still feel like that's an achievable number based on everything we know today. And so the RCC indication is part of that, also that growth, but also NET is a big part of that growth as we look into '27, '28 and '29.

Got it. So maybe just touching upon the -- kind of like what drove the reduction in guidance and kind of like the second quarter revenue for cabo?

Yes. So we talked about it on the call to a large degree. But when we looked at the overall kind of the pace of the NET indication, we saw that as we drove into the community with our expanded field force, we saw that the kinetics around how patients -- some patients move from therapy to therapy, we saw that was a little bit slower than we originally had projected. And so in a more indolent disease like NET versus other solid tumor malignancies, they don't get scanned as often, right?

So the kind of the solid tumor -- for some of the patients and other solid tumor malignancies, they get scanned every 3 months. And from a NET perspective, a neuroendocrine tumor perspective, it could be -- for some of these patients, it could be a longer period between scans and also sometimes a longer period between therapies. And so that's what we noticed in the market. We don't see a change in our overall outlook for the total potential, but it's just going to be a slower ramp than we originally projected.

Yes. I mean I think the best way I think about it is really kind of more of a temporal dynamic than anything. It's kind of that gap between new patient market share and total market share. So P.J., our Head of Commercial, kind of talked about this on the call with 47% or so new patient market share. As patients, as Chris said, are coming in for scans, if they do need to come on to a new therapy, increasingly, they're going on to cabo.

But that time course on when that new treatment decision happens is just a little bit slower, especially in the community because of either the scan interval or is there a treatment break between these because, again, unlike a lung cancer or most other solid tumors, that slower growing disease that's just inherent in neuroendocrine tumors makes that kind of decision point or part where the new bottle is dispensed, just temporarily a little bit slower. But again, the focus from our perspective, that leading indicator is new patient market share. We're confident that those patients are there. We're increasingly successful in kind of converting those new patients. It's more kind of a temporal dynamic than anything around when that kind of switch occurs.

Got it. Have you shared your assumptions on like peak opportunity in the NET space for cabo? And kind of like how has your launch ramp changed or your assumptions on launch ramp changed?

Yes. I think we've talked about net being about $1 billion indication from an oral perspective at contemporary pricing, and we still believe that's the case. And as Andrew was talking about, we're -- the new patient share that we're picking up is around that 45% range, and that's a good leading indicator of our penetration. And also, what we're starting to see, too, is the actual stacking of prescriptions for patients, and that's a big part of the longer-term success as those patients build on cabo, then there'll be potential higher revenue.

Yes. So it's kind of the dynamic again, the way that we think about it is that aspirationally $1 billion TAM, our goal is to capture as much of it as possible. That's kind of the endpoint. That shape of the curve, how we get there is a little bit dependent candidly on kind of this dynamic around new patient starts, et cetera. But at steady state, as that total market share and new patient market share kind of converge, I think that's where that endpoint number becomes more important.

Got it. Very helpful. Maybe just switching gears a little bit to Handa's tentative approval under cabo-like therapy and kind of like how does that change your view on the competitive landscape for cabo?

Pretty minimally. I think as a generalizable statement, 505(b)(2) products in the absence of clinical data haven't been successful commercially. I think kind of the best known 505(b)(2) product is ABRAXANE. And utilization of that product was really driven by large, robust randomized data sets showing that there's a meaningful clinical improvement of the product versus, say, the reference. Absent of that, given the dynamics around non-AB-rated, non-interchangeable, nonsubstitutable. The -- just the inherent challenges of the 505(b)(2) products around labeled risk, market penetration due to having to go out and build a commercial organization without data, all historically have really made these products largely unsuccessful from a commercial perspective.

And so I think the short answer candidly is we don't view the 505(b)(2) products as a meaningful commercial risk to our CABOMETYX business. And our focus is really on 2 things: ensuring patient safety, are these 505(b)(2) products ultimately good for patients, and that was kind of at the heart of one of our concerns about that program. And then second is ensuring our intellectual property and asserting our IP rights when appropriate.

Got it. And how should we be thinking about the IP property until the end of the decade? Is there anything there that is concerning? Or when should we be thinking about loss of exclusivity and just erosion of sales for cabo?

Yes. I mean I think one of the truisms in biopharma is the more successful you get, the more legal problems or legal challenges you'll face. And so our -- we run our business with the assumption around cabo generics emerging January 1, 2031. That's when we've announced settlements with Teva, Cipla, others around kind of a true cabo generic. Between now and then, obviously, there's always litigation. There's always things like last week or a couple of weeks at the end of last month, we won on appeal with MSN. But 1/1/31 from our planning purposes is probably the best date to use.

Got it. Very helpful. Okay. So maybe switching gears a little bit to zanza. We got the non-liver met STELLAR-303 analysis. How confident are you in securing an all-comers label come December?

Yes. I mean we based the filing on the ITT population or the filing was the data from the ITT population, which is all comers. And so I think that's what drives our confidence. The data that we presented at ESMO of last year and subsequently published really shows that consistency of benefit of the doublet across all of those different subpopulations. The non-liver met outcome really is probably the result of probably not enough power in that specific subpopulation. But just as a reminder, kind of that ITT group was inclusive of both patients with and without liver mets. And so our filing reflects that.

Got it. What has been the feedback from doctors from all the data that you've shared so far? And what percentage of patients have -- don't have liver mets? And what -- how are you thinking about like penetration in the?

Yes. So I don't think that our -- the market research and kind of all of our conversations around the combination certainly doesn't focus on the liver met, non-liver met dynamic. It's much more about having an opportunity for patients to gain access to this doublet. So there's the chemo-free component of it. There's the checkpoint containing component of it. There's the fact that data -- the benefit is there regardless of prior Avastin use. It's all of those different things that kind of sum up to a high degree of enthusiasm from the patient and clinical community to potentially have a new treatment option for these patients.

Coming back to the -- one of the things that I mentioned that kind of consistently comes up is that checkpoint containing dynamic. So if you think about how CRC is treated, there's certainly the academic centers, but perhaps more than other tumor types, there's a pretty large contingent of the community prescribers as well. And given that they tend to treat lung cancer, RCC, liver cancer, all these different types of solid tumors and beyond, there's kind of this inherent familiarity with checkpoints that up until now, patient watching the Super Bowl and sees a bunch of ads for checkpoints, they go to their oncologists and say, "Hey, is this something that I could be eligible for?" Until the zanza data in STELLAR-303, the answer has been no.

But we think that this provides that opportunity to have kind of not only an active modality like a TKI, but also layer on that CPI component as well that I think kind of offers the best of both worlds. And if you look at our data that we've generated, certainly, there's a contribution from both of those.

Got it. Are there any specific types of patients that would particularly benefit from this approach or that would make up for this like early launch...

Yes. I mean, again, given the consistency of benefit, especially as kind of described in the forest plot, our goal, our plan is to kind of try and capture as much of that market as we possibly can. I think in the past, we've described kind of that third line plus CRC segment is about a $1.5 billion opportunity. And candidly, our job is to target as much of that as we possibly can because we think that this is a great opportunity for patients to have a new effective potential standard of care.

Got it. And you mentioned recently also the expansion of your GI sales team, not only to address the net launch, but also in preparation for your CRC launch for zanza. Maybe you can share with us kind of like the metrics there? And how should we be thinking about launch readiness?

Yes. So as you said, we -- and I mentioned earlier, too, we expanded the sales team earlier this year. We started the process late last year and pretty much everybody was on board by the end of the first quarter and started to have an impact really in the net indication during Q2 and continue to progress in Q3 and look forward to Q4. But from a CRC perspective, 303 perspective, we're launch ready. We'll be launch ready when we get approval. We've -- within our guidance, we've included our launch expenses and things like that.

So we've accounted for all that. And the commercial team is getting themselves ready and understanding the market through ad boards and things like that. And as Andrew said, there's been a lot of excitement around the fact that there is a checkpoint option now, and that's a key and important part of that, especially since a lot of this, as Andrew talked about, is treated in the community.

Got it. Should we be thinking about the launch as a PDUFA comes in potential approval and then you can launch right away? Or will you be waiting a little bit for zanza's launch?

Waiting for zanza launch. No, we'll be launching right away.

Right away. Got it. And do you expect any AdComs?

Yes. It's hard to say.

Yes. I mean, I guess what we've said is if we had been asked by FDA or informed by FDA for an AdCom, we would have let you guys know. But beyond that, I can't speculate.

Very helpful. Okay. And I mean, it's still a little bit early, but what factors should drive pricing and kind of like coverage?

Yes. We haven't talked about pricing specifically, but it's been a question we've gotten in a lot of the meetings today. I mean it's -- the way we look at it is it's going to be pricing contemporary to what's happened -- what's been happening more recently in the market. And so that's kind of the approach we're looking at, and we'll look at all different metrics in order to determine the correct price, but no specific comment on pricing today.

Got it. Okay. So maybe just shifting gears towards STELLAR-304, the non-clear cell renal cell carcinoma Phase III study. Just in terms of control, what's the bar, a lot of utilization off-label of the cabo combo there. How should we be thinking about what's success in that study? Is statistical significance enough? Or should we be looking at off-label usage as the bar?

Well, it's a complicated question. I mean, just as a reminder, all drugs with approved in RCC are approved in clear cell and non-clear cell. It's kind of an interesting dynamic within the oncology world where the labels are granted based on randomized data in the clear cell space, but have broader indication statements for essentially all RCCs. So cabo, like all other drugs in RCC is approved in non-clear cell. So it's not off-label use.

Got it.

But I think the challenge from a patient and physician perspective and actually kind of why we sought out to do 304 in the first place is utilization for the large part is really driven by answering the question, which small unrandomized study do I trust the most? The challenge with non-clear cell is just the data is -- there's never been a large randomized study done there. All of the inherent complications with overinterpreting unrandomized small studies kind of get amplified in a disease like non-clear cell where patients can be a little bit heterogeneous based on the subtype and all of those sorts of things.

And so what 304 really sought out to do is define a standard of care in that population. And so realistically, comparing the data when 304 reads out to some of these Phase IIs is really a true apples and bananas kind of thing just because of those complications we all have looking at interpreting and understanding limited small and Phase II data where maybe they over-index to a certain intermediate or favorable risk, all those different things that we all know. So 304 is an opportunity to kind of plant a flag in the ground with level 1 evidence and say this is potentially the standard of care in non-clear cell and kind of no longer be in that realm of how -- which small study do I believe or trust and interpret that into my patient that's in front of me. So that's really the dynamic.

Got it. So you mentioned non-clear cell has always been a little bit more challenging and kind of like there's no controlled studies. Why do you think this is? And what's the risk to the Phase III then?

It's a great question. I think, again, kind of as we started looking into it, we were figuring that out as well. I think one of the answers is, as I mentioned before, all of the drugs have labels that are inclusive of non-clear cell. And so cabo gets used there, SUTENT gets used there. Everything kind of gets used there. So it's just been a kind of a unique dynamic within the oncology world. And so again, the goal of 304 is to kind of definitively answer that question as opposed to really just try and gain as much share without -- in the absence of large data sets.

Got it. And you also mentioned some heterogeneity in the histology. Can you just remind us which histologies are included in 304? And how should we be thinking about the potential differences in PFS for one histology versus the other?

Yes. I think kind of without speculating on the data ahead of time, it's probably more relevant to talk about how we're excluding the chromophobe subpopulation. Again, that was kind of based on some relatively limited data sets that we had seen before. And so 304 is a relatively inclusive study. chromophobe is a pretty small subsegment of that, but we just wanted to make sure that we were successful in the study. So it's probably better to think about which ones we're excluding than kind of list all of the types.

Got it. Is the study large enough to really understand like the differences between the histologies?

Again, I don't want to speculate on the data, but we think it's a well-designed study.

Got it. Okay. And maybe just before we move away from non-clear cell, how are you thinking about the overall opportunity there?

I think if you look at the epidemiology of RCC, it's about 20% or so, kind of drilling into what that TAM looks like is a little complicated. Just as I mentioned before, everything kind of gets used there. So our goal is to capture as much of that 20% as we can with hopefully, data, but it's really going to depend on what it looks like.

Got it. Maybe switching to clear cell. And here, you've pursued the strategy of combining with HIF-2. Where do you think zanza can really establish itself within the clear cell space?

Yes. I mean we're really excited working with our partners, Merck, on the 033 and 034 studies, both areas where we think kind of there's this high unmet need, in particular, kind of looking at LITESPARK-012, where the survival data of pembro on the adjuvant side is really driving a lot of utilization there for appropriate patients. When they do kind of -- if they do ultimately progress, the question becomes, well, what should they get.

The data across the industry has consistently shown that probably retreatment with a checkpoint has historically been much less effective. And so Exelixis and our partners, Merck, are kind of at that forefront of answering the question of what should be the standard of care. Same is true with 034, where, again, as part of that patient journey in the second-line plus segment, does the combination of zanza and belz kind of improve the outcome for patients there. And so we think that the kind of potential differences and really best-in-class profile of zanza pair well with a HIF like belzutifan. And then really, the question that we get asked a lot is, well, what's next in RCC.

With the failure of the LITESPARK-012 study, that was the frontline len/bel/pembro study really kind of opens the door for someone like Exelixis to kind of come in and really take that opportunity. And so that's something that we're focusing on pretty carefully and making sure that the biology is driving that decision and how do we really establish that new standard of care there. So something to pay attention to.

Got it. Do you think that the combination agent of choice in terms of HIF-2, belzutifan plus zanza? I do you think that makes a difference? Or is it more of selecting the proper TKI?

I guess time will tell, so to speak. We certainly think that belzutifan is a very effective HIF-2 agent. I mean if you look at what the combination provides is it really the firepower and the low primary PD dynamic as well as just zanza on its own is a good drug. But combining it with a drug like belz, we think covers a lot of bases. And so the question is a best-in-class TKI with a very, very strong HIF, can that benefit patients, and we certainly think, yes.

Got it. So maybe shifting gears to the net opportunity for zanza and the first-line study here. Does the slower kinetics for the second line, does that change your view on the opportunity for zanza in the first line and kind of like overall opportunity within NET?

Yes. I mean I think we continue to be very excited about NET overall. Again, coming back to kind of this kinetics versus market opportunity perspective, and we're certainly focused on the overall market opportunity. We view NET in totality as one of the core franchises for Exelixis. Taking a step back, franchises is probably the best way to think about the company overall.

We have kind of the individual product franchises like cabo and zanza where there are multi-indication drugs. But say, within other degree is either RCC or NET, where we have multiple products, multiple programs within each of those. And so NET is one of the core franchises at the company. It's one we're executing on with cabo, investing with zanza and certainly investing with our earlier pipeline as well. So we think it's historically been greatly underserved, and we really have the chance to be kind of the dominant player there. So we're certainly very excited about 311 as well as kind of what's next from the kind of next things we're going to do.

Got it. Does the difference in kinetics impact the way you think about trial enrollment for 311?

No. I think someone asked us on the last call of actually 311 was having an impact on cabo, probably a little bit on the margin. But I think that temporal dynamic is much more of a factor than how we're seeing patients. But it's certainly not lost on us that the enthusiasm for zanza in the 311 study and kind of that pace of enrollment that we're seeing is certainly something to consider.

Got it. And maybe I just wanted to touch upon the meningioma opportunity. I feel like we don't really get to talk about it too much. Is the Phase II study could potentially support an accelerated approval? And how should we be thinking about the response rate there and the unmet need?

Yes. I mean, again, all this is data dependent. But if we're able to show a robust response rate, given the high unmet need for this patient population, it's certainly something that we could pursue. It's all kind of data dependent, so to speak. But our goal, our hope is we can generate as high of a response rate as we possibly can, just given that these patients really don't have many effective options. And it's really based on kind of a foundation from some early data we've generated with cabo that would suggest that there's real promise here.

So I don't want to get ahead of ourselves on kind of what that regulatory path looks like, but we want to do whatever we can to kind of help patients here just given the absolutely high unmet need.

Got it. Maybe given that there's not a ton of studies in this space that have been successful, just like what does robust efficacy look like in this space? And based on other types of accelerated approval, it's been mostly in response rate and duration of response. Is this what we should be thinking about when looking at this data potentially in the future when you share it?

Yes. I mean the primary endpoints, response rate, secondaries, duration, PFS, OS. But given the relatively indolent nature of meningioma, maybe that's a little bit longer term of an endpoint. Beyond that, I can't really speculate on what the bar is other than our goal is to generate as robust of a data set as possible just so that we can help patients.

Got it. What has been the challenge within these patients that's driving this lack of systemic therapies?

The biology, I guess, is probably the simplest and finding that right combination of targeted biologic-based activity, tolerability and focus as well. I think historically, it's probably an underinvested indication, same as NET. I think we're kind of the strongest voice out there, so to speak, in the NET community. So at least on the branded side. So a combination of a lot of those things.

Got it. And how should we be thinking about the market opportunity in this space versus the NET opportunity or the CRC opportunity?

So we haven't really defined specifically what the TAM in meningioma is, but we think it's quite significant.

Got it. Okay. So maybe just -- in terms of what's next beyond zanza, I mean, we haven't seen a lot from the early pipeline, but maybe can you share what are you the most excited about? And is there perhaps an R&D Day planned or something where we're going to learn a little bit more about the activities there?

So cadence of R&D days, I think everyone would kill me if we did them more than once every 2 years. We just did one in December. So it's a lot of planning and logistics goes into each of those. I think our focus really is generating as much data as quickly as we can to come to a go/no-go decision because ultimately, that's kind of our focus is do we want to invest in late-stage studies for this program? Does the program have the potential to become a new standard of care in indication X or multiple indications X?

Does it have the potential to be that next franchise molecule beyond cabo zanza? Kind of that's our focus. And so the dynamic there is instead of putting out a press release that here's 10 patients, here's 4 responses and declaring victory, let's generate a data set that gives us a reasonable sense of what the profile is versus what it could be and then that informs kind of that go/no-go. So from a capital efficiency, capital allocation, capital investment perspective, we want to make sure that we're making informed decisions on that expensive part of the development curve, which is late stage. And so we want to make sure that we're moving the right assets into late-stage development as we can. We can only do that if we ask the right questions and generate the right data.

Got it. So maybe just following up on this. We've seen how a no-go decision looks like. It's usually during earnings. But how does a go decision look like here? Would you share it during earnings? Would you share it with some kind of presentation or medical meeting, company?

Yes. I think it -- honestly, it all depends on the situation that we're in at the time. So it's -- I wouldn't want to say we're going to do it one way or another. I mean it's just -- it will all depend on the actual situation.

Got it. And maybe just last question for me in terms of you've been doing share buybacks. How do you plan to balance that with business development? You were talking about it a little bit at the beginning. Like are there any particular therapeutic areas I'm assuming or types of mechanisms that you're looking at?

Right. So we look at capital allocation in 3 buckets, right? We talk about R&D at $1 billion or less every year. We look at BD deals that Andrew and Stefan look at BD deals all the time. And it's primarily focused on GI and GU areas. And then from a share buyback perspective, through last quarter, we had done about $2.9 billion of share buyback from 2023 to second quarter '23 to second quarter '26. retiring about 90 million shares. And so that -- and we have about $600 million left on our current authorization as of the end of last quarter. So that is also a key part of capital allocation. So all 3 of those buckets are a key part of the capital allocation game that we're play. I don't know if you want to talk about...

Importantly, I think they're not mutually exclusive either. And so we think that kind of the -- our financial profile allows us to invest kind of in all 3 buckets concurrently. And from a BD perspective, we want to make sure we get it right.

Got it. We're out of time. So thanks so much for joining us today. This was incredibly helpful.

Thank you.

Thank you so much.

Good day, ladies and gentlemen, and welcome to the Exelixis Second Quarter 2026 Financial Results Conference Call. My name is Kathleen, 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, Mr. Andrew Peters, Senior Vice President of Strategy and Investor Relations. Please proceed.

Thank you, Kathleen, and thank you all for joining us for the Exelixis' Second Quarter 2026 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; Dana Aftab, our Executive Vice President of Research and Development; and P.J. Haley, our Executive Vice President of Commercial, who will review our progress for the second quarter 2026 ended June 30, 2026.

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 in the future performance of the company. This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial and strategic matters, potential growth opportunities and government drug pricing policies and initiatives.

Actual events or results could, of course, differ materially. We refer you to the documents we file from time to time with the Securities and Exchange Commission, 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 the discovery, product development, business development and commercialization activities.

With that, I'll turn the call over to Mike.

All right. Thank you, Andrew, and thanks to everyone for joining us on the call today. Exelixis continues to execute across the key elements of our business, positioning the company to deliver on our strategic objectives for 2026 and beyond. We are in the early innings of our next phase of growth as we deliver on our strategy to evolve from a single compound company to one with a pipeline of potential oncology franchise opportunities. Zanzalintinib is poised to transform Exelixis as our next franchise molecule, potentially first, with the third line plus CRC filing that's currently under review, followed by accelerating progress on the next 6 pivotal trials that we've highlighted recently.

Importantly, a second wave of trial is mining up nicely to initiate potentially as early as 2027. Our confidence in cabo's long-term revenue growth trajectory remains unchanged. The updated financial guidance reflects modestly slower growth in 2026 and due to a more gradual ramp for the net indication, which reflects the unique characteristics of the net patient population and histology. We remain confident in the long-term potential of the cabo net indication and view the net franchise as an important growth driver for cabo, zanza and other molecules in our pipeline.

We continue to see meaningful opportunities to expand our impact for patients, strengthen our commercial position and create value for shareholders. Our strategy to build a multi-franchise oncology business contains 5 key elements, including: first, execution. Zanza is leading the pack as our next potential franchise opportunity and our highest R&D priority. The XL team continues to execute on key objectives across the program, including the STELLAR-303 regulatory review, pivotal trial data readouts, expediting clinical trial enrollments and new study initiations. The second is expansion. We are building the foundation for the next wave of growth opportunities for zanza. Beyond our current pivotal trials, we are actively evaluating new development opportunities that could further expand the scope, reach and long-term value of zanza in GU, GI and other indications.

Our goal is to build a durable franchise with stacking capabilities that could drive growth for years to come. The key element is commercial performance. We continue to see substantial growth from the cabozantinib franchise. Cabo remains the leading TKI for RCC the market leader for the oral second-line plus net segment and a key player in the treatment of patients with liver and thyroid cancers. Second quarter 2026 U.S. cabo franchise net product revenues grew approximately 10% year-over-year to $573 million. Continuing this role as a worldwide leading TKI, Global cabo franchise net product revenues generated by Exelixis and its partners grew approximately 13% year-over-year to $806 million in the second quarter 2026.

Fourth is preparation. We continue to prioritize our commercial readiness for the potential launch of zanza and third line plus CRC, pending a positive regulatory review later this year. We led the CRC opportunity represents an important first step towards establishing an as our second oncology franchise and a significant driver of future growth. We see this element of our strategy is especially timely as we pursue new GU and GI indications specifically in tandem, early and late-stage opportunities in CRC with STELLAR-303 and STELLAR-316.

Fifth and finally, discipline. We remain committed to rigorous expense management and capital allocation. This can be seen by trimming expense guidance, while we invest in our mission-critical R&D priorities and keeping our projected free cash flow essentially unchanged. We believe this balanced approach remains an important differentiator and positions us to create long-term value while maintaining strategic flexibility. Taken together, these 5 strategic elements, working in tandem, understrength of our strategy and the progress we are making across the business.

We believe we are well positioned to advance zanza towards becoming a major oncology franchise expand our development portfolio, drive continued growth to the cabozantinib franchise and deploy capital in a disciplined manner to maximize shareholder value. So with that, please see our press release issued an hour ago for our quarterly financial results and a comprehensive summary of key corporate milestones achieved during the period.

And with that, I'll turn the call over to Chris.

Thanks, Mike. For the second quarter of 2026, the company reported total revenues of approximately $629 million, which included cabozantinib franchise net product revenues of $573 million. CABOMETYX net product revenues were $571 million and included approximately $2.7 million in clinic trial sales. As a continued reminder, clinical trial sales have historically been shale, and we expect this to continue into the future. Gross to net for the cabozantinib franchise in the second quarter 2026 was 29.5%, which is lower than the gross to net we experienced in the first quarter 2. This decrease in gross to net deductions in the second quarter 2026 is primarily due to lower co-pay assistance for commercial patients, which is partially offset by a modest increase in 340B utilization when compared to the first quarter of 2026.

Additionally, we're updating our estimate for full year 2026 gross to net deductions, and we are now projecting that it will be between 30% and 31%. Our CABOMETYX trade inventory was flat at 2.1 weeks on hand at the end of the second quarter 2026 when compared to the first of 2026. Total revenues in the second quarter of 2026 also includes approximately $53 million in royalties earned from our partners, Ipsen and Takeda on their sales of [indiscernible]. Our total operating expenses for the second quarter of 2026 were approximately $380 million compared to $359 million in the first quarter of 2026. The sequential increase in these operating expenses was primarily driven by higher clinical trial costs marketing expenses and stock-based compensation.

Provision for income taxes in the second quarter 2026 was approximately $50.6 million compared to a provision for income taxes of approximately $57.2 million for the first quarter of 2026. Company reported GAAP net income of approximately $212 million or $0.85 per share basic and $0.82 per share diluted for the second quarter of 2026. The company also reported A net income of approximately $237 million or $0.95 per share basic and $0.91 per share or we diluted. Non-GAAP net income excludes the impact of approximately $25 million of stock-based compensation, net of the related income tax effect.

Cash and marketable securities for the quarter ended June 30, 2026, for approximately $1.4 billion. During the second quarter of 2026, we repurchased approximately $312 million of the company's outstanding common stock, resulting in the retirement of approximately 6.5 million shares of the company's outstanding common stock at an average price per share of $47.95. During the second quarter, we did the October 2025 stock repurchase program. As of the end of the second quarter 2026, we had approximately $598 million remaining under the $750 million stock repurchase plan authorized by the company's Board in May of 2026.

And finally, we're updating our full year 2026 financial guidance. We are lowering and narrowing our total revenues and net product revenue guidance, which lowers the midpoint by $50 million when compared to our previous items. This updated financial guidance reflects modestly slower growth in 2026 due to a more gradual ramp for the net indication than the original projection. Additionally, we are reducing R&D expense guidance, lowering the midpoint of our R&D expense guidance range by $50 million when compared to the previous guidance. Details of our full year guidance can be found on Slide 14 of our earnings presentation.

And with that, I'll turn the call over to P.J.

Thank you, Chris. CABOMETYX net product revenue grew 10% year-over-year for Q2 2026 relative to Q2 2025. Revenue growth for the first half of 426 was modestly slower than we had anticipated due to a more gradual ramp in the growth of net in the second line plus setting due to patient connects. Importantly, we are pleased that cabo has achieved second line plus oral class new patient market share greater than 45%, and we believe this is a leading indicator for future growth of the net business. The RCC business continues to grow as we have a strong promotional focus on our first line 9ER data, where we maintain a high market share as the #1 TKI plus IO combination in addition to being the #1 prescribed TKI in renal cell carcinoma.

Prescription data in the oral TKI market basket of cabo, lenvatinib, axitinib, sunitinib and pazopanib convey the strength of cabo relative to the competition. Looking at the TRx comparison, Q2 2025 to Q2 2026, CABOMETYX grew 2 share points from 45% to 47%. Additionally, CABOMETYX TRx volume grew 12% in Q2 2026 compared to Q2 2025. And outpacing the growth rate of the market base, which was 6% for the same period. CABOMETYX was approved for net about a year ago, and we have many learnings regarding this unique tumor type. Net is heterogeneous and generally more indolent than many more aggressive solid tumor malignancies.

As we have been in the market speaking with physicians and conducting advisory boards, we have learned that this may lead to differences in management of these patients. Sometimes net patients are scanned less frequently than a standard 3-month interval and often a patient's disease may be relatively slow growth. Furthermore, the initiation of subsequent therapy could be less urgent for some patients, resulting in attenuation of a current treatment or sometimes a treatment break. Hence, the patient kinetics of NET in the second line plus setting can be more gradual than other solid tumors.

That said, we continue to be pleased with the market dynamics as the CABOMETYX [indiscernible] oral new patient grew substantially in the second quarter to over 45%, extending the brand's leadership position in the space. We have begun to see the benefit of more patients on therapy as refills are driving more demand and given the increased new patient market share, we expect refills to continue to increase going forward. Market research indicates that there is opportunity to continue to grow market share, particularly in the community setting.

Our expanded GI sales team was in the field providing greater reach into the community in Q2, and we believe this contributed to an increase in our second-line plus net market share. We also acquired and implement granular utilization data it gives us greater resolution on the net business at the prescriber level for certain segments of the market. These data are giving us the ability to optimize our promotional efforts through refined targeting [indiscernible] to highlight the potential for cabo growth in net, and we remain confident that as patients seek treatment after which will translate into a robust long-term opportunity.

Our new representatives joined us with significant oncology sales experience, particularly in colorectal cancer and GI oncology. The expanded sales team will gain valuable experience selling cabo before we turn our focus to the potential launch of zanzalintinib in colorectal cancer. As we're thinking about building on and expanding our GI franchise, we're thrilled with the results of STELLAR-303 and a PDUFA date set for later this year. Pending regulatory approval, we believe that these data would provide Exelixis with a compelling commercial opportunity in 1 of the big 4 tumors.

Third line plus CRC setting consists of approximately 22,000 patients in the U.S. and represents an overall opportunity of $1.5 billion in terms of contemporary pricing. Our market research and advisory boards demonstrate positive feedback and excitement for the STELLAR-303 data. Physicians reiterate the significant unmet need for patients in the third-line CRC setting and are excited for the potential to have a an immune checkpoint inhibitor available for the broader population of CRC patients.

CABOMETYX business remains strong, with growth being driven by both RCC and NET as our team's sole focus is maximizing the impact of our promotional efforts across all customers and tactics. Cabo remains well positioned as the #1 TKI and TKI plus IO combination in RCC as well as the #1 oral therapy in second line plus NET. Looking forward to zanza, our internal team is in full launch preparation and the excitement around these efforts is palpable. We look forward to the opportunity to launch the next Exelixis franchise later in the year to be able to help appropriate patients with colorectal cancer.

Beyond STELLAR-303, we are enthusiastic about the significant development plan for zanza, which could position the zanza franchise to far exceed cabo in terms of the number of patients that could be impacted across tumor types and settings.

And with that, I will turn the call over to Dana.

Thanks, PJ. My update today will be focused mostly on the 7 ongoing or imminent pivotal trials for zanza as well as some updates on additional exploratory studies and plans to continue driving the breadth of development to zanza, all of which is aligned with our strategy in R&D, which prioritizes developing zanza as a multidimensional solid tumor oncology franchise molecule.

Starting with our NDA for zanza plus atezo in colorectal cancer, which is based on the results from the STELLAR-303 trial. This continues to be our top priority as we work toward the PDUFA date in early December. Our team continues to focus on the ongoing review and is fully engaged in launch preparations. Alongside those activities, we've also been steadily moving forward on our strategy to realize zanza's franchise potential by continuing to drive the breadth of development of zanza in key tumor landscapes and indications. In the early colorectal space, our team has been highly focused on launching the [indiscernible] trial, which will investigate zanza with and without subcutaneous pembro in patients with resected Stage II or III CRC who, following definitive therapy have tested positive for molecular residual disease or MRD and have no radiographic evidence of disease.

The unmet need is high for these patients, and we've gotten a lot of positive feedback on the study from KOLs in the GI oncology community. Activation of the first site in this trial is imminent, with many more lined up behind it, and we anticipate patient screening to begin this month. With Natera as our collaborator, we've been able to select sites based on actual test metrics, prioritizing those with the highest numbers of MRD-positive patients. So we're confident this approach will translate to a steep enrollment curve, especially since there are no other ongoing Phase III trials competing for these patients.

In the [indiscernible] in STELLAR-311 is our global Phase III trial evaluating zanza compared to everolimus as an initial oral therapy in patients with pancreatic or extrapancreatic neuroendocrine tumors. That study was initiated last year, and we continue to see robust enrollment that is months ahead of projections, reflecting both investigator and patient enthusiasm for the study.

Moving on to genitourinary tumors and kidney cancer specifically. STELLAR-304 is our first pivotal trial for zanza in kidney cancer, evaluating the combination of zanza plus nivolumab versus sunitinib in patients with locally advanced or metastatic non-clear cell renal cell carcinoma. I'd like to emphasize that the non-clear cell RCC space is underserved with no positive readouts from a Phase III study, specifically focused on these patients despite them representing approximately 20% of all RCC cases. A handful of Phase II studies, the majority of which are single-arm, nonrandomized trials have shown activity with a range of treatments in this setting with wide variations in response rates and durations of PFS for sunitinib and other agents that are currently patients.

Such variations are to be expected when comparing data across trials, especially when those trials are small and geographically restricted. Given the fact that STELLAR-304 is the first large randomized controlled Phase III trial for these patients and is also enrolling globally. We expect that, if positive, the trial could establish the first ever Level 1 evidence for benefit and a new standard of care for these patients. We completed enrollment in STELLAR-304 last year. And given current event rates, we continue to expect top line results from the study in the second half of 2026.

If positive, those results could lead to our second NDA filing for zanza. Pivoting now to clear cell, our progress continues with regard to the 2 pivotal Phase III studies that Merck is running to evaluate zanzalintinib in combination with belzutifan. The Light SPARK 033 trial is comparing zanza plus bells versus cabo in the frontline setting for patients who received adjuvant treatment with anti-PD-1 or anti-PD-L1 therapy. And Light Spark 034 is comparing zanza plus bells versus bells plus placebo in the second-line plus setting after both anti-PD-1 or L1 and VEGFR TKI therapies.

We're excited to see these Phase III studies in clear cell RCC moving forward, and we believe there are other important opportunities to explore in this space, nearing zanza with other modalities and orthogonal mechanisms in first-line RCC, especially immuno given the demonstrated clinical differentiation we've observed with zanza and its potential to be the TKI of choice for combinations with immunotherapies as well as other mechanisms of action. Our discussions with potential collaborators have been advancing well, and we plan to give further updates on these activities as we get closer to launching the trials.

Moving on now to other indications in the GU space. We're excited to advance an expansion cohort in the ongoing STELLAR-002 study to evaluate zanza in patients with metastatic bladder cancer who have progressed on the combination of enfortumab vedotin or EV plus pembro. The rationale for this cohort is based on a significant body of data generated with cabo showing encouraging activity in bladder cancer. Bladder was not prioritized for pivotal development with cabo due to the rapidly changing landscape at that time. What's changed since then is the approval of the combination of EV plus pembro in multiple settings, including in the front line for patients with metastatic disease.

This resulted in an important new standard of care for these patients, but very quickly a new unmet need emerged with essentially no established standard of care for patients after they progress on the combination. We're enrolling a cohort in STELLAR-002 evaluating zanza as a single agent in patients who progressed on EV plus pembro, and we're already seeing encouraging signs of clinical activity. It's early days. But if the data continue to develop in this way, we plan to move quickly toward launching a pivotal study in this indication. Another expansion cohort, zanza in the STELLAR-002 study is in combination with docetaxel in patients with metastatic castration-resistant prostate cancer, or CRPC, who have measurable disease.

The rationale for this cohort is based on data with cabo where a small Phase II study showed favorable out cabo was combined with docetaxel in patients with metastatic CRPC. We're particularly excited about this cohort because if zanza in combination with docetaxel is shown to be safe and active, that could open up a number of opportunities across a range of solid tumors where docetaxel, other chemotherapies or ADCs carrying cytotoxic payloads remain the standard of care, such as in second-line non-small cell lung cancer. Sites for this expansion cohort in STELLAR-002 are now activated and open for an on.

Moving on now to STELLAR-201. This is our Phase II trial evaluating zanza in patients with recurrent meningioma who are no longer responsive to or eligible for local therapies. The primary endpoint of this trial is objective response rate with secondary efficacy endpoints, including duration of response, progression-free survival and overall survival. The trial will enroll up to 100 patients and our enrollment in this trial so far is exceeding our initial projections which we believe reflects the high level of interest and enthusiasm for the trial among neuro-oncologists.

One factor driving excitement for this study is the fact that there are no accrued systemic therapies for magma that's refractory to local therapies, so this indication represents a very high unmet need in neuro-oncology. Pending favorable results and given the absence of any approved systemic therapies in this setting, the STONE 201 trial could be an important opportunity for zanza to become the first systemic therapy that could improve outcomes for these patients.

Lastly, we've been making steady progress toward a nation of STELLAR-202. Our planned Phase II trial in squamous non-small cell lung cancer that will explore the addition of in the maintenance phase after induction with pembro chemotherapy. The rationale for this trial is partly based on data from the CONTACT-01 trial, for the subgroup of non-small cell lung cancer patients with squamous histology appear to derive substantial benefit from the combination of cabo plus atezo compared to chemo. This is an important opportunity given the relatively short PFS in the maintenance setting and the lack of any new approvals in frontline squamous non-small cell lung cancer since KEYNOTE-7 established the current standard of care with pembro plus chemo.

We expect to initiate STELLAR-202 in the second half of this year. Now shifting to our early clinical pipeline, our 4 molecules currently in clinical development, namely XL-309, XB-010, XB-628 and XB-371 continue to progress and we are also continuing to move new small molecule NAVC programs towards IND filings and development candidate nominations, and I look forward to sharing more details as these programs advance.

So with that, I'll turn the call back over to Mike.

All right. Thanks, Dana. To close today's call, I'll start by thanking the entire Exelixis team for their great efforts during the first half of the year. 2026 continues to be a potentially transformational year for the company, and everyone at Exelixis is working together as one team with a single focus to improve outcomes for cancer patients and build value for all our shareholders, advancing zanza as our second potential franchise opportunity remains our top priority while we use the revenues from cabo's growing business to invest in the pipeline while returning value to shareholders through our share repurchase program.

I want to thank everyone at Exelixis for their individual and collective efforts, incredible focus as we work day in and day out on our mission to help cancer patients recover stronger and live longer. 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 Instructions]

And our first question comes from the line of Paul Choi of Goldman Sachs.

I want to ask on STELLAR-304 and timing. Do you think this is something that might be able to make a major medical meeting this year? And just any sort of updated precision on data timing that you could offer would be great.

Dana, go ahead, please.

Sure. Thanks for the question, Paul. So as I said in the -- in my prior remarks, we are expecting to achieve the planned number of events in the second half of this year -- appropriate for me to speculate on when exactly that's going to happen or even when the data will be available at a medical meeting. What I can say is that we will message on that at the appropriate time.

And your next question comes from the line of Akash Tewari of Jefferies.

This is Anastasia for Akash. So I wanted to ask about your first-line post adjuvant study. Specifically, I think you guys have made a comment about maybe like a 15,000 patient population. I'm wondering if that changes at all based on LITESPARK-22 study, the one that had improved DFS. Do you anticipate patients will start switching to to an already existing like the pembro plus 52 alpha. And if you do, does that reduce your patient population? How are you viewing that data?

Yes. Thanks for the question, Anastasia, this is P.J. I think obviously, very early days for the the LITESPARK-22 combination just getting approved with bells in the adjuvant setting. I think what we see in the first-line setting in terms of patients overall coming off of previously treated adjuvant therapies in that kind of the 20% to 25% range of first-line patients. I wouldn't want to speculate with regards to how much utilization -- the combination will be used in the adjuvant setting. But I will say, historically, that setting is one that's very sensitive to toxicity. This is, I think, a reason that agents with positive studies such as sunitinib really didn't get uptake in that in the past. And I think with the overall survival bar, that pembro monotherapy is set there it's a very high bar to beat. So I think physicians will think very carefully as to whether or not they want to add toxicity in terms of another agent in this setting.

[indiscernible] Andy Hsieh of of William Blair.

Sorry about the background noise. I'm just curious about your take on the ongoing STELLAR-311 study against the backdrop of the guidance lowering, whether there's a chance that it's cannibalizing cabo sales resulting in a more gradual ramp.

Yes. P.J., please?

Yes. Andy, thanks for the question. As Dana said, we're really excited, first and foremost, about the STELLAR-311 study. I've had opportunity to speak to a lot of KOLs, obviously, in the net space. I'll just say they're very excited about that study, as Dana said, is progressing well. So I think to your point, any time you do have a study that is recruiting, it does draw potential patients from the commercial patient pool, so to speak, and it can be a bit exacerbated in the smaller tumor type, for example. So we think that could be having a small impact. But I'd say, certainly, what I mentioned in terms of patient kinetics -- in terms of just patients taking a bit more time to go from therapy in subsequent settings is really the driving factor as it is a more indolent tumor type.

And fortunately, these patients, many of them may have the luxury of a little more time before going on to that therapy. That said, I think it's really important just to reiterate that I remain really excited about the opportunity in net. We're not really changing the outlook at all. As you mentioned, it's just kind of a -- the ramp is a little more gradual, but we're excited that we achieved new patient market share over 45% this quarter. And I think I'm sure you'll recall that we always talked about the the TAM in this setting is being about $1 billion for the oral therapy market in the second-line plus setting. So we're excited about that market share and eventually, those patients -- we believe when they do have a therapy selection, it will be cabo in most of those cases. So we're excited about that going forward.

Your next question comes from the line of Sean Laaman of Morgan Stanley.

Just with the CRC PDUFA date coming up later this year. What label language would be the most commercially meaningful? And what label limitations, if any, around liver mets prior therapy or subgroup interpretation do you think could could be real that may constrain uptake?

Yes. Thanks, Sean. Dana, want to take that one?

Yes, sure. So as I mentioned, Sean, earlier, the -- this is an ongoing review. Our team is highly focused and extremely excited, in fact, about what this can mean for the company, especially given the fact that -- if approved, this would be the first immunotherapy containing regimen for the vast majority of patients with this disease. And also, it would be the first launch of our next franchise molecule. So it means a lot for patients and for the company. So there's a lot of excitement around this. Beyond that, we really can't comment on an ongoing review and especially on the label that is really up to discussions with the agency.

And your next question comes from the line of Silvan Tuerkcan of Citizens Bank.

This is Josh on for Silvan. Congrats on the update. [indiscernible] shared their vision for $5 billion in revenue for zanza by 2033. Now I guess, 1.5 years from that point, can you highlight the progress made towards that goal? And if how the makeup of that projection has evolved since then?

Yes. [indiscernible] the question, yes, that number was given, I would say, late '24 around our view on what success aspirational view on what success could look like relative to our second franchise molecule. The fact that we have launched or about to launch 1 is imminent of the 7 pivotal trials with the next wave on the way, I think, speaks to the depth and breadth of the opportunity going forward. Super excited about what's already in the oven, if you will.

And then the next wave -- as you heard Dana talk about today, potentially involving other GU and GI indications, we think is potentially super valuable for patients as well as driving value for shareholders. Obviously, we have a lot of work to do. We're in the execution business, but we're committed to making this second franchise as valuable for patients and for shareholders as possible.

And your next question comes from the line of Kalpit Patel of Wolfe Research.

Just one on the ANDA's tentative approval. We've been feeling questions on that. And my question is if they do get the the conversion or they get the full approval, does that in any sense, accelerate the timing of the generic developers the agreements that you have in place before the 2031 time lines?

Yes. Andrew?

Kalpit, thanks for the question. can't really get into the specifics of the agreements that we've had with the other true ANDA generic filers. But I would note that the sort of scenario that you're describing isn't particularly common in these sorts of agreements. And so I wouldn't think it's something to expect.

And your next question comes from the line of Yaron Werber of TD Cowen.

Great. I have maybe kind of a dual part question. The first one on meningioma, STELLAR-201, so it's really encouraging to see how fast it enrolled. And we've seen in these areas that a single arm Phase II can lead to approval, how fast can you -- do you think you can generate data? Kind of what's the standard of care historically shown? And then secondly, just maybe just on ANDA, can you maybe walk us through some of the precedences on whether a new sort of salt can actually get NCCN guideline placement without generating clinical data?

Yes. Dana, why don't you start and then we'll do a quick turn over.

Sure. Sure. So thanks for the question, Yaron. Regarding STELLAR-201, this is a single-arm Phase II study designed to enroll 100 patients with meningioma, who have progressed on or are no longer candidates for local therapies. As I mentioned, it's a very high unmet need. There's no standard of care for these patients. And the excitement on the trial is really being driven in part by the emerging data from a small study with cabozantinib. So our intention is to bring the appropriate data to regulatory authorities at the appropriate time. But in the meantime, we're also in the process of designing a confirmatory Phase III trial. So as you're kind of hinting , this could be a very fast process. But the details of that really need to evolve over time. So we really can't comment on that at this time.

Andrew?

Yes, on so on the 505(b)(2) dynamics, a couple of things to mention here. As you know, there are pretty big differences between the kind of Standard ANDA pathway in the 505(b)(2), things like labeling, therapeutic equivalents, interchangeability. Those are all very different for 505(b)(2) products. You correctly pointed out the new 505(b)(2) is a different salt with very different properties around PK and some other things as we outlined in our citizen petition. And so as NCCN considers all of those dynamics and the real lack of clinical data, it kind of contrasts with other 505(b)(2) examples like Abraxane that have been successful in their adoption, but that has largely been based on large Phase III trials, large randomized Phase III trials, establish efficacy.

I guess kind of the key thing from Exelixis' perspective is we're focused on 2 things, patient safety and prioritizing our intellectual property rights, and we're going to continue to focus on those 2 things. But I think as you think about guideline recommendations, that patient safety dynamic is really important.

And your next question comes from the line of Michael Schmidt of Guggenheim Securities.

This is Michelle on for Michael. I just wanted to ask about STELLAR-304. It seems like enrollment ran for about 9 to 10 months longer than the original protocol suggested. So I was just wondering if you could speak a little to what drove that enrollment delay? And if you think that this extra time and follow-up means that the OS will be more mature top line than you had originally expected?

Sure. Thanks for the question, Michelle. It's Dana. So you're commenting on trial dynamics, right, where the numbers that you see in trials and progress posters by clinicaltrials.gov listings are all based on projections, right? But at the end of the day, enrollment happens as it happens. And we don't have a perfect crystal ball to understand how these dynamics are really going to play out. We put our best foot forward. But there's always some shift in these time lines, not just in enrollment time lines, but also in how the event rates come in.

So as I mentioned in my prepared remarks, we're -- and actually, I think we mentioned for the first time last quarter at the earnings call, that we are expecting the trial to read out in the second half of the year. It's still that now, right? We're still planning for the second half of this year. And again, that's our best estimate based on our event rates that are coming in currently.

Your next question comes from the line of Leonid Timashev of RBC.

Josh on for Leo. So I was wondering how you might be thinking about zanza playing alongside novel agents in nets like ADCs or some radio pharma programs that are out there?

Thanks. T.J., do you want to take that one?

Yes. So I mean, I think as far as zanza and NET, the study is designed -- and as Dana and I mentioned and I kind of reiterated earlier, a lot of excitement around this study is designed to really position zanza to be potentially the first oral agent in neuroendocrine tumors. Other modalities are there. Obviously, you have the SSAs, you have the radioligand therapies and then kind of the orals, I'd say overall, as you think about the space, those are the 3 high-level modalities. So given the fact that this is the first study Phase III randomized study to go to have the potential to read out positive relative to an approved oral agent success in this study would position zanza, I think, very well in the neuroendocrine tumor marketplace.

[Operator Instructions] And our next question comes from the line of Jason Gerberry of Bank of America.

This is Chi on for Jason. Question is on NET. Given your observation on cabo brand in the NET indication, do you expect to see similar patient inflow kinetic dynamic for sensor in NET? Or would you expect a different trajectory for zanza if you can secure a head-to-head data over everolimus in STELLAR-311? And just quickly, could you provide how much net contributing to cabo sales this quarter?

Yes. Thanks for the question, Chi. Again, I think when you think about zanza in NET, some of the things I've already spoken to here, the position it really potentially well, obviously, given a positive study, regulatory approval projecting here in the future. The fact that it is head-to-head as you point out, with everolimus. So a few things patient eligibility in the study, it will be positioned really is potentially a first or second-line agent. So I think when you think about that, that will change the potential for the kinetics of the patient flow in that setting.

So we would expect it to potentially be different. Obviously, very hard to to project given so many variables before we see the data out in the future. But I think suffice it to say, as I mentioned, the KOLs are very excited about the study. When our top physicians are excited about it, that always gives us excitement. So really looking forward to the readout of that study.

And your next question comes from the line of Etzer Darout of Barclays.

This is [indiscernible] for Etzer. You've previously talked about potentially partnering zanza in the same way that you did Cabo. Are you still looking to pursue that? Or are you going to try and keep an internal globally?

Yes. It's Mike. Thanks for the question. I think what we said previously is that we're looking at all options there. very carefully and very thoughtfully, taking into account all the different levers and, if you will, pulls and puts that are involved in potentially partnering something ex U.S. So still under evaluation. We have lots of options, lots of interest certainly, we expect that to continue to grow as we turn over more cards, hopefully positive in terms of pivotal trials. So stay tuned.

And your next question comes from the line of Ash Verma of UBS.

Just going back to the STELLAR-303 study in CRC, what is your best guess in terms of what might have driven this recent update at the nonlevered subgroup did not achieve [indiscernible] OS benefit? Is it possible some subgroup analysis was like underpowered? Or is it anything to do with atezo that might see some diminishing efficacy? And have you discussed this with the agency as a part of your ongoing review?

Dana?

Sure. Thanks for the question, Ash. So yes, regarding the non-liver met primary endpoint, as we announced, I think, in June that endpoint essentially did not meet statistical significance, although I'd say that the the treatment effect was very similar to when we announced the interim results of that endpoint last year when we released the data on the ITT population. So basically, over time, we really didn't see the data evolve to a point where it became significant. And as you mentioned, you pointed to one potential factor there. This is a very small.

This is a very small subpopulation of the study. The most important thing to us is that ITT population is the overall population, the entire population of the study. It includes both liver mets patients and nonlivermets patients, and those are the data that were the subject of the NDA that we submitted to the regulatory agency.

And your next question comes from the line of Stephen Willey of Stifel.

Yes. So I guess persistency with oral TKIs as maintenance therapy has historically been somewhat challenging across a number of different tumor types for various agents, I think mostly related to reasons that that PJ cited when he was talking about adjuvant RCC. So just curious, what can you do in the STELLAR-316 and 202 trials just to make sure that persistency doesn't end up confounding data interpretation?

Yes. So let me start, and Dana or PJ can opine if needed. So I think the key there, and thanks for the question, Steve, is really around picking the right dose and taking into account the patient population, their kind of general performance status and what they're progressing from or after their last treatment to be able to maximize any potential clinical benefit and therapeutic ratio. We feel like we've got a really good handle on that. Obviously, we have a lot of experience there with cabo from the standpoint of picking a lower dose with 9ER and really kind of looking at the temporal aspect of clinical benefit as opposed to an early response rate, which then you pay for later with potentially more tax.

So it's really balancing activity -- short-term activity with long-term duration to be able to give benefit. Obviously, some of the earlier maybe first generation or 2 of TKIs have some challenges there. We feel really good about that with zanza relative to the target inhibition profile, the pharmacodynamics, the short half-life. So whether it be 316 or 202 or even 201, we feel like we've got pretty good insight to be able to maximize that opportunity.

Thank you. And at this time, there are no further questions. So I will turn the call back over to today's host, Mr. Andrew Peters.

Thank you, Kathleen, and thank you all for joining us today. We welcome your follow-up calls with any additional questions you may have that we were unable to address during today's call. Have a good rest of your day.

Ladies and gentlemen, that concludes today's call. Thank you, everyone, for joining. You may now disconnect.

Great. We'll continue with the next session. I'm Paul Choi, and I cover this mid-cap biotech sector here at the firm. It's our pleasure to have Exelixis join us for this session. To my left is Andrew Peters, who heads up Strategy and IR. Maybe what we'll do is kick it off and let Andrew maybe describe the company's priorities and strategy for the balance of 2026 and going into 2027, and then we'll go into Q&A after that.

Yes. Sounds good. And thank you for the invite. Always a great conference, good meetings this morning and looking forward to the rest of the day. Just as a reminder, I'm going to be making some forward-looking statements today. So please see all relevant disclosures around the risks to our business and 2026 is an important -- big picture, I think the way that we tend to think about the world is through the lens of franchises. And kind of what I mean by that is it's kind of multidimensional.

So the idea, say, take something like cabo and zanza, where we're investing broadly in those molecules with multiple indications within each drug. And then within each of those indications, say, either RCC or CRC or NET kind of going broadly as well. So not only with zanza with multiple trials, say, ongoing with -- in CRC, but say, XB371, our tissue factor targeting ADC, some other areas as well. And then kind of broadly speaking, franchises within ADCs, franchises within small molecules, franchises within multi-specific antibodies. So that sort of thing.

So from a big picture strategic perspective, I think really what we're doing is transitioning from a single franchise company to a multiple franchise company. And what that means is we're going to maximize the value of kind of the cabo franchise, keep our eye on the ball and make sure that we're executing, focusing every day, every minute, every hour on getting cabo to patients while also getting ready for the launch of zanza in third line plus CRC and then executing from a clinical development perspective, the remaining 6 pivotal studies that we have ongoing there, while we're also investing in our earlier-stage pipeline, while we're also looking externally to potentially build out that third and that fourth molecule.

And then just lastly, taking kind of those cash flows that we're generating and investing in kind of the internal bucket that I mentioned before, externally and then focusing on some kind of more shareholder-friendly activities like buybacks. So big picture, the strategic question that I get a lot is that sweet spot, but it really is kind of that transition from a single franchise to a multiple franchise company and all of the individual things that are encompassed within that.

Great. Maybe let's start with your current commercial franchise with cabo and maybe more specifically, the addition of the NET indication in the past few quarters and how that's contributed to growth. Can you maybe just help us understand what percentage of the mix is that now? And sort of how do you envision that, I guess, at steady state as you look forward here?

Yes. So as we talked about in the last quarter, now that we're kind of 1 year post launch, frankly, for competitive reasons, we're no longer kind of breaking out specifically that NET contribution. What we have said is that when we reiterated guidance again on the first quarter call, we expect growth to come from both the RCC segment and from NET. The NET indication is one we're really excited about. It's a high-priority franchise for us, not only kind of the cabo investment that we're making, but also kind of what we're doing with zanza and then some of our earlier-stage studies.

So I think it's that dynamic that we're really focused on. The only other thing I'd add there just on the NET side, as you know, we added to our sales force earlier this year in part to continue to maximize the effectiveness and momentum around the launch in the NET indication, but also to kind of hit the ground running, so to speak, ahead of a potential zanza approval later this year as well kind of in that similar space. And so it's a little bit of a two-pronged effort.

Ahead of zanza coming up here. Great. I am curious, though, can you provide some color on where you're seeing the most cabo utilization in NET where are you seeing in terms of settings versus chemo and radiopharmaceuticals and any particular patient subgroup, whether it's pancreatic or extrapancreatic?

Yes. I mean, as P.J. has talked about in the last couple of earnings calls, the launch is going really well. It's the #1 oral now in kind of new patient starts in that second-line plus segment. And so it's really reflective of the data. And if you look at CABINET broadly, I think one of the things that's most encouraging about it is just the robustness across each of those subcategories or subsegments of patients. And so we're really seeing use kind of across the board. I'd say nothing in particular jumps out, but that's kind of the benefit of having such a broadly robust data set.

Great. You also mentioned earlier, and this, I think, continues to surprise investors this many years into the launch is that you're continuing to see RCC growth and what people sort of write off as a much mature market, but you continue to gain share sequentially quarter after quarter, you're approaching about half the market, roughly speaking. in terms of market share.

And so can you maybe articulate for us where this growth continues to come from? Is it from duration of therapy? Is it just more share gains versus other small molecules, increased utilization of IO and TKI combo? Maybe just some color there would be helpful.

Yes. I mean, as we've talked about kind of the data that we've provided is additional share gains. And we go out and fight every day for that incremental share point because we understand what that means from a value and from a revenue perspective. But someone asked the other day like why or how. And it's really simple, good data and good team and the data that we've generated and the data that we continue to generate, say, kind of long-term 5-year data and all of these updates that you see at conferences like ASCO GU or when they're presented, that gives an opportunity for our commercial organization, for our reps to go out and have conversations with clinicians about why we think that cabo/nivo should be the preferred option for these patients.

And having the right team in place to then go out and have those conversations and interactions with prescribers is really, at the end of the day, the recipe for success. And that's something that our maniacal focus on cabo and the success of cabo, we're not distracted by 1 million other different things. It is something that I think makes us relatively unique. and is something that, as you mentioned, we're seeing continued growth this far after approval. It's something we're really proud of.

Great. I want to turn to zanza here, and we were all at ESMO last year. And so maybe could you briefly recap the STELLAR-303 data for us and then contextualize what do these data imply for its use in sort of previously treated metastatic CRC here?

Yes. So the STELLAR-303 is really interesting study kind of strong foundation, let's say, to help build zanza where we think it could go to ultimately be candidly bigger than cabo. So that study was looking at zanza plus atezo versus regorafenib, which is the standard of care in that kind of third line plus space, showed a statistically and clinically meaningful improvement over the standard of care on overall survival, which is the gold standard in oncology.

And I think the important part of that, roughly 11 months, 10.9 versus 9-ish months in the control arm is really that consistency of data and that consistency of benefit across the board. That's something that has stood out in all of our market research, not only around the different patient populations, but even say, looking at things like prior treatment with, say, Avastin, where other studies say may have seen a little bit of a different dynamic, different efficacy across whether patients had seen prior Avastin or not.

So that consistency of benefit is something that stands out. Maybe adding to that, we had a poster at this most recent ASCO conference, we had a pretty elegant way to -- and one of the dynamics there, and it shows that the combination of zanza/atezo does have an additive benefit for patients. Just the only other thing I'd add is kind of the 303 study was the latest in a series of up until then, unsuccessful attempts to get IO into this patient population.

And if you compare it to, say, prior studies like LEAP-17, at the end of the day, the biggest differentiating factor candidly, was probably zanza. And so it does, at least to me show that zanza is a differentiated best-in-class TKI. And that's why we're so excited not only about the 303 opportunity, but as I mentioned before, using that kind of as that foundation to build on from there.

I want to double-click on something you just mentioned here, which is use of IO in this particular patient population. I think people who treat colorectal are familiar with using KEYTRUDA and other IO agents in the MSI-high population, but it hasn't really been used in this particular later-line population, let alone in combination. And so can you maybe share your thoughts on whatever physician feedback has been both since that ASCO poster that you referenced and ESMO with regard to use of combination therapy here from the KOLs?

Yes. I mean that's actually something that has consistently jumped out in market research and conversations that we've had. I think if you take a little bit of a step back and think about the CRC market in general. One of the things that's a little bit different about CRC, say, than some of other tumor types is it tends to be a little bit more community-based than kind of academic KOL based. And what that functionally means oftentimes is these clinicians, these prescribers are treating CRC patients and lung cancer patients and RCC and kind of across the board.

So what that inherently means is they all have this high degree of familiarity with checkpoint inhibitors. And so up until now, their patients have come to them and said, "Hey, I just saw this commercial on the Super Bowl for this thing. Can it help me? And unfortunately, no, it's not approved for your type of cancer. Well, if zanza is approved later this year with atezo, the answer can be yes. And so that dynamic around patient awareness, physician familiarity, frankly, the chemo-free option for patients who have had a relatively long journey in CRC with multiple prior rounds of chemotherapy, all of those things kind of build into this market dynamic around an excitement around the doublet. And so it's something that you're right to point out, certainly comes up, but we're -- at the end of the day, we're eager to help launch this and get it into patients.

Great. Maybe one more question on KOL feedback before we move on is any sense from either the physician community at ESMO or more recently at ASCO, if there's a particularly readily identical patient population where an IO plus zanza combination would be most initially used, I guess, based on either the patient background, demographics or just sort of appetite to try an IO combination here?

Yes. I mean I mentioned it before, but one of the things that's most encouraging, I think, about the data set is just the consistency across subgroup. One of the dynamics that you can often see is in other studies at least, maybe an effect size in one particular subgroup driving the overall activity. We don't see that same dynamic here. And so as we've gone out to the market and kind of done a lot of this research ahead of time, that theme has actually played out that it doesn't really seem like it's just one particular group that seems most likely or most -- most appropriate for this.

Frankly, it's our goal, our job is to ensure that zanza/atezo is used in the widest group possible. Again, if you take a step back and think about kind of the overall CRC landscape, what we've said is it's about $1.5 billion kind of total market, but that's relatively evenly split between, say, the SUNLIGHT regimen, TKIs and then kind of a mix of chemos and some other things. So our goal, frankly, is really to penetrate across all 3 of those segments as broadly as possible because we do think that this is really a new novel combination that really has the potential to help these patients live longer.

Great. Your PDUFA is coming up for zanza in December here. And so I guess one question is, would you launch immediately upon approval here in the calendar year? Or would you sort of wait for the turn of the calendar given the rough holiday timing? And then my second question is, how do you think about pricing here given the data you have and maybe some of what your payer conversations have suggested in terms of what the market can support?

Carefully. I mean I think it's something that we haven't discussed widely publicly. But I think pricing of any medicine is an important consideration, and it's something that we're spending a lot of time with. As it relates to your question on launch timing and preparedness, we're going to be ready to launch kind of day 1. When that happens, we're going to be ready. And so it's certainly not something that we're going to want to wait until the new calendar year because at the end of the day, our job at Exelixis is ultimately to help patients live longer.

And we want to get this new medicine into the hands of prescribers and ultimately the patients candidly as soon as possible because we really do think that this has a potential to right shift that survival curve and benefit patients. And so we're going to be ready from day 1. If it happens on the PDUFA and happens earlier, there's always that possibility. We want to make sure that we're not going to be the limiting step here for patients.

Great. Historically, you've partnered your cabo sales in terms of ex U.S. markets. But can you maybe first update us on your regulatory plans for sort of the key ex U.S. markets for zanza here and then sort of the commercial strategy as you advance on the regulatory side for zanza, at least initially here in CRC?

Yes. So it's something that, again, we spend a lot of time on kind of internally thinking through all of those different dynamics. As you can appreciate, there's a lot of inputs to say, going into that. One of the, frankly, most relevant ones is just understanding the MFN dynamic and how pricing ex U.S. is going to potentially play a role in the U.S. as well. So as you know, we own rights to zanza globally. We have yet to kind of decide on what we're going to do with kind of that ex-U.S. market. Outcomes range from do we want to launch it ourselves? Do we want to find a European partner?

Do we want to find a global partner kind of ex U.S. as opposed to, say, what we've done with cabo with Ipsen ex U.S., ex Japan and then our partners, Takeda with the Japanese rights. So there's all those different dynamics around it. But I think what we want to ensure is we get that U.S. launch right first, understand all of the relative dynamics around MFN and ex U.S. pricing and its potential influence on the U.S. market, and then we'll kind of come to a real decision around what we're going to do with the rest of the world.

There's also obviously the consideration of indication expansion there as well, which we can address in a moment. But you talked earlier about sort of the 3 segments of -- within mCRC. But as you look at sort of commercial analogs here, there have been 1 or 2 launches in the small molecule space in CRC here in the U.S. in the past couple of years. But is there any one that you'd probably call out as sort of the best analog for zanza launch here? And I guess also on the commercial side, how much of your current cabo, whether it's on the RCC or net side prescriber base overlaps with a potential CRC prescribing population?

Yes. Probably tough to speculate on kind of what's the most similar launch dynamic. I mean, candidly, I think the way we view it is our goal, our job is to maximize penetration as quickly as possible into that segment that I mentioned before, either the $1.5 billion total market or the 3 different patient buckets. And so that's, frankly, our goal is to kind of maximize the value there as quickly as we can. As it relates to kind of this commercial footprint and overlap with the sales force, as I mentioned before, getting those boots on the ground, focusing initially on kind of maximizing the NET launch while also gaining familiarity with the customers, gaining familiarity with our own internal systems.

That's an important driver. And so our goal, if you fast forward the clock a couple of years, is to have much more of an equally balanced GI and GU footprint, whereas now we're much more GU than GI just based on kind of RCC and its relative maturity to NET. But as we layer on zanza CRC in additional indications and kind of cabo continues to build out in NET, we see that kind of GI/GU as ideally more 50-50 split.

One of the things we talked about ahead of the NET launch, and again, this kind of plays into the dynamic, one of the breadth of cabo, but two, the community versus academic space -- at the time of the NET launch, we saw a really high amount of existing cabo prescribers, something like 75%, 80% of NET prescribers already wrote cabo for another indication. And the remainder were generally co-located in sites that in an office next door, for example, tended to give cabo. And so that's the foundation or the kind of base point to where we're going to grow from commercially for zanza.

Great. If there are any questions in the audience, please raise your hand, and we can get a mic to you. In the interim, I want to turn to the STELLAR-304 study, in which you're evaluating nivo plus zanza and the non-clear cell RCC population. The study is, I believe, scheduled to top line in the second half of this year. And so maybe as we think about non-clear cell RCC, how do you guys forecast or estimate the potential TAM here versus the clear cell market?

Yes. I mean if you look at kind of just purely the epi, it's about 20% of RCC. So it's a reasonable proxy, I guess, kind of plus/minus depending on a bunch of different factors. But just looking purely on the segmentation of patients, I think that's a good starting point.

Maybe just to provide an overview, how are these patients sort of more or less currently treated? Are they allocated to any particular therapy or directed any way in terms of current treatment approaches? And as you think about your 1L study, this will be sort of the first directly focused study, I believe, in this population. How could that, I guess, in your view, potentially change prescribing behavior in this category?

Yes. That's one of the, I think, kind of the more interesting dynamics around, frankly, any indication is we've looked at it. When we first started discussing the non-clear cell opportunity, it really was, at the end of the day, pretty surprising that there had never been a pivotal study run in that indication for a variety of historic reasons. Basically, approval in the non-clear cell space is done somewhat by inference. Every drug that's approved in clear cell is also approved in non-clear cell, the label, it reflects both despite the fact that non-clear cell hasn't really been studied in that robust way.

So right now, use is somewhat guidelines driven and those guidelines, again, are kind of informed by single-arm unrandomized potentially selected relatively small end studies and all of the inherent challenges and limitations with those sorts of things. Someone mentioned to me recently that use and utilization in the non-clear cell space can be something akin to like which unrandomized study do you trust more sort of thing. And so the result of that is utilization is a little bit more mixed than I think one would expect.

There's not a lot of great market share data because we don't necessarily have all of that information. Is this a clear cell script or a non-clear cell script. We just -- it's somewhat imperfect from that perspective. And so our sense is that if we can come to market with robust data showing compelling treatment effect against a current standard of care, then that provides an opportunity to really establish what that standard of care is, kind of planting a flag in the ground, so to speak. and really kind of go from there.

Great. One question I have is, given that you're doing a combination therapy with a checkpoint inhibitor, how central sort of to the commercial outlook here is hitting on the OS secondary endpoint, to your view, to driving adoption of this combination in non-clear cell RCC.

Yes. I mean, candidly, I think it's somewhat of a statement of the obvious. The more robust data we have, the better. One of the lessons from 9ER is hitting that response rate, PFS and ultimately survival have certainly helped adoption. I can't speculate on what the data is going to be. But again, our hope is we want to be able to come to market with as compelling of a story to, again, help patients live longer without cancer and ultimately live longer.

Great. Assuming the data are positive from 304, can you walk us through what time lines might be to either presenting the detailed data and filing the sNDA? How does this maybe compare to maybe some cabo analogs, if that's appropriate? Or do you think you can move more quickly here given you'll be launching zanza in the not-too-distant future?

Yes. I mean I think the short answer is probably as soon as possible. Again, one of the 3 lines that we talked about at the company is live longer and recover stronger is a motto at the company. And so at the end of the day, if we're able to show positive data, we want to do everything we can possibly do to get it in the hands of prescribers and ultimately patients because that's what we're here for. And so I think we certainly have a history of being able to move quickly, being able to prioritize effectively and efficiently to either present the full data or submit at an accelerated pace. So something we're going to hope to do, but we'll see based on the data.

We've just touched on 2 of the pivotal programs for zanza here, but you have multiple other studies going on, including one in MRD-positive CRC, which I think is super interesting, and we're just starting to scratch the surface on that one as well as combination studies with Merck's WELIREG in post-adjuvant IO frontline RCC as well as a second-line population. And then also in neuroendocrine tumors.

So I guess, first, you have a lot going on in terms of multiple programs. which, I guess, if you were to guesstimate could potentially be completed earliest? And the second question is, as you think about resourcing and just sort of assessing the scenario of wins for these potential studies, how do you think about resourcing and likelihood of success here?

Yes. I mean I think that's something that hopefully differentiates Exelixis from a lot of other companies is that we're trying to be particularly strategic and thoughtful around indication selection and clinical trial design and development in that at the end of the day, we want to run positive studies and positive studies in large market opportunities. And so if you look at the 7 pivotals that we have ongoing or announced right now, they're all in relatively large market opportunities, and they're all in areas that I think are relatively high probability of success studies and we're running them in a way to be capital efficient.

A model that we liked with cabo that we've now incorporated into zanza is this idea of finding clinical collaborators. So you take, say, our relationship with Merck, which you mentioned before, we're running 3 studies now with them. Functionally speaking, kind of the way that the economics work is the costs are split basically 50-50 across the 3 studies. And so that's a really capital-efficient way for us to interrogate broadly the zanza opportunity, but also have a chance to work with probably the best oncology drug developer in the world who's also, frankly, our biggest competitor.

And so it's this kind of interesting dynamic where we're able to efficiently allocate that incremental investment dollar in zanza to ultimately broaden that revenue opportunity, but in a way that we think all have high probability of success, whether it's 316 where either zanza alone or zanza plus pembro is randomized against watch and wait or placebo, just given the dynamics of that indication or looking at, say, the post-adjuvant RCC or later-line RCC, all these things kind of we take each study individually as something that we think is a smart investment to make because it's -- ultimately, as I've mentioned multiple times today, our goal, our job is to establish a new standard of care for patients. That's why we're here. And so if we're able to do that, we believe that will translate to meaningful revenue. And if we can generate meaningful revenue, we can generate value for all stakeholders in the company.

We have a couple of minutes left here, but maybe turning to your earlier-stage pipeline. Can you maybe for investors who are not as deep, call out 1 or 2 earlier-stage assets that may have a nearer-term clinical readout? And versus what gets, I guess, most excited? I think DLL3 looks super interesting. There's been some progress there most recently at ASCO. But if you were to call out sort of 1 or 2 near-term catalysts, what would you point investors to?

Yes. I mean without kind of getting into the specifics of timing, the way we view our early-stage pipeline is we want to generate as much data as quickly as possible to help get us to that go/no-go decision. And what we mean by that is, is there an asset that's going to raise its hand with data and say, invest in me in a pivotal study. We're not in the business of kind of dragging something along to show 10 patients here worth of data and say, okay, look, how great this is, go raise some money and raise some blah, blah.

That's all too common probably, unfortunately, in biotech, but that's just the reality of how our business works. We're in the fortunate position where we don't need to go out and kind of potentially overpromise. What we're going to do is essentially show a profile of this is what, say, XB628 is versus what this is what it could be. And so we're going to present data when it's mature, stable and a sufficient cohort to get a sense of what that is. But the way, again, coming back to kind of the beginning of the conversation to view our early-stage pipeline is through that franchise space.

So take XB371, the tissue factor ADC that we conceived of as a CRC asset to kind of build upon that foundation with zanza. Similarly, with XB628, so that's our PD-L1 NKG2A bispecific, that one has really interesting novel biology looking at bringing in both the adaptive and the innate immune system. But really kind of the crux of that is asking the question, well, does that mechanism, does that combination have the potential to combine well with, say, something like zanza.

So again, that's kind of this franchise build-out mode of building on and further enabling zanza across all those different indications. And so that's kind of the best lens to view the early pipeline, whether it's the SSTR program. Same thing, that has the ability to meaningfully drive utilization and something like NET. And so that's probably the best way to view the early pipeline is through this franchise lens and maximize value kind of across these multiple different factors.

Great. We're up on time here. So I think we'll end it on that note. My thanks to Andrew for sharing how Exelixis is evolving from a sort of a one product story into a multiproduct, multimodal story.

Thanks. Great. Thank you.

Thank you.

Well, good morning, everyone. I really do appreciate it. My name is Akash Tewari. I head our firm in biotech efforts on the research side here at Jefferies, and I have the pleasure of hosting the Exelixis management team which, again, is a commercial stage company that is in several different tumor types and is a leader kind of in renal carcinoma. But then also has ambitions to really think about VEGF inhibition in a broader subset of diseases, and that's what they're explaining -- looking at with zanza, Andrew, why don't I hand it off to you for some intro remarks, and then we'll get started.

Yes. Thank you for the invite. Always a great conference. Great set of meetings today. Always good to meet with investors. Just as a reminder, we're making forward-looking statements today. So please see relevant disclosures in our regulatory filings for risks related to our business. But I would certainly agree with you, I mean Exelixis is -- I don't know what generation of the company it is at this point, but we're kind of in that important transition point from going from our first franchise product in cabozantinib to our next franchise in zanzalintinib. And that's kind of the lens that we view the world of drug development, the world of oncology is kind of through this franchise mode where -- not only are we investing kind of broadly in each molecule.

But within each tumor type, for example, we're also kind of broadening our investment there. So whether it's RCC, we're going to continue to be the leaders in RCC or a newer area like colorectal cancer with zanza, not only kind of this later line setting with the STELLAR-303 study, but investing, say, in the 316 study in the earlier line and then layering on our pipeline as well, say, XB371, our tissue factor ADC, which we really view as a colorectal asset as well. So it's kind of that franchise mode that we're really using to kind of define our 2026 and beyond. But happy to get into a lot of the details there.

I want to start with more of a conceptual question. And it's interesting. I still remember back in 2020, I think Mike had put up like the $4 billion number on cabo. And obviously, okay, cabo didn't get there, fine. It still became a multibillion-dollar product. There were a lot of successes. But I think -- and I don't know if Michael ever admit it, but I do feel like you guys learned from kind of that second wave of drug development with cabo and you're applying a lot of those learnings to zanza. And I think that's actually quite interesting, right? I don't see a lot of studies like COSMIC-303, right?

I see a lot of studies where you're looking at adjuvant settings, post maintenance settings, areas where there's really defined clinical unmet need. Can you talk about kind of -- is that perception correct, right? And what learnings did you have from kind of that development you had with cabo that you're now applying to zanza that you feel like maybe investors are missing?

Yes. I mean I would certainly say kind of taking a step back, everything we do at Exelixis is kind of through what we call the cabo lens, learning what's been successful, learning what to do right and learning kind of areas that we should avoid in the future. But I would correct one thing. We certainly continue to be excited about the growth profile for cabo going forward. So it's something that as we look ahead to, say, 2030, we're still certainly excited about it. But that cabo lens is really a couple of different things. Cabo has been successful commercially because we've been able to define a new standard of care in the areas that we've developed it, whether it's second line RCC first with the METEOR study then as a monotherapy in first-line RCC and then in combination with nivo.

The reason cabo is used is because it helps patients live longer and helps patients live longer without their tumor progressing and all of the important decisions and drivers for utilization there. And so what that means is that we're in the business of running studies that we think have the potential to really define that new standard of care. The second piece is we're also in the business of running successful studies. We're not in the business of just running trials for the sake of doing it. And so we try and be particularly thoughtful around probability of success trial design, statistical powering, understanding kind of appropriate comparators to really make sure that the data we're generating enables physicians and patients to really drive those treatment decisions.

And so that kind of cabo lens is really when we apply it to zanza, it's what are areas of unmet need and large market opportunities? What are studies that we can run to kind of help define and plant a flag in the ground for zanza to be the new standard of care? And can we do it in a way that's capital efficient. I'm sure Chris will talk about this later, but one of the models that we really liked with cabo was working with clinical collaborators, whether it's Bristol, Roche, Genentech or now Merck, kind of splitting costs, splitting risk, splitting expertise, splitting capability and being efficient in how you run pivotal studies.

We'll sell a lot of -- Bristol sells a lot of nivo in RCC. We sell a lot of cabo. Kind of that same dynamic with zanza is certainly an approach we want to do going forward. And so kind of taking a step back, as we think about that zanza franchise approach, it's about all of those learnings and lessons in that cabo lens and applying it to what we think is a best-in-class molecule in areas of high unmet need where we can define a new standard of care.

I mean, I think maybe let's start with kind of first-line RCC. And again, you mentioned you go where the puck is headed. Can you give us some perspective about really what your overall long-term strategy is in first-line, a, like is there an ambition to ultimately run that CheckMate 9ER trial? And what would that look like? Because you've alluded that might go with maybe even partnerships outside of Merck. And then number two is what is the opportunity in the post-pembro setting, right? And if you were to think about that commercial opportunity to what you have currently in first-line RCC, is there an argument to be made that actually the post-pembro maintenance is a larger commercial opportunity?

Yes. So I think both of those questions are somewhat related to kind of our core -- one of our core strategic principles is basically, again, through this franchise lens, we want -- we're the leaders in RCC, and we want to continue to be the leaders in RCC. Our kind of view on it is if cabo is the TKI of choice in RCC for the 2020s, we want to run a series of trials to define zanza as the TKI of choice in the 2030s. And so you mentioned kind of our efforts so far.

We have the 3 studies ongoing in RCC. And I think just to kind of answer your question on market opportunity, given rough guidance for a little over $2 billion in that space across those 3 studies. But the way we think about it is where you said how is standard of care evolving over time? How is that patient's journey in kidney cancer evolving over time? As more patients are diagnosed earlier, as more patients who are diagnosed kind of in that more localized setting, get adjuvant therapy, adjuvant pembro, this question of what should they get afterwards starts to come up, and that's the LITESPARK-033 study. We really want to define what that is. And then similarly, kind of as the treatment journey gets redefined for patients in that later line setting, the combination of zanza and belz, we're evaluating versus belz monotherapy. So both of those, we think we have reasonably high likelihoods of being successful, again, to kind of define the new standard of care. On the question of frontline, we think we kind of have half of that covered right now that frontline but post pembro adjuvant.

The 15,000 patients?

Yes, plus/minus. I think it depends on kind of how we see and how someone views the evolution of that utilization over time as well as the evolution of when patients are diagnosed, does the advent of improved diagnostic modalities kind of change some of that time course of metastatic diagnosis versus prior. So it's a multifunctional kind of dynamic. But when we think about that kind of de novo metastatic first-line space, it's certainly an area that we want to invest in, but it's one that we want to be thoughtful about how we invest in because our own experience with COSMIC-313, as you mentioned, as well as the recent LITESPARK-012 data show that you have to be particularly thoughtful and careful about rational combinations -- where does the biology suggest that what are those combinations that have the potential to shift the standard of care?

Because say, going back to COSMIC-313, that was a successful study on PFS, but as we looked at the opportunity and kind of the lack of survival data and again, this patient journey dynamic in RCC, where there are now multiple lines of therapy understanding the trade-offs between PFS benefit with additional tox without survival versus sequence therapies, that's just a dynamic that's relevant for every patient who has kidney cancer. And so Mike talked about it, Dana talked about it. One of the dynamics that we're certainly thinking about is we think zanza is a best-in-class TKI.

We think it has the potential to be a backbone therapy and its shorter half-life and all of its profile lend itself to kind of being that sort of backbone. And the question becomes, what are the sorts of mechanisms, orthogonal mechanisms, in particular, that you can kind of come at the cancer from multiple different angles to try and really drive the most robust benefit because at the end of the day, we don't want to run a study to generate similar data to what we've seen before. We want to run a study to be successful. So that's where we're being really thoughtful about. But I think, as Mike has said, we tend to view zanza in terms of waves of development in that kind of next wave in RCC, we're excited to share.

I mean -- so look, to that point, I guess the kind of nuanced question there is, do you think it will ultimately be a triplet regimen or a doublet regimen, right? Because you'll talk to maybe some of your peers in the space that are more on the HIF-2 alpha side, right, where they're like, look, we're not -- we want to go with a doublet regimen. And ultimately, we think that would be beneficial and Merck ultimately went with the triplet, and that was really the error. But really that doublet combo is good enough to be better than, let's say, CheckMate 9ER, the LEAP trial.

There's another view of like, well, no, I mean, you are going to need 3 different therapies here. They need to all be combinable and they need to be tolerable so that you can actually get that DOR. But we're not comfortable with just, let's say, a HIF-2 alpha TKI combo first line as better than CheckMate 9ER. What's your team's kind of internal thinking there, doublet or triplet when you do ultimately go into that frontline setting?

I guess the answer candidly is kind of it depends on what those are. The reason I mentioned the orthogonal mechanisms before is if you think about kind of the HIF space and VEGF TKIs, we think that the secret sauce, special sauce for zanza is that it hits kind of this whole other neighborhood of MET, AXL, MER, the TAM kinases, et cetera. That's kind of why we think it's different. But at the end of the day, one of its core efficacy drivers in RCC is kind of that VEGFR kinase inhibition.

Well, HIF and VEGF are kind of on the same axis. So you're kind of doubling down there. And so from a cancer biology perspective, it certainly makes sense to want to bring in an alternative mechanism to make sure that you're kind of attacking the tumor from as many different angles as possible. So your question of whether it's a doublet or a triplet, it's -- I would say it's somewhat semantic because take, for example, XB628, our PD-L1 NKG2A bispecific. A theoretical combination of that brings in adaptive immune system, innate immune system and then kind of the kinase inhibition piece. So that's probably a doublet, but it's incorporating multiple mechanisms of action as well.

So that's kind of an example of the sort of thinking that we have around, let's let the biology make the decision, drive the decision, let's let the data drive that decision and really understand how do we really, again, run a study to right shift that survival curve, right shift that PFS curve all while doing so in kind of a way that's not adding additional tox for these patients because, again, in RCC, patients are living longer and longer, and we're certainly -- it's the best part of our job to be part of that. But you have to understand that clinical benefit risk trade-off as well.

Understood. I mean, I couldn't agree with you more. But then the tricky question becomes, well, okay, if it's maybe like there's 3 options here in my mind. You have something where it's a next-gen IO approach. You have T cell engagers and then you have ADCs, right? I don't think I've seen anything early on right now, whether it's in a pharma pipeline or in a Smid-Cap pipeline where I'm like this is a step order improvement. But maybe I'm wrong here because I'm -- when do you think about those 3 modalities when adding on to zanza, where do you feel like there is this kind of natural synergy in first-line RCC? And maybe what am I and maybe what are investors missing about how this market is actually evolving over time on the pipeline side?

Yes. I mean I think kind of the latter question is really we're the leaders in RCC, and we're going to continue to be the leaders in RCC and invest appropriately to do so. That cabo lens dynamic that I mentioned before is also that we want to make sure we're appropriate stewards of shareholder capital, and so we're going to run the right study. We want to run positive ROI studies that have a high probability of success that have that opportunity to be commercially successful. Whether it's one of those modalities or others, that's kind of TBD. I think I probably am a bit more optimistic on what's out there, especially what's out there in potential combination with zanza.

One of the challenges that I think the industry has and certainly, folks like you have is trying to extrapolate the potential for later line data for Modality X into an earlier patient population. I certainly think that we have the ability kind of through the Exelixis lens to kind of understand some of those risks a little bit differently. So we're excited. We're having a lot of conversations right now about what those combinations could look like. But I think it's suffice it to say kind of the 2 key points are we're going to make appropriate investments, and we're going to make sure that we're really having a thoughtful, strong opportunity in kind of that frontline space.

And are there any targets that you think you might call out, whether it's emerging in China or otherwise? I know like there's ENNP3 bispecific data that's getting generated. There's next-gen ADCs out there. I mean, anything that you think is particularly interesting?

Yes, but I won't call them out.

Worth asking. Okay. Understood. Now when we think about LITESPARK-001, and obviously, Merck is going to have a regimen that will, let's say -- look, it looks supportive of displacing cabo in a second-line setting over a period of time. But I also find it notable that Merck right after that data is also running the exact same trial with you with zanza but now displacing belz. How do you think about -- like what is Merck see with zanza, especially in that kind of second line setting where they feel like maybe there's room left on the table from the LITESPARK-001 data to actually improve the standard of care for patients? And how do you expect to show that case with -- I know you have a Phase III trial that recently started there.

Yes. I mean I think honest answer is I don't really want to put words in Merck's mouth. But from our perspective, I think we certainly view zanza as a best-in-class TKI. And the totality of data generated for any of those combinations would suggest that tolerability is really important. Combinability dose selection is really important. And so can the combination of zanza as a best-in-class TKI and belz as a highly efficacious kind of very good HIF inhibitor can that have the potential to generate strong data, both from an efficacy perspective, but also from a safety and tolerability perspective.

Because, again, how you combine, how you double down on kind of that VEGF axis is really important. And so understanding the differences, say, between len and zanza is particularly important. But again, I think it's also in part on how kind of patients will be treated in the future. So that's just -- as I mentioned before, that's one of the key considerations that when we have conversations with our now partner, that's where a lot of that begins.

Just closing the loop on second line. I mean my sense is it's maybe like a $300 million to $600 million or somewhere in the range, let's say, it's about $500 million in second-line RCC for cabo. But your team has been kind of -- a, I know you guys have never admitted that, so that's me. But number two, you've kind of said like, look, as use in first -- like second line goes down, there's potential uptake in first line and patients -- doctors are really thinking about stratifying different therapies. So when you think about the absolute impact on the LITESPARK-001 data as that regimen gets on to the market as we think about to the end of the decade. Do you think there will be any impact on absolute cabo sales? Or no, you're going to see this natural switch of as second-line use declines in a subset of patients, there's going to be an offsetting increase in first-line usage?

Yes. I mean, without kind of getting into guidance on guidance kind of long-term outlook, I think that's probably directionally consistent. I mean the most simplistic way to think about it is if a physician has come to the conclusion that len/pem is probably their go-to treatment of choice in second line, what it probably means is they would no longer use len/pem or len/belz second line. They would no longer use len/pem in the first line because you wouldn't [indiscernible] twice. And so what that means, functionally speaking, is for those patients who are likely to get an IOTKI, cabo/nivo becomes kind of that frontline modality of choice.

And if you think about, generally speaking, over the last 3 to 5 years, that dynamic of trying to drive every additional market share point in frontline RCC, that's been our primary focus anyway because the frontline market, just factually speaking, tends to have longer duration, longer time on drug. So it tends to drive incrementally higher revenue kind of first line versus second line. Still TBD, a little bit early to see kind of how all of these new combinations get adopted in the market, whether share is coming from single-agent TKIs or len/av, which is another regimen that's used right now. So there's kind of a lot of moving pieces. But directionally speaking, that's probably a reasonable way to think about it at least right now.

Understood. Now can you touch a bit on -- I know there was data at ASCO presented with cabo, actually running something similar to what you're running in non-clear cell against sunitinib in first line. A, can you talk about your early thoughts on that data set? Obviously, it was Phase II and academic run. And then -- so, a, how do you think a clinician will look at that data? And then number two, how do you -- what's your level of confidence? I know you have a Phase III in non-clear cell that's reading out later this year about whether your drug will differentiate there? Or what's kind of the magnitude of improvement you're expecting over sunitinib?

Yes. I mean it's a good example of one of the unique dynamics around the non-clear cell space in that honestly, when we first started thinking about it, I was surprised that there had never been a Phase III done in that setting. And the way that I kind of conceptualize it is utilization in part is essentially driven by this idea of which small on unrandomized Phase I/II do I trust more as a physician and a patient because we all know the caveats and limitations of these smaller studies, patient selection. Frankly, investigators are really good at identifying and selecting certain patients for these trials, which is a dynamic that you don't see and really can't do in large randomized Phase III studies.

And so it's group over here of utilization being all over the map because it's defined by a bunch of different ISTs or single-arm studies and then 304 being the opportunity to kind of plant a flag in the ground and say, this is the standard of care potentially in the non-clear cell space. And so there are kind of 2 different things. And so I think the way that we look at it and certainly, our market research is emerging in that direction is that physicians will be comfortable using what drug or what combination has Level 1 evidence of showing an advantage over a standard of care. It's just that non-clear cell for a variety of kind of historic reasons, utilization is driven by inference and driven by the fact that all kidney cancer drugs are approved for both clear cell and non-clear cell.

Right. Understood. Now stepping back and Andrew, this is a conversation you and I have had about how much you think buy-side and sell-side analysts of the zanza indications, you have 8 trials announced. How many of them are actually in people's models? I think it's probably 2 or 3. And then relative to the trials that you actually have ongoing -- for the -- for us, we haven't modeled those other 5 indications, right? What are your favorite children, right? What are those markets where, again, it fits that profile of really clear unmet need, potent shoot. So you have high confidence that zanza will get established into standard of care? And then number two, do you think the commercial opportunities are really underappreciated?

Yes. I mean, it's an honest answer in saying, I think we've been particularly thoughtful around each of the studies. Our goal for 2026 and beyond is to really show that zanza is a franchise molecule. And we're certainly excited about 303 and the launch and kind of priority 1A as a company, but it's really kind of setting the foundation for zanza as an opportunity. And so we think about it as a franchise and collectively across all of those studies, where individually, we think they're all reasonably sized, if not very large market opportunities with high probabilities of success.

And so honestly, my view is look at each one of them individually and have a conversation, have an understanding, do whatever work you need to do to understand is this study likely to succeed? And if it succeeds, what is the commercial opportunity here? An example of that, say, like STELLAR-316. So that's another area where we're essentially defining a new standard of care because right now, with the advent of Natera's Signatera test, there's this new patient population that if they're ctDNA positive,

now finds themselves at very high risk of relapse.

Until that kind of new diagnostic modality was available that dynamic didn't really exist. And so we're looking at either zanza monotherapy, zanza in combination with subcu pembro against watch and wait placebo. And so that's an indication where we've already shown a survival benefit in a much later heavily pretreated population that we know is sensitive to this sort of therapeutic modality. And so it's an example where we're defining a new patient population. There are a lot of these patients who really do need a therapeutic intervention because right now, they're being told that there's a really high risk of their cancer recurring, but there's nothing you can do about it.

And so that kind of anxiety, that kind of unmet need is very palpable. And so it's a sort of thing where simplistically, again, any time you can randomize a large global or large randomized study against placebo, it's probably...

The size of that commercial opportunity, let's say, relative to RCC and first line, how should we think about that?

I think at the highest level, we've said there's 12,000 plus/minus patients. How that number evolves over time is kind of that availability and utilization of the Signatera test improves. Similarly, if there is a therapeutic intervention is there a higher likelihood of one, people getting tested, but two, people getting treated. It's a reasonably sized market. And then kind of at the end of the day, the math is pretty simple. It's number of patients, time share, times price, times [ adoption ]. So...

Chris, for you to kind of wrap it up. It's funny. Your stock has tripled, not funny. That's credit to what you've done. But it's interesting. A lot of investors are like, "I don't get it. Why are they still buying back their shares?" And normally, when a company buys back their shares, the obvious announcement is we think we're undervalued, right? But you're also at this point, as you approach the cabo LOE, where there is this question of like, well, what's the allocation between external BD, buying back our own shares and then also pursuing other kind of Merck partnerships where you can really divvy up the capital cost. What's the right balance for you now that you've already -- you've gotten to this new level in terms of valuation and investor expectations? Should we continue to expect this level of share buybacks on a go-forward basis? Or this is more of like a temporary dynamic?

Yes. So I mean, from a capital allocation perspective, we look at it not mutually exclusive in any way in 3 buckets, right? R&D expense that we have every year, potential BD, M&A and then share buyback. And like I said, they're not mutually exclusive. So we've committed to spending $1 billion or less in R&D for the time being. We continue to look at assets from a BD M&A perspective. We haven't -- as our record has shown, we haven't found that many things that we really like, but we're continuing to look. And then we've been buying back shares for the last 3 years almost since first approval in March of '23.

And you kind of touched on the undervalued part, right? When you look at the -- how the analysts are modeling it and how this -- the Street generally is modeling zanza which is our next potential franchise molecule. There are not a lot of the indications in there. The ability to continue to develop zanza in a way that will drive sales in the 2030s, as Andrew talked about, the TKI, the 2030s we think -- we continue to think we're undervalued, and that's one of the reasons.

I know it's not going to be guidance, but I will take this question in. You think you're undervalued. And you guys have given long-term perspectives on zanza. But this is a question you get -- your partner with Bristol. Bristol gets this comment of like, is there a trough? Is there growth? It seems to me like a lot of the zanza Phase III start to read out before the end of the decade. And you're going to start to get uptake. Is there a possibility you have just straight growth through the cabo LOE? Is that how investors should be thinking about this?

Yes. Like you said, I'm not going to give guidance on that. But I think we're very excited about the opportunity that zanza brings and the potential that at the end of this decade, the beginning of the next decade, that zanza allows us to grow through that LOE for cabo.

But to add maybe this, any potential of like JPMorgan from a few years ago where you call your shot and give kind of a 4-, 5-year commercial outlook on zanza and the uptake. Is there appetite internally to do that anytime in the near future?

That's a tough question to answer. I mean it depends, right? It depends on -- we did that because -- we did that back in 2020 because we weren't getting a lot of credit for 9ER or the potential of 9ER and then the other indications we're developing. And if we see that situation again, and we'll evaluate everything.

Okay. Understood. Thank you so much. I really do appreciate it.

Thank you.

Hi. My name is Jeffrey Walch. I co-lead the U.S. biotechnology coverage at Bernstein. Very excited today to have a nice fireside chat with Michael Morrissey, PhD, President and Chief Executive Officer of Exelixis. Look forward to the conversation and thank you for attending.

All right. Great to be here. Thanks for the invitation today and looking forward to -- we had a great day. Looking forward to a great conversation. Before I begin, let me just state that I'll be making forward-looking statements today. So people listening should see our SEC filings for a description of the risks that we face in our business.

That's perfect. And Michael, really appreciate you and the team coming out today. We've had you attend multiple of these conferences and really appreciate always hearing your story. And personally, I'm excited to have this conversation today. I worked with your company back when I was at Bristol-Myers Squibb. So I know Exelixis well as a drug collaborator.

That's right, collaborator.

Yes, collaborators on dual LAG program. So look forward to a nice conversation and love to hear about your strategy and what you're sort of thinking.

I mean maybe just as a high level, just to kick us off, maybe just give an overview of Exelixis' multi-franchise strategy approach.

Yes, for sure. And I think it's what drives everything we do tactically in terms of how we look at building the business, how we've built the business so far on the strength of cabozantinib, but how we're looking to really take the business to the next level or 2 in terms of how we approach, really, every aspect of biotech R&D, commercialization, the intersection of all those different aspects together.

Look, we're all in the same business to a certain degree. We want to help patients. I think we have an overriding focus on improving the standard of care for patients with cancer. And that is largely informed by the success of cabo that we've had over the years. Getting a p-value can sometimes be really challenging. Other times, it can be relatively straightforward, but a p-value and a successful pivotal trial doesn't necessarily mean you're going to be a commercial success.

And the way you drive commercial success is you basically change standard of care. You make it such that your offering therapeutically is moving the needle for patients in a way that prescribers, payers and even patients need to stand up and acknowledge and want to be part of.

So we've done that, I think, pretty well with cabo. I mean we've learned a lot. We've done a lot. We don't always knock it out of the park in terms of some of the indications we've chosen and combinations that we've chosen, but we've really, I think, been able to funnel our view of what success looks like for a company like us. And it's really franchises.

And we -- as we talked about -- previously, we made it a big focus of our R&D Day back in December. We really think about that in terms of different dimensions, right, in terms of how we view a franchise. Obviously, you can have a franchise within a single molecule like cabo. You can reinforce franchises in indications. We focus in the GU and GI space. We don't focus on all of heme/onc. We don't focus on all of solid tumors, but we're really focused on moving the needle for GU and GI patients with cancer.

And then we have, I think, a pretty, not strict, but focused view on modalities, like, be able to put -- we want to be able to put basically drug product into a bottle and then make that bottle available commercially. So it really focuses where we want to play relative to the modalities from a manufacturing point of view. We're a relatively small company. We can only do so much heavy lifting from a manufacturing point of view. We obviously have great depth and expertise in small molecules and now biologics as we've moved in that direction. But we have to stay focused.

And that's, I think, one of the things that we've tried to strive as a management team is to really focus and prioritize. And strategy often comes down to not really so much what you're doing, but what you choose not to do and to have that discipline to be able to really narrow the focus to, again, bring benefit to patients and shareholders, but at the same time, have the right level of focus, so you can move the needle virtually every day.

So that's how we're operating, and we do that from the standpoint of how we look at targets for discovery, how we look at molecules that we can combine with relative to indications that we want to pursue within the GU and GI space. And we obviously have some flexibility. I think you've seen that with the zanza program where we're looking at peripheral indications outside of GU and GI, say, like lung maintenance or meningioma that don't really fit into that kind of strict category, but we have such interesting potential and activity that we can flex a little bit, again, look for data and kind of a surveying effect and go.

So -- but I think the team is really well organized and very focused along these kind of lanes of thought and lanes of research. And our job is to execute every day with cabo and zanza in the pipeline and assets that we can find from external sources.

That's great. I mean -- and you said before that sort of you have this product strategy, the modality strategy, the tumor franchise strategy. What would you say sort of distinguishes your approach between the three? How are they similar? How are they different? How you approach each of these three?

Yes. So I would say they're all -- I think they're all interrelated, right? You really have to be able to -- in the most simplistic term is kind of the Venn diagram view of the world. The more overlap, the better, right? And that -- I think from our point of view, then is just kind of dimensionalized on multiple levels in terms of what we're doing by ourselves, what we can do in collaboration, right?

We've talked about this in BMS. I mean that interaction, that collaboration, which goes back for literally decades is a good example where sometimes we collaborate, sometimes we compete, sometimes we're collaborating with the competition in terms of, say, some of the early cabo/nivo work. It's all part and parcel with the focus and the priority for us is what's the right science, what's the right biology to kind of embrace and then what are the right clinical work that we need to do to be able to, again, move the needle for patients.

And I think with that focus on -- again, we're not looking at nano niche indications because I think history has shown that -- I mean that can certainly help a small number of patients, but the upside can be limited to a certain degree. So again, we're focused on big indications in both the GU and GI space, renal cancer, colon cancer, prostate cancer, et cetera, where we really think we have the opportunity to do well by patients and also drive value for the company and shareholders.

Yes. And I've seen the collaboration firsthand and I think this is a great part of Exelixis. Anything -- in terms of collaboration, anything that you look for, anything in terms of the benefits that the company has from that? Or when you think to collaborate with other companies, what are some of the things that you're looking to achieve?

Yes. It's always the common language of our -- do we have aligned goals and philosophies around what success looks like, number one? Do we have the right scientific, I would say, both overlap and complementarity that we need to, really, in some ways, synergize what each side can bring to the table and then provide even super additive, if not synergistic value to patients?

So it's that kind of special place where you're kind of working above the fray of the noise that normally happens kind of in the background and able to operate in a way that, again, allows you to move. And I think that a lot of the collaborations that we had in the early days on the discovery side were just fantastic in terms of being able to have a situation where 1 plus 1 was 5, equals 5 as opposed to 2 or 1.5, which is often the case.

And on the clinical side, too, I mean the 9ER study that we did, as I've said previously, it's kind of in the ROI hall of fame in terms of we had cabo and nivo, 2 leading single agents that were actually had initial single-agent top line data literally on the same day. And then from that day on in terms of second-line studies, people ask the question, well, if they work so well by themselves, both have a survival advantage, both with the nivo for patients, what happens when you combine them?

And it was certainly a very rewarding process then to collaborate between the 2 companies, the top KOLs in a way that was really allowed us to move quickly and dramatically and to win on response rate, PFS, overall survival and quality of life together, set us up really well to move -- continue to move cabo up in terms of being a market leader for RCC. So we're super excited about that.

And that -- I think that success, and that comes after the typical kinds of failures that happen in this game. But it certainly builds a level of focus, of resilience of conviction that we've done this, we can do this again and then get out there and make the whole process work from asking the right questions on the discovery side or on the combination side and then doing the right level of clinical work to be able to -- again, to really get over the goal line time and time again.

So done that with cabo. It's a molecule that has, I think, 8 different indications or 8 successful pivotal trials that led to a very broad label. Obviously, it's a commercial success across different indications. We think zanza is probably a better next-gen molecule based upon some of the early data. First trial in third-line plus CRC was successful in overall -- enhancing overall survival. That comes on the back of 4 failed checkpoint-based trials. So different kind of clinical phenotype, if you will, getting a lot of positive feedback in terms of the market potential, and we're under review right now.

So it's one that we're really excited about. And again, that we think really kicks off the opportunity for zanza, which I'm sure we'll talk more about today. But it's indicative of how we think about building a franchise, right? The right combinations, the right indications, the right lines of therapy, really, pushing the needle in terms of where you're in a hypercompetitive space indication-wise versus maybe what's kind of wide open right now and pushing that envelope.

So it's how you expand in a measured fashion and doing that in a way that I think reflects how we view running the business because we run the business like a business. We've been profitable, I think, since 2017 or so. We're very convinced that buying back shares right now makes a lot of sense, and we have for the last several years because we just think we're undervalued based upon how The Street views zanza currently. But we think over time, that will change. We have 7 ongoing or soon-to-start pivotal trials of the first wave. And I think the next wave kind of forming as we speak. So there's lots of moving pieces with zanza following on the success of cabo.

And then the question is what's potentially the third franchise molecule? What's the fourth franchise molecule? Because that's -- in our view, that's how you build really important growth in the story and how you kind of change the vector each time in terms of what growth in terms of impact on patients in terms of revenue, in terms of market cap can be. So that's the focus. Team is -- it's lean and mean, and I'm really excited about where we're at and what our future looks like, and we're just committed to executing every single day.

Absolutely. And on that -- on the point where you ended, so what do you think of how the pipeline is situated for future pan-tumor leadership? Anything in particular you want to highlight, anything you'd like to talk about?

Yes. So we have 4 molecules in the clinic now. We've got a few more on the way. Obviously, zanza is leading the charge. We stopped really investing in cabo per se, and we've talked about that for the last few years now why we're doing that. But we think zanza is the right molecule to put a lot of energy behind right now. And from a pure resource allocation point of view, that gets fed first relative to how we're doing it.

We're -- and we have consistently embraced the idea that if you want to be a leader, if you want to move the needle for patients, you've got to belly up to the table and invest in and run and execute on pivotal trials. That's the only way the p-values that you hope to get are the only way to move the needle and get the attention of regulators and payers and HCPs down the table.

So a lot of companies, certainly in our -- where we were 10 years ago, we were hesitant to do that because it's a big gulp moment in terms of do I really want to spend $100 million, $200 million doing this? We do that readily. Once we've done the analysis of the situation, both clinically and commercially, if it makes sense to us within that analysis and we have the data supporting it, we're -- we understand you've got to be able to put that risk capital to work to be able to generate value for patients.

So we do that readily, and we do that in a way that, again, gives us the conviction that we can do that again and again and again. So -- and it's picking your fights to a certain degree, right? So obviously, we're a leader in renal cancer with cabo. And we certainly plan to try to maintain that with zanza. We've got 3 pivotal trials going right now. And probably, we'll have more on the way in the future.

We think colon cancer is another good example of an indication that is ripe for innovation. And certainly, the STELLAR-303 success really underscores that. We have a trial for called STELLAR-316 looking at really post-adjuvant kind of therapy for high-risk patients based upon the Natera Signatera technology, where you can preselect high-risk patients based upon their MRD status.

Again, there's no standard of care for those patients. They're just kind of -- they get surgery. They get chemo, in either order, depending upon if it's colon or rectal and then they just kind of watch and wait, right? And that's -- if there's a way you can identify, preselect these high-risk patients as has been done recently in, say, bladder with a very well, I think, just elegant technology. It really brings potentially a lot of value to patients.

And 303 and 316 kind of travel together. We're constantly getting talk about one with a cabo and the other one comes up and vice versa. So it really reinforces the idea that that's how you build leadership in a given area in a given franchise, whether it be a molecule or an indication or a modality is you just -- you keep investing in a very thoughtful, pragmatic way. You use data, you use your insights, you certainly -- whatever conviction you have to be able to kind of push that ball, if you will, move that ball downfield in the football analogy. And that's something that we do, I think, really well and have the conviction that more often than not, if we make the right choices and we execute well, we'll be successful.

So -- but the pipeline is full. Early stage, we have 4 compounds in Phase I, Phase Ib, a couple of ADCs, USP1 inhibitor and bispecific XL628 that we're just starting to look at zanza combinations with. So that's super exciting. And looking to do more. We've got a couple of INDs kind of on the way with DLL3 and an oral SSTR2 antagonist. So those should be at the IND stage this year.

And we're looking, I think, pretty aggressively for potentially later-stage assets in the GU, GI space. We've got a very great balance sheet, Again, we're profitable. Lots of cash flow. So we have room to maneuver there as well. So again -- but we're looking at doing the right investments based on the right data, based upon the right view of the commercial opportunities in these indications. And I think more often than not, we're going to be successful.

Yes. Any of those ADCs in particular that you want to highlight or that you heard about?

Yes, I think -- I mean they're both really interesting and there's more on the way. But I think XB371 is a tissue factor targeting ADC with the topo warhead. It's designed kind of de novo to play in the CRC, in the colon cancer space where we want to build. So you can imagine getting to a point where whether we have single agent or we have combinations with zanza, a combination with zanza and a checkpoint, just building off the foundation of 303, and that's how kind of building a franchise in that indication across molecules, in this case, across modalities as well.

So it's that kind of multifactorial view of what's the best way to bring value, additional value, change standard of care for patients. And again, part of it is obviously empirical. You've got to generate data. Part of it is very clear looking at -- if you look at that example of 371, zanza and say, a checkpoint, right, you've got 3 orthogonal MOAs, which arguably kind of at least de facto should have minimal kind of AE overlap liabilities. And the question is, do you have the right -- are you picking the right pathways? Are you picking the right, if you will, warheads or the right agents to be able to bring maximal benefit at the right level of therapeutic index, right?

So it's theoretical. You look at the situation, you look at the genetics, you look at the evolution of the -- of that -- how that indication is actually -- from a standard of care and how it's treated. And then you've got to look downfield 2 years, 5 years, 10 years and say, "okay, how am I going to move the needle in that time frame?" So it's a bit of kind of putting the Carnac hat on and asking some important kind of forward-looking questions.

But we're not doing anything to change standard of care today. It's always what happens 3 years, 5 years down the road because everything is moving so quickly. You've got to almost preselect kind of where you think the bar is going to be and then try to beat that, right? So -- but yes, there's a lot going on, and it's fascinating to watch the technology advancements on the translational side.

Certainly, on the discovery side, we have our own cryo-EM that the structural team is just -- I mean the rapidity and the depth of data we can generate on new areas of research, say, in the RAS space or in the SSTR2 space is just -- it's amazing to be able to have an idea, make a molecule, get some data, solve the structure, say, well, I guess I was wrong on that, but it does bind. It just binds this way or that way, and then you'll be able to modify your thinking and then go forward. So it's a full court press and with multiple inputs from multiple, if you will, perspectives. But I think that's what makes Exelixis so strong is that we can pull all that together with the right team and the right approach and move things forward.

And you've talked a lot about CRC so far in RCC and also neuroendocrine is a focus. And just curious what you're thinking for your SSTR2 and your DLL3. They sound very small cell neuroendocrine type focus. Maybe you could just expand just in general, neuroendocrine, about those targets.

Yes, exactly. So that's -- I mean that's a franchise that we talked about this in December, where we're just starting kind of scraping the surface with cabo based upon the CABINET study. We've got the STELLAR-311 study that's ongoing. We're currently recruiting, looking at zanza compared directly to everolimus, which is standard of care, second line plus, first-line plus in that situation as usually before cabo, the first oral therapy that was used.

So CABINET looked at cabo against placebo in later-line patients. This is going -- kind of going 1 or 2 steps up in terms of line of therapy but also against an active control. So you would imagine if that wins, it really kind of opens up a lot of additional leeway for us in terms of how that might be used, right?

The mainstay of neuroendocrine tumors is really SSAs, somatostatin agonist, right, which are all peptidic and parenterally administered. Having an oral therapy that could displace those being used in the frontline setting is a huge opportunity for patients. These are all subcu injections, big needles, can be painful. To be able to have an oral therapy that they can take once a day at breakfast or at night would certainly simplify -- not only simplify administration, but from a PK/PD point of view, really kind of even things out from the standpoint of getting away from some of the valleys that, in more advanced patients, can certainly cause problems from a symptoms point of view.

So -- but I guess that's a good example of -- it's still early. We're still kind of wrapping up GLP tox and hopefully, we'll be in man later this year. But it kind of -- it really shows to us the important perspective we have from a commercial point of view, with very few biotech companies have unless you've got a big commercial molecule that can inform how you evolve your strategy quickly in terms of asking the right questions about where's the maybe either underappreciated or unexpected opportunity. And then what's the best way to navigate that and what's the best way to use our financial depth to be able to build a leadership position.

So I think that's a good example that it's actually a really big indication. It's just kind of under the radar for a lot of big companies. And it's one that we think we can build. And I think the estimate is that it could double or triple in size over the next 10 years. So we want to be part of that growth because if we're successful in helping that indication grow, then we're -- means we're helping a lot more patients.

And if we can do that with more than one molecule, it's cabo, if it's zanza, if it's the SSTR2 story, if it's DLL3, if we can be part of that and own pieces of that pie as opposed to one pie as it's growing and helping that many more patients, then we can check a lot of boxes in terms of we've helped patients. We've improved standard of care. We're driving value creation, and we can then take that -- take those revenues and reinvest those in R&D and really move the next generation forward because from our point of view, value creation is all about building franchises and building one after another. And 2 is better than 1, 4 is better than 3. I mean the math just kind of gets very, very appealing after a while.

Yes. I mean at the core of Exelixis, I think also RCC is at the core as the starting point. Maybe going back to that, what do you see as key highlights, key next steps as you expand and grow within RCC and sort of to get from where you were?

Yes. No, it's a really interesting kind of look back in terms of where it was back in the early teens. First-gen molecules, second-gen molecules were kind of percolating along. I think we really changed the landscape there by asking some very fundamental questions about tumor biology at the most basic level and simply ask the question with cabo, "can you inhibit the primary driver of tumor angiogenesis and the resistance mechanisms at the same time, okay?" That was a simple hypothesis, right, be able to make the molecules that did that.

As we profiled them further, we learn more about their direct anti-tumor activity. We learn more about their impact on the -- on both sides of the immune system. And in some ways, we ended up with a molecule and a class of molecules that had an impact on literally every cell type in the tumor microenvironment. Part of it on purpose, part of it is kind of by accident. It came along with the right, but I think that serendipity and that empiricism is an important part of the process.

People don't like talking about that, but that's the reality of the situation. You know that from the days, right, in pharma. So then we just went from there, right? And we did a lot of work ourselves, a lot of work in collaboration with other companies and got some great collaborations as part of our CRADA with the NCI. And fast forward, we have the leading -- cabo is the leading TKI for RCC. It's the leading TKI in frontline IO/TKI combinations. It's the leading TKI in second line plus -- leading oral therapy in second-line plus NET because we've been able to generate kind of standard of care moving data and then be able to monetize that and kind of make that happen from the standpoint of our commercial depth and heft.

So that's something that we're focused on. Obviously, zanza, we've got a lot going on there. The 304 trials looking at non-clear cell RCC in combination with nivo. No one has ever done a pivotal trial in that subpopulation of RCC. So we're super excited about that.

We've got a couple of different trials going with Merck now in terms of the zanza, belzutifan combination, looking at post-adjuvant patients as well as second- third-line plus patients in both combination with belzutifan.

And we're very, very focused on being able to come up with approaches for frontline RCC as well. And I think that the learnings from all the different kind of competitive machinations over the last few months has really reinforced in our mind, certainly in my mind, the importance of I think asking the question a little bit differently is can we -- by doing a broad survey clinically, can we find orthogonal MOAs, mechanisms of action, that can give us arguably better activity with zanza in a checkpoint, either as a single-agent modality, so a triplet, or as part of a bispecific kind of like 628, right, where we've got PD-L1 and NKG2A, the natural killer cell ligand to be able to kind of find the right balance of additional potential activity, okay, without having a lot more tox.

Because if you're talking about -- again, we and others together, whole industry-wide effort, we've really moved the needle, right, in terms of patient benefit for RCC, right? And by looking at new MOAs, new ways of approaching the problem and then doing the right combinations. And this is then going to the next level. But you're working at a much higher base than you were before. So you've got to really thread the needle. And whatever you do has to have the tolerability and the activity for going to the next big increment in terms of whether it be PFS and/or OS, right? So it's a heavy lift.

And as you've seen with IO in general, right? I mean these things, there can be a long increment between breakthroughs, right? You have IL-2 and then you 25 years and you have PD-1s and CTLA-4s and now we've waited 15 years. And people are trying a lot of stuff and it's all great science. It just hasn't worked out, right? So every time you improve standard of care, it actually gets more difficult, so -- which is why for us, it's -- I think it's really important that we are committed to our leadership in RCC. We're investing there. We're doing it the right way in terms of sharing the cost, if you will, with our collaborator.

But we're also looking in areas like NET, like CRC and a meningioma, whatever, that kind of spreads the risk and has significant upside all by itself. So again, before the fact -- and we've seen this with cabo, you can design trials that you think are going to work. Most of them do work. Some of them are commercial blockbusters. Others are a little bit less compelling. But doing that all before the fact, there are so many factors that you just can't control for, you've got to have the right mix of trials and combinations and lines of therapy to be able to cover all the bases. And then when you do see breakout data, then you've got to capitalize on that with great speed and great conviction.

Absolutely. I mean you're just hearing you talk about the bar and thinking about this is where KEYTRUDA and KEYTRUDA/pembro, how it evolved going against chemotherapy, with a lower bar. And now as you say, we're waiting -- we waited a long time to see what can now go head-to-head in KEYTRUDA.

And on that point, when you think about the trials you guys are conducting, how do you sort of stack the deck? You've got great data. You're now thinking what trial to do. What do you do? What do you think to really increase your PTS? Nothing has ever de-risked, but just curious about that.

Well, it's a combination of both. And I think we're thinking, learning self-reflecting organization. And I think the part of the charm that we, I think, have been able to execute on is looking at what has worked and what hasn't worked and then ask some of the hard questions about, okay, what have we learned because you can learn a lot more from a failure than you can from a success sometimes, right, if you're not totally myopic, right?

So -- and I think that's where the -- asking the right question around combinations is so important. So we have a Phase II that we talked about, Dana talked about on earnings about a month ago in terms of looking at a second-line maintenance of zanza plus pembro in a squam population post basically chemo, pembro. And I think that's a good example where could we actually improve patient outcomes in the maintenance phase by combining with pembro.

Same thinking goes. We've done a lot of work, say, in prostate cancer with cabo. We had a trial in second-line lung cancer with cabo and atezo. Those have all failed. What have we learned from that? Well, with zanza, maybe we have the opportunity instead of trying to docetaxel head-to-head, which is still used a ton in all kinds of different tumor types because it's really hard to beat. It's truly standard of care.

Can we -- do we have the right molecule with zanza and from an activity tolerability point of view that we can actually combine with docetaxel? And so that doublet against docetaxel could be a really interesting way to go. So that's part of the next wave. And we're doing -- we actually have a trial going right now looking at that combination in later-line prostate cancer to understand tolerability and PK and those kinds of things and initial activity. But you can imagine if we can actually see benefit there so that could apply to prostate cancer, that could apply to second-line non-small cell lung cancer.

That could -- we ask the question, could you combine, say, zanza with standard chemo in frontline CRC. So kind of reinforcing this whole paradigm around building franchises across lines of therapy and like we've done with cabo and RCC. So it's a constant, I think, examination of what's the best place to put our efforts to make our investments based upon the data, based upon our vision for how things will evolve over time.

Yes. Earlier in the conversation, you mentioned how strategy isn't just what you choose to do. It's the things that maybe you don't do, things that you sort of either avoided or didn't dive too deep into. Is there anything that as you reflect on your time that you're running Exelixis, anything that you are maybe happy you didn't wait into, whether you were considering it or not, things that you feel maybe worth it?

Yes. Well, I would say the -- it's a great question. So I'm -- I think I've been in terms of my scientific career, more tend to focus than be broad because I think that's always the best way to marshal the resources you've got the critical thinking, you have access to either internally or externally, KOLs or through collaborations.

I think the focus that we've done has been partly organic, right? We have activity in GU and GI cancer. So let's double down there. We've got a commercial organization that's built to excel in GU and GI. So it makes sense to build in there, right? We've dabbled in other areas with cabo in the past, other molecules in the past as we were signal searching and those did not work out as well as we would have liked for them to we've double down where we're active, where we're successful and it makes a lot of sense.

But I think that one of the most important things we did early on was not looking at heme/onc and saying heme is so competitive. They're so deep there. The combination approach is so successful, really asking the question, what do we have to offer there that could be different and could, again, an improved standard of care. And I think the conclusion that we made was probably not a lot. Let's focus in on solid tumors where it's just a much, much tougher go in terms of both pharmacodynamics, right, in terms of genetics and certainly then in terms of the actual pharmacology you're trying to impart there.

So I think that's the right move. Lots of important work has been done in thoracic oncology and breast cancer, those kinds of things, I don't think we could be as effective as we are in GU and GI if we were more broadly based, right?

So look, we'll double down. always -- we always have the option if our MOAs and our pharmacology overlaps with biology and another tumor type, we can always go there. We're doing that now. And part of it is opportunistic, part of it is mechanistic. So nothing stops us from doing that. But I think to keep everybody focused on what we're trying to do because, I mean, there's literally millions of patients in this subsection that if we're successful, we can bring a lot of value to and can, again, grow the company and build shareholder value with as we go forward. So focus is a good thing for us for sure.

Absolutely. And maybe just thinking forward-looking, what does -- what do you see your success for Exelixis in maybe a 5-year time line? Whatever that metric looks like, what would you sort of look forward and say, if I'm happy with this.

Yes. No, it's a good question. It's something that we think about a lot. I think about success on a log scale, not a linear scale. And that from the standpoint of any kind of quantitative metric, patient numbers of patients you treat, patient years, you can improve upon all that drives revenue, and it's the kind of the big circle one drives the other. But again, I think the multi-franchise pipeline of franchise molecules kind of plays to that theme, right? We want to jump up in half log units as quickly and as often as we can because that's the way you bring value to patients, and that's the way you bring value to shareholders.

The two are intimately connected in a way that one goes with the other. And the value isn't just another molecule, but it's improving standard of care. So for me, again, I'm not an oncologist, I'm a scientist by training, over the years, that's become kind of a very, very clear guide for me. If we're not actively changing standard of care, then we need to ask the question, what are we doing? Why are we doing it? What are we doing? Do we want to invest here or someplace else? Because that's -- ultimately, that's the goal. If we do that well, everything just kind of flows from there.

And that's true, I would say, in general, within the industry, right? You change checkpoints. I mean they dramatically change standard of care. Now it's taken another 15 years to go to the next level, and that's -- but that's the business we're in, right? It's a tough business, right? Anybody who plays in this space can appreciate that on a very -- as I know you can, a very personal level because it's hard. You fail more than you succeed. You understand less than you think the factors at play.

When I was dabbling in antibiotics or antivirals from a pure genetic point of view compared to what's happening with solid tumor oncology where you can have in 1 organ, and this has been proven by kind of autopsy, you can have a liver post-resection that is -- has got different -- 10 different tumors with 10 different genotypes, right? I mean it's just -- it's tough. And you really need to bring every MOA to bear, every approach to bear, sometimes every modality to bear to move the needle. So I think it's with a great -- any success you have to be humble about because it's tough. And that success was hard-earned and maybe a little bit of luck was involved as you go, but you've got to be able to capitalize that and build foundations that you can then build companies and bring more success to patients. Yes, for sure.

And that's wonderful. And we've talked a lot with RCC. You talked about neuroendocrine. Maybe just give a little bit of time for CRC, too, is that when you think of your strategic vision for CRC and the trials and the things that you'd like to do there, anything you'd like to highlight?

Yes. So we talked about that a lot already. I think that certainly having a foundation of success with 303 in a later-line population, checkpoint-based kind of regimen along with zanza, really interesting. Again, that's been an area that's been heavily invested in by a number of companies, all met with lack of success and because it's just a tough place to play. So we're very fortunate to be able to win there. We have some data at ASCO, which I think is going to be pretty interesting around contribution of components that I would refer people to because it really highlights, I think, some of the way we view science in a way that I think is very novel as well.

Yes. So the foundation of success there, can we take the same general approach where we have activity in terms of improving survival with measurable tumors, right? Patients with metastatic disease, as you can see radiographically. And can you go up in the line of therapy to the 316 opportunity where you've got basically no metastatic, no visible imageable metastatic disease, but you have high-risk patients post-surgery and chemo who are bound to progress based upon kind of longitudinal data within 6 or so months, right?

So the question is, will the same MOAs that appear to work in measurable disease work in tumors that you can't -- that micro metastases that you can't visualize radiographically, right? So I think it's a fascinating kind of connection between those 2 ends of the spectrum. The fact that we're -- we had success with zanza checkpoint that I think gives us a lot of confidence using, again, as I mentioned before, using the Natera technology to select the right patients is the way to play the game, right?

You want to -- not everybody needs this. A lot of patients are cured with surgery and chemotherapy. And that's fantastic for them. But those that aren't, we need to get in there. And for whatever reason, genetically, they need an extra boost. And if we pick the right combination and the right kind of details around how that works, can we convert what is a relatively short time period to then kind of real problems in terms of metastatic disease? Can we lengthen that?

So that's a -- look, for me, that's a noble enterprise. And obviously, we're in it to run a business and ultimately drive shareholder value, but there's a lot of patients. There's thousands of patients every year that could benefit from that. And that's a big benefit, both physically and I think about it psychologically. There's no -- I mean, they're just waiting. There's no standard of care for that right now post -- for those high-risk patients, post-surgery and chemotherapy. So to be able to -- if we're successful, have something to offer them, I mean, that's very motivating and inspiring for everybody at the company. So we're serious about this stuff. We understand the stakes that are there for patients, and we're doing everything we can to move the needle quickly and confidently with high quality every single day.

Well, we've talked about several different tumor types, CRC, RCC, neuroendocrine. Is there any other tumor type that you think would be worth highlighting? If not, we can talk about maybe some -- any other modalities that you think haven't talked about enough.

Let's move to the modalities. I think that's actually -- it's a good time. And we talked about ADCs, right? We obviously have a strong small molecule approach, bispecifics. I think one of the things that we've done over the last 2 years is we were traditionally a small molecule-focused shop. And on the restart sort of our discovery efforts understood that the more breadth we could bring into our discovery world from a biologics point of view, the better in terms of covering more MOAs, getting away from potential overlapping toxicities of having small molecules kind of play in the same structural space, if you will.

And that thing has been a real successful operation from the standpoint of -- we haven't invented new technologies, but I think we've aggregated technologies across the board. The execution has been absolutely phenomenal from a target identification to kind of drug elaboration, if you will, optimization, both with bispecifics as well as ADCs, for example. And we've been able to transition that from small scale to at scale for GLP and then GMP applications. So -- and that's all happened in a very seamless focused fashion. And the team is -- it's just first rate, right?

We can go from concept to molecule to assays to scaling up either internally or externally and kind of turn that crank in a really impressive sort of way. So I'm really pleased about that. And it just gives us that much more kind of therapeutic and pharmacological breadth to be able to ask important questions, right? Now unlike a couple of years ago, pre-expanding into these biologics, we were like, okay, where do we -- who do we collaborate with to find this. Now we can say, okay, if we're looking at the biology correctly, we need something here and something here. This is a small molecule. This is an ADC. This is a bispecific. Let's go do it, right?

And we can do that as well as anybody, right? So -- and then the scale up -- I mean, making things on a milligram scale can be easy, making things on a kilogram scale. You got to have the right people and the right opportunity with the right -- really, the right interest and the right vision to be able to get that done in real time. So I've been super pleased how fast we've built that and the expertise is just first rate.

That's amazing. And you talked earlier -- in our last couple of minutes here, you talked earlier about you have great financial position, stock buybacks. I mean we haven't talked too much about the financial commercial side of the company. We're mostly focused on drug development. So maybe just in the last couple of minutes, anything from the commercial side, finance side that you think is important to talk about the strategy and how you execute?

Yes. I would say, at the highest level, it's all integrated. We have one strategy. We have one focus. Obviously, we have different groups and different responsibilities and accountabilities in terms of how that works, but everything works together. And the way we're organized, the way we're co-located, the commercial people, the competitive intelligence people, the discovery people, that leadership operation is talking on an hourly basis, right? And that's the way it has to be, right?

Having people in silos, sitting in their offices, drawing structures and thinking about whatever, just doesn't -- that doesn't work, right? You've got to have the right level of insight. And certainly, whether it be on internal programs, but also looking at external assets, right? We need to have a full view of what the opportunity is. And we're fortunate to have this fully enabled commercial team that has achieved and overachieved and competed with all the big guys all the time, right?

So to be able to have that depth and that breadth and having that mindset that says, a good idea, but a tiny indication or a good idea, but don't forget about this competition and that's a good idea. I mean having that analysis is now just -- it's just kind of -- it happens automatically almost. I don't want to organize it. It just happens when the people are talking and there's the right level of engagement and accountability about making that work.

So in that regard, it's super fun to watch. It's not easy. And sometimes there's just things we don't know, and we have to be able to model effectively and then make -- we're paid to make decisions without having perfect insight into all the different variables, and that's part of the job, too. So -- but I think from a financial point of view, the depth we've got and the modeling capabilities we've got really helps us do that a long way. So great team. Everybody works together really well. I'm super excited about where we're going, and we just need to continue to keep our heads down and just keep cranking, which we do.

Well, that's amazing. I mean this has been a great conversation. I really appreciate the chance to learn from you, and I'm sure everyone else listening has as well. So thank you for sharing your strategy, your future vision and really appreciate your time today.

Fantastic. It's been a great day. I appreciate the invite and looking forward to seeing you again soon.

Absolutely. Thank you, Mike.

Okay. Thank you. All right. Great.

All right. Good afternoon, everyone. I'm Stephen Willey, one of the senior biotech analysts here at Stifel. And glad to have with us for the next session, Andrew Peters, who's the Senior Vice President of Strategy and IR at Exelixis. Andrew, thank you for the time. It's always appreciated.

Yes. Glad to be here.

Maybe we can jump right into zanza, which obviously remains the focal point of an expanding development effort across a lot of different tumor types and lines of therapy. So you've got this December PDUFA date that's approaching in third-line colorectal based on the STELLAR-303 data. Just how do you think about the value proposition of this regimen in this setting? And do you think that there's a subset of later-line patients for whom this regimen might be best suited?

Yes. Steve, glad to be here. Just as a reminder, I'll be making forward-looking statements today. So everyone online, please see our disclosures around risks to our business and our regulatory filings.

So it's an interesting place to start, and I'm glad you started kind of the discussion on zanza that way. Highlighting the breadth of what we're doing with zanza is really how we think about the business. Mike talked about it on the last earnings call, and we certainly highlighted at R&D Day, kind of this idea of franchises is really what we're trying to do, the breadth of development with 7 ongoing or planned pivotal studies with zanza.

And certainly, one of those core areas is not only the zanza franchise, but the CRC franchise as well. So the foundation of that is the 303 data with zanza, and it's one that we want to continuously build on. I'm sure we'll get to 316 later, kind of in that post-adjuvant, post-definitive therapy CRC space. But really, this idea that we want to establish a leadership position in CRC and really build from there. And we think that the 303 data certainly enable us to do that.

So on the heels of kind of that positive data that came out at ESMO last year, showed a survival advantage against a very active standard of care. It's something that as we've done market research and are really starting to ramp up a lot of that launch prep, we're finding that the patient community, the physician community is especially excited about having another option.

I certainly wouldn't frame it as we're thinking about it as only targeting a segment of patients. The way we see the landscape is it's actually quite fragmented. I think we've talked about this before. That third line plus CRC is about $1.5 billion addressable kind of market today, with about 1/3 in that sunlight regimen, 1/3 in TKIs and 1/3 kind of a mishmash of a bunch of others. And so our job, and I think something that we've been especially good at in the RCC space, is just focusing and being competitive and trying to gain as much market share across all of those segments as possible.

If you look at our data, kind of the forest plot shows that there's no real patient population that drives that activity. It's actually pretty robust and consistent benefit across all of those different subtypes. And then layering that on top of -- zanza/atezo offers a chemo-free option, an IO-containing option. Those are the sorts of messages that we think are starting to resonate in a lot of the market research that we're doing. And we're certainly excited, if approved, to go out and have those conversations with providers about having another option for their patients.

Okay. One of those subgroups is this non-liver met subgroup. And you've got this prespecified OS analysis for which we're expecting data sometime, I think, the middle of this year. How, if at all, would you expect this data to impact regulatory discussions or labeling discussions? And again, I know this was prespecified as a dual primary endpoint, but you did hit stat sig in the ITT population. So why does this analysis, I guess, even matter to that extent?

Yes. I mean, the simplest answer to the question is the more data, if positive, that we're able to share with providers and patients to kind of complement the story that we've already generated, the better. I mean if we're able -- again, if the data are positive, having a label, say, Kaplan-Meier curve for the ITT, Kaplan-Meier curve for the non-liver met, that just adds to kind of the robustness of that conversation that we can have with providers and patients around this option for patients.

Certainly, as it relates to kind of how the NLM data will impact our ongoing discussions with regulators, we certainly see this as kind of par for the course. This is pretty standard in any ongoing review for the agency to ask for updates to data, especially on something like survival. And so we think that this is just something that will kind of fit in with that normal course of review.

You did highlight that this is part of that dual primary endpoint. Factually speaking, part of the reason that data at ESMO, data midyear is really about kind of the time course of disease for these patients. Patients who have, unfortunately, liver metastases just tend to see events much faster. But this is kind of much more of a standard update than anything.

Okay. Maybe just continuing on zanza for a bit here. So we get a lot of questions around safety tolerability at the 100 mg dose. Just given that if you look at median dose intensity from STELLAR-303 and some of the other Phase II data sets that we've seen, it's kind of a fraction of the specified dose. So can you just talk about the dose optimization work that led to the selection of this dose for this initial suite of Phase III studies?

And then I know that you've talked about other or additional dose optimization efforts that have been initiated to inform dosing in other combo-based trials in earlier lines of therapy. Is there anything you can say about how those additional efforts have kind of informed zanza dose selection for the next suite of trials that you're looking to enroll?

Yes. So again, I think it'd be helpful to kind of set the framework around how we think about just dose in general, dose in 303 and dose for the other studies. So at Exelixis, an incredible amount of work kind of goes into that process. Not only around generating a significant amount of early data, but we have an incredible PK team that does exactly this, focuses on a lot of in-depth modeling around exposure response, understanding tumor sensitivity, line of therapy, combination partners. Those are all of things that really play a role in kind of how we determine dose selection, not only for 303, but other studies as well.

One of the things that we talk about at Exelixis is kind of this cabo lens helps inform everything that we do with the company. And the learnings and kind of the process of development in cabo certainly followed the same path where we started, say, the monotherapy at the higher dose as we moved -- in later lines as we moved into earlier lines of therapy or different cancer types. And certainly in combinations, we kind of evolved that to really focus on clinical benefit risk, tumor sensitivity, combination partner, what the biology really tells us and what the modeling really tells us.

And so we're kind of following that same playbook, so to speak, with zanza. And so we don't necessarily say, okay, there's one dose across all indications. We have a lot of in-depth work that goes into kind of dose selection for each individual study. And we think that, that's kind of the best approach we should take.

One of the dynamics that we talk about a lot is we want to make sure that our job ultimately at the end of the day to create value for all stakeholders in the company is to run successful trials, not just run studies. And so dose selection and optimizing dose for each of those kind of components and incorporating a lot of that exposure response modeling and all of the other things that the PK group does, that all kind of fits into how we think about is this going to be a positive study? Is this a study we want to invest in? And is this study going to have the ability to shift standard of care? Because the only way that we're going to be successful commercially is if we're able to define a new standard of care for patients and help them live longer. And that's certainly kind of what we're aiming to do.

Okay. Kind of another near-term zanza catalyst that we're anticipating is top line data from STELLAR-304, which is in non-clear cell in combo with nivo. So I know that there hasn't really been any prospectively generated data in this setting from a Phase III perspective. But IO/TKI regimens, they're already listed as preferred treatment options in NCCN treatment guidelines. So what kind of commercial opportunity do you see this 304 data unlocking? And how do you think these data will then change the prescribing narrative going forward?

Yes. 304 is an important study for us, and importantly, for patients as well. Candidly, I think as we were starting to strategize around what we wanted to do in RCC, this idea of really no standard of care in non-clear cell honestly surprised me a little bit. The fact that there's never been a large randomized study in this space is somewhat unique in oncology. And it's really a fact of all drugs, all combinations that are approved in RCC have a label for both clear cell and non-clear cell.

And use, as you mentioned, is really driven by kind of guidelines. But again, those guidelines are informed mostly by single-arm, unrandomized kind of Phase I/II type studies, which we all can appreciate the challenges of interpreting that data because so much patient selection can oftentimes go into that. And so from the physician and patient perspective, understanding, well, how does this data set apply to the patient that's in front of me can be challenging.

And so what we wanted to do with 304 was really plant a flag in the ground and say, okay, with Level 1 evidence against an active standard of care, is zanza/nivo able to show a benefit. And that's what we're hoping to read out, looking forward to reading out later this year.

Again, the feedback we've gotten from the RCC community is exactly that, is that they've been waiting for something to help inform a lot of those treatment decisions. Because from their perspective, reading the guidelines, you're basically trying to pick, well, do I trust this small Phase II study or this small Phase II study or this small Phase II study? And all the caveats with cross-trial comparisons, single site versus a few sites, what are the patient characteristics of these? Were they preselected? All of those dynamics are certainly important.

And so 304 offers a chance for us to really define a standard of care. And again, with Level 1 evidence, if positive, hope to move up, kind of become that clear recommended combination.

Okay. Maybe just sticking to RCC. So we just learned about the second Phase III zanza trial that you are running in collaboration with Merck. I think it's LITESPARK-034. We just saw Phase III data from LITESPARK-011, which was generated in pretty much the same kind of patient population. So how do you think 034 creates a second-line foothold for zanza in the context of this 011 data that we saw, I think, at ASCO GU earlier this year?

Yes, ASCO GU. Yes. I mean, I think one of the dynamics that really that informs how we think about zanza development is this idea of cabo is the TKI of the 2020s in RCC. How do we make zanza the TKI of the 2030s in RCC? And certainly, a big part of that, and I'm sure we'll get to it later, is how -- the way patients are treated can evolve over time. And so a lot of that is understanding, okay, let's not run a study for how patients are managed today. Let's run a study for how we think patients will be managed in the future.

So what the LITESPARK-011 data show us is if VEGF/TKI combinations certainly can play a role in the patient's journey with RCC, what we want to define with both 033 and 034 as well as other studies that we're planning with zanza is how can we improve and iterate on that. The totality of the data that's been generated so far across all of these different regimens, all these different combinations, whether it's 005, 011, 012, 022, those inform a lot of those decisions.

And so we ask questions like every patient who's coming in and trying to understand how they're going to be treated, is it better to combine? Is it better to sequence? The dynamic at ASCO GU that came out after that data were presented was, well, if there's no clear survival advantage, based on what we've seen so far, the absolute PFS for, say, a TKI monotherapy, followed by what we've seen, say, with LITESPARK-005 with belzutifan, how does that compare with what the combination does? So it's going to be on us and generating data with LITESPARK-034 to more robustly answer that question. And that's really our goal.

As I mentioned before, our job is to kind of right shift that standard of care. And so the question is, if LITESPARK-011 shows that this combination can have an effect and positive impact on patients, can an optimized TKI like zanza, best-in-class TKI further improve upon that? And then similarly, kind of with 033, as that treatment dynamic changes and more and more patients get treated, say, with adjuvant pembro in frontline, what does that treatment option say should be for patients? So it's kind of that -- what's the expression in hockey, skate where the puck is going. That's kind of how we think about development of zanza in RCC.

Okay. So you mentioned 033, which was the first RCC collaboration that you announced with Merck. Just a couple of questions on that, right, because that's looking at belzutifan and zanza as kind of post-adjuvant IO frontline therapy. So I guess, number one, we know from LITESPARK-022 that belzutifan added to pembro can improve outcomes, right? So I guess first question would be, what is your expectation for belzutifan uptake in adjuvant?

And then the second question is, we've known that adjuvant pembro has been around and available and approved, I think, since '21. And IO/TKI is still considered to be standard of care frontline therapy following pembro in the adjuvant setting, right? Like, that's still the tailwind that you're benefiting from 9ER. So would it be a more, I guess, appropriate comparator arm for this trial? Should it have also included an IO/TKI arm as frontline?

Yes. So there's a couple of different questions there.

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Yes, always. As a former sell-sider, I can certainly appreciate that. One of the dynamics that we've seen and I think the industry has seen is the challenges kind of, frankly, across tumor type of IO retreatment. And so understanding the actual contribution of that IO piece if you [ perceived ] pembro in the adjuvant space is -- it's not really seen as kind of being -- contributing a lot. So we certainly feel that 033 is well designed to kind of answer that question of if IO retreatment is not really expected to be successful, what should that standard of care be? This is the first study to help answer that question. So we want, again, want to be involved in defining what that is.

Again, this comes back to this dynamic around TKI of the 2020s versus TKI of the 2030s. We see the kind of world of adjuvant checkpoint use only expanding in the future. One of the dynamics that we've seen is now that pembro does have a clear survival advantage, it's driving -- increasing and accelerated adoption. But beyond that, as the number of kind of de novo versus prior diagnoses kind of change as well, we expect that number to increase over time. And so it's this matter of -- if our view is that the number of patients who are treated with pembro and the adjuvant is expected to grow over time, we want to make sure that we're helping to define the answer on kind of what's that standard of care.

As it relates to kind of the adjuvant belz/pem use, our observation has been that kind of that hockey stick acceleration of adoption for pembro in the adjuvant space was really when they saw a survival advantage. Because, again, these early-stage patients, as I mentioned before, it's always going to be about clinical benefit risk. And so when you're adding on an additional mechanism, you generally see additional tox. And understanding, well, if I'm adding on additional tox, what is the actual benefit that I'm getting? Especially with the 5-year survival rates of RCC continuing to improve, especially relative to, say, when cabo was first introduced, understanding the combination versus sequence dynamic is always going to be important. And so that's something to consider, again, as we think about not how are patients treated today, but how will they be treated in 2030 and beyond.

Okay. STELLAR-311. So this trial is evaluating single-agent zanza versus everolimus as first TKI therapy in neuroendocrine tumors. I think unlike the other STELLAR trials, you're characterizing this as a Phase II/III. So is there a formal Phase II portion of this trial? And if so, what is it actually assessing?

So we haven't broken out kind of the specifics around what that Phase II/III gate is. But in general, like all Phase II/III studies, it's a way to be reasonably efficient from a timing perspective to understand is the study likely to be successful, what are some of the metrics that we can take kind of an early look at, and then continue to enroll. It's just a mechanism that we can use to really be efficient, both from a risk perspective, but importantly, from a time perspective, how to kind of get that completed as quickly as possible.

Okay. Maybe the last -- or maybe second to last zanza question. So STELLAR-316, right, this is the trial you referenced earlier where you're looking at zanza and zanza plus PD-1 in early-stage colorectal. It's -- conceptually, I think it's a very interesting study. There's certainly a lot of observational data that's supporting worse outcomes in these MRD-positive patients.

But I guess when we've talked to KOLs about therapeutic intervention in these MRD-positive CRC patients who don't have evidence of clinical progression, the feedback there has been pretty mixed, and maybe that's just a byproduct of some of the historical data that's been generated in that setting to date. But how do you just think about kind of the mixed opinions that seem to be out there around slotting something like zanza into treatment here and whether or not that could have an impact on the pace of enrollment and just how you think about the market opportunity?

Yes. I mean, this is one that I'm particularly excited about. We're particularly excited about it. Again, this is a study where Exelixis is really kind of defining a new standard of care.

When we've done kind of our pretty robust KOL work and really understanding that opportunity, I would frame it a little bit differently. If you look at the data that Natera has generated and published, those Kaplan-Meier curves for kind of that MRD-negative versus MRD-positive are striking. And kind of the current standard from the patient's perspective is watch and wait. These patients who are MRD-positive, ctDNA-positive kind of know that they're an exceptionally high risk of their disease recurring and can't really do anything about it.

What we're offering is a potential intervention where we know that zanza is active in a much later-line population showing a survival advantage. So it's a sensitive tumor type. And then we're offering them either zanza monotherapy, or as we've announced, zanza with pembro. And so offering kind of that opportunity to really right shift again that DFS interval, which is unfortunately very short for these patients, that has the potential to be quite meaningful.

I think you've heard Dana on the last couple of earnings calls talk about our view on potential enrollment being particularly brisk. That's one informed by this high unmet need from a patient's perspective around what do I do if I am kind of ctDNA-positive. But two, operationally, the benefits of working with Natera and working with Merck to kind of help identify those patients and really accelerate operationally what that could do.

And so I'd actually frame it the other way. This is one where we're really excited to enroll. And as we reflect on kind of the 303 data, what we've observed is KOLs who are really excited about 303 start learning about 316 and get even more excited about zanza as a franchise in CRC. And similarly, as those docs who are interested in kind of that 316 post-definitive therapy CRC space, they start to learn about zanza in the later lines. And it's kind of that echo chamber that we're hearing a lot about that really kind of, I think, is getting us excited about what we could do as kind of having a real franchise in colorectal cancer.

Maybe last question here. So the pipeline behind zanza, you've got a few different modalities. There seems to be a bit of a building concentration on biotherapeutics, right? I think you've got ADCs that now represent the majority of these earlier-stage pipeline efforts. Should we expect to learn anything about kind of the 4 assets that are currently in Phase I development? Will we learn anything about those things before the end of this year or maybe first half of next?

Yes. I mean, I think the way that we view it -- and again, as you can appreciate, you've known us for a long time -- we're a little bit atypical for a biotech. One, we're profitable. Our focus, candidly, is on execution. And so we're not going to dribble 10 patients' data here and there to try and raise money or use the stock or anything like that. What we want to do is once we have mature, stable data that reflects this is what the profile is versus what the profile could be, that's when we'll present it.

I think what we've shown ourselves to be really able to do is be -- is to prioritize. And so if any of those early-stage programs aren't going to potentially define a new standard of care, we'll move on to the next thing. We're going to kill things quickly is kind of one of the mantras that we have here, and that's how we can be efficient is just this really stringent prioritization kind of across the board.

And so whether that's moving to the next, seeing us start a pivotal with one of those programs or seeing us cut it, that's the sort of thing that you'll see. And then we'll present when that data really is mature and you guys can get an understanding of -- it's not just a couple of patients here or there. It's really a robust data set to help inform why we're making these investment decisions.

All right. That's all we have for time. Andrew, always appreciate it. Good to see you.

Good to see you.

And thanks for listening, everyone.

Our second session, we've got Exelixis, and we're really excited to have them here. They're represented by Andrew Peters, who is the SVP of Strategy. Thanks for being here.

Yes. Thanks for the invite. Glad to be here.

Yes. So a lot going on at the company. I wanted to start maybe on the commercial franchises first. So you guys have given guidance. Cabo had a pretty solid quarter. So maybe at a high level, I mean, how are you thinking about the balance of the year, the future trajectory this year for cabo across its existing indications?

Yes. Happy to get into that, I guess, before answering, I want to make sure that everyone understands going to be making forward-looking statements today. So please see our relevant disclosures in our regulatory filings. Yes. So as you said, kind of our guide reflects continued growth for the cabo franchise. Kind of specifically where that's going to come from, I think it's really about our organization, our company continuing to be laser-focused on cabo, both on the base business as well as the NET launch. It's one of the things that we've done well historically, and it's something that we want to continue to do and make sure that we're not taking our eye off the ball.

We've talked about kind of over the last several years, continuing to see market share gains, not only in RCC and in particular, frontline RCC. But now as we're kind of launching into that NET segment, really driving that NPS, which from our perspective, is a pretty good forward-looking indicator. As P.J. talked about on the earnings call, highest NPS we've ever had during the quarter. And so it's that laser focus on additional market share, finding those patients as we've now kind of expanded our commercial footprint to focus not only on the NET launch and community side, but really lay the groundwork ahead of potential zanza launch as well. So it's really kind of that singular focus on making sure that we're going out every day and talking about cabo, talking about the data and that, again, driving market share.

Got it. Maybe just to dive in a little deeper on that. There's obviously 2 major parts that we as investors have been focusing on the RCC side and the NET side. Just on RCC, I mean, there's been some competitive data, particularly in HIF-2. I guess how are you thinking about maybe the balance between first line and growth you have there versus maybe competitive pressures in the second line and how you envision the trajectory?

Yes. So I mean, it's sort of the obvious that oncology is competitive, has always been competitive, will always be competitive. And that's what we do every day as we kind of go out and fight to either develop new therapies to establish standard of care or really ensure that drugs like cabo are able to be used in the largest number of patients possible. So as it relates to the HIF space, obviously, this is an evolving dynamic with the recent LITESPARK-012 data as well as our own initiations of the 033 and 034 space. So it's certainly a mechanism that we're paying a lot of attention to.

As it relates to kind of this dynamic around frontline, second-line use, we've seen a lot of speculation that if len/bel does get adoption, say, from LITESPARK-011 in the second line, does that drive incremental use for cabo in the first line? That certainly would be an outcome that we'd be okay with given kind of the relative duration dynamics between those. But I think there's still kind of a lot of additional information that needs to come out around just the -- between LITESPARK-05, 011, 012, 022, it's just a continuously evolving space. And so one we're obviously paying close attention to. But right now, cabo is the #1 IO/TKI. It's the #1 IO, and we want to do everything we can to make sure that, that dynamic continues in the future.

Got it. And the other side of the equation is the NET growth. And we've done a fair amount of work here as well and found pretty high levels of prescriber enthusiasm. I think on your recent call, you guys mentioned the #1 prescribed oral agent in second line plus NET. So I guess how do you think about how much more growth there is in NET? So you guys recently had the sales force expansion included team moving in that space as well. So I guess what are you hearing on the ground?

Yes. So again, I think we'd agree with your characterization around kind of that level of enthusiasm. We certainly saw a lot of adoption kind of right out of the gate in the academic space, just given the strength of the CABINET data. But again, as we've talked about historically with our success in RCC, it's really about going in and driving market share gains. And if you think about, say, NET, along with RCC, it's not only about penetrating that academic kind of KOL sphere, but then going into that community space as well where the vast majority of patients are actually treated.

And so what the sales force upsizing allows us to do is kind of do both, continue to kind of really hit hard and kind of hammer home the message around cabo's strength and really the benefit for patients here, but also educate those kind of community -- more community-based docs who may not see that same kind of volume either of RCC patients or NET patients. So it's kind of expanding that to drive additional share. We're now kind of a year into the launch, but one of the dynamics with NET is just understanding that it's a relatively indolent disease. So there's always that NRx/TRx dynamic that's going to start to happen as well, where you're stacking patients not only with new patients, but refills and kind of that's something that we're going to continue to look for as well. And I think our guidance, which reflects growth not only in the RCC space, but NET as well kind of takes all of that into consideration.

Got it. I want to move on to zanza and some of the pipeline updates there. But since we're on the topic of NET, I just wanted to first touch on 311. I guess, how you're thinking about that study, the differentiation that zanza might provide both in the paradigm and which is going to fall in NET as well as how that handoff might work between cabo and zanza in the future?

Yes. So I think it's a dynamic that's really going to go into kind of 2 key areas. One is just the uniqueness or kind of differences between cabo and zanza and kind of the more user-friendly, shorter half-life, potentially more tolerable, all the things that we've started to see earlier on and then just the differences between 311 and CABINET. So CABINET relatively later line population, placebo-controlled reflecting that dynamic versus 311, where it's really kind of defining or hoping to answer the question, what should be that first oral option.

And so what that means from a practical perspective is it's an earlier population, and it's also head-to-head against kind of the current standard of care in everolimus. And so again, it's going to come down to levels of evidence if we're able to show that zanza is statistically better than kind of the current standard against an active comparator. We think that, that's a really powerful message that in the future, our reps will be able to go out and market to versus CABINET, which again, it is really rare in this business to see HRs with a 0.2 and 0.3 in front of it. But again, for the most part, that was also a relatively later line population for a lot of those, if you look at kind of the breadth of that study.

The nearest-term opportunity for zanza is obviously from 303 and CRC. So I want to touch on the commercial there as well. But first, there's also going to be a potential data update in the NLM population. I guess, how are you thinking about what you'd like to see there? And maybe what success in NLMs might mean more broadly for the CRC opportunity?

Yes. So again, there's a couple of dynamics there. On the success side, statement of the obvious p-values. That's really kind of the bread and butter of the industry and what's what allows our sales force to go out and really hammer that message home that zanza/atezo should be the new standard of care for these later-line colorectal patients. In terms of does it matter? Obviously, the ITT population, which read out last year and has the PDUFA date in December is inclusive of both patients with liver mets and non-liver mets.

But again, kind of the best case scenario, so to speak, is really a data set that enables our commercial organization to go out and have conversations with physicians and prescribers to really emphasize and reemphasize that dynamic around why the combination should be kind of the standard for patients what the inclusion of an IO potentially means from the patient's perspective and really just why we think the data are starting to resonate kind of as we do these kind of market research and KOL checks, a lot of those messages that are starting to come out. So the non-liver met readout, certainly looking forward to it and hoping to show as strong a data as possible. But just again, as a reminder, kind of that ITT population is really inclusive of all patients.

Appreciate there might not be a lot you can say on the next part of this. But as you mentioned the PDUFA as you guys move towards that date. I mean, anything to note on the regulatory interactions?

Yes. I mean other than we have a great relationship with the agency. From our perspective, the review and the filing has kind of gone as well as we could hope. It's one of those things that we just -- this isn't our first rodeo, so to speak, on the regulatory.

On FDA, the FDA is it?

Yes. So it's a collab that we have that experience in kind of those existing relationships. And it's been a great collegial collaborative process so far.

Great. And then as we look towards, I guess, December and potentially starting that launch, the data you've shown suggested benefits broadly for CRC patients. And your strategy, as you mentioned, has been fight for every patient. So is the initial push going to be broad? Is it going to be focused on both community academic? I guess how do you think about the initial stages of that launch and where you're going to position the drug?

Yes. I mean kind of as we've shown at RCC, going out and competing commercially is something that we do especially well. And it's really going to be about kind of targeting all of those populations, fighting for every patient, fighting for every market share point is something that we want to do. As I mentioned, kind of those dynamics around the messaging that's really resonating with patients. It's potentially the first IO that's going to be available to these patients is something that we continuously hear, but also kind of that chemo-free dynamic as well as you think about the patient's journey from diagnosis towards that treatment decision in kind of the third-line space, functionally, they'll have been on chemo that entire time.

So understanding a IO-containing chemo-free regimen that has a clear survival advantage over a prior standard of care really does resonate. Then you also understand, say, relative differences between our data and as you mentioned, kind of this robust benefit across all prior subtypes, whereas if you look at, say, some competitor data, that same dynamic around something like prior Avastin use or prior bev use and the differences kind of in efficacy there. That's something that I think given how patients are treated in the U.S. could be especially relevant.

Got it. And just to remind everyone, the sales force there is largely in place so you can it's right.

Yes. So I think, again, kind of what we've talked about as a key part of the sales force expansion that we completed last quarter was not only kind of to continue to accelerate that net launch, but also lay the foundation for zanza potential approval later this year.

Got it. You guys have talked about how this could be potentially a $1.5 billion market opportunity. As investors start doing more work on the launch? I mean, are there any other metrics that you'd point to, any other launches that we should think about to better understand how the shape of zanza and CRC could look?

Yes. I mean I think the best way to think about CRC is kind of that $1.5 billion opportunity when you apply kind of contemporaneous pricing and duration and all of that is really a reasonably fragmented market, and that's in part driven by this academic versus KOL dynamic, which is probably more prevalent in CRC than some other tumor types, but it's kind of 1/3, 1/3, 1/3, 1/3 roughly that sunlight regimen, 1/3 kind of TKIs and then 1/3 hodgepodge of chemo-type options. And so our goal, our mission, our singular focus, again, is to make sure that we're taking as much share from each of those 3 buckets as we can. And so can't and won't be able to give guidance on what that trajectory looks like other than it's going to be our job every day to kind of come in and drive that adoption.

Got it. I wanted to pivot towards zanza in RCC and non-clear cell as well with the STELLAR-304 trial. We're looking for data from that this year. I guess, can you talk about, given that there's no approved -- formally no approved treatment options in this setting, specifically for this, what -- you're going to tell me p-values, but what looks like -- like what a win for you guys that can help you get competitive, move into this underserved patient population? I guess how are you thinking about that?

I mean, I don't want to say it again, but I think that's the honest answer is great data. P-values, one of the things that's driven success in for cabo and RCC and why it's the #1 IO/TKI is that kind of PFS, response rate, survival, all of those improvements really resonate with patients and physicians. And so it really comes down to kind of what the existing dynamic is in that kind of non-clear cell space and what we're hoping to achieve there. And it's this relatively unique aspect of the non-clear cell segment where there's really no data kind of across the board.

And so we were having a conversation with an investor earlier and adoption is really driven somewhat by inference from the clear cell space and then as well as guideline-driven recommendations based on some really sparse data sets, single-arm unrandomized data and potentially selected patient populations. So it can be really hard to kind of understand, well, how is my patient going to respond to individual therapy or combination X. What this study does is it provides kind of robust data really to answer that question. And so that exact dynamic is actually something that I think we've heard continuously from physicians that they're really looking forward to because we're really the leaders here in defining how patients should get treated.

And how much is non-clear cell is more of a foothold for zanza in the space initially versus a large opportunity in and of itself it's 20% and cabo is a great drug as well as you know.

Yes. I mean I think 20% of a large market is still relatively sizable. And so I don't want to underplay that dynamic. But we'd certainly agree that as we think about zanza going forward, one of the things that we often talk about in the way we think about development is cabo has been the TKI and RCC of the 2020s, zanza is going to be the TKI and RCC of the 2030s. It's not only about the non-clear cell segment, but how are we approaching kind of that clear cell space as well with 033, now 034 and then kind of the next steps, the next wave of investment, so to speak, to continue to build that out. And so that's one of the kind of overarching themes for us is that 2020s to 2030s dynamic for zanza and making sure that we're covering all the bases, so to speak, not only in non-clear cell, but post adjuvant frontline, de novo frontline and then kind of that second line plus segment. And so we can make sure that as patients are treated differently now than they will be in the future, we want to make sure that zanza is a central part of that.

Yes. And you guys clearly have a leadership position in RCC. And maybe going back to this HIF discussion, there's a number of trials that is participating in with these HIF targeting agents. So are we viewing it too much through a competitive lens where really uptake growth of these agents is going to be a positive for zanza given the potential combination approach here?

Yes. I mean it's -- again, it's an interesting and relatively unique dynamic where we're now collaborating with functionally our biggest competitor. And we love working with Merck. We announced another clinical collaboration with them this morning for the 316 study. So it's a relationship that I think reflects not only our confidence in the uniqueness of zanza, but that dynamic around understanding if we fast forward the clock 5 years or so, how are patients going to be treated. Our job as drug developers is really to define new standards of care for patients and really ask the question, the way we drive value for patients, for all stakeholders, for shareholders is really if we can define a new standard of care, if we can help patients live longer, that translates to higher revenue, kind of more value, all of that dynamic.

And so we think that the combination of a HIF inhibitor like belz and zanza plays well together and importantly, has the potential to answer really important questions from a clinical perspective, such as if more and more patients will get pembro on the adjuvant side, what should they get if their cancer returns. Again, we're going to be the first to define that answer. Similarly, kind of as adoption of all of these different agents kind of changes in the future, what should be that kind of second-line plus segment as well. So again, that zanza/belz combination is something that we're really excited about.

So 033, 034 and then kind of, I'd say, the last piece is stay tuned for that next wave. You talked about we're the leaders in RCC -- we want to continue to be the leaders in RCC. We're going to invest there. But importantly, we're going to invest there smartly. I think the lessons not only from our own 313 study, but the recent LITESPARK-012 study kind of can certainly help inform what is it going to take to be successful there, orthogonal combinations of orthogonal mechanisms and smart trial design is going to be kind of central to that.

You alluded to 316 earlier. So I wanted to touch on that. It's an adjuvant study in MRD-positive patients. I guess the focus here right now is on execution as you guys work to ramp that up. I guess, can you talk about that, how quickly you can get that running? Obviously, there's some unique approaches to that study, looking at minimum residual disease, the Natera collaboration, Umbrella and Merck. So just how should we think about time lines there and how quickly we can start layering on the zanza opportunity?

Yes. I mean I think this is a study that we're particularly proud of because, again, we're involved in defining a new way for patients to get treated. As the recent IMvigor approval will show, this is an approach that's really cutting edge and offers an opportunity for patients to really define kind of a new journey for them. Right now, in CRC, unfortunately, there's this -- the Signatera test can help you define based on ctDNA positivity or negativity, how your treatment journey will likely go. If you look at the data, the separation of those curves between ctDNA positive and negative is really striking. And it shows that, unfortunately, for that kind of 15%, 20% or so of patients, there is a really high degree of relapse.

And unfortunately, right now, kind of the current standard is watch and wait. And so from the patient's perspective, that can be particularly challenging. It's coming in waking up every day and understanding is the tumor going to come back. What we're now offering is kind of that question of either zanza alone or zanza in combination with KEYTRUDA, can that push out that DFS interval that unfortunately, for these ctDNA-positive patients is relatively short over 6 months or so. And so that dynamic, along with working with Natera to help operationalize the study is something that I think we can build on because these are patients with a high unmet need. They're being identified literally every day. And so that operational advantage from a kind of clinical trial execution perspective is something that we think we can accelerate.

Got it. Unfortunately, we're out of time. There's so much at the company to talk about. You didn't touch on prostate, lung, early-stage pipeline, business development, all else that's going on. So thanks for being here again.

My name is Jason Gerberry. I cover pharma and biotech at BofA, and I'm pleased to be introducing Exelixis and CEO, Mike Morrissey. So Mike, thanks again for joining us.

Great to be here. Nice to see you.

So hot off 1Q and another announced share buyback. I figured I'd start with just a couple of questions on capital allocation before we go into kind of program-specific questions.

So maybe just to start, as we think about capital allocation priorities longer term, beyond this year, how are you guys thinking about kind of returning capital to shareholders versus like managing the next 4 years of cabo exclusivity and then the investments that you're making in zanza? Are there any specific, I guess, pivot points at all that you could see where, hey, maybe we want to invest more in zanza or some early-stage assets that look particularly promising and you step off the gas a little bit from a share buyback perspective? Just trying to get a sense of the toggles there beyond the share.

Yes, that's great. I'll probably spend the next 28 minutes talking about that one topic, and maybe we will. So let me just say great to be here. Thanks again for the invite. It's always great to be in Vegas, talking with the BAML team and all the investors that come.

Before I begin, I'll just remind you that I'll be making forward-looking statements today. So please see our SEC filings for a description of the risks that we face in our business.

So let's talk about capital allocation in the context of how we view the business, how we run the business, how we see it, how we've seen it in the past and how we're going forward in terms of some of the themes that we've talked about a lot in the last year. Certainly highlighted at our R&D Day in December around how we view building value for patients and shareholders, and that's through building franchise molecules that can improve standard of care for patients, and by doing that, drive good value returns for shareholders.

So our view has been to run the business very efficiently and to -- a keyword is to prioritize how we do everything in discovery, in development in the commercial world to make the right set of priorities based upon data and based upon how we see the landscape evolving, how we see early data, how we see the competitor data flow, as well as movement to be able to maximize our chance of success. Again, for patients, improving standard of care, and then having that then drive shareholder value appreciation.

In terms of capital allocation, it's not one size fits all. There's not one lane that we look at in terms of temporal terms, sequential terms. We've been profitable on an annual basis since

[Technical Difficulty]

Last one on just non-clear cell. Is PFS delta separation enough? Do you need meaningful OS separation to drive these recommendations to drive the clinical success in non-clear cell?

Yes. Look, statement of the obvious, it's always good to have an overall survival signal in your label, right, in terms of marketing. I mean, that was the special sauce, if you will, with the first approval we got with METEOR, right, was we had survival when no one else didn't, and it would really help us differentiate. So survival, I'm not sure you need it for approval, but in terms of building a winning commercial position, survival really helps, obviously.

Yes. Okay. Fair enough. And then your clear cell strategy, and I guess, just your outlook, right, in lieu of the LITESPARK-011, maybe it's hard to answer this question without seeing detailed data, but just how you see the read across to the ongoing frontline studies? So you've got LITESPARK-033, 034, I guess that's the second-line study. But just with respect to the ability to generate practice-changing data with like a zanza/welireg combination given overlap in the combination mechanisms?

Well, I think that's one approach that we're taking. And I think that's juxtaposed with what we're looking at relative to first line, where we've talked about, I think, pretty clearly that we're looking for combination opportunities with orthogonal MOAs.

So before the fact, you've got hypotheses and you have to test those hypotheses, right? And we're doing that, say, with zanza/belz in a couple of different trials. We're talking to a lot of people and are in pretty advanced discussions now around looking at the first-line de novo metastatic population opportunity with zanza, plus/minus a checkpoint, plus a potentially orthogonal mechanism that doesn't have the same overlap with either one of those. That gives you more room to play on the upside for efficacy and potentially minimize the downside on safety tolerability.

So I think that's a really important component here, obviously, working in the same pathway. And there's examples of that working well sometimes, other times not within oncology, but it's a fine balance. You really have to thread the needle in terms of efficacy and safety, right?

So I think our view -- and we certainly have some experience here with with COSMIC-313 -- is that you've got to pick your combination partners with care. And we're doing a very -- we've done a very careful survey and know the space really well, looking at a variety of potentially bispecifics or add-ons to a zanza checkpoint combination that we think could give us some really interesting opportunities in that frontline de novo metastatic space.

So -- but again, we look at this as part of our, again, aspirational vision to take the success that cabo had in the 20s and translate that to a much larger scale for zanza in the 30s. So we've got some time to navigate all that and be able to figure that out and get that going and get that done. So I'm excited about that for sure.

One thing that your commercial org has done really well, like when you roll out NET is you have physicians that are highly familiar with CABOMETYX. And so they're maybe more inclined to be prescribers in the neuroendocrine tumor setting. As we think ahead to the CRC launch, you've expanded the sales force in the GI setting. So can you talk about the ability to kind of leverage that competency in perhaps a newer subset of oncology?

Yes. Well, certainly, the part of the term of cabo is that we've had such broad success in the GU space that, again, in the community setting where the HCPs are much more generalist in terms of what they see in terms of patient tumor types, they have the ability to mix and match there pretty readily. And so using that to then build off of zanza, certainly in colon is a really, really important part of that, right?

So -- and we're building that awareness, and we're building that, I would say, that information. The good news about building out the GI team, and to a certain degree, the GU team as well over years now is that by location and by therapeutic area overlap, most of our reps have experience, say, at Genentech within the oncology setting with Avastin, with [ Colin ], with other tumor types. So we have a very deep knowledge of that commercial space from a sales and marketing point of view. And I think that depth will play off dramatically in terms of a CRC launch, both for 303, if that happens in the near term.

And then the 303 and 316 play together really well. I like that idea of doubling down in these indications, again, building franchises along that dimension of tumor types, multiple lines, multiple shots on goal, potentially combination partners. So it just gives you much more reach there as well.

Okay. So it sounds like you've mentioned community a couple of times with respect to CRC. I would think third line would have been maybe more academic-focused because it's a later-line patient, but maybe I'm wrong. Do you see this more as a community?

It's really a community setting. Yes.

Okay.

Yes. And this is why it's so important for us to really make sure that we've got that covered on the GI side going into that. Yes, for sure.

So I would say your sales force probably plays pretty significantly in the community setting.

We do well in both areas extremely well, right, for sure.

Okay. STELLAR-316, maybe if you can just talk a little bit about like the rationale for that study and what what data points you saw, what really inspired the decision to go after that market opportunity that can really like expand?

Yes. It's a really exciting approach and one that -- as I said before, 303 and 316, they just play together really well. So we're talking to KOLs about one, and they bring up the other one and vice versa, right? So it just reinforces our commitment to GI oncology, to all lines, all opportunities within CRC.

The high-risk post-adjuvant population is truly high risk. Those patients can progress within 5, 6 months of their last round of adjuvant chemotherapy. So they're -- and they're in a tough spot because there's nothing really approved for them besides basically nothing, but they can go back on more chemo or go on to a clinical trial, but all that's kind of tenuous, right?

So we saw that as a very important first step. The Natera technology, we think, works extremely well. The application to bladder with IMvigor just highlights the opportunity there where atezolizumab was shown to be successful at improving both DFS and overall survival with a selection process that was driven by the MRD positivity. So it's a very good way to find patients who are at risk, select them, if you will, and study them as their own little group, or in this case, big group, and then go forward and run the trial.

So we're very excited about that. The good news in terms of operationalizing a trial like that is that they have such a deep level of experience and data around both institutions and investigators that use that technology for late lines -- for post-adjuvant CRC that -- it makes site selection and investigator kind of recruitment very, very straightforward.

So we think this is a trial that we could get up quickly, run fast. We're going to enroll it only in the U.S. because that's where that technology is used. It will be a 3-arm study. It will be zanza monotherapy, zanza plus a checkpoint inhibitor that we'll talk about later versus the best supportive care. So it will be a very straightforward trial using, again, MRD positivity as the selection criteria for getting into the trial.

How many cycles of zanza plus PD-1 are you testing?

It's not limited.

Not limited. Okay. And the motivating force here, was this more the ALTAIR study, which looked at Lonsurf and ctDNA-positive in CRC setting or zanza PD-1 data in metastatic setting and seeing that synergistic benefit?

Yes, it was more of the latter. Certainly, some of the earlier data from the competition was enlightening. It wasn't that helpful because it was just such a complicated, kind of convoluted study.

I think the best way to frame the logic -- and we're almost done here, but I'll just wrap it up like this -- is if zanza plus a checkpoint was effective at improving survival for patients with radiographic tumor, a large enough tumor mass where you could see it on an MRI or CT scan. Then going after micrometastases with the same approach was a pretty good bet, right, from the standpoint of being able to go after the same mechanisms that are driving established tumors, in this case, trying to block micrometastases from forming, right?

So the logic is kind of -- it's kind of a no-brainer. Begs the question, we've got survival from 303, which supports that. And we're super excited about being able to get that going very, very soon.

All right. Great. Well, we're out of time. So thank you, Mike for joining us.

You bet. Thank you.

Good day, ladies and gentlemen, and welcome to the Exelixis First Quarter and Fiscal Year 2026 Financial Results Conference Call. My name is Sherry, and I'll 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, Mr. Andrew Peters, Senior Vice President of Strategy and Investor Relations. Please proceed.

Thank you, Sherry, and thank you all for joining us for the Exelixis First Quarter 2026 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO; and Chris Senner, our Chief Financial Officer; Dana Aftab, our Executive Vice President of Research and Development; and P.J. Haley, our Executive Vice President of Commercial, who will review our progress for the first quarter 2026 and ended March 31, 2026.

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. This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial and strategic matters, potential growth opportunities and government drug pricing policies and initiatives.

Actual events or results could, of course, differ materially. We refer you to the documents we file from time to time with the Securities and Exchange Commission, 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 cost associated with discovery, product development, business development and commercialization activities.

With that, I'll turn the call over to Mike.

All right. Thank you, Andrew, and thanks to everyone for joining us on the call today. Exelixis is off to a strong start in 2026 and with meaningful progress across our discovery, development and commercial activities. Our strategy has a singular focus to build a multi-franchise business in solid tumor oncology focused on GU and GI histologies based on the depth of the cabozantinib business RECONNECT the potential breadth of the zanzalintinib opportunity and the scope of our early-stage pipeline.

Key highlights for the quarter include: first, we saw a continued strong performance of the cabozantinib business. CABOMETYX continued to grow in revenue, demand and market share as the leading TKI for RCC and the market leader for neuroendocrine tumors in the oral second-line plus segment. Importantly, we expedited the build-out of our GI sales team in the first quarter to accelerate the growth of the CABOMETYX INTUITY before zanza could come online for CRC later in 2026.

First quarter 2026 U.S. cabo franchise net product revenues grew 8% year-over dollars compared to the first quarter of 2025. Continuing its role as a worldwide leading TKI global cabo franchise net product revenues generated by Exelixis and its partners grew 12.5% year-over-year to $764 million in the first quarter 2026. Chris and P.J. will share our financial and commercial highlights in their prepared remarks.

Second, zanza is in the pull position as our next potential oncology franchise opportunity. The NDA for the zanza-atezo combination and thirdline plus CRC, based on the STELLAR-303 data is currently under review and is the top priority for the entire Exelixis organization. The zanza development program is rapidly advancing with 7 ongoing or soon to start pivotal trials along with additional Phase II trials planned in prostate cancer and lung cancer. Dana will review the highlights for zanza and our extensive pipeline of early-stage assets in his prepared remarks.

Third, the goal of our development effort is to establish zanza as the TKI of choice in the 2030s and for RCC and other important indications that could surpass the impact of cabo in the 2020s. Zanza already has a meaningful development footprint in RCC with 3 ongoing Phase III studies across multiple lines of therapy, underscoring both the breadth of our ambition and the confidence we and others have in this molecule.

At the same time, as our experience with COSMIC-313 highlighted and was also recently seen with news from competitive trials, navigating the complexities of first-line RCC to improve upon existing regimens is a challenging endeavor at best and requires careful selection of combination partners to improve efficacy parameters while managing tolerability and safety considerations. We remain committed to raising the bar in first-line RCC and continue to prioritize orthogonal MOAs to combine with zanza.

In parallel, we seek to expand the breadth and depth of our zanza pivotal trial efforts, positioning zanza for durable leadership in RCC and other important tumor types. Fourth and finally, we remain committed to running the business at the highest level of efficiency as we advance our R&D priorities and at the same time, generate substantial free cash to invest in the pipeline to the right targeted BD at the right price to access external sources of innovation and to continue our share repurchase program, including an additional $750 million that was just authorized by the Exelixis Board.

So with that, see our press release issued an hour ago for our first quarter 2026 financial results and an extensive list of key corporate milestones achieved in the quarter. And I'll now turn the call over to Chris.

Thanks, Mike. For the first quarter of 2026, the company reported total revenues of approximately $611 million, which included cabozantinib franchise net product revenues of $555 million. CABOMETYX net product revenues were $552.8 million and included approximately $3.6 million 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 2026 was 30.2%, which is higher than the gross to net we experienced in the fourth quarter of 2025. This increase in gross to net deductions in the first quarter of 2026 is primarily related to higher 340B volume, higher Medicare Part D discounts and rebates and higher co-pay assistance when compared to the fourth quarter of 2025. Our CABOMETYX trade inventory was slightly lower at 2.1 weeks on hand at the end of the first quarter 2026 when compared to the fourth quarter of 2025. Total revenues in the first quarter of 2026 also includes approximately $45.9 million in royalties earned from our partners, Ipsen and Takeda on their sales of cabozantinib.

Our total operating expenses for the first quarter of 2026 were approximately $359 million compared to $363 million in the fourth quarter of 2025. The sequential decrease in these operating expenses was primarily driven by lower clinical trial costs, offset by higher FTE-related costs and stock-based compensation expense. Provision for income taxes for the first quarter of 2026 was approximately $57.2 million compared to a provision for income taxes of approximately $8.2 million for the fourth quarter of 2025. This increase in tax provision was related to certain items that were recognized in the fourth quarter of 2025.

The company reported GAAP net income of approximately $210.5 million or $0.81 per share basic and $0.79 per share diluted for the first quarter of 2026. The company also reported a non-GAAP net income of approximately $232.8 million or $0.90 per share basic and $0.87 per share diluted. Non-GAAP net income excludes the impact of approximately $22.3 million of stock-based compensation expense net of the related income tax effect. Cash and marketable securities for the quarter ended March 31, 2026, was approximately $1.4 billion.

During the first quarter of 2026, we repurchased approximately $430.8 million of the company's outstanding common stock, resulting in the retirement of approximately 10 million shares of the company's outstanding common stock at an average price per share of $42.99. As of the end of the first quarter 2026, we had approximately $159.4 million remaining under the $750 million stock repurchase plan authorized by the company's Board in October 2025. We expect to complete the October 2025 stock repurchase plan this month. Additionally, in May 2026, the company's Board authorized a new $750 million stock repurchase plan that expires on December 31, 2027.

And finally, we are reiterating our full year 2026 financial guidance, which is detailed on Slide 16 of our earnings presentation. And with that, I'll turn the call over to P.J.

Thank you, Chris. The CABOMETYX business continued to grow in the first quarter of 2026. The team is executing at an extremely high level with CABOMETYX continuing to be the #1 prescribed TKI in renal cell carcinoma, the #1 TKI plus IO combination in first-line RCC and the #1 oral agent in second-line plus neuroendocrine tumors. Importantly, Q1 had the highest number of new patient starts in a quarter ever for CABOMETYX, representing strong momentum in the business.

At the same time, CABOMETYX plus nivolumab had the highest quarterly first-line RCC market share to date. This is an exciting time for the team with zanzalintinib on the horizon as we prepare to launch our next franchise molecule, which would also expand the Exelixis GI franchise. The prescription data in the oral TKI market basket of cabo, lenvatinib, axitinib, sunitinib and pazopanib convey the strength of cabo relative to the competition. Looking at the TRx comparison of Q1 2025 to Q1 2026, CABOMETYX grew 3 share points from 44% to 47%. Additionally, CABOMETYX TRx volume grew 14% in Q1 2026 compared to Q1 2025, outpacing the growth rate of the market basket, which was 7% for the same period.

Physicians are responding positively to the broad net label and the contemporary trial design and perceive the efficacy and tolerability of cabo as favorable relative to other small molecule therapies in the space. academic and community prescribers are using cabo broadly across patient and tumor characteristics, including patients with neuroendocrine tumors arising in the pancreas, GI tract and lung across all tumor grades, functional and SSTR status and those who have received prior treatment with Lutathera.

Turning to new patient market share for second-line plus neuroendocrine tumors in the first quarter, we are pleased that CABOMETYX remains the market leader in the oral therapy segment. Additionally, our research indicates that there is opportunity to continue to grow market share, particularly in the community. For that reason, we expedited the expansion of our GI sales team in Q1, and the team was in the field, providing greater reach into the community in order to continue to grow net market share for CABOMETYX. Our new representatives joined us with significant oncology sales experience, particularly colorectal cancer and GI oncology.

Importantly, the expanded team will be able to gain valuable experience selling cabo before we turn our focus to the potential launch of zanzalintinib in colorectal cancer. As we are thinking about building on and expanding our GI franchise, we are thrilled with the results of STELLAR-303 and a PDUFA date set for later this year. Pending regulatory approval, we believe that these data would provide Exelixis with a compelling commercial opportunity in 1 of the big 4 tumors. third-line plus CRC setting consists of approximately 23,000 patients in the U.S. and represents an overall market opportunity of approximately $1.5 billion in terms of contemporary pricing.

Our market research and advisory boards demonstrate positive feedback and excitement for the STELLAR-303 data. Physicians reiterate the significant unmet medical need for patients in the third-line plus CRC setting and are excited for the potential to have an ICI option available for the broader population of CRC patients. In closing, we are pleased with the growth of the cabo business, both in RCC and net -- in neuroendocrine tumors, prescribers see CABOMETYX as a more favorable choice versus other previously approved generic small molecule therapies.

Simultaneously, our internal team is in full launch preparation for zanza and the excitement around these efforts is palpable. We look forward to the opportunity to launch the next Exelixis franchise later in the year to be able to help appropriate patients with colorectal cancer. Beyond STELLAR-303, which could exceed cabo be impacted across tumor types.

I will turn the call to Mike.

Thanks, P.J. Our strategy R&D continues as a multidimensional solid tumor oncology franchise molecule. And as you'll hear in my upcoming remarks, we continue to be focused on maximizing our productivity with disciplined investment in high-value opportunities for zanza as well as the rest of our portfolio. Today's update provides a little more clarity on the 7 ongoing or soon to start pivotal studies for zanza. So my update today will be focused mostly on those trials, but I'll also spend some time on additional exploratory studies that we've designed to investigate zanza's potential in certain patients with prostate or lung tumors.

Starting with our NDA for zanza plus atezo in colorectal cancer, which is based on the results from the STELLAR-303 trial, our team has been highly engaged during the review process. And from our standpoint, the review has been proceeding on schedule towards the PDUFA date in early December. As a quick reminder, the trial has dual primary endpoints designed to assess overall survival, both in the broad intention to treat or ITT population, which includes patients both with and without liver metastases as well as more specifically in the population of patients without liver metastases, which we refer to as the NLM patients or population.

The study met one of its dual primary endpoints, demonstrating a 20% reduction in the risk of death with the combination in the broad ITT population at the final analysis, while data pertaining to the other dual primary endpoint of overall survival in the NLM population showed a trend in overall survival favoring the combination. The NLM data were immature at the data cutoff, and the trial has been proceeding to the planned final analysis for this endpoint, and we continue to expect to have those top line results around the middle of this year, depending on event rates.

The level of excitement here is really high right now about what a potential approval would mean for this large and underserved patient population. And as you heard from PJ, our preparations for launch are in full swing. So we'll be ready to go the moment we receive a positive decision. But as we've discussed since late last year, we believe there is significant additional franchise potential for zanza in colorectal cancer in an earlier stage of the disease.

To realize that potential, our team has been highly focused on launching the STELLAR-316 trial, which will investigate zanza with and without an immune checkpoint inhibitor in patients with resected Stage II or III colorectal cancer who following definitive therapy have tested positive for molecular residual disease or MRD and have no radiographic evidence of disease. About 20% of patients are MRD positive following definitive therapy, and these patients typically have a poor prognosis with median disease-free survival times in the 6- to 8-month time frame.

Critically, these patients have no therapeutic options that have been shown in a Phase III trial to prevent or delay metastatic progression of their disease. So this represents a significant opportunity in the colorectal cancer landscape. As we've communicated in the past, MRD and STELLAR-316 will be determined with the Signatera circulating tumor DNA test with Natera as our diagnostic partner. Their database built from testing thousands of patients each year has been incredibly helpful to us in terms of prioritizing activation of clinical trial sites that are already known to have the highest cadence of testing and the highest numbers of eligible patients.

We're quite pleased with the level of enthusiastic feedback on STELLAR-316 that we've gotten from key opinion leaders and other stakeholders, and we are on track for initiating the trial around midyear. Moving on to kidney cancer. zanza's target profile, including the TAM kinases, MET and VEGF receptors position zanza for success given the known roles played by these kinases in kidney tumors. STELLAR-304 is our first pivotal trial for zanza in kidney cancer, evaluating the combination of zanza plus nivolumab versus sunitinib in patients with locally advanced or metastatic non-clear cell renal cell carcinoma.

The non-clear cell RCC space is underserved with no positive readouts from a Phase III study specifically focused on these patients despite them representing approximately 1/4 of all RCC cases. If positive, STELLAR-304 could potentially establish the first standard of care based on a randomized controlled Phase III trial for these patients. We completed enrollment last year. And given current event rates, we now expect top line results from the study in the second half of 2026. And if positive, those results could lead to our second NDA filing for zanza.

In terms of opportunities in the clear cell RCC space, progress continues with regard to the 2 pivotal studies that Merck is running in clear cell RCC, evaluating zanza in combination with belzutifan. LITHSPARK-033, which compares zanza plus bells versus cabo as first-line therapy in patients who received anti-PD-1 or anti-PD-L1 therapy in the adjuvant setting was initiated last year. In addition, Merck recently initiated LITSPARK-034, a global Phase III pivotal trial evaluating zanza plus bells versus bells plus placebo in second- or third-line patients with advanced RCC who have progressed on or after both anti-PD-1 or L1 and VEGFR TKI therapies in sequence or in combination.

We are certainly excited to see these Phase III studies in clear cell RCC moving forward. And based on our franchise experience in this indication, we believe there are other important opportunities to explore. As we've mentioned previously, we continue to have discussions with potential collaborators to investigate novel combinations pairing zanza with other modalities and orthogonal mechanisms when there is strong scientific rationale for the combination. Given the demonstrated clinical differentiation we've seen with zanza and its potential to be the TKI of choice for combinations with immunotherapies and other mechanisms of action, we're looking to advance novel combinations in the future that have significant potential to move the needle for clear cell RCC patients. We hope to give further updates on these activities in the future as we get closer to launching the trials.

Moving on now to neuroendocrine tumors. STELLAR-311 is our Phase III trial evaluating zanza compared to everolimus. Sites and investigators are very enthusiastic about the trial given their growing experience with cabo in later-line disease and the opportunity presented by STELLAR-311 to improve on the current treatment landscape in earlier lines, which hasn't seen anything new for over a decade. That enthusiasm appears to be driving the very strong momentum we're seeing in the trial.

Another opportunity for zanza that we've been discussing since late last year is in meningioma, which is the most common primary central nervous system tumor, accounting for approximately 40% of cases. Most meningiomas are benign, slow-growing neoplasms. However, up to 22% will recur after primary therapy, which consists of surgery and radiation. Importantly, there are no approved systemic therapies for meningioma that's refractory to local therapies. So this represents a very high unmet need in neuro-oncology.

Today, we announced that we have now initiated STELLAR-201, our Phase II trial evaluating zanza in patients with recurrent meningioma who are no longer responsive to or eligible for local therapies. The primary endpoint of the trial is objective response rate with secondary efficacy endpoints, including duration of response, progression-free survival and overall survival. The trial will enroll up to 100 patients. And given the extremely high level of interest and enthusiasm for the trial among neuro-oncologists, we anticipate enrollment to be brisk. Pending favorable results and given the absence of any approved systemic therapies in this setting, the STELLAR-201 trial represents an important opportunity for zanza to become the first systemic therapy that could improve outcomes for these patients.

Today, we also announced 2 additional studies exploring zanza combinations in indications where significant unmet need exists. STELLAR-202 is a planned Phase II trial in squamous non-small cell lung cancer that will explore the addition of zanza to pembro in the maintenance phase after induction with pembro plus chemotherapy. Part of the rationale for this trial comes from data we obtained from cabo plus atezo in the CONTACT-01 trial, where the subgroup of non-small cell lung cancer patients with squamous histology appeared to derive substantial benefit from the combination compared to chemotherapy. This is an important opportunity given the relatively short PFS in the maintenance setting and the lack of any new approvals in the frontline squamous non-small cell lung cancer since KEYNOTE-407 established the current standard of care with pembro plus chemo.

We're also planning an additional expansion cohort in the ongoing STELLAR-002 study to evaluate zanza in combination with docetaxel in patients with metastatic castration-resistant prostate cancer who have measurable disease. This is also based on initial observations with cabo, where a small Phase II study showed favorable outcomes when combined with docetaxel in metastatic CRPC patients. This cohort in STELLAR-002 is particularly meaningful because if zanza in combination with chemotherapy is shown to be safe and active, that could open up a number of opportunities across a range of solid tumors where chemo or potentially even ADCs carrying chemo payloads are standard of care. Our teams are super focused on launching these new studies soon, and we expect both to be initiated in the second half of this year.

Now shifting to our early clinical pipeline. We have 4 molecules in this space that are currently in clinical development, namely XL309, XB010, XB628 and XB371. And the Phase I studies for these early molecules are progressing well. In terms of earlier-stage development candidates, we are continuing to advance exciting new small molecule and ADC programs, and I look forward to sharing more details as these early pipeline programs advance. Our strategy with the early pipeline is focused on identifying the next potential franchise molecules beyond cabo and zanza. So we will continue our approach of getting to go/no-go decisions quickly and efficiently, leveraging our expertise to pick the winners and ultimately maximize impact for patients.

So with that, I'll turn the call back over to Mike.

All right. Thanks, Dana. I will wrap up here by thanking the entire Exelixis team for their outstanding efforts in the first months of 2026. We think 2026 could be a potentially transformational year for the company, and everyone at Exelixis is working together to move the needle for cancer patients and continue building value for all our stakeholders. We are focused on growing the cabo business while at the same time advancing zanza as our second potential franchise opportunity, all while continuing to investigate our early-stage pipeline.

As always, I want to thank everyone at Exelixis for their individual and collective efforts, great teamwork and positive energy as we work every day to exceed expectations on our mission to help cancer patients recover stronger and live longer. 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 Instructions] And our first question will come from the line of Paul Choi with Goldman Sachs.

My question is for Dana. And in light of the recent miss from the LightHSPARK-012 study, can you maybe just comment on your thoughts on updated thoughts or learnings from that trial result for your belzutifan plus zanza combination development program, specifically LGHSPARK-033 and 034 -- and just any learnings or potential trial considerations that you've had in the wake of that data?

Thanks for the question, Paul. Yes. So first of all, our strategy with zanza is to really focus on creating the next franchise molecule in RCC and the top TKI combination therapy in clear cell RCC in the 2030s. So the results from LightHSPARK-011 are -- that was with -- sorry, with 012 that was the triplet of pem len plus belz versus pem/len. As Mike mentioned earlier, triplet therapy in clear cell renal cell carcinoma is not an easy game. And our strategy is really focused on trying to establish a standard of care that covers multiple possible outcomes based on trials that are going on now.

So we have multiple shots on goal with LITSPARK-033034. We have the STELLAR-304 data coming out, hopefully soon in non-clear cell renal cell carcinoma. And as I mentioned earlier, we're evaluating a number of other potential novel and innovative combinations to further explore the clear cell RCC space. So that includes molecules from our own early pipeline. If XB628, which is our novel and innovative bispecific with multiple IO arms on it pans out, that could be a very interesting combination to explore in these patients. It would be very innovative and nothing in that space has been explored so far.

So as Mike said earlier, we have multiple shots on goal to really establish and drive the zanza franchise into clear cell RCC in the future, especially focused on the 2030s, not on today, but on the 2030s.

One moment for our next question. And that will come from the line of Yaron Werber with TD Cowen.

Just 2 quick questions from us. One, if you could please provide some color on the contribution in renal cell carcinoma versus NET for cabo? And then second, I recall that cabo failed as a monotherapy in advanced unselected non-small cell lung cancer and also on OS in Phase III for pancreatic, even though it showed a response in PFS. So you touched on some of the combo regimens that have shown early data, but could you maybe expand on the rationale for testing combo therapies in STELLAR-202 and 002?

Yes. Dana, why don't you take that second question first. And I think she was talking about prostate cancer. So what's the rationale for going into Phase II in non-small cell and then prostate cancer?

Sure. So as I mentioned, the data that support our hypothesis for testing zanzalintinib in patients with non-small cell lung cancer comes from the CONTACT-01 study, which I think you're referring to. So this is the Phase III study evaluating cabozantinib plus atezolizumab versus docetaxel in a broad population of non-small cell lung cancer patients. So in that study, the subpopulation of patients with squamous histology actually did quite well, appeared to have a favorable benefit compared to the control arm in the study.

For that reason, the STELLAR-202 trial is focused 100% on the squamous patient population with non-small cell lung cancer. In this population, the current standard of care is platinum-based chemotherapy plus pembrolizumab during induction, which is up to 4 cycles of chemotherapy or 12 weeks. And then they go on pembrolizumab maintenance. So we are looking to add zanzalintinib onto the maintenance arm of pembrolizumab.

We've already shown that zanza can sensitize patients to benefit with IO in the STELLAR-303 trial, a population of colorectal cancer patients that have historically been refractory to treatment with IO. So we think this is a very rational exploration to pursue for these patients with squamous histology non-small cell lung cancer and high unmet need. In prostate cancer, similarly, there was a small Phase I study combining cabozantinib with docetaxel.

So the Phase III trials that failed were not combining cabozantinib with chemotherapy. In the small Phase I, however, we saw very, I'd say, favorable outcomes in the patients that were treated in this small study. So based on the results from that, we believe there is rationale to pursue that combination in the Phase I STELLAR-002 trial. Once we get data showing safety and potentially activity of that combination, that opens up a lot of different avenues of exploration, either in castration-resistant prostate cancer, potentially in lung cancer and potentially in other indications where either chemo or chemo-based therapies, including ADCs might be standard of care.

One moment for the next question. And that will come form the line of Sudan Loganathan with Stephens.

So my first one, I wanted to get your comments on the quantifiable metrics regarding cabo sales in net and how the maybe sales team has grown over this time and how it will continue to? And then secondly, on zanza ahead of the CRC launch, what are some quantifiable metrics there as well that we can keep in mind ahead of the potential launch towards the end of this year?

Great. Thanks. P.J., do you want to take that one?

Yes. Thanks for the question. With regards to NET, we are really pleased with how the business is going. As I mentioned, overall, in the first quarter, we had our highest new patient starts ever for CABOMETYX in a quarter. So that's certainly a really strong sign of the health of the business now and as those new patient starts ultimately translate to refills going forward, puts us in a really good position.

Our business in net is broad, as I mentioned in the prepared remarks, really across all segments and is viewed very favorably by physicians. Importantly, we are the market leader in the second-line plus oral segment. And our research and feedback really indicate that we have opportunity to continue to grow, particularly in the community setting, which is why we expedited the build-out of our of our GI sales force, so we could really have that deeper reach into the community and drive further business there.

I'm really pleased to say that, as I mentioned, we brought in a very strong team with GI and CRC experience in sales, and we're really already seeing impact from that team. So we're very, very pleased with that. Importantly, that team gets here and gets a chance to know the customers in the GI segment, gets experience selling cabo and a TKI, which is fantastic. As we think about looking forward to the potential approval of zanza in CRC, which, as I mentioned, we're all really excited about.

Our launch preparation is really in full swing and the team is really focused on driving that forward. We're really excited to be able to optimize that launch and help patients with CRC. This is a really big and exciting opportunity for us in terms of the potential to be in one of the big 4 tumors of colorectal cancer, the third-line plus setting, as I mentioned, is 23,000 patients. And as we look at that market in terms of contemporary pricing, that's a $1.5 billion opportunity.

But really, the way we're thinking about zanza is, obviously, that initial launch will be really important, but we're thinking about it in terms of franchises and how do we expand ultimately then the CRC franchise with an earlier study such as STELLAR-316 -- and ultimately, how do we build it out in RCC, as Dana discussed, potentially in lung, meningioma, et cetera, with just so many exciting opportunities. So really looking forward to getting going on am.

One moment for our next question. And that will come from the line of Sean Laaman with Morgan Stanley.

This is [ Catherine ] on for Sean. We just had one on the updated SELLAR-304 data readout timing. Could you provide a bit more color on whether the slower event accrual reflects better-than-expected disease control? Was it a mix of the enrolled histologies or other trial dynamics? And then as a quick follow-up, just given that the population is highly heterogeneous, how are you defining success against or across histologies? And are there specific subtypes where you believe the rationale is strongest here?

Sure. Thanks for the question, Catherine. So regarding 304, again, this is our Phase III study comparing zanzaltintinib combined with nivolumab versus sunitinib. And as such, it really is the first Phase III trial to address this high unmet need patient population. Currently, there is no Level 1 evidence supporting a standard of care in these patients. So we see a huge opportunity here for the combination of zanza plus nivo. Regarding the slight change in timing for events, I really don't want to speculate on what's driving that. We're just in the late stages of collecting events. So as we mentioned, we expect to get those soon sometime in the second half of the year.

One moment for the next question. And that will come from Andy Hsieh with William Blair.

So just talking about the 316 for a little bit. There's an AdCom recently that kind of talks about a progression -- definition of progression or change of therapy that's based on non-radiographic progression. And so for the adjuvant CRC study, I'm just curious about the back and forth with the FDA agreeing on an MRD positivity as a way to change therapy. Just to educate us on what the dialogue was and then how you come to the conclusion that this is actually a regulatory approvable approach?

Thanks, Andy. Dana, do you want to take that one?

Sure. Thanks for the question, Andy. So we've discussed the STELLAR-316 trial, I think, since December last year. We're super excited about this study because it really addresses a high unmet need population. This is a population of patients who are resected Stage II or III colorectal cancer, have completed definitive therapy and now are in a watch-and-wait game. to wait and see if they develop late-stage disease. The Signatera test has shown in a number of different studies to very -- with a high degree of accuracy, predict rapid progression of patients. So the patients who are positive for the test typically have a median disease-free survival of around 6 months. So it's a very high unmet need population.

The trial has been well designed with, I'd say, a large degree of input from key opinion leaders, other stakeholders as well as the agency. And we're very, very confident in our design, and we're really excited to release more details as we get closer to launch. And when we do, you'll see a lot more design characteristics of the study, especially when it gets posted to clinicaltrials.gov. So just stay tuned for more information.

One moment for our next question. And that will come from the line of Michael Schmidt with Guggenheim.

I had a question on RCC. And just wanted to understand the size of the opportunity for the LightHSPARK-033 study. What percentage of patients would be qualified for this? And then beyond 033 and 034, are there any other studies you're considering for RCC, specifically with zanza?

Thanks, Michael. P.J.?

Yes, thanks for the question. With regards to LightHSPARK-033 and as we've talked about here, we're really thinking about RCC broadly as establishing zanza as a franchise in RCC and certainly beyond. That opportunity, as you look at the first-line setting can be approximately 1/4 of patients coming off of adjuvant therapy. And obviously, that can evolve as more and more patients are getting adjuvant therapy, but approximately 1/4 of the first-line setting.

But I think the important thing, too, is really doing multiple studies as we've laid out in terms of LifSPARK-33,34, STELLAR-304, kind of drawing off our experience from cabo, how we did multiple studies in RCC to really establish ourselves as the leader -- the leading TKI in the 20s here, and we're building towards our vision of establishing zanza as a leading TKI of the 30s.

As Mike and Dana mentioned, we're looking at combinations with orthogonal MOAs and different approaches to continue to really raise the bar in the standard of care in the first-line setting in RCC generally.

And one moment for our next question, and that will come from the line of Silvan Tuerkcan with Citizens.

I just want to ask a little bit broader around your strategy around resource allocation. You're running one of the broadest development strategies for an unapproved drug at this moment, and you even expanded it now. And obviously, you're sitting on a lot of data that we don't see, but that clearly make you very excited on zanza. How do you balance that broad strategy with buybacks and potential M&A, which hasn't happened yet?

Yes. Silvan, thanks for the question. Chris, do you want to take that one?

Yes, Silvan, thanks for the question. So from a capital allocation perspective, and that's how we look at it is how do we allocate capital against R&D, how do we allocate capital against BD opportunities and then how do we allocate capital against share repurchases. And we're a financially strong company. We have significant cash flows. We're prioritizing our R&D spend on a constant basis so that we're understanding what projects are kind of sticking their heads up and saying fund us. And so we'll continue to do that. Andrew and Stefan and the team are continuing to look at BD opportunities. And we do have access to capital also.

So we have a lot of things going on here that allows us to execute on all those 3 elements of R&D investments, BD investments and share buybacks. And from a share buyback perspective, we believe that zanza is a great opportunity and that if that opportunity is not really being appreciated generally, and we think we're undervalued. So we're going to continue to buy back shares.

One moment for our next question, and that will come from the line of Jason Gerberry with Bank of America.

This is [ Chi ]on for Jason. And so my question is on LSPAC-034. Can you contextualize the choice of using Belzutifan monotherapy as the control arm as opposed to, say, an alternative TKI monotherapy or perhaps even Belzutifan plus Lenvima given the pending sNDA review there? And I also noticed that OS is listed as a dual primary endpoint. So would PFS alone be sufficient to support approval? Or would you need an OS win there? So just again, thinking about both likelihood of success and regulatory bar based on the recent LISPARC-011 data?

Yes. Dana, go ahead.

Sure. So LISPARK-034 is Merck study. And as you mentioned, it's evaluating zanza plus bells versus bells plus placebo in the second-line plus setting in patients who have progressed both on an IO-based regimen and a VEGFR TKI regimen, either in sequence or in combination. So the dual primary endpoints are 2 different efficacy endpoints -- in clear cell RCC, OS has really become a gold standard. So having 2 different efficacy endpoints in the trial typically requires both to hit, but it really depends on the data, right? It's always data dependent and the timing of when those results come in. Regarding the population, this study as well as many other studies that are ongoing now or planned for the future really anticipate multiple potential treatment landscapes for patients.

So this is really in the landscape of patients who are really going to be candidates for belzutifan alone or belzutifan in combination with a TKI. So these are typically, again, patients who have already progressed on a TKI-containing regimen and an I-O-containing regimen. So that really should be an important opportunity, important unmet need when this trial reads out.

One moment for our next question, and that will come from the line of Leonid Timashev with RBC.

I want to stick with the franchise approach by 2030 that you've been talking about. I mean you mentioned CRC. I wanted to focus on NETs and how you're thinking about the franchise there in the future. I mean you're running 311, but are there any other combinations that you're looking at, especially as the treatment landscape evolves with radiopharmaceuticals, ADCs? How are you envisioning building out zanza into the 2030s?

Yes. Thanks for the question. Why don't we tag team this. P.J., why don't you go first and then Dana can add some commentary?

Yes. Thanks for the question, Leonid. With regards to kind of the way we're thinking about 311, I guess, in the marketplace, as I mentioned, cabo is off to a really strong start in terms of kind of the second-line plus setting. And that study is designed specifically to go head-to-head with everolimus as an active comparator, which is kind of a first in the setting. So really positioning that patient population in the first or second-line setting, so earlier lines of therapy and obviously, then a larger patient population and really potential to beat an active comparator head-to-head, a lot of excitement around the study design, as Dana mentioned in his prepared remarks. And so we're excited about that zanza opportunity.

Yes. And then beyond that, I'd say that we are -- I think we've mentioned this before, we're very committed to this patient population. We've seen how much benefit cabo is bringing to the table for these patients. We've seen the excitement around STELLAR-311. So we're really focused on how else we can really address this patient population. So I think as we discussed at R&D Day, we're also looking at a number of other potential opportunities earlier in the discovery pipeline to either address specifically the neuroendocrine tumor patients who require treatment also with an SSTR2 agonist.

These are mainly patients with functional tumors, but any other patients who express the receptor and are known to be potentially sensitive to that type of treatment. We're developing a small molecule that we hope to file an IND on later this year. that could be a novel approach to offer in combination with zanza if the STELLAR-311 trial is successful, we might do that type of combination in the future. And then broadening out to other types of neuroendocrine carcinomas. This is namely tumors that express DLL3.

So primarily small cell lung cancer, but a range of other neuroendocrine carcinomas that occur throughout the body in the GI tract and in the prostate. And that molecule, we presented some data at AACR this year, XB773. It's a DLL3 targeted ADC that with a very novel format. It's a very small format with a topoisomerase inhibitor payload that we think is differentiated versus the other competitive molecules that are in the space right now. And that molecule can be quite exciting once we generate some data. And if it does stand up and show some interesting activity, there we can also explore combinations with zanza. So we have multiple irons in the fire exploring this space across histologies and different patient populations.

Our next question will come from the line of Kalpit Patel with Wolfe Research.

Maybe one on the LGHSPARK-012 trial. There was no benefit of the triplet there compared to the doublets in that first-line setting. So I guess for your and Merck's strategy, would you ever entertain a triplet in that exact same first-line setting? Or what would that future study look like in CRC?

Go ahead.

Yes, I'll take the question, Kalpit. Thanks for the question. Yes. So as you know, we are collaborating with Merck on LSPARK-033, which is evaluating zanza plus bees in the frontline setting, and that's versus cabozantinib. So slightly different hypothesis that's being addressed here. There's no IO in this combination because it's assuming that the patient is coming in after adjuvant or it's requiring patients to come in after having been treated in the adjuvant setting with IO. So looking at other potential combinations beyond this, especially triplets that requires a lot of very specific and focused scientific rationale.

So we're not opposed to doing it. It just has to be the right molecule in the right setting. As I mentioned in my prepared remarks, -- we have been looking at a lot of orthogonal MOAs to pair with zanzalintinib in this space as well as we're actually going to be investigating the combination of zanza plus our own novel bispecific IO in its Phase I study. So we're pending more discussions and more data that we can generate in Phase I, and we'll reveal or disclose more details about any of those trials as they come to fruition and get closer to launch.

One moment for our next question, and that will come from the line of Etzer Darout with Barclays.

First, do you -- how are you thinking about like how are you planning to leverage the non-liver met data from STELLAR-303 given the December PDUFA date? Are you going to update your NDA to include that data? And then it would be interesting to hear your thoughts around the investigator-sponsored trial coming up at ASCO of cabo/nivo in non-clear cell renal cell carcinoma and how to think about that data set relative to zanza and 304?

Dana, go ahead?

Sure. Thanks for the question. Yes, regarding the STELLAR-303 trial, as I mentioned, we are on track to see those results of the non-liver metastasis subgroup, the primary endpoint that's focused on that subgroup around midyear this year. We're still on track for that. Regarding the data and sharing with the FDA, we certainly plan to share those data as well as any other data that the agency might ask for as part of the ongoing review. And again, as I mentioned, from our standpoint, that review is progressing on schedule toward the PDUFA date in early December.

One moment for our next question, and that will come from the line of Ash Verma with UBS.

Yes, I wanted to just get the latest thoughts on cabo competitiveness in RCC. So just given where we saw earlier the LISPARL-022 study that had a PFS positive, do you think it's unlikely to show OS separation because there isn't enough attribute to that analysis?

P.J.?

Yes. Thanks for the question. I think we're really pleased with where we are competitively in RCC. Generally, I wouldn't want to speculate on how other trials continue to read out their data. But what I'll say is kind of as we talked about earlier, building a franchise -- we've done so many studies in RCC that we have strength of the business really in every segment. We saw this quarter the highest frontline market share for CABOMETYX plus nivolumab in the first-line setting, which we're very pleased with. And we continue to see strong momentum there in the first-line setting, given just sort of the breadth and depth of the data and also the experience that prescribers have using this combination now for so many years. So we see potential to continue growing in RCC, and particularly in the first-line setting.

At this time, there are no further questions. And so I will turn the call over to today's host, Andrew Peters. Mr. Peters?

Yes. Thank you, Sherry, and thank you all for joining us today. We welcome your follow-up calls with any additional questions you may have that we were unable to address during today's call. Thank you all again, and have a great rest of your week.

This concludes today's program. Thank you all for participating. You may now disconnect.

Hello again, everyone. I'm Etzer Darout, senior biotech analyst at Barclays. It's my pleasure to have Exelixis with us. With us today, we have Senior Vice President of Strategy and Investor Relations, Andrew Peters. Thank you so much for joining us. And I'm sure folks are familiar with the Exelixis story, but maybe it'd be helpful to maybe just start with some introductory remarks, and then we'll go into Q&A.

Sure. Thank you again for the invite. Always like being in Miami this time of year, even though the weather in California is also nice this week. As a reminder, we're going to be making some forward-looking statements today. So please see disclosures around relative risks in our business in our SEC filings.

So Exelixis is a commercial oncology company, really built around our lead molecule, CABOMETYX, cabo which is a tyrosine kinase inhibitor that targets VEGF as well as a whole host of others, Met, Axl, MER, the TAM kinases, really kind of designed to be a best-in-class molecule across a wide range of indications. It's approved in kidney cancer, liver cancer, thyroid cancer and now neuroendocrine tumors. And so it's really kind of provided the foundation and a lot of the insights is to what we do at the company, both from a research and discovery perspective, but importantly from a strategic perspective as well. And I'm sure I'll get to that a little bit later.

We did $2.123 billion in net product sales last year. We've guided roughly $2.4 billion or so at the midpoint for this year and kind of the cabo business continues to hit on all cylinders commercially. Behind that, we have kind of our next-gen, what we think of as a truly best-in-class and optimized TKI that comes on the heels of cabo called zanzalintinib, which kind of takes the core essence, the special sauce, so to speak, of cabo and further optimizes it, most notably around half-life and kind of PK and some of that.

So zanza is in 7 pivotal studies right now with plans to initiate additional studies hopefully soon. And we also had on the first positive pivotal data from that program readout last year, and we have a PDUFA date from FDA in December. Beyond that, we have a whole host of both small molecule and biotherapeutics in our internal portfolio. And then kind of lastly, more in my purview is as we think about where do we want to be in 5 years and how do we really grow value, it's treating more patients with more medicines, helping them live longer and shifting that standard of care in oncology.

And so as part of that, our financial success that we've had with cabo enables us to both invest internally, invest externally. And then we've been embarking kind of on a series of share buybacks as well to make sure that we understand, we think our stock is cheap candidly. So yes, so that's kind of a little bit of an overview of the company and happy to kind of go wherever.

Yes. Maybe first on that top line guidance that you talked about. What do you see as sort of the key levers around top line guidance? I mean I think the positive, I think, over the last couple of years has sort of been the neuroendocrine franchise. And if you think about just in general about sort of top line and then the guidance and you think about sort of what are the pushes and pulls as you see it?

Yes. So as we talked about kind of on the last earnings call, the really growth drivers for next year are pretty simple. It's continued momentum in the base business around RCC and then continuing to kind of execute on the NET launch. Both of those, as we expect both for 2026 and beyond are kind of really drivers going forward. So I think I'd focus there.

Right. And then as far as sort of maybe the last part that you talked about, just in terms of BD and the potential to sort of maybe look at the external environment for potential assets. I guess what are you seeing in the marketplace that you think could potentially generate value, not necessarily assets, but just maybe indications or specific profiles that you think could be additive to what Exelixis has already built with this commercial platform?

Yes. I mean the way that I think about the company and kind of the way we think of -- we've described ourselves externally as we're kind of a big small company. And what we really mean by that is unlike kind of our larger peers, we've chosen to be particularly focused in solid tumors and even within solid tumors, GI and GU oncology. So within kind of those franchises, so to speak, we think that we're scaled, we're optimized, we're experts, and we're leaders in RCC, NET, CRC.

We want to continue to build out around those. And I mentioned kind of the cabo story and how it is a through line through everything we do. When we think strategically about the company, we use something that we call the cabo lens, which is what are the learnings as to why is cabo successful? How do we continue to double and triple down in the areas that we have been successful? And how does that create value ultimately for all of our stakeholders, for patients, for shareholders, for employees, et cetera.

And so kind of within that GI/GU landscape, that's kind of very much where we focus. As it relates to kind of what's external, kind of accurate outlook is biotech is a tough business. And I think we have to kind of go in eyes wide open as we're looking both at our internal portfolio as well as externally. The math will say that most things just don't work. And so our job as drug developers is to try and find those needles in a haystack, so to speak, that are going to be those programs that ultimately help patients.

One of the things that we've learned kind of again in that cabo lens is that the reason we've been so successful commercially isn't because we're the ace VEGF TKI on the market, it's because we've been able to generate differentiating data and shift that standard of care -- shift that Kaplan-Meier curve to the right. That's why cabo is used.

And so when we look externally to try and identify those opportunities that can supplement our portfolio, that's really the lens that we're looking at is program X at another company, something that we truly believe has the potential to become a new standard of care? If not, it's not for us. We're not going to invest in it. So we're pretty disciplined on that front, and we're going to continue to be so.

Great. And Merck disclosed a couple of belzutifan data sets at ASCO GU for patients with renal cell carcinoma. Maybe just from your perspective, what you view sort of the read-throughs are for cabo and maybe even for zanza as you think about potential non-clear cell -- potentially other RCC indications for that program.

Yes. So kind of before during and after that conference, we had spent a lot of time with clinicians who are treating patients trying to understand the dynamics around the data. And one of the things that kept coming up is this question of that all patients and physicians have when they're trying to understand new mechanisms, new combinations in particular is, is it better to combine? Or is it better to sequence? And oftentimes, kind of the best way to answer that is really through just the simple question, is there an overall survival advantage?

From our perspective and a lot of the feedback we heard from RCC treaters is essentially, if you take kind of a second-line TKI program, 10, 11 months PFS followed by the belzutifan monotherapy data from LITESPARK-005 with 5-, 6-month PFS, kind of that absolute PFS is actually similar, if not a little bit longer than what LITESPARK-011 saw, plus you layer on kind of the added toxicity of the combination and the fact that with the combination, you also lose what we've heard pretty consistently is a big driver of belz use is the so-called TKI break.

So a lot of these patients will have been on a prior TKI for the past 24 months sometimes. And so all drugs have adverse events and TKIs have a particular set, TIF targeting agents have a different set. And so what kind of that sequenced approach with belz has historically offered is providing patients kind of an active modality with a little bit of a different tolerability profile and that's kind of been an important part of why that program has been so successful.

So the question then becomes, if you're not really gaining a lot from a PFS perspective, you're adding tolerability issues and you're kind of limiting your ability to offer patients that TKI break, that's somewhat of a challenging dynamic, and that's why our experience was there wasn't a ton of robust enthusiasm for it. The second dynamic that's actually come up around Exelixis and the data is for those physicians and patients who do ultimately decide that, that combination is probably best suited for them in the second line, what it means is we'll probably see a little bit more frontline share for cabo/nivo.

The reason for that is as physicians are kind of looking at all the arrows in their quiver, so to speak, on how to help patients along their journey with RCC, if they have a sense that they're going to give len/belz in the second line, they probably won't use a len-based regimen in the first line. And we've been trying to drive kind of that frontline share for the last 3 years. And so if len/pem isn't an available first line, they'll probably go to cabo/nivo. So net-net, I think kind of the overall results of the [indiscernible] were a little bit of a net positive for us, but we'll see.

Right. Maybe shift gears to zanzalintinib with a PDUFA for third line plus CRC in December. How are you thinking about maybe incremental sales force? And how much of the existing sales force for RCC can you leverage?

Yes. So taking a little bit of a step back, one of the things that we've increasingly talked about over the last couple of years is aspirationally our goal to be reasonably balanced 50-50 between, say, GI and GU. Obviously, that was kind of kicked off with the CABINET data and our launch for cabo in NET. But we certainly think with zanza coming in, CRC to expect to kind of fully build that out.

And so what we did and what we announced at the end of last year was an increased size of our commercial organization, our sales force, specifically around kind of the NET opportunity to really kind of maximize and put our foot on the gas to make sure that we're doing everything possible to kind of target those patients and really maximize that opportunity. But what it also does is kind of that GI focus enables us to really have a lot of organizational and operational boots on the ground, so to speak, to prepare as much as we can ahead of the potential launch later this year.

And so one of the, I guess, incremental updates that we'll get for STELLAR-303 is CRC data in patients with and without liver metastases, an update there. What does that ultimately contribute to the opportunity for zanzalintinib in this late-line setting initially? And then also, how common is that sort of testing done in CRC patients where this is something where physicians can easily adapt in terms of their diagnosis of CRC?

Yes. So I guess that the liver met, non-liver met dynamic is it can often be just kind of observational. Does the patient have a metastasis in the liver. So it's actually something that's quite common. As it relates to the overall profile, I guess, the important dynamic to keep in mind is that the data that read out last year reflects kind of the ITT population. So it's inclusive of both patients with liver mets and non-liver mets.

What we're waiting for later this year is really the fact that at the time of that primary analysis, the number of events for the non-liver met patients was relatively immature, somewhat of a kind of obvious dynamic given that patients who have metastases in liver tend to have much worse prognosis, given the physiological impacts of just what that metastasis would represent. So not surprising that you see kind of a different temporal dynamic.

But what's also important is the data that kind of came out at ESMO as well as published afterwards was really that we don't see a meaningful difference in effect size across any of those populations, liver met, non-liver met, prior VEGF use, et cetera. And so I think that was actually honestly a pleasant, I don't want to say surprise, but really a pleasant update for us because it shows that the combination of zanza/atezo is really active across all patients. So that's kind of the important dynamic.

Why we're looking forward to the data later this year is, again, somewhat of a statement of the obvious. When our commercial team goes out into the market and sees physicians and kind of starts to have those conversations, it's a much more powerful message when you can candidly show, here's a Kaplan-Meier curve with the ITT, here's the liver mets and here's the non-liver mets and really show kind of overwhelmingly that patients live longer if they're on the doublet versus kind of the current standard. And so that's kind of why we think it's so important is it further adds to the story of why we're so excited about zanza in the setting.

Great. And for STELLAR-316, you've decided to go into adjuvant CRC. Maybe what data points that you're looking at, whether externally or internally that sort of prompted the move into that earlier line setting?

Yes. So this is one that I'm particularly excited about, and I think I'm kind of proud that Exelixis is really at the forefront of the science here. Kind of the incentive, one is, as I mentioned earlier, kind of this franchise view of the world, we really want to kind of invest and broaden our presence in CRC, not only with zanza, but with the rest of our pipeline as well.

But as we started to look at kind of the CRC landscape and say, okay, we have a positive Phase III study in a late-line population. We understand now that kind of this tumor type is particularly sensitive to zanza, what can we do with it? And kind of at the same time as that, a lot of data started to emerge around kind of this ctDNA positivity and what that means from a patient's perspective. And so Natera has the Signatera test and they published pretty extensively around what it means from the patient's perspective when they're ctDNA positive or ctDNA negative.

So unfortunately, for about 20-ish percent of patients who, after what we call definitive therapy because there's slight little differences between colon and rectal. But broadly speaking, after kind of that adjuvant treatment, if they ultimately do become ctDNA positive, what that means is they have a reasonably high rate risk of recurrence in actually a relatively short period of time around the order of 5, 6 months, 6 months or so.

The other unfortunate kind of reality for those patients is the current standard, if you do test positive ctDNA is watch and wait. There's essentially nothing we can do for these patients until their tumor eventually comes back and progresses. And so the combination of all of those things basically let us realize, well, there's this huge unmet need that we have the opportunity to kind of identify patients who are likely to recur, who are also likely to be sensitive to our drug, zanza and basically design a study to help them.

And so when we look at the design of the 316 study as well as kind of the operational dynamics around working with Natera, it's something that I'm particularly excited about because unlike a normal standard Phase III study where you open up 1 million sites and kind of screen a ton of patients and hope that, that funnel ultimately delivers it, the ability for Natera to kind of help us and work with us to help identify those patients that could be potentially eligible for the study from an operational perspective, that's pretty interesting.

And then similarly, we have the ability to offer these patients an option, whereas right now, it's watch and wait. And so it enables us as a company to run a placebo-controlled study in oncology, which again helps us kind of define that new standard of care and really help patients. So that's kind of the key dynamics there.

And do you have a good sense of the -- maybe the median rate or median time to progression for those patients...?

Yes, it's about 6 months, if you look at it. And that's kind of generally around pretty consistent around date of ctDNA positivity. And so that's kind of an important dynamic to keep in mind.

And for STELLAR-304, this is the non-clear cell RCC pivotal study. What conversations have you had with the FDA around sort of choosing sunitinib as a comparator versus sort of the zanza plus nivo active arm? I guess one of the things we sometimes get from the questions are having sort of a control arm where you can sort of see what the incremental benefit is of your drug in question versus sort of a completely different standard of care. Just wanted to kind of understand the dialogue...

Well, I think the challenge and candidly, one of the reasons we wanted to run 304 is it's a little bit of a new and novel dynamic in oncology where there's actually never been a randomized study in non-clear cell RCC. It's kind of this interesting area where all drugs that are approved to treat kidney cancer actually have labels that are inclusive of both clear cell and non-clear cell. And even though there's been no data really to define that. Instead, what tends to drive utilization is single-arm, unrandomized, small, sometimes even single center kind of substudies that tend to have pretty wide error bars and confidence intervals around kind of data.

So it's somewhat of a tricky question to say, what does SUTENT do? What does cabo do? What does len do? What does pembro do? And so that's why in kind of the market, our experience has been that utilization is really kind of a little bit all over the map. It's a hodgepodge of a bunch of different stuff just because there is no standard of care. And so when we thought about embarking on kind of an expansion of the zanza opportunity, that was one of those things where we realized this is a chance for Exelixis to again define a standard of care, plant our flag in the ground and say, with Level 1 evidence, this is what patients should use if they have kind of the clear cell or non-clear cell histologies. And so that's kind of the background of that whole process.

Great. And for zanza with STELLAR-311 in neuroendocrine tumors, I guess one question that we're constantly being asked is the positioning of zanza relative to cabo given sort of what we've seen from cabo in that indication. And ultimately, does cabo ultimately going generic also play a role in how those sort of can coexist?

Yes. So I think the best way to kind of frame that or think about that is to kind of contrast the CABINET study with what we're doing in 311. So CABINET was a cooperative group run reasonably broad study that was placebo-controlled and had a pretty wide range of patients in their prior treatment experience. But for the most part, there were a lot of reasonably late-line patients in there. 311 on the opposite side of the end is kind of comparing zanza against that first oral option, everolimus.

And so that just -- it's a different patient population, one against an active comparator versus kind of placebo. So I think our expectation for the evolution of the NET market is kind of that exact dynamic where robust -- hopefully robust data against an active comparator in a much earlier line population is in a little bit of a different category than kind of that later line placebo-controlled study. So I think that the dynamic and the difference between the 2 is really what's going to drive uptake in the future.

Right. Maybe a couple of questions on the early pipeline, one of which is XB371, your tissue factor ADC. We also see a few other anti-issue factors moving through the clinic. And how are you thinking about differentiation there, again, relative to TIVDAK relative to what else is sort of being developed?

Yes. So I think kind of the -- again, the core of that is really around our view on franchises and kind of the importance there. So TIVDAK as an example, kind of the more standard, historic Seagen MMAE [indiscernible] kind of linker technology. 371, we think, is kind of a fully optimized ADC where the antibody, for example, is noncompetitive with Factor VII, whereas TIVDAK is. So obvious implications around the coagulation cascade and potential bleeding risk, et cetera.

The other dynamic coming back to the franchise point is we chose both a linker and then importantly, a warhead, which we think are particularly active and important in CRC. So that's essentially an ADC that we designed to kind of further our franchise view of the colorectal cancer opportunity because of that chemo sensitivity of the tumor and the expression profile of tissue factor in those patients. And so it's a really good example of kind of when we approach where we want to go strategically, we're trying to be particularly thoughtful around how do we execute on that, what are the best modalities and targets, et cetera.

Great. It looks like we're up on our time. Andrew, thank you so much for your participation. Thank you for our listeners as well.

Thank you.

Thank you. Welcome back to the Citizens Life Science Conference. My name is Silvan Tuerkcan, and it's my pleasure to host Exelixis with Andrew Peters. Thank you so much for joining us.

Yes. Thank you for the invite. Glad to be here.

Do you have any opening remarks? Or should we start forward-looking statements?

Yes. Happy to get into all that fun stuff. So just as a reminder, today, I'm going to be making some forward-looking statements. So please see all relevant disclosures about risks in our business in our SEC filings.

Yes. No, I just want to give a chance to get that other way. Maybe can you walk us through some of the recent cabozantinib numbers and where investors should be focused in 2026?

Yes. So 2025 was an exciting year for Exelixis, not only kind of the first pivotal data from our zanza program, but I think kind of in the background, we continue to kind of operate at the highest level on our commercial organization on the development organization kind of across the board. So at the heart of that is cabo, CABOMETYX was approved in, I guess, seven different indications now.

But kind of the heart of that growth is coming from, one, the RCC business and then the recent launch in neuroendocrine tumors. So we did $2.123 billion in revenue and gave guidance for, I guess, $2.4 billion roughly in the midpoint for 2026. And so we see that kind of continued momentum, continued operational focus in that business just going forward. Within kind of our guidance, we expect growth not only in our kind of core RCC franchise, but our newly launched NET indication as well. So hitting on all cylinders, so to speak.

Maybe talking about the NET opportunity first. Obviously, we've heard a couple of numbers on how big that could be. But how far are we penetrated into that opportunity? And what's your latest thinking of the size there?

Yes. So with the approval in kind of the end of March last year, we're still almost a year from the launch. But it's an exciting indication, one that we think is probably underappreciated not only by -- the Street, but historically by pharma as well and why we're so excited about it, not only kind of with the cabo launch, but our development program with zanza as well and then our SSTR2 program behind that.

So what we've talked about historically is if you take kind of the oral segment, the oral segment in net, it's about $1 billion if you kind of apply some contemporary pricing and contemporary duration, just given that prior to cabo was really a generics market. So our goal is to candidly just launch and penetrate as much into that $1 billion segment as we can. One of the dynamics that we always highlight about neuroendocrine tumors is oftentimes these can be relatively indolent tumors for patients, disease for patients.

And so there's the dynamic not only of market share capture, but that time course of waiting for patients to kind of roll off their prior therapy, have the conversation with their oncologists as to kind of what's the new option that they should consider, and we hope that's going to be cabozantinib.

Great. And I think initially, when I added the indication, I think I estimated about $300 million. And then I think in this earnings, you already said they contributed $100 million. So obviously, I greatly underestimated like many others, this opportunity. But yes, there's a lot of patients out there, I think, looking for an oral option.

Yes, exactly. I mean I think it's one of those that when the cabo NET data read out, we started doing kind of our typical kind of channel checks, market checks, really putting kind of pen to paper, so to speak, understanding the market size. And it was one of those that every time we kind of kept going back to it, it kept looking better and better.

And so I think last year or the year before, what you started to see is this evolution of our enthusiasm and excitement around just NET as an indication over time. And right now, the way we think about our business is kind of through the lens of franchises, obviously, kind of within single molecules, cabo, zanza, multiple indications, but also the indication verticals. So we want to have a presence of all of our compounds in RCC, CRC and now NETs.

And the reason is the more we've really come to understand that opportunity, the more we realized it's much larger than I think people appreciate. And it's also an opportunity for us as Exelixis to really become the dominant player there. So in the same way that we're the market leaders in RCC, we want to be the market leaders in NETs. And certainly, kind of with the launch of zanza, hopefully later this year, we want to grow to be the market leaders in CRC as well.

Great. Maybe talk about the existing franchise and the dynamics in renal cancer. ASCO GU had some updates from competitors and specifically, Merck had the LITESPARK-011 data in the second line. Is this a threat to your cabo monotherapy there? And what portion of current cabo sales would that be competing with?

Yes. So the 011 data kind of taking a step back from the weekend and just kind of taking it all in, so to speak, before, during, after the dynamic we've really heard is kind of as expected. We knew it was a positive study based on the top line release or the headline release on PFS, but all of our kind of physician work, clinician work had basically said the best way to figure out how this combination can fit in the treatment paradigm for patients is really around overall survival and the importance there.

And the reason for that is one of the challenges with any oncology drug is the question of do you combine mechanisms, do you combine modalities or do you sequence them? Typically, if you combine them, you're going to want to see a survival advantage because you lose whatever kind of advantages you have if you sequence it. So if you look at the 011 data and contrast it with what you would reasonably expect with, say, a second-line TKI and then a third line belzutifan is 10, 11 months plus/minus with the TKI, 5, 6 months with belzutifan.

So kind of that absolute PFS benefit of the sequence approach is actually similar, if not a little better than what they saw in the combination. Then you layer on kind of the added tox of any time you combine 2 molecules, you see kind of this additive tox -- to the extent that roughly 40% of patients in that study, 20% for len, 20% in belz actually discontinued 1 of the 2. And so you functionally have a pretty good number of patients with a monotherapy anyway.

And so from the patient's perspective, from the physician's perspective, again, that question comes up is, well, what should I do combine or sequence. The other thing to consider is that one of the dynamics we've heard that's been a pretty significant driver of belz use is what's called the TKI break is how patients and clinicians describe it. For a lot of these patients, they'll have been on therapy IO/TKI oftentimes for the past 2-plus years.

TKIs all have a certain set of kind of common adverse events. And so what belz does is it adds a mechanism that's active in RCC, but has kind of a different grouping of side effects. And so what that means is that it gives them a break from kind of the standard TKI-related AEs. When you combine them upfront, you kind of lose that break. And so the dynamic that we heard was basically without survival telling us that there's a clear-cut reason to use the combination, it's probably net-net, not a big impact.

The other dynamic that we've heard is that for those physicians and clinicians who do choose to use kind of the len/belz in that second-line setting, -- what that probably means is they'll incrementally use additional cabo/nivo in the front line. The reason for that is we're out every day in the market competing for market share in the frontline segment with len/pem. And so if physicians know that they'll probably use len second line as part of the belzutifan combination, that means they won't use it frontline, so they'll go to cabo/nivo as kind of the IO/TKI of choice. And so that kind of dynamic, I think, net-net, leads us to believe that the update over the weekend is probably a net slight positive for us. But ultimately, it's probably not practice changing landscape changing, et cetera.

Yes. My one thought is also -- I have one eye on LITESPARK-021, which is, I guess, in the early line pem, belzutifan and versus pembro alone. Is there a read across from the data that -- or what's your takeaway from the data that we saw, I guess, from in LITESPARK-11 to 21?

Yes. I mean I think the thing to keep in mind for any of these earlier studies, especially kind of in the adjuvant space is, again, the need to show kind of a survival advantage because everything I said before about combinations versus sequencing is even more important earlier and the earlier and the earlier you go kind of in that treatment journey for patients with kidney cancer because, again, as you consider line of therapy, what these patients deal with on a day-to-day basis, especially kind of in that adjuvant space, a lot of these patients are functionally cancer-free.

And what is that cost benefit of adding a second drug in that -- as part of their kind of treatment, what are they actually getting out of it. So that's one of the kind of important dynamics to consider any time you move earlier. And candidly, it's how we think about development across the board around optimizing dose, optimizing combinations, why we're so excited about zanza because it offers some kind of improved optimized ability around dose titration, et cetera. So it's one of those things that I think is a through line through all oncology development and commercial utilization and all of that is that kind of clinical benefit risk as you consider effect and adverse events and all that stuff from the patient's perspective.

Great. And I was also thinking that since you mentioned adjuvant, the LITESPARK-022, the pembro adjuvant setting, would that also drive maybe in the frontline patients into the cabo combo because when you use, I guess, IO upfront, would you then gravitate more to a TKI in the frontline setting?

Yes. I mean, again, it's kind of more of that same dynamic. Our perspective on the 022 data at ASCO GU was certainly interesting, but adoption based on a somewhat modest DFS benefit is probably unlikely, again, because of everything we talked about before around sequencing versus combinations and you lose the benefit of, say, having that HIF later in disease progression.

The evolution of the RCC market over time has really been encouraging and rewarding to see as the kind of 5-year survival rates continue to creep up, that's because companies like Merck and companies like Exelixis continue to invest in the space. But a lot of that's also driven by new drugs, new modalities that can be used kind of both early and late. And so the decision to kind of use them at a particular time point, you got to make sure that over the course of the journey for patients that they have, it really is worthwhile for them.

And then there's anything we could read across from any of the ASCO GU data with Welireg to your zanza combo there. So for example, LITESPARK-033 anything that makes maybe you incrementally more positive on that combination?

Yes. I mean, from my perspective, I'd say, certainly, the data show that belz is a very active and interesting drug in RCC. And the question then becomes how do you optimize it, where do you optimize it? And what do you combine it with? Certainly, our perspective that if you contrast, say, len versus cabo versus zanza, we certainly think that zanza is an optimized best-in-class TKI.

And so we're asking the question with 033, if you have a HIF inhibitor like belzutifan, with an optimized TKI like zanza, can some of the challenges that patients faced around discontinuations, toxicity and all of those dynamics that may have limited the 011 data with a better TKI, can you overcome some of those limitations. The way that we think about development in RCC isn't how are patients treated today, it's how are patients treated in the future.

What we talk about internally is cabo is the TKI for the 2020s. We want zanza to be the TKI for the 2030s. So we kind of sat down with our partners, Merck, to really pencil out how do we want to work together on this combination. The reason we kind of settled on that 033 setting, that post-adjuvant setting is now that pembrolizumab has an overall survival advantage in the adjuvant space, more -- we think more and more patients will kind of be treated much earlier there.

So then the question becomes, well, what do they get if they ultimately do relapse. And so that's kind of the dynamic that we wanted to focus on. It's more of a question of what's that patient journey in 2030, 2031 as opposed to what does it look like today. But overall, I think we're really encouraged and excited about the combination.

Yes. Maybe talking about zanza a little bit more at a high level. And obviously, that's the focus of many investor questions we get today. 1.5 years ago, you put roughly a potential for $5 billion on this drug. I don't know if that's still accurate. And how are you at a high level thinking about the different indications, which ones are really the key ones to get to a really good number for that program and which are maybe the smaller ones and which ones are the high-risk ones?

Yes. So when we put that $5 billion number out, I think it's -- we wanted to kind of highlight, one, the breadth of the opportunity that we're pursuing, but also just candidly say, we're excited about zanza. We think it can be bigger than cabo, kind of full stop. Subsequent to that, we've actually continued to expand our clinical program. We now have 7 pivotal studies ongoing. And so if anything, that number is probably a little bit low.

One of the important dynamics that I'd highlight around kind of that market build, so to speak, is that it's not driven by any single indication. The other kind of part of that messaging that we wanted to put out there is that as we're evolving as a company kind of from the cabo RCC story to cabo NETs and now zanza, it's also about the expansion of not only owning GU oncology, but GI oncology as well.

So as part of that $5 billion or so is roughly kind of 50-50 split between the two. We've since added additional indications like STELLAR-316 in an earlier CRC setting, and that's one we're particularly excited about. So I think the best way to think about zanza and my goal for 2026 is for investors and stakeholders to really understand that while we're really excited about STELLAR-303 and the commercial launch potentially later this year, I think i kind of a hyper focus on -- we get questions all the time around market share and all those stuff. That's really important, but it also risks kind of missing the force for the trees, so to speak, that we think zanza collectively has a really big opportunity.

And we've been particularly thoughtful and deliberate about which indications we're selecting, why we think we're likely to be successful because at the end of the day, our business is to run successful studies to help patients live longer, not to kind of just run studies for the sake of running studies. And so we want to be successful kind of across the board.

Great. Maybe talk about your first successful study there, the STELLAR-303, zanza/atezo in late-line colorectal, obviously, a very fragmented market. You will still awaiting some OS data here on a subset of patients. Can you just kind of walk us at a high level about how you think about that market and maybe give investors an idea of how big that can be?

Yes. So I guess kind of to the latter question, our best guess, our market research suggests that collectively in the U.S., that third line plus segment is about $1.5 billion kind of total. And share, as you highlighted, is reasonably fragmented. About 1/3 of the market is kind of the sunlight regimen, 1/3 of it's TKIs and 1/3 of it is kind of chemo and a bunch of other stuff.

The other dynamic there is there's the community versus kind of academic center and like all oncology drugs, the vast majority of patients ultimately are treated kind of in that community space. And so when we think about kind of the zanza/atezo opportunity ahead of the PDUFA date in December, our market research really suggests quite a bit of enthusiasm for the combination.

Part of that is driven by the fact that there have been many, many prior attempts to get a checkpoint inhibitor in these patients. And our study was actually the first to be successful there. And so one, we think that highlights kind of the differences between zanza and some of the other TKIs comes at the heels of LEAP-17. It was a study that Merck ran that evaluated len and pem, and that study actually was unsuccessful. We did atezo/zanza kind of in a very similar population and obviously showed a survival benefit.

And so one of the things that keeps coming up is, one, offering patients a checkpoint containing regimen. It's really driving a lot of enthusiasm. Kind of simply put, everyone is watching the Super Bowl. They see ads for pembro, they see ads for nivo, they see ads for these drugs that seem to have quite an effect in cancer patients and ask their oncologists, "Hey, is this an option for me?" And until now, the answer has been no.

And so having the ability to offer patients a chemo-free regimen, a checkpoint containing regimen that has shown a survival advantage over standard of care that we think is a compelling message, plus when you layer on the fact that in kind of the U.S. contemporary market, the way patients are treated, the number of prior cycles or prior lines of bevacizumab use, it can kind of complicate the picture for how sunlight is used because if you look at their data, there's a pretty stark difference between how that combination behaves, whether or not patients had seen prior bev use. So we're really excited about it. We're kind of doing a lot behind the scenes to kind of get up and running and be ready for that potential approval later this year.

And then we're still missing a little piece of the data, the OS in non-liver mets patient. What's the importance of that? Or I mean it's not gating for the...

Yes. I mean, overall, the data that we presented at ESMO was published reflect kind of the ITT population. And I think one of the most important parts of that data set was really showing we had benefit across all of those different cohort subtypes, liver met, non-liver met, prior bev use, et cetera. Really kind of that consistency of response is something that jumped out to me, jumped out to KOLs, et cetera.

The liver met, non-liver met dynamic kind of goes back to, say, our clinical hypothesis prior to the start of the study. Thankfully, it just shows it's efficacy is not driven by any particular subgroup. It's kind of broad across the board. But it's also somewhat of the statement of the obvious that if we're able to show robust benefit across each of those populations statistically, that's better from a commercial perspective.

And so my ideal scenario is being able to show a Kaplan-Meier curve of the ITT liver met population and non-liver met population because that's a powerful message to clinicians and the patients that's basically saying the robustness of this combination really has the opportunity to affect patients' lives and help them live longer, better, et cetera. And that's really the goal at the end of the day is to shift that standard of care.

Yes. I'd love to talk more in detail about that, but I wanted to touch on another study, STELLAR-304 that we are getting a few questions on as we're waiting the readout in the non-clear cell RCC setting. Can you just tell us about maybe what the bar here is? And to date, what data or what investors can find confidence in for that readout?

Yes. I mean the 304 study is an interesting one in that it's actually the first pivotal study that's ever been run in non-clear cell RCC. Just functionally speaking, all drugs that are approved in kidney cancer have a label for both clear cell and non-clear cell, despite no data, kind of no randomized data, I should say, suggesting kind of how they perform.

And so what we wanted to do is really kind of plant our flag in the ground and say this is the standard of care in the segment of patients is about 20%, 15%, 20% of kidney cancer because right now, use is based on relatively limited single-arm unrandomized studies that, as you know, can be kind of challenging to interpret. If Sutent or cabo or any of the agents that are used show pretty wide confidence intervals around each of these studies that are single center or select patients a certain way, it's actually kind of hard to define what performance is expected.

And so unsurprisingly, as a result, use is a little bit of a hodgepodge across the board. There's no real dominant player in the non-clear cell space. And so this gives us a chance to come out with Level 1 evidence and say, hopefully, zanza/nivo is the standard of care in this patient space. So we'll see. We've guided for data in the middle of the year.

Great. Well, thank you so much. Thanks for joining us today.

Thank you for having me.

It's a pleasure to host you.

Good morning, everyone. My name is Emily Shutman, I'm a Vice President here on the Targeted Oncology team at Leerink. And I'm super happy to have with me Andrew Peters, Senior Vice President of Strategy and Investor Relations at Exelixis. So thanks so much for being with us today.

Happy to be here.

Great. So yes, maybe we could start out. ASCO GU happened very recently. So I was thinking we could start with RCC and talk about some of the dynamics within the HIF-2 alpha space for RCC. The results from LITESPARK-011 for belzutifan and Lenvima and second-line RCC were just presented. I believe it showed a PFS benefit without a Statsig benefit in survival at the time of the second interim analysis. So all that said, I'm just kind of curious to understand your perspective on this data set and where you think this regimen may ultimately fit in versus cabo in second-line RCC.

Yes. And thanks again for the invite. Happy to be here in sunny Miami. As we were talking about before, the West Coast in California has been quite a nice winter, but I understand from a lot of people that are coming from the Northeast, it's quite a treat. Before I begin, we'll be making some forward-looking statements today. So just as a reminder, please see relevant risks -- disclosures around risks in our business and SEC filings.

So yes, ASCO GU kind of a pretty common topic these days. I think from our perspective, the conference overall was as expected. What we mean by that is kind of before, during and after ASCO GU, a lot of the conversation among clinicians is really this idea of is it better to combine modalities? Or is it better to sequence? And the LITESPARK-11 data kind of in our view, and I think what a lot of the KOL feedback has been really kind of is aligned with that. If you look at, say, TKI monotherapy in the second line, followed by, say, belzutifan monotherapy in that third-line segment, the overall PFS benefit is similar, if not a little bit longer than kind of the data that was seen in 11, adding to kind of the additional tox that you saw and the fact that roughly 20% of either bells or Len discontinued. So you have somewhat of a sequence treatment anyway given that a lot of those patients are functionally just on a single agent anyways.

And so as we think about kind of the overall impact of the data, it's probably pretty benign to our business. And if anything, where we do see some len bells use kind of in that second-line space will probably drive incremental cabo/nivo use in the front line. Obviously, patients tend not to see individual treatment retreatment. And so if someone say going to get Len/Bel second line, they probably won't get Len first line. And so that's where we'll see some incremental cabo/nivo use. So kind of net-net to us, as expected, pretty overall, not a lot of robust enthusiasm for the data, let's say, given that lack of survival. And then on balance, kind of if it does get used, we'll probably see some incremental share in the first line.

Got it. Okay. No, that makes sense. Yes, we also did some KOL calls on this topic and something that they emphasize that's really important is ultimately seeing that sort of static OS benefit pan out. I guess what are your sort of thoughts on that dynamic? Like what are the -- what's the likelihood that you think the OS could eventually be Statsig? Or what are the pushes and pulls to think about there?

Yes. I mean, really hard to kind of speculate without knowing a lot of the intricacies of the statistical plan, so to speak. But -- so really kind of hard to speculate. But at this time, I'd say it's -- it would be hard to see that they'll have a very, very robust survival advantage, let's say. So if anything, we'll just have to see the data.

Yes. No, that makes sense. I think that's consistent with what we've heard, too, especially some KOLs, I think, are nervous that not really too much works after lenvatinib in that setting, whereas there are more options after cabo, which could be something that could influence the OS as well.

Yes. So we'll just have to see.

Yes, for sure. That makes sense. And then maybe could you speak a little bit about the quality of life and toxicity data that we saw for that doublet versus cabo? I think you touched on it a little bit, but that's something that's definitely risen to the surface in our KOL conversations as being really highly relevant in this setting in addition to survival.

Yes. I mean one of the dynamics to consider again in this question of combination versus sequencing is what's the added tox that you're giving as part of the combination. And then I think importantly, hopefully, it's not being crossed over that the adverse events that you see, particularly around, say, hypoxia and cardiac dysfunction, those can be especially problematic from a clinical dynamic perspective is both for patients and physicians as you have to think about baseline characteristics of patients, hypoxia, how do you monitor that?

What's the potential implications of higher-grade hypoxia over a particular amount of time? Is that what's driving kind of that increased cardiac dysfunction. So all those different dynamics are certainly in play, again, contrasted with the sense of, okay, physicians are comfortable with how they currently treat kind of in that second-line space, very comfortable with kind of that third-line bells monotherapy use.

On the AE side, one of the things that we've consistently heard is that sequence approach offers patients the benefit of kind of what we think of as like a TKI break with bells. And so for patients who have been on either IO TKIs or TKI monotherapy for 2-plus years prior, all drugs have adverse events, but the difference between, say, a TKI and a HIF is a little bit different. And so having that opportunity to be on as a monotherapy, an active modality with a slightly different AE profile, that's something that we've heard is actually important to patients and clinicians. And so that dynamic, I think, is important to consider in that overall just framework for how patients get treated as part of their journey with kidney cancer.

Yes, definitely. Yes. Sort of adjacent to that, I want to talk a little bit about your collaboration with Merck with belzutifan. So the LITESPARK-33 trial just started. So maybe, yes, you could talk a little bit about where you see zanza and belzutifan fitting into the sort of evolving treatment paradigm?

Yes. So 33, I think, is an interesting study because when we first started talking with Merck, one of the questions that came up and at least how we think about it is cabo is the TKI of the 2020 how do we define zanza, the TKI, the 2030s. And part of that is just how the evolution of patients with RCC will be treated and how that changes over time. So with pembro with adjuvant pembro, especially now that they have an OS advantage with treatment, our expectation is that, that dynamic of the number of patients who will be treated with pembro over time increases and changes.

So one of the questions that we asked and we're hoping to answer with 033 is really not what does the market look like today, but what does it look like in 2030, 2031, 2032. And our expectation is kind of that percent of patients who have received prior adjuvant pembro will be much higher. And so 033 is designed to really, again, define what the standard of care is should be in those patients. With that data being so new, the pembro adjuvant data, it's really kind of an unanswered question right now. A lot of things are used, cabo is used kind of more by default than anything.

And so 033 is a chance to say, okay, with a -- we think truly best-in-class next-gen TKI combined with HIF like belzutifan, do we have a chance to kind of redefine and functionally answer that question? And hopefully, the answer is yes, but we'll see.

Got it. Yes. Can you comment on, I guess, what percent of patients get adjuvant pembro today and where you see that going?

Yes. It's kind of still somewhat early days. I think our sense is just with the overall survival data, our expectation is that's going to continue to grow.

Got it. Yes. No, that makes sense. And the space, this HIF-2 alpha space is pretty dynamic now in RCC, a number of competitors. There's one trial called the PEA 1 trial, which is testing another HIF-2 alpha agent, casdatifan in combination with cabo in post-IO RCC. I think it might be helpful if you could talk a little bit about the key differences between LITESPARK-33 and PEAK-1 as well as any thoughts you have on the differences of the potential profiles of these combinations based on what we know about these different agents today?

Yes. So I think kind of a statement of the obvious that oncology is competitive. It's dynamic. It's always been competitive and dynamic. And so it's just kind of the nature of how we think about our business. So 033, as I said, kind of is really designed to specifically answer that question of that post-adjuvant treatment. As I understand it, I think Peak 1 is a little bit of a broader study kind of looking at more of just a generic post-IO, which is a slightly different patient population.

As it relates to, say, the differences between PA and Bells, candidly, it's probably too early to say. One of the challenges that we all have is trying to understand and tease out early kind of Phase I unrandomized data and how that will play out and influence in larger randomized Phase IIIs. The challenge is that functionally, a lot of times, Phase I patients can be different than Phase III patients. And almost a truism in oncology, you tend to see a degradation of benefit when you go from Phase I to Phase III just because of how those patients are functionally.

So really kind of early days there. One of the things I'll say is we're really excited to be working with Merck. There's no better oncology development company in the world than Merck. And so with them operationalizing the 2 studies that we're working together, along with kind of the financial partnership that we have in terms of kind of the co-funding arrangement, it's something that we're really excited for.

Yes. No, absolutely. And then, yes, I believe based on the collaboration agreement, Merck is also expected to announce a second Phase III trial for zanza in RCC. And I know this is in Merck's hands, but just kind of curious if you could comment at all on when this announcement could be or what the trial might look like, how it might be different than LITESPARK-33? Yes, any color you could provide?

Yes. I think at this point, kind of the best way to say it is just stay tuned there. We've agreed with our partners to not talk about specifics of the study until it's up and running. And so excited to talk about it when that is. But for now, I think kind of the best way is just stay tuned.

Okay. Yes, fair enough. Maybe transitioning to non-clear cell RCC. Top line data for zanza [ and nivo ] in frontline non-clear cell RCC are expected in mid-'26. Maybe you could talk a little bit about this opportunity, the trial and just sort of the broader thesis behind this combination.

Yes. So it have had really great meetings so far this morning and obviously been with data later this year have been a topic of conversation. And as I've -- as we've discussed many times in the past, one of the really striking things that always jumped out to me as we were thinking about running this study was the fact that there's never been a large randomized study in non-clear cell. By default, all of the approved agents in RCC are approved for both clear cell and non-clear cell.

And utilization is driven by kind of guideline recommendations, which themselves are a bit of a hodgepodge of single-arm unrandomized sometimes single center IST type studies that define how patients get used. So as a consequence, market share and utilization when we can tease it out is a little bit of a hodgepodge and mismatch of everything. And so what 304 does is it provides an opportunity to define with Level 1 evidence with a large randomized pivotal study, what a new standard of care could be.

And so it's a chance with zanza, nivo randomized against SUTENT to exactly define that. And so if you think about kind of the opportunity set, non-clear cell from a pure epi basis is, say, 15%, 20% of RCC. And so that's kind of how we're thinking about the market opportunity overall is do we have a chance to really draw a line in the sand and say this is the new standard of care based on robust evidence as opposed to kind of reading through some pretty limited data sets, cabo included that define the market right now.

Got it. Yes, that makes sense. I guess maybe could you set some sort of guidelines around like what level of efficacy you're hoping to see in this study?

Yes. I mean kind of tough to speculate ahead of the data, but somewhat of a statement of the obvious. We want to see robust benefit across response rates, PFS and ideally survival. The way that our experience is the way that drugs are commercially successful is if they define a new standard of care and shift how patients are treated. And so the way that, that's done is to have differentiating data. And so that's kind of the goal.

Got it. Yes. I guess, are you hoping to see better efficacy than what cabo plus nivo or atezo has shown in the Phase Ib, Phase II experience. I think there's some early data sets showing ORRs in the 30s to 40 range, PFS north of 10 months or so, 10 to 12 months. Is that something that you're looking to see?

Yes. I mean, again, that's almost the point of the study is to kind of show the limitations of those small unrandomized data sets. I mean depending on which study you look at, you tend to see pretty wide ranges of outcomes. And so it just inherently shows the limitations of cross-trial comparisons between small end data sets, which themselves have pretty wide error bars. And so I think there's some inherent challenges of saying 304 versus 20-patient data set here is a little bit of an apples and oranges comparison.

So I think our goal is to define with a robust data set what that could be because obviously, within non-clear cell, there are a bunch of different subtypes. And depending on how those were enrolled in these smaller studies, it can certainly influence. And so I think our sense is our job is to just define what that is and answer the question definitively, how should patients get treated.

Yes. No, absolutely. Yes. And I guess, I mean, beyond like the efficacy and the fact that this was the first robust Phase III data set in non-clear cell. What are other sort of qualities of zanza that you think would drive usage over cabo in the setting? KOLs that we've spoken to comment a lot on the titratability advantage over cabo that seems to really resonate with treating physicians. So if you could maybe speak to that and some other sort of advantages.

Yes. I mean I think it gets to kind of the heart of why we develop zanza in the first place. So cabo is a great drug. We -- everything we do at Exelixis, we say we kind of do through the cabo lens. One of the dynamics that does come up with cabo is it's around a half-life. It's around 4 days. And so what that translates to from a kind of clinical practice perspective is all drugs in oncology, all TKIs, patients inevitably develop AEs that are needed to manage.

The challenge there, if you kind of go by the treatment algorithm is dose hold to resolution of symptoms and then rechallenge at a lower dose. But because of that relatively long half-life that cabo has, that dose hold period can be 10 days, 2 weeks, sometimes even longer. And so that can be challenging from a patient management perspective, that can be challenging from a combination perspective if patients are on multiple modalities.

And it can be challenging just from the perspective that the longer someone is not on drug, especially at subtherapeutic doses, does that give the cancer an opportunity to kind of regain a foothold, so to speak. So zanza was really designed to take that same kinase profile that cabo has, which we really think is the sweet spot that differentiates it relative to some of the other VEGF-targeting TKIs and then improve the PK profile. So zanza's half-life is a little under 24 hours.

And so that makes it more user-friendly, so to speak, from a combination perspective, from a down titratability, all of those sorts of things. And so as we think about kind of zanza, not only in that non-clear cell space, but across the 7 pivotal studies that we're running, that's one of the most important dynamics because our view is while monotherapy certainly has a role and we're developing and it's a NET and meningioma, if you look broadly at kind of what we're hoping to do with zanza over time, it's certainly around investing in combinations as well.

Yes. No, definitely. That's helpful color. And then I want to talk a little bit about CRC. The Phase III STELLAR-303 trial for zanza and atezo read out positively at ESMO this last year. I think you have a PDUFA in December. Could you maybe talk a little bit about this data set and some of the features of this regimen versus RGO standard of care versus the SUNLIGHT regimen, which is the standard of care in the setting as well?

Yes. So we're really excited about kind of the potential zanza launch later this year in CRC. That third line plus CRC segment is a really interesting opportunity because if you think small G globally, how patients are treated in the U.S., say, given the relative dynamics between, say, KOLs and the community and just how patients are managed over time, share is roughly 1/3, 1/3, 1/3 kind of that sunlight regimen, TKIs and chemo.

But importantly, one of the things that historically hasn't been available to patients in CRC is kind of the checkpoint inhibitors and immunotherapy. And so what the 303 data provide is data to show with an overall survival advantage that patients live longer taking the combination of zanza and atezo compared to kind of the current standard of care. And so as we've gone out to the market with research and that's one of the things that jumps out is it's an opportunity to provide patients an option to have treatment with a checkpoint.

We all watch the Super Bowl and see all these ads for pembro and nivo and all this stuff. And it's a dynamic that we've observed that patients come in to talk with their oncologists and ask about these checkpoints. And up until now, the answer has been, unfortunately, these aren't available for your type of cancer. So we think, one, that's a powerful message. Two, showing a survival advantage versus standard of care is certainly kind of the gold standard historically in oncology.

And we think the 303 data that we showed at ESMO and was concurrently published certainly demonstrate that zanza/atezo should be a new standard of care. And then kind of lastly, on your question on the sunlight regimen, one of the dynamics that, again, has kind of come up in our research is if you think about how patients are treated in the U.S., the vast, vast majority of them will have prior bev use, either once, sometimes even twice. And so that sunlight data, there's actually a pretty stark difference in how patients respond to that combination, whether or not they had prior bev.

So kind of overlaying that with treatment patterns in the U.S., there's kind of another dynamic at play, especially when you consider kind of looking at our own data, there's no real difference, say, between prior bev use or not and no real difference between liver met and non-liver met. We just had a robust result across all the different potential stratification.

Yes. No, that's definitely come up in our KOL conversations as well. And I think, yes, that was one of the more positively surprising aspects of that data set for us was the robust benefit in liver mets patients. I guess, could you maybe comment a little bit on any hypothesis you have for why there was such a strong benefit in liver mets patients when historically IO/TKI combos haven't been able to show a benefit in that segment?

Yes. I mean, I think, candidly speaking, it just is a good example and highlights why zanza is different. Taking a step back and why we focused initially on this dynamic between patients with liver mets and not, physiologically, these patients are very different. You would expect if there's metastases in the liver, they have a much poor prognosis, and that's been clear. But one of the things that we've observed in the industry has observed empirically across all of these relatively contemporary studies in late-line CRC is that patients behave differently, especially on checkpoint inhibitors with and without liver metastases.

And kind of the most recent study, LEAP-17 that Merck ran looking at lenvatinib plus pembro, functionally speaking, if they would have just looked at non-liver met patients, that probably would have been a positive study. And so that kind of drove a lot of our interest around designing the study to specifically from a statistical perspective, look at those 2 different groups. kind of fast forward the clock and when we read out the top line and then full data at ESMO, we were pleasantly surprised and encouraged that we saw a robust response across both of those cohorts.

And to me, to us, that just shows that zanza is actually different. And it's not just that VEGF inhibition that's driving activity, but it's hitting the TAM kinases, hitting [ MET, EXEL, Merck, ] all of the things we think that are unique and differentiated about zanza, kind of myeloid cell biology, tumor microenvironment, all the stuff that we think historically has benefited cabo, say, all that holds true and we think kind of drive a lot of that difference. And so it shows that the combination is very effective and highly encouraged to see that activity across a broad range.

Got it. Yes. No, that makes sense. I guess sort of, yes, related to that, the final OS analysis in non-liver mets patients is expected in mid-'26. I think that one initially wasn't positive at the interim, the liver mets OS was. I guess sort of in that context, how are you thinking about this upcoming non-liver mets analysis? And kind of curious if you think that the benefit in liver mets, does that derisk the non-liver mets to some extent? Or how are you guys kind of...

Well, I think -- so just to clarify, so the data that we presented at ESMO and top line, so that was the ITT population. And so we showed a benefit across all patients. It's inclusive of patients with and without liver metastases. But given the dynamic that I talked about earlier around patients with and without just functionally can be different, the relative maturity, the number of events, survival events for that non-liver met group was still early. And so that's kind of what we're waiting for later in the year.

Certainly, kind of directionally, we're encouraged by the early look, but we'll see in the middle of the year. And so that's just kind of a dynamic to consider. But overall, when you kind of squint and look at the tail of the curve and all of that, we're certainly hopeful that we'll see a benefit. I mean, again, a statement of the obvious, one of the better case scenarios or best case scenarios from our perspective is if that data is positive, and we're able to get in a label or show clinicians kind of that benefit in the ITT benefit in the non-liver met benefit in the liver met group, that helps really drive hopefully, uptake in utilization and show that the combination really is a new standard of care in that space.

Got it. Yes. No, that's really helpful. Maybe just in our last minute, talk a little bit about 2026 guidance. I think it's like contemplates 10% to 12% growth year-over-year. Could you talk a little bit about what's driving that in '26?

Yes. I mean, as we talked about kind of in the last earnings call, continued momentum in the base business in RCC and then kind of additional momentum from the net business. So the guidance reflects kind of both of those drivers, which we expect going forward. So kind of...

Okay. Well, thanks so much for joining me.

Good afternoon, everybody, and thank you once again for joining us for the 46th Annual TD Cowen Healthcare Conference. I'm Yaron Werber from the biotech team, and it's a great pleasure to moderate the next fireside chat with Mike Morrissey, CEO and President of Exelixis. Mike, good to see you.

Good to see you. Great to be back. Another one, it's March, must be common, right?

March -- and thank God, it's not, but it's not snowing. Thank God.

We'll talk about the weather later.

Exactly. So maybe a lot going on. Do you want to maybe say a few opening remarks?

I would love to. Yes, before I begin, I'll just say that we'll be making forward-looking statements. So please see our SEC filings for a description of the risks that we face in our business. Yes, look, we're Exelixis commercial stage, oncology-focused, again, commercially oriented, franchise-oriented biotech company. We've been around for a while. We have, I think, hit our stride in the area of building franchises. And certainly, with cabozantinib, we have the first one under our belt and looking to do more with the pipeline.

We had an R&D Day in December where we spent a couple of hours talking about what we're looking to do to build a pipeline of franchises and how we think about franchises in multiple dimensions to be able to -- whatever we do, always improve standard of care for patients with cancer, first and foremost, and then move the needle for all of our stakeholders in terms of building global franchises that can really take cancer care to the next level. So we're doing that with cabo, hoping to do that with zanza, have a pipeline of early-stage assets that are really exciting, and I'm sure we'll cover all that today.

Yes. And if anybody has any questions at any point, just feel free to raise your hand. So let's start. We're all fresh out of ASCO GU and lots going on with -- this is -- RCC is an important market, and obviously, some other people have taken notice. Merck just released their LITESPARK-011 data in second-line testing [indiscernible] head-to-head against cabo. And we are waiting for LITESPARK-021, potentially data by year-end testing, there's another drug, but the important one is pembro [indiscernible] Lenvima against pembro Leni in frontline. And so -- and that's a PFS study with, I believe, survival [indiscernible]. So what was the impression of LITESPARK-011 and kind of...

Yes, sure. Let's talk about...

Is it going to find a role?

Yes. Let's talk about all that. So first kind of foundational statement, statement of the obvious, right? Oncology is hypercompetitive. We not only acknowledge that, but we've reveled in that over the years. If you go back and look at how cabo has maneuvered multiple indications since the first launch in second-line RCC based on METEOR, we've got 8 indications in our label, monotherapy combination, GU, GI, blah, blah, blah. So we're -- we acknowledge, we understand that this is a highly, highly, highly competitive space. It always has been. And our job is to navigate that by making sure we bring the best drugs forward, the best combinations forward to, again, singular focus on improving standard of care for patients with cancer.

So cabo is the leader, leading TKI in RCC in general, but certainly in the second line and the first line TKI IO category as well, so we are super proud of that and looking to extend that as we go forward with cabo and then be able to transfer that over to zanza. Cabo as we talking about today and over the last couple of months the dominant TKI in the 20s and our goal to make zanza the dominant TKI in the 30s, right. So the data this weekend from 11 to be frank, kind of, met our expectations, we thought we would win on PFS, not surprised by the data at all.

If you look at the data for cabo, the contemporary data for cabo from CONTACT-03 from the control arm of 11, you add that to belzutifan from 05, you would expect 15, 16 months of PFS, and I think they saw 14.5 or whatever that was. So not all that surprising. Survival isn't significant. We'll see if it crosses that threshold or not. Tolerability, safety, I think that was hit a little bit at the meeting, I think probably underappreciated some of the complications there. I think you can probably -- I don't want to speak for Merck, but you can probably infer from that data why we and they think zanz belz's combination looks potentially pretty exciting. Yes. So look, does that gain -- does that combination gain market share? We'll see. We're not really concerned about that because, again, all of our modeling kind of assumed this outcome. We're confident based on all the market research that if we lose anything second line, we'll gain that back first line because of cabo's just superior activity as a single agent, a lot of docs actually reserve it for second line. So they choose not to use it first line in combination with nivo. So there's a reason to change that dynamic that actually works for us. So we'll see.

So in some ways, it's another day at the office, and we're excited to be able to keep our eye on the ball with cabo in all the indications, but certainly RCC and NET. And then this is the transitional year for zanza, where zanza filing is in, review is going well. We expect that will continue to be the case, and we're hoping to launch end of the year. And then we have a full suite of pivotal trials either ongoing or planned to start this year and the next wave coming. So that Exelixis story is really evolving from a singular focus on cabo to this broader focus on zanza and then the pipeline.

Yes. When -- so their p-value on the second for survival with a hazard ratio of 0.85 was 0.0608, something like that. But the alpha was 0.0245, and this is the interim. From IA1, the hazard ratio was 0.9...

Got all the stuff down, that's good...

Can they really even get that? Because it's...

I don't want to speculate. I mean -- how many events do they have left remaining? Do they over whatever. So I don't -- again, I don't want to get into that level of speculation. The feedback that we've gotten before the meeting, during the meeting, literally after the meeting, it's a classic question of is it better to combine early, kind of take all your shots upfront or sequence, right? And that's a question throughout oncology and the data really has to drive that, right?

One of the things that we've heard a lot about belzutifan, which kind of makes sense is that docs like to use that a little bit later because it gives the patients a break from some of this long-term cumulative TKI tox. So if you think about it from the standpoint of somebody -- a renal patient has been, whether it's IO/IO or IO/TKI and then a TKI afterwards, I mean, they've probably been on drug for a couple of years probably. And there is this long-term chronic exposure tox that kind of creeps in. So I've heard numerous docs say, I like using belz a little bit later because it gives them a break from that. And they can go back to a TKI afterwards if they need to, right?

So again, everybody is different. You've got the academics who are a little bit more aggressive. You've got the community docs who have a different mindset sometimes. So we're here to help patients with cancer. Certainly, kidney cancer is where our main focus is. We have very, very strong growth over the years. If you think about what we've done since we launched 9ER, we've essentially tripled revenues on the back of that data. We're excited about NET. And then there's this whole landscape ahead of us, this whiteboard of open space for zanza, colon, meningioma, potentially other tumor types that we're going to certainly want to explore as we go forward if the data continues to look good, that gives us a lot of opportunities there to build that, too.

Yes. Okay. So let's move to LITESPARK-033, the zanza [indiscernible] combo against -- I'm sorry, zanza [indiscernible] against cabo and the post-adjuvant...

I never heard Welly before either -- that's -- you should trademark that one.

Because you say belz...

Belz, yes...

Okay, I'll call it belz...

Either way...

So that's essentially post-cabo -- sorry, postadjuvant IO. So this is a frontline regimen essentially, but it's cabo mono is that relevant? And I imagine it's one study as part of -- I imagine it's a [indiscernible] right? So there's going to be probably another study. that is being planned with Merck in frontline. I imagine it's going to be a triple. So is the gating factor waiting to figure out the dose to then start the second study or maybe to zoom out what's the strategy for this combo in frontline for it to be competitive?

Yes. So I would say a couple of things. Merck will talk about the details of the second study when that starts. We've agreed that they're going to kind of control the narrative there, and I don't want to disrespect that agreement. So I'll leave that there. There's been a narrative that it might not start based whatever because of the light sparkle, [indiscernible], that's just complete hogwash. okay? That study to all knowledge I have, which is as recent as last week, Friday is basically it's planned to start. So details...

Starting early in the year.

Whenever. I'm not going to comment on timing, but it's just again...

That was the guidance, right?

Yes. Okay. Yes. Just stay tuned on that, okay. The other thing I would say is -- and this is really important, is you got to think about the next wave of studies, not in the context of 2025 and 2026, but in the context of the 2030. The question that we talk about a lot and we think about a lot is how will standard of care evolve over the next 5, 10 years because if you're aiming for what the target is today and things change over even a reasonably short time frame, then you're going to miss the mark, you're not going to be relevant.

So we think the adjuvant setting in all tumor types, but certainly renal is ground for a lot of important improvements and a lot of important advances and to have a molecule in a combination like [ ZanzaBells ] that has the ability then to play in early makes a lot sense. So that is one approach, right? You think about what we're doing in renal, we've got basically [ 304 ] and then on [indiscernible] that should read out midyear, plus or minus. And then excuse me, then 2 Merck studies that's just the first stake in the ground, if you will, right?

We're really excited about being able to pair [indiscernible] with orthogonal MOAs right, that allow us the opportunity to really see synergy across the continuum of RCC patients, right? If you look at -- if you look at the VEGF [indiscernible], that's all one pathway. The biochemistry is intimately related. One regulates the other, and that's been known for years, right?

So you want -- again, doubling down there makes sense, but there's a trade-off in terms of additional efficacy versus safety. We're much more interested in asking the question. Are there other pathways in specialties -- and importantly, other bispecifics that we can combine Xansa with that give us more breadth of coverage biochemically and from a target pathway point of view, that could lead to better efficacy. Because for us, the name of the game is, again, improving standard of care. And you can only do that if you're taking kind of [indiscernible] goal -- so we're excited about that. It's early look at what you've got here, it's like with colon and net it's just the beginning. It's not the end all, it's just the start.

Yes. Is it possible that the Merck second study is in the adjuvant center?

I'm not going to talk about the second study. They'll talk about that at the appropriate time.

If I'm thought that collaboration was for metastatic, but maybe which is broadly [indiscernible].

[indiscernible] okay. .

Okay. Key maker is testing several different things. Can you talk about the key maker-U03 and where [indiscernible] in there?

Not much to say there. I think that's their basket. Again, you should ask them, not more than me. I think that's their basket study where they've looked at different combinations, and we're certainly using that to do dose range finding, part of the Xansa Bell's run up into pivotal. So...

Yes. But that's only has [indiscernible], right? No other...

Right now, it's just [indiscernible].

I'm just kind of reading between the lines, I mean, to your point, I don't see a triple coming down, but we'll see with pembro.

Yes. Again, I don't want to get into the details that we haven't talked about previously. There's -- question is again, broadly speaking, how do you define a triple? Is it 3 agents? Or is it 3 targets [indiscernible] so stay tuned.

Okay. Got it. Any questions from the audience? Can we talk about maybe just a little bit of the dynamics right now. I'm going to now go back a little bit commercially and talk about Q4 and the guidance for the year. So in the guidance for the year of [indiscernible] in Q4, you saw nice growth in that. There's always some lumpiness in gross to net ordering patterns and quarter-over-quarter RCC growth. It looks like the tailwind in that quarter was a net continues to grow really nicely. So as you think about fiscal year '26 and the guidance for [indiscernible], revenue guidance was about up 9% to 13% year-over-year. What's driving that? And what do you expect [indiscernible].

Both in the base business and in net. We haven't broken that out for obvious competitive reasons. We expect both to grow in '26. We had a strong year in '25, right? Revenues were up, I want to say I'm looking at Chris 17% year-over-year, demand was up 15%. So very small impact of growth on -- from price. And that is -- part of that was net. We did about $100 million, a little bit more than $100 million in net in 2025. And the rest was solid growth in the base business.

So now quarter-to-quarter, it's choppy. We had a really strong Q3, a little bit lighter Q4, all the gross-to-net issues. So nobody should be looking with that much precision quarter-to-quarter since it's just lumpy and choppy, but we had a great year last year, and the transition from '25 to '26, we talked about muscling up more on the GI side at the end of last year. That's now done. We've got a full complement of our kind of field-based reps for the GI sales team in place today that complements the full field force we have in GU.

So I mean, the mission there is to obviously, get the terminal velocity with net for cabo as soon as possible so that end of the year, whenever the approval comes for [indiscernible] and CRC, we can put our attention there. So we want to be able to, again, sequence and focus and deliver. The CRC opportunity is huge for us. It's a big population. A medical need is high, lots of interest in the Xansa atezo combination. Again, as we talked about previously. This is the first time a checkpoint containing regimen has actually worked.

And third line plus non-MSI-high CRC after 4 failures with other checkpoint [indiscernible]. So again, [indiscernible] seems to be the special sauce there. And we [indiscernible] ITT population. Non-liver met should read out, again, midyear, plus or minus. So ideally, things work out to have that whole kind of data set in the mix for a launch, it would be great, right? It would be a great way to get out of the gate strong. And it's a big opportunity. And with the post-adjuvant trial that we're now planning to do with Natera that I'm sure we'll talk about later.

I mean the buzz around Xansa CRC is really high, 303 and 316 play off each other. We talk to [indiscernible] they bring up the other in vice versa. So it's a great setup for what we think could be a really strong new franchise in CRC for [indiscernible].

Yes. So net did about $100 million in year 1. The market opportunity we thought can even be sort of $500 million to $1 billion, right? So the path ahead to getting there it sounds like you're mentioning that it's gotten good traction in the academic settings. Is it about moving to the community? Or what's kind of the game?

Yes. So the main focus now is to get the community uptake to be -- to match what we're seeing with the academics. And that's -- it's -- again, it's more dispersed, if you will, as it always is in the community opportunity. These patients -- this is an indolent disease, patients progress slowly. So therefore, the number of patients coming into any community site compared to some of the bigger tumor types is less. So you just need more face time, more nonpersonal promotion, more alerts, if you will, about what the data is and why they want to use it, right?

So -- and that's all -- we've had this issue -- we had this issue with cabo in RCC back in 2016, 2017. There are docs we had survival of second-line RCC and there were docs in the community still writing the [ Phenotym ], right? Because they just it wasn't as familiar with them. So we know how to do this. We're pros at being able to kind of shift the mindset based upon high-quality data, and we're going to do that compliantly and off we go.

Okay. Maybe zanza for NCC RCC, we're expecting that data. This is STELLAR-304, right, randomized 2:1. zanza/nivo against sunitinib, primary endpoint is PFS. Data is expected midyear, I believe, right, in PFS. So cabo atezo or cabo/nivo, they showed 31% to 48% response rate, about 9.5% to 12.5% PFS. In [ PAP/MET, it's PAP/MET ], cabo alone showed about 23% ORR and about 9 months PFA.

That was single agent.

Single agent. Yes. Sunitinib did 4, just to give everybody a sense of 4% ORR and 5.6 months PFS. So pretty low and sunitinib is the comp. So if cabo/atezo or nivo/atezo comps, we're looking for a nice beat here, 30% to 40% ORR, 10 to 12, 10 to 13 months PFS, almost doubling PFS. Is that sort of what -- the way you're looking at the world for that study?

Yes. I guess I would frame it more of the comps in clear cell, right, and trying to recapitulate what we see in clear cell in this first, again, never been -- there's no existing pivotal trial in non-clear cell RCC to put a stake in the ground, have Level 1 evidence would be fantastic, right? So a win is a win. We'd love to be able to get the trifecta here like we saw with 9ER and Media or everything else where you've got PFS survival and response rate all going in the right direction. And that's the way to capture people's attention and to bring that standard of care up to par.

So yes, so we're all in there. I mean it's -- again, it's the first stake in the ground for RCC. It's 15%, 20% of the overall market. And there's a lot more coming. Again, I'm not sure we're going to invest more in non-clear cell, but from the standpoint of being able, again, to look at orthogonal MOAs combined with zanza in a way that we can move the needle early in the treatment paradigm is the way to go with an eye for the 30s, not so much the 20s.

Right. Okay. But you're thinking clear cell-like data, the clear cell-like data would be even higher than the data I quoted.

Yes, I think we have to aim high. I mean we're going to get what we get. So it's just a matter of the more data we have that is compelling around the efficacy and safety endpoints, the better statement of the obvious.

Yes. Okay. So now going back to CRC with zanza, so back to STELLAR-303, and we're waiting for the non-liver mets midyear. So NLM originally outperforms the ITT. So is the hope here for stat significant survival benefit in that subset? Is it possible?

Well, that's the whole goal, Yes, for sure. And that's ideally what we would like to have. We have a win in the ITT population to be able to -- and we have a clear win statistically in the liver met population, right? So can we round that out with a statistically significant improvement in OS for the non-liver mets. That's the question, right? So to be able to have all 3.

I mean you think about what that -- again, if we were able to achieve that and we get approved on that and all the caveats, but that's a pretty strong way to market the drug to physicians, prescribers and ultimately, their patients who are asking upfront, why can't I get a checkpoint containing regimen for my disease, right?

So again, we always do the right thing. We always play by the rules, all that stuff. But I mean, that's the goal is to be able to have -- if it's there to have that offering to provide that. And I think that's a pretty compelling data set, right? There are obviously, all the chatter last fall. I mean that in some ways, I think the background noise has dissipated. The unmet medical need is there. The interest in this kind of regimen is growing with time. The idea that we're going to reinvest in CRC and 316 in this post-adjuvant study, just raises, I think, the level of enthusiasm for zanza here as well. So I think it's going together really, really well, and the team is executing at a very, very high level, and I'm really excited and proud of them for what they're doing right now.

The PDUFA is December 3, I was sort of hoping to get more of a priority review. I mean there is...

Sorry, I didn't deliver on that one. It's kind of my...

Why -- what's going on with FDA...

I wouldn't want to speculate on that. We've had great collaboration with them, great discussions with them. They have to make the call. I'm not privy to how they decide this kind of stuff. That's -- I'm happy to engage and however they want to engage and we'll get that done.

Okay. Is it that they felt that there's other regimens in that area?

I wouldn't want to speak to them.

Okay. Any questions from anyone? Maybe just before we go into the rest of the pipeline, stock buybacks. So as we look at your cash flow, it's going to accelerate in the future. I think you've been doing, let's say, right now about $750 million a year or so. We think that could accelerate...

If you look at our guidance, right, probably should, right?

And we should expect the same sort of cadence consistently? Because I mean the stock has been kind of -- it's not like the stock is diving down, you can go...

So look, our whole -- not just philosophy, but how we've executed on capital allocation is pretty simple, right? We want to invest the right amount of money in the internal pipeline development, and that's having the right level of stringency and prioritization around where we invest and where we don't. And we've done that historically I mean, going back to 2010, how we've done that. We basically killed everything in 2010 to focus on cabo and focus some more on cabo and then just kind of turn the corner in terms of once we had a signal.

So I think we do that pretty well, and I think the whole management team is very, very aligned with making the right hard decisions about go-no-gos and about where we invest and where we double down based upon the data that we have versus where we pull back. So that will continue. But we're spending in $900 million to $1 billion a year in R&D. That feels about right. And then we have to make the best of that, right, in terms of where we prioritize and how we set.

BD is absolutely critical, and I've talked about this publicly in terms of how we're looking for kind of later-stage assets. Early stage pipeline is full. We don't need to add more there, but later-stage assets that are either in pivotal trials or ready for pivotal trials is our sweet spot, and we're focused on that. M&A is unlikely. But the right BD back-end loaded pay-for-success kind of deals we think makes a lot of sense, and that will continue to go.

And then, look, we -- our buybacks aren't just there to spend money. We're investing in a company that we really believe in that we understand, I think, better than anybody else, and we think is significantly undervalued. So why wouldn't we buy back our shares if we think the future value is much greater than is perceived with present share price. And I think we -- as I think Chris has said numerous times today, over the last couple of years, we've spent -- we bought back $2.2 billion of shares -- 77 million shares. At some point in time, if we're successful, we're going to be an EPS company. So the more we can pull that float down, the more that's going to help us on the EPS side in the future.

And if [indiscernible] like we think we will, -- we get another molecule that can become a franchise, get the third [indiscernible] franchise, then we're going to be in that rarefied air, where our success is looked at purely through the lens of EPS. So then the more shares we pull off the table now when it's cheap, the better. So that's the plan.

The third orthogonal mechanism, is that something from the outside? Or is that something internal?

Either one, we're looking for this next -- the next franchise needs to stand up like cabo did like answered say, "Hey, super active. invest in me, right? So we like 628, the PD-L1NKGA2 bispecific, 371 is a tissue factor targeting ADC with a topo ligand that's designed literally specifically for CRC. So again, you can imagine things going in different directions. [indiscernible] I mean, the next wave of opportunities for pivotal trials where we think -- and we've gotten a lot of feedback from KOLs that the tolerability profile is such with [indiscernible] that it might be the TKI that combine with actual chemotherapy. So we're looking at Xansa say, docetaxel combinations starting in prostate cancer to ask the question since no one seems to be able to beat dose in prostate or lung could you combine a concrete.

We need early data and everything else. But I think it's a very intriguing way. You can see if there's success there, what that could do to revenues. If you can play the second-line prostate second-line lung and really Yes, it's huge, right? So lots of options, but the focus is pipeline franchise molecules. That's the how we look at that lens of single compound, single indication just doesn't really appeal to us because it just doesn't make sense relative to how we can maneuver and really build this outsized success.

Yes. Well, terrific. I think we're at time. Excellent. Mike, thanks so much for coming.

Great to be here again.

Nice to see you.

Nice to see you. Thank you.

Good day, ladies and gentlemen, and welcome to the Exelixis Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. My name is [ Towanda ], and I'll 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, Mr. Andrew Peters, Senior Vice President of Strategy and Investor Relations. Please proceed.

Thank you, [ Towanda ], and thank you all for joining us for the Exelixis Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. Joining me on today's call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; Dana Aftab, our Executive Vice President of Research and Development; and P.J. Haley, our Executive Vice President of Commercial, who will review our progress for the fourth quarter and fiscal year 2025 ended December 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. This includes statements about possible developments regarding discovery, product development, regulatory, commercial, financial and strategic matters, potential growth opportunities and government drug pricing policies and initiatives.

Actual events or results could, of course, differ materially. We refer you to the documents we file from time to time with the Securities and Exchange Commission, 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. With that, I'll turn the call over to Mike.

All right. Thank you, Andrew, and thanks to everyone for joining us on the call today. 2025 was a transformational year for Exelixis with strong growth across all components of our business. We expect to build on this momentum in 2026 and have already made significant progress during a very busy January. Critically, and we'll emphasize this here and throughout the call, Exelixis has a singular focus to build a multi-franchise business in solid tumor oncology based on the foundation of cabozantinib, the potential of zanzalintinib and the depth of our early-stage pipeline.

As outlined at our December R&D Day, our strategy to build a pipeline of franchises in solid tumor oncology covers 3 critical dimensions: products, tumor indications and modalities, and is based on current Exelixis leadership in GU oncology and our aspirational goal to expand our leadership in GI indications with equal intensity and potential upside. The Exelixis strategy for product, tumor and modality franchises provides the framework to drive both the growth of any overall market we choose to pursue and the potential to capture a greater share of the commercial opportunity with multiple entry points.

Our operational model to establish, expand and entrench any given franchise highlights the potential value for all our stakeholders. Importantly, the progress we have made over the last 12 months as well as our expectations for 2026 and beyond are well aligned with this franchise-focused approach. With that context in place, we outlined important news and priorities to kick off 2026 at our corporate update in January at the JPMorgan Healthcare Conference. I won't reiterate everything here today, but just focus on the top highlights, including: first, we saw continued strong performance of the cabozantinib business in the fourth quarter and full year 2025.

CABOMETYX maintained its position as the leading TKI for RCC and the market leader for neuroendocrine tumors in the oral second-line plus segment. Full year 2025 U.S. cabo franchise net product revenues grew 17% to approximately $2.12 billion compared to full year 2024. Fourth quarter 2025 U.S. cabo franchise net product revenues grew 6% year-over-year to $547 million compared to the fourth quarter -- continuing its role as a worldwide leading TKI, global cabo franchise net product revenues generated by Exelixis and its partners were approximately $754 million and $2.89 billion in the fourth quarter and full year 2025, respectively.

Importantly, cabo's U.S. net product revenues exceeded $100 million for the neuroendocrine tumor indication in 2025. Second, we're excited to accelerate zanza as our next potential oncology franchise opportunity in 2026 with the recently announced acceptance of our NDA for the zanza/atezo combination in third-line plus CRC based upon the STELLAR-303 data. The entire organization is rallying around this important 2026 milestone, and we've taken decisive steps to fortify our commercial footprint to maximize the impact of potentially launching 2 drugs in different indications in successive years.

Notably, we've expedited the build-out of our GI sales team in January with the focus to accelerate the growth of the CABOMETYX neuroendocrine tumor opportunity before zanza could come online for CRC later in the year. We think this enhancement could be an important component of our growth narrative in the near term and speaks to the confidence we have in both cabo and zanza as we move into 2026.

Third, zanzalintinib is rapidly advancing as our next franchise opportunity with 7 ongoing and soon to start pivotal trials, along with a variety of important trial concepts under consideration as potential -- as a potential next wave of pivotal trials. We continue to prioritize zanza, both as a monotherapy and in combinations for existing and new indications as an expeditious path to a second Exelixis oncology franchise. Importantly, we're excited by the level of interest in new clinical collaborations for zanza from the JPM meeting that could expand the breadth and depth of our zanza pivotal trial efforts to potentially define new standards of care for patients with cancer.

Fourth, as we highlighted at our R&D Day in December, our Exelixis IND pipeline is full for the next several years with potential first-in-class and/or best-in-class molecules demonstrating differentiating activity based on extensive preclinical testing. All our efforts are focused on identifying the next clinical asset we can move into full development as another potential Exelixis franchise opportunity. Dana will summarize our status today at a high level, and I refer you back to the replay of our R&D Day to dive into the details for zanza and the rest of our pipeline.

Finally, business development activities continue to focus on late-stage assets in the GU and GI space. We're pursuing back-end loaded pay-for-success transactions that fit into our oncology franchise framework as a top priority. In terms of capital allocation, we're confident we have the balance sheet and expected free cash flows to advance our pipeline priorities, access new molecules from external sources when appropriate and continue our share repurchase program when we believe our shares are undervalued. With that, please see our press release issued an hour ago for our fourth quarter and full year 2025 financial results and an extensive list of key corporate milestones achieved in the quarter. I will now turn the call over to Chris.

Thanks, Mike. For the fourth quarter of 2025, the company reported total revenues of approximately $599 million, which included cabozantinib franchise net product revenues of $546.6 million. CABOMETYX net product revenues were $544.7 million. Gross to net for the cabozantinib franchise in the fourth quarter of 2025 was 28.5%, which is lower than the gross to net we experienced in the third quarter of 2025.

This decrease in gross to net deductions in the fourth quarter of 2025 is primarily related to lower PHS and 340B volume when compared to the third quarter of 2025. Additionally, we estimate that our gross to net for the full year 2026 will be between 31% and 32%. As previously disclosed, Exelixis has been designated as specified small manufacturer, which requires Exelixis to pay a 2% discount in 2026 on all Medicare Part D sales and is included in our gross to net estimate for the year. Our CABOMETYX trade inventory was slightly higher at 2.2 weeks on hand at the end of the year when compared to the third quarter of 2025.

Total revenues in the fourth quarter of 2025 also includes approximately $52.8 million in royalties earned from our partners, Ipsen and Takeda on their sales of cabozantinib. Our total operating expenses, excluding restructuring expenses for the fourth quarter 2025 were approximately $363 million compared to $341 million in the third quarter of 2025. The sequential increase in these operating expenses was primarily driven by higher manufacturing costs for drug development candidates, NDA filing fees, personnel expenses and higher marketing expenses, offset by lower stock-based compensation in the fourth quarter of 2025.

Provision for income taxes for the fourth quarter of 2025 was approximately $8.2 million compared to a provision for income taxes of approximately $58.8 million for the third quarter of 2025. This decrease in tax provisions was related to items that were recognized in the fourth quarter of 2025. The company reported GAAP net income of approximately $244.5 million or $0.92 per share basic and $0.88 per share diluted for the fourth quarter of 2025. The company also reported a non-GAAP net income of approximately $259.5 million or $0.97 per share basic and $0.94 per share diluted. Non-GAAP net income excludes the impact of approximately $15 million of stock-based compensation expense net of the related income tax effect.

Cash and marketable securities for the year ended December 31, 2025, was approximately $1.66 billion. During fiscal year 2025, we repurchased $954 million of the company's outstanding common stock, resulting in the retirement of approximately 24 million shares of the company's outstanding common stock at an average price per share of $39.61. As of the end of fiscal year 2025, we had approximately $590 million remaining under the $750 million stock repurchase plan authorized by the company's Board in October 2025. And finally, turning to our financial guidance for the full year 2026. We announced our 2026 financial guidance during the JPMorgan conference in January, which is detailed on Slide 19 of our earnings presentation. And with that, I'll turn the call over to P.J.

Thank you, Chris. The CABOMETYX business remained strong in the fourth quarter of 2025. The team continued to execute at an extremely high level, CABOMETYX continuing to be the #1 prescribed TKI in renal cell carcinoma, the #1 TKI plus IO combination in first-line RCC and the #1 oral agent in second-line plus neuroendocrine tumors. This is an exciting time for the team with zanzalintinib on the horizon as we prepare to launch our next franchise molecule, which would also expand the Exelixis GI franchise.

The prescription data in the oral TKI market basket of cabo, lenvatinib, axitinib, sunitinib and pazopanib convey the strength of cabo relative to the competition. Looking at the TRx comparison of Q4 2024 to Q4 2025, CABOMETYX grew 3 share points from 43% to 46%. And importantly, CABOMETYX TRx volume grew 15% in Q4 2025 compared to Q4 2024, outpacing the growth rate of the market basket, which was 7% for the same period.

Physicians are responding positively to the broad net label and the contemporary trial design and perceive the efficacy and tolerability of cabo as favorable relative to other small molecule therapies in the space. Prescribers are using cabo broadly across patient and tumor characteristics, including patients with neuroendocrine tumors arising in the pancreas, GI tract and lung across all tumor grades, functional and SSTR status and those who have received prior treatment with Lutathera.

Turning to new patient market share for second-line plus neuroendocrine tumors in Q4. We're pleased that CABOMETYX remains the market leader in the oral therapy segment. And additionally, our research indicates that there is opportunity to continue to grow market share, particularly in the community. As Mike highlighted, cabo 2025 revenue in neuroendocrine tumors exceeded $100 million, and the team is fully engaged on driving growth in this indication in 2026 with a strong focus on the community setting. For that reason, we are pleased that we have completed the expansion of our GI sales team, which will yield greater reach into the community in order to continue to grow net market share for CABOMETYX.

Our new representatives join us with significant oncology sales experience, particularly in colorectal cancer and GI oncology. We are excited to have them hit the ground running. Importantly, the expanded team will be able to gain valuable experience selling cabo before we turn our focus to the potential launch of zanzalintinib in colorectal cancer. We're thinking about building on and expanding our GI franchise, we are thrilled with the results of STELLAR-303 and a PDUFA date set for later this year.

Pending regulatory approval, we believe that these data would provide Exelixis with a compelling commercial opportunity in 1 of the big 4 tumors. Our market research and advisory boards demonstrate positive feedback and excitement for the STELLAR-303 data. Physicians reiterate the significant unmet medical need for patients in the third-line plus CRC setting and are excited for the potential to have an ICI option available for the broader population of CRC patients.

In closing, we are pleased with the growth of the cabo business, both in RCC and mets. In neuroendocrine tumors, prescribers see CABOMETYX a more favorable choice versus other previously approved generic small molecule therapies. Simultaneously, our internal team is in full launch preparation for zanza and the excitement around these efforts is palpable. We look forward to the opportunity to launch the next Exelixis franchise later in the year to be able to help appropriate patients with colorectal cancer. Beyond STELLAR-303, we are enthusiastic about the significant development plan for zanza, which could position the zanza franchise to far exceed cabo in terms of the number of patients that could be impacted across tumor types and settings. And with that, I will turn the call over to Dana.

Thanks, P.J. Our strategy in R&D is on building franchises in key solid tumor indications, and we continue to be focused on maximizing our productivity with disciplined investment in high-value opportunities for our portfolio. Zanza is clearly our next big franchise opportunity with 7 ongoing or planned pivotal studies. So my update today will be focused mostly on zanza, but I'll also touch on our earlier-stage pipeline of small molecules and biotherapeutics.

As Mike mentioned earlier, the FDA accepted our new drug application submission for zanza with a PDUFA target action date of December 3 this year. The NDA is based on the results from the STELLAR-303 trial comparing the combination of zanza plus atezolizumab versus regorafenib in patients with non-microsatellite instability high colorectal cancer who had received multiple prior therapies. As a quick reminder, the trial has dual primary endpoints designed to assess survival outcomes, more specifically in the population of patients without liver metastases, which we refer to as the NLM patients or population and more broadly in the intention to treat or ITT population, which includes patients both with and without liver metastases.

The study met one of its dual primary endpoints, demonstrating a 20% reduction in the risk of death with the combination in the broader ITT population at the final analysis, while data pertaining to the other dual primary endpoint of overall survival in the NLM population showed a trend in overall survival favoring the combination. The NLM data were immature at the data cutoff, and the trial has been proceeding to the planned final analysis for this endpoint, and we expect to have those top line results around the middle of this year.

Needless to say, we are very excited about engaging with regulators on this first NDA for zanza in combination with atezo, which, if approved, could potentially become a new standard of care for CRC patients who have received multiple prior therapies. We believe that the STELLAR-303 results demonstrate clear clinical differentiation of zanza from other TKIs and IO combination partners investigated in this space and that zanza's differentiated mechanism of action, including inhibition of the TAM kinases and MET is a key factor in this clinical differentiation and underscores zanza's franchise potential.

As a next step toward realizing that potential, our team is highly focused on investigating zanza in an earlier setting in patients with colorectal cancer. To that end, we're planning to initiate the STELLAR-316 trial this year in patients with colorectal cancer who are positive for molecular residual disease, or MRD, after completing definitive therapy. By definitive therapy, we mean rectal cancer patients who have been treated with total neoadjuvant therapy followed by surgery or colon cancer patients who had surgery followed by adjuvant chemotherapy. About 20% of patients are MRD-positive following definitive therapy. And these patients typically have a poor prognosis with median disease-free survival times in the 6- to 8-month time frame.

Critically, these patients have no therapeutic options that have been shown in a Phase III trial to prevent or delay metastatic progression of their disease. Thus, this represents a significant opportunity in the colorectal cancer landscape. In STELLAR-316, MRD will be determined with the Signatera circulating tumor DNA test, and we are very excited to be working with Natera as our diagnostic partner in this endeavor. Their commercial test is very extensively utilized in this setting and their database built from testing thousands of patients each year gives us incredible insight and clarity regarding patient demographics and outcomes.

Some of the primary hurdles in Phase III trial execution are around site performance and patient recruitment, but we now have information from our partner that should help us focus on prioritizing activation of clinical trial sites that are already known to have the highest cadence of testing and the highest numbers of eligible patients. Thus, once STELLAR-316 is initiated around midyear, we expect enrollment to be quite brisk. Moving on to other trials. STELLAR-201 is a single-arm Phase II trial designed to evaluate zanza in patients with recurrent meningioma, and we expect that trial to initiate around the middle of this year. STELLAR-311 is our Phase III trial evaluating zanza compared to everolimus as an initial oral therapy in patients with neuroendocrine tumors.

That study was initiated last year and is proceeding on schedule. And STELLAR-304 is our pivotal trial evaluating the combination of zanza plus nivolumab versus sunitinib in patients with locally advanced or metastatic non-clear cell renal cell carcinoma. We expect top line results from STELLAR-304 around midyear. And if positive, those results could lead to our second NDA filing for zanza. Finally, progress continues with regard to the Phase II umbrella study being conducted by Merck in which the combination of zanza plus belzutifan is being evaluated in patients with previously treated metastatic RCC and 2 pivotal studies that Merck is running in clear cell RCC evaluating zanza in combination with bells.

One of those pivotal studies is LITESPARK-003, which is comparing zanza plus belz versus cabo as frontline therapy for patients who received anti-PD-1 or anti-PD-L1 therapy in the adjuvant setting. And that study initiated in December last year. We will update you on the details of the other Phase III study as they become available. Given the demonstrated clinical differentiation we've seen with zanza and its potential to be the TKI of choice for combinations with immunotherapies and other mechanisms of action, we're continuing to assess the landscape of additional opportunities for zanza development.

To that end, we've engaged in discussions with potential collaborators on some exciting new combinations, and we look forward to sharing more details of these opportunities as we get closer to launching the trials. Now shifting to our early clinical pipeline. We have 4 molecules in this space that are currently in clinical development, namely XL309, XB010, XB628 and XB371. And the Phase I studies for these early molecules are progressing well.

In terms of earlier-stage development candidates, we are continuing to advance exciting new small molecule and ADC programs, and I look forward to sharing more details as these early pipeline programs advance. Our strategy with the early pipeline is focused on identifying the next potential franchise molecules beyond cabo and zanza. So we will continue our approach of getting to go/no-go decisions quickly and efficiently, leveraging our expertise to pick the winners and ultimately maximize impact for patients. So with that, I'll turn the call back over to Mike.

All right. Thanks, Dana. I'll wrap up here by thanking the entire Exelixis team for their outstanding efforts in 2025. As we reflect on the substantial progress we've made over the last 12 months, we importantly look forward to 2026 as a potentially transformational year for the company.

We will continue to execute on all cylinders with cabozantinib while also preparing for what could be our second potential franchise for zanzalintinib, all while we continue to advance our early-stage pipeline.