Exelixis, Inc

Exelixis, Inc. (EXEL) CEO Mike Morrissey at BofA Securities Napa Biopharma Conference Call – (Transcript)

Exelixis, Inc. (NASDAQ:EXEL) BofA Securities Napa Biopharma Conference Call June 24, 2020 3:30 PM ET

Company Participants

Mike Morrissey – President and Chief Executive Officer

Conference Call Participants

Jason Gerber – Bank of America

Jason Gerber

Good day everybody. My name is Jason Gerber. I cover Specialty Pharma and [indiscernible] Biotech at Bank of America. I’m pleased to be introducing our next company presenter, Exelixis and CEO, Mike Morrissey. Mike, we’ve done Vegas and Napa now digitally, we’re very sterile, very benign, anti-climatic, but glad to have you nonetheless.

Mike Morrissey

Well, and I’m in my same living room with my same clothes on and my same tennis shoes.

So, yeah.

Jason Gerber

All right.

Mike Morrissey

Groundhog Day all over again, but it’s great to be here. And thanks again for the invite. And again, before we begin, I’ll just remind everybody 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.

Jason Gerber

Yep. Okay, great. So look for everybody listening. This is the first one of these I’ve done know in Napa Digital, but we’re trying to make this very interactive. I don’t see any questions in the queue, but I – certainly a lot – submit questions through aircast. I’ll be – I’ll ask them. I’m going to focus first on liver cancer because it’s one of the, you know, the 2020 events that we are focusing on in our research. And so, you know, very curious to get your perspectives on the Frontline HCC opportunity, Mike. And so, on COSMIC-312, can you just discuss how enrollment’s progressing? Do you think the company is still on track to have an interim update in the second half of 2020?

Mike Morrissey

Yes. So thanks for the question. It’s great to focus on 312 and HCC, as you know, we and others, you know, we’ve been really focused myopically on 9ER and prostate and other stuff. So, this is a really important indication. This is an opportunity for, I think, everybody in Biopharma to focus on a very important disease that impacts literally millions of people globally every year.

So, we’re excited to be in this space. We’ve got, you know, we had great data at the ASCO GU with cabo and IO earlier in the year, and we’re certainly working very hard on 312. So, in terms of what’s happening there, I can tell you that we have hit the 740 patient randomized milestone recently. So that’s great news, and certainly, I think great kudos go to the team for working through really all the complexities, not only of running a, you know, large, global pivotal trial, but doing it, you know, in the time of COVID where you’ve got regional differences of, you know, sites turning on and off and all the challenges that go with that, while the global healthcare system tries to manage that pandemic.

We will continue enrolling for the next month or so, but there’s a little imbalance in the single agent cabo arm due to the amendment that we put in relatively early, but had an impact on enrollment. So, we’ll finish that over the next month or so and then move forward from there. So, in terms of what’s happening with the interim, again, we gave the initial guidance in January of 2020 that we – if things went on, kept on track, we’d have top line data, potentially, at the end of the year.

I remind everybody this is all event based, both for PFS and OS. We’re mid-year right now. So would want to say one thing or the other relative to what’s going to happen at the end of the year, but we’re certainly very focused on making sure we can get this trial done as quickly as possible based upon the events that have to accrue for both progression and then survival. So, stay tuned there.

Jason Gerber

Okay. Now, I believe that this trial, the enrollment criteria are pretty much virtually the same as the IMbrave150 trial, not sure if there are any differences worth flagging, but I asked this because, anecdotally, we’ve heard that the 150 trial excluded patients with poor liver function or risk of bleeding, which may represent potentially as much as two-thirds of the eligible patient population. And so, I’m just wondering, you know the representativeness of that data given that Avastin could have a bleeding risk in these patients. I think it was 30% all grades. And, you know, I would think that that could represent an opportunity for shorter acting, anti-angiogenic being on board with the with the IO agent. So just curious to get your perspectives on trial enrollment, how is it similar or different from IMbrave150 in the issue that we flagged there?

Mike Morrissey

Yeah, so at a very, you know, kind of top line summary I think 312 and IMbrave are relatively you know, similarly designs trials. You know, we have a cabo only arm, they didn’t do that type of single agent arm for either [indiscernible], you know we’re enrolling more patients than they are, but certainly using a lot of the same investigators, all the same regions of the world. I would say the one, the one – I would call it a big difference, but the one new one and you bring up bleeding as a important consideration to think about here is that, you know, these patients with their, you know, inherent liver disease are at risk for bleeding. And that’s normally around the idea that as the disease progresses, liver cancer patients can develop either esophageal or gastric varices which are prone to bleed and in some cases, when these ruptures occur, you know, it can be can be life threatening.

In the IMbrave trial, they did endoscopy on every patient to understand, you know, that factor in real time. We’re not doing that. We’re looking at very detailed medical histories like we did with CELESTIAL in weeding out patients that way based upon their medical history and their history for bleeding. So, I’ll remind you that in the in the CELESTIAL trial 800 patients second-line, so later line therapy, we have one grade five bleed in the IMbrave trial, with the extra screening they had five. So, but again, it’s part of the disease, obviously you want to be able to maximize efficacy and safety. So, I have to look very carefully at this component of the patient, you know, pathology and comorbidities as you go forward here. So, very important.

Jason Gerber

Yeah, so I think, you know look, if we were to think about a scenario where 312 looks similar to IMbrave, you know, I asked the question because I’m curious how you’d envision the market evolving. Do you think that this is a market where there’s a traditional first mover advantage, do you do you see the marketplace becoming segmented? You know, one of the arguments I’ve heard is, well maybe some doctors may prefer two IV infused drugs. Another counter argument I’ve heard is, well, you know, you raised the issue about bleeding and maybe some doctors may prefer to just have a shorter acting anti-angiogenic. So if the bleeding occurs, I can get the patient off of their anti-angiogenic versus Avastin, it stays in them for three weeks.

Mike Morrissey

So, so the question is, is how market evolves.

Jason Gerber

The question is, how you would envision, yeah, on the market evolving, and it’s the area where you had comparable data?

Mike Morrissey

Yeah, look, and it’s all about the data. Right. And I think that’s the, you know, that’s the ultimate [arbiter] here on what will happen, what can happen, what we’ve seen happen with us and others, you roll in there with better data, differentiating data, that you can, you know, reinforce with prescribers in terms of the benefits you bring that others may not have, you can use that first mover advantages are often important when there is equivocal data, but data is rarely all equivocal across the board.

So, so again, I don’t have a crystal ball. I can’t tell you how; you know how 312 is going to stack up to IMbrave and the other trials that are ongoing here. This is a very competitive space that’s a bit of a statement of the obvious is oncology. Everything is competitive, right? There’s no single player in any indication that, you know, has that, you know, has that indication for themselves. It’s just, there’s just too much going on here. So, we’re comfortable in either scenario, whether we have, you know, whether we’re second with, you know, different data with better data, some way to be able to make that happen, or in a situation where, you know, even if we have equivalent data, there’s enough differences in terms of how you know, how cabo can be used here, to be able to help patients, again, pending, pending the appropriate data, where we think we can make a lot of progress.

So, we’ve got good name recognition here. Everybody understands, you know, the activity of celestial – of cabo and celestial, which, you know, having that, you know, initial survival signal gives us a lot of traction to then move in to the frontline setting once we have the appropriate level of data. So, long winded way of saying we need data and we need to be able to see how that looks, but, you know, with our with our commercial infrastructure and the momentum that we’ve got right now, we feel pretty good about that in any upside scenario for sure.

Jason Gerber

Got it. So obviously, part of the HCC story, I think with investors is to show me story. I think, this idea of a market paradigm shift. Let’s say the U.S., for example, we’re about 30% of eligible patients, by our estimates are getting systemic therapy. With Roche rolling out, IMbrave on 150, how quickly can you see that evolution occurring to systemic treatment rates increasing, potentially even doubling? Is that something you think can happen in four to five years, is it a decade, you know, in terms of your experience as you look at market analogues, you look at the quality of data that’s being generated in the space. Just curious to get your perspectives on that?

Mike Morrissey

Well, I think if you look at, you know, if you look at the introduction of novel IO therapies into frontline indications, think about lung, think about melanoma, think about renal, you know those have all been very rapid and the uptake has been swift and the impact on I think both patients and on the, you know, the standard of care opportunities has been as robust as you would possibly hope for. It’s a little bit more complicated here because of what has historically been a lack of really, you know, kind of game changing compounds with data that you know, either medical oncologists or hepatologist or you know, interventional radiologists can kind of focus on together and not segments the patient triaging approach, but really unify that in a way that makes sense.

I would propose, I guess I would argue that I think IMbrave does that for the first time where you have a very effective, very tolerable regimen that clearly surpassed the long, you know, maybe long-term standard of care that left a lot of people wanting for more, right? So, I think this is the catalyst, if you will, that we’ve been talking about for the last two or three years now that can really unify the market. Unified standard of care across three different medical disciplines in a way that brings the most benefit to patients, and it’s going to – I think it’ll be the catalyst for seeing more patients put down the medical oncology work stream and bring them more benefit because they’re getting these drugs and they’re getting introduced into systemic oncology setting faster earlier in their disease when they’re healthier, they’re more robust, they have a lot more liver function. They’re [amenable] to these kinds of therapies.

So, yes, I think this is the catalyst and the next steps, follow on from there, whether it be, you know, what we’re doing or what others are doing in the frontline setting, how you then, you know, even go step further and maybe think about triplets. How you can more effectively triage patients when they progress on frontline IO. It’s that evolution, but there’s, again, globally, there’s 800,000 new patients diagnosed with liver cancer every year and that’s a large number of patients that need, you know, need better therapies today. So, I’m super excited about this and I think it’ll be the first step and what I hope to be a real renaissance in liver cancer treatment paradigms going forward.

Jason Gerber

And [so not to put words] in your mouth, so I want to summarize, so would you think that frontline lung and how quickly the IO was adopted in frontline lung is a good analog then for perhaps the market transformation in the move away from [indiscernible]?

Mike Morrissey

Frontline lung, I would say is one example that I use that yeah, I wouldn’t want you to put words in my mouth either, I think that was a market that already existed in terms of medical oncology. So, it’s obviously different. I think the challenge here now is going to be the tension between, you know, interventional radiology and medical oncology and asking the question operationally, how that’s going to – what’s best for the patient from a standard of care perspective, right. And I think that that tension will evaporate quickly when the data from IMbrave and the next wave of trials that will read out over the next year or so starts to take hold.

So, is it going to be instantaneous like it was, you know, with IO and lung, probably not, but will it be faster than four or five years, sure hope so. I mean, if it takes the medical community that long to make that transition. You know, I think we’re probably not serving our patients as well as we could. So…

Jason Gerber

Okay. One issue that I wanted to touch upon and you know if the audience doesn’t ask me questions I’m going to keep – I have a few more on this liver cancer topic which is of interest to us. So, I guess in second-line ipi/nivo showed some very impressive efficacy survival data, and as it pertains to IMbrave patients who are on the TKI monotherapy didn’t have the opportunity to cross over to the ipi/nivo whereas with both your trial and Merck’s IO TKI trial that is a possibility to crossover for lack of a better term, but get nivo with the second line. I think they chose 22 months or less. So, I’m curious if that creates a risk, a challenge in terms of the – your cosmic through into showing as compelling of an OS benefit as say we saw and IMbrave curious of your thoughts there.

Mike Morrissey

Yeah, well, I’m smiling here because, you know, 12 months ago or 18 months ago, that same question was asked about 90 arc, right, you know, how are you going to possibly show a survival advantage in renal when you’ve got ipi/nivo and [axi Pem] and everything else out there that’s going to you know, salvage the [indiscernible] right. So, this is the, it’s always an issue, any global randomized OS survival, overall survival study has that, you know, has that inherent risk that you know, new therapies, new regimens, can potentially, you know, salvage the control arm and you know, kind of, you know, have an impact on the steps. That rarely happens. And certainly, you know, we had this issue over and over and over again relative to renal that obviously, both, you know, for both METEOR and 9ER where that didn’t come to pass.

So, you know, I mean, obviously, you want the best thing for your patients, obviously, you know, the more, you know, the more treatments they get the better. And you know that that normally has a, I would say it’s a, it’s differentially impacted by the regions where you enroll. And obviously, we’re all enrolling all of our pivotal trials globally, because that’s kind of where the patients are, and to be able to get to, you know, the kind of numbers we’re talking about in a relatively, you know, kind of reasonable timeframe, you’ve got to enroll globally, and a lot of those therapies aren’t available.

So, unfortunately, in terms of either in terms of their regulatory issues or their, you know, the reimbursement issue. So, to make another long story short, this is a topic that comes up for every survival trial. And it’s something that we just deal with and we, you know, we understand and we take steps to minimize that complicating what we’re doing in terms of the readouts that we want to see.

Jason Gerber

Is there any aspect of the geographical distribution of the study that adds to that comfort knowing that ipi/nivo may not be able to salvage the [indiscernible] arm, for example, in terms of enrollment within Asian countries that perhaps where ipi/nivo is not made available yet?

Mike Morrissey

I would say in general, the fact that global pivotal trials within the – throughout the industry are run globally and are run in Asia or they’re run in South America, they’re run in Europe, I mean, everywhere, right? Each of those regions or sub regions has different you know, different parameters around how they view subsequent therapies and what’s available and what’s not. So, you’re looking at a very broad population, and you’re looking at a very broad set of issues in terms of what’s just general availability.

So, bottom line is that I don’t think that’s something certainly that we worry about. I’m just, obsessed about it because I understand based upon the, just the empirical data that we’ve seen ourselves and others have seen, this has not been a complicating issue in the past.

Jason Gerber

Okay. Okay. Now, just a couple more on this. So, Merck’s KEYTRUDA LENVIMA combination appears positioned to be a strong competitor in the space and arguably has some advantages in the eyes of [KOLs] that we’ve talked to at least in liver cancer on the basis of their frontline reflect [study data]. In your mind, what are some of the key battlegrounds within the IO TKI segment? You know, if you are to ultimately, you know, be competitive with Merck like you are in a lot of other end markets?

Mike Morrissey

Yeah, again, as I said before, this is an area with a lot of competition. You know, the [Marchesi] trials amongst others are in the mix right now. There’s other IO trials going in the frontline setting too. Yeah, the situation is, just it’s going to come down to the data, right? Excuse me, relative to, you know, what we have versus what others have in terms of efficacy, safety, tolerability, etcetera. Right? So, you know, it’s something that everybody, anybody in this business whether you’re on the, you know, company side or on the investor side has to have, you know, some degree of comfort or understanding that nobody is, no one’s alone here, right? And we’re certainly not they’re not, we have very, I think we have very competitive data.

You know, you mentioned the ipi/nivo survival data being 20 plus months. Well, you know, cabo-nivo had the same kind of numbers for OS from the overall cohort that we had at ASCO GI. So we’re confident in our data. We’ve got a 20% to 30% response rate. We’ve got good PFS data with cabo IL and first and second line HCC. So, yeah, I mean, we can all quibble about a small Phase 1B datasets and try and dissect what they mean, and don’t mean and who’s got the edge and what is it all. You know, who’s got what, where, and when, but end of the day you got to run the big trial, you’ve got to randomize, certainly running a randomized trial is the great equalizer here. And we’re doing that and as I mentioned before, we hit our first big enrollment milestone with hitting the [740 recently], and so I feel like we’ve got good momentum here and we’ll get the trial done and the data will speak for itself. So, we’ll see.

Jason Gerber

Okay, well, one thing that I at least noticed from COSMIC 312 is that you know, you obviously you have the cabo therapy mono arm, and [lymphedema] did not show superiority over sorafenib, you know, single agent and so one thing that we’ve heard from KOLs is that, this could be a differentiator for you guys, if your mono therapy arm looks more – show superiority over sorafenib, so, I don’t know if you can speak to the strategy, you guys, I think are the only ones that have a single agent arm and do you think that could be a competitive differentiator for you?

Mike Morrissey

Ah, sure, look, anything is possible. I mean, that arm was put in there, based upon feedback from the agency around, you know, having single agent cabo in the frontline setting, helping define the contributions of components in this indication, in this line of therapy, so plain and simple. It’s, you know, 185 or so, patients will be enrolled here. So, as you would imagine the powering showing any kind of superiority, head-to-head against sorafenib here is going to be, you know, pretty tight, right?

So, again, it’s more there to fulfill a regulatory requirement than to show superiority. So, I don’t want people to, you know, get too focused on you know, something that, you know, wasn’t designed to do, but you know, again, we talked to the agency a lot, we get feedback from them, and we try to incorporate it to both, you know, satisfy their requirements and make a better trial, which we did here. So…

Jason Gerber

Okay. That’s my last question on HCC. I do have one from the field. So, I’ll ask that, it’s – now’s the better time than any. So, XL092, the question simply is, what should we expect from that? I presume that means, the question means this year, you presumably will have some pre-clinical data that you can share and perhaps also disclosed, moving into the clinic and a program and what that program would look like would be my own inference, but perhaps I’ll let you take it from there.

Mike Morrissey

Ah, yes. So XL092 is our next gen cabo. As we talked about previously, we have, you know, spent a decade or more studying, investigating the activity of Cabozantinib in the clinical setting, by itself in combination, different doses, you know, really broad development program. We have learned a lot from that and we applied those learning’s to making what we believe is a better next gen molecule that was based on a number of very, I think, very straightforward, but elegant hypotheses about how one could make a better combo, and we did that pre-clinically based upon all the data we generated, and certainly now move that into the clinic about a year ago to start, you know, asking some of those same questions in the clinical setting.

We have committed to presenting data for that molecule to a, you know, major international meeting, the abstract has been submitted. It’ll be in the fall if it’s accepted, which I certainly expect it will, and we’ll get the data out at that time. I won’t comment on all the details the who, what, when, where, and how much. That will come out with the abstract and the end of the presentation, but, again, the goal here is to be very descriptive and pretty direct about what we got and why we did it. You know, what we’re seeing. And it may include clinical data as well.

Stay tuned on that. But again, we’re very excited about this. We’re very – again the opportunity here to be able to look broadly across different indications, different combinations, doublets and triplets in the, you know, vast open whitespace, where cabo has not played yet, we think is very attractive and can be, I think, very important part of our business, both for helping patients and, you know, building value in the company. So, on top of that, we will have probably three more presentations in the fall at various meetings about other pre-IND assets for things like CDK7, potentially the ICON-2 assets, other stuff as well, that we’re excited about from our earlier stage pipeline to give people a sense of the kind of work we’re doing in drug discovery through this broad network of both internal and external researchers. So, it’s a good time for us to kind of again, put a stake in the ground and talk about kind of the next wave of molecules that are moving into the clinic.

Jason Gerber

So, it would be some form of Phase 1 data in the fall, when you say may include clinical data. So, at a minimum, it’s more like PKPD type of data distribution [indiscernible].

Mike Morrissey

Yeah, again – I know. Yeah, I know. I don’t want to go into the details of what we’re going to have because we’re still looking to that right now, but you know, if we choose to have, we have the opportunity to put clinical data in with this presentation. If we choose to do that, you’ll see that when we both have the abstract and have the other presentation. So…

Jason Gerber

Got it. Okay. And again from the group, please feel free to log in questions either email, id me or just shoot them over through [Veracast]. Maybe just shifting gears to the lung data that were presented. This was a data set that was presented in subsequent to the last time you and I talked at our conference in Las Vegas. You guys obviously have subsequently initiated a Phase 3 with Roche for a [Tesla cabo] in second-line lung. You know, in terms of the strategy here, trial design, I think there are some other, two other IO TKI’s already in Phase 3, do you, you know, are there any important differences that you’d flag, do you feel like ultimately, pretty consistent in terms of the approach from a [indiscernible] perspective?

Mike Morrissey

Yeah, I think that there’s various slight nuances that are different. You know, going against those [indiscernible] post IO, post chemo makes the most sense. That’s the big, that’s the big bolus of patients when they progress. They’ve usually seen both of those in some shape or form. So, straightforward design, minimal bells and whistles. You know, the, the ASCO data set from COHORT 7, I thought was very strong. I think people really understood the patient population that we worked with in terms of having patients be, you know, mix a second and third line, mix – equal mix of resistant and refractory is a pretty, pretty late stage population with a 27% response rate. You know, good, good overall tolerability and safety.

So we’re excited about that and, you know, this is one of the one of the more straightforward questions we have to ask clinically. So great to be working with Roche and their depth in lung and they’ll run the trial and they’ve got a, you know, global network of investigators that they’ve worked within the past, both the recent past with atezo, but kind of broadly speaking, you know, with their other assets, so it’s great to great, great place to play for sure.

Jason Gerber

I know companies are, and I’m sure you are as well, however you’re reluctant to talk about FDA interactions, but have you had discussions with the FDA about studies in this setting? And I asked just because just thinking about the idea that the patient who had some response to IO and this idea that perhaps they were deemed to progress or, and maybe weren’t and in a single-arm trial, are they having a benefit from their prior IO therapy, or are they having a benefit from the atezo carbo regimen? You know, it’s obviously a challenge that we hear from physicians in terms of analyzing small datasets, especially single arm data sets in the lung space. So, just kind of curious, any feedback that you’ve gotten from regulators, I think at the end of the day when you have a competitor arm in Phase 3 that solves for everything, but there’s also a discussion in the backdrop, do you upsize this trial to maybe 125 patients and have the optionality for accelerated [indiscernible]?

Mike Morrissey

Yeah, so there’s about five or six questions in there. So, you know, don’t want to, you know, go out of school and talk about what, you know, our discussions with the agency. I can tell you that we have, you know, I think designed the appropriate Phase 1b trial cohorts with seven, as well as a single agent, cabo cohort to be able to understand the activity of the doublet versus the single agent cabo. You know, your commentary around pseudo progression, you know, again, I don’t I don’t want to debate that with you. You know, we’ve certainly, you know, talked to a lot of a large number of investigators ourselves about that and everybody has a different view on that, and it’s, you know, it’s kind of in the in the area of, you know, anecdotal information more than, you know, really hard data collected data that, again, in a randomized sense that you could, at least I can believe in, right.

So, I’m not too worried about that. That topic has, I think in some ways come and gone and again it’s out there, but it’s less of a concern relative to what we’re seeing, and we’ll answer the question appropriately in terms of you know, having a control arm to be able to compare cabo artezo to docetaxel, which is, you know, certainly, you know, one of the one of the molecules that is used routinely, as these patients progress from either IO chemo or either as a combination or sequentially.

So, again, the data will speak for itself. In terms of what we’re doing in COSMIC-021, I think I’ve been pretty consistent that lung is probably a step or half step behind where prostate is, where we have a very good kind of view on light of sight for potential sub parties filing with prostates. We need more data with lung to be able to understand the totality of data with cabo artezo versus single agent cabo because we’ve seen some activity with cabo by itself and lung in the past.

So, I don’t want to oversell, you know what we might do with that, from a regulatory point of view. I don’t want to discount that either. I want to get more data. I want to look at all the data. I want to understand the nuances of that data with the appropriate number of patients. And we can upsize both cohort 7 with an additional 50 patients, and we can also add more patients to cabo if we’re seeing some level of activity there. So, I want to do this, you know, in a rigorous fashion. I’m going to get all the data and as we analyze that data, and we have finalized our plans then we’ll be sure to share that with you and the rest of the investment community.

Jason Gerber

Got it. So it sounds like, you still believe that there’s the potential pending more data, but obviously, given the sheer size of the opportunity in long, in the competitive dynamics sort of makes sense to operate in two tracks, right, in terms of initiating the Phase 3, so that you’re not too far behind, but obviously, you know, if timing wasn’t as big of a consideration, maybe you’d accrue more data before jumping into a Phase 3.

Mike Morrissey

Well, you need a Phase 3 either way, right. You know, if you believe as we do that a near 30% response rate in a highly pretreated, highly refractory population is a meaningful signal, and you know, all of our advisors, you know, in the academic world are excited about that signal then with all the caveats of single arm non-randomized studies that we all know about, we all talk about so no surprise there, then than a, you know, a global pivotal trial is a nice to have, it’s a must have, right. Because even if you go down to [the sub part-ish] route, you still need to have a confirmatory trial going to have that level of traction with anybody, right.

So, it’s, you know, it’s just, in some ways, it’s just almost common sense in terms of a logical progression of what we have to do. We have a very clear line of sight on what success could look like, in either scenario, and you know, we just need data to fill in the details so that we can choose path a or path b or both. So, but I don’t want to get ahead of myself here because we’re just not as far along prostate, we had a very clear signal, we had a very clear understanding. We’ve been in that space for a long time. You know, that was relatively straightforward. This is just you know, a little bit more complicated and you know, take our time and do it right and not overhype it, not under hype it or not, not under, you know under talk about it. So, we discounted that we just need more data. So, plain and simple.

Jason Gerber

Okay. Yeah, and I know that you guys haven’t been too detailed in terms of when the next timing update for more data could come out of either prostate or lung, but presumably, you’ve been clear about your prostate, regulatory backstop from a timing perspective. So, is it fair to assume that at the major oncology medical meetings be it either the next ASCO or AACR or ESMO. These are the venues to be looking at for further updates from both of these programs or indication?

Mike Morrissey

Yeah, I would not count on that. I think what we’ve done is, we’ve put a stake in the ground with the ASCO GPU and the ASCO presentations for prostate and lung. The headline is, the combination is active and has good tolerability with low discounted rates for both. That in my mind is the, you know, we have fulfilled the obligation to investors to give them a sense of what we’re talking about here. The next step is, get all the data and pull it together and pick your regulatory path and go right. So, my most important priority is to get complete datasets and do filings and get approvals and then market the drug. Okay. That is, the data you’ll see along the way will coincide with those milestones as we go forward, right. So…

Jason Gerber

Yep. Okay, great. That’s really helpful thinking about the pathway here. Maybe just shifting gears to CheckMate -9ER I’m reluctant to – I have a hard time creatively asking the questions in any different way. I feel like you’ve been asked the questions, a million different ways here, but your PFS data was very intriguing. I think in terms of the hazard ratio that you showed and it seems like that could be a potential point of differentiation versus competitors. You know, and as investors may cross trial comparisons to competitor data, however, challenging and tricky that could be, you know, I guess the one thing I’m wondering about is, I look at the competitor Merck data, the PFS sort of bounced around between 15 and 17 months. In the more recent presentation, I think it came back to, I think it was 15 months. So, I guess just on that point, right, but what should we compare it to? Right? I think when you guys presented 9ER, you guys were, you know, quick to point out the right competitor for OS on hazard ratio. So, just curious how to think about the PFS signal? Comparing it to the [indiscernible] data.

Mike Morrissey

I mean, again, I would look at everything. I mean, you know, I can give you bits and pieces here of what I’m intrigued by, but you know, the, the totality of data is the critical thing, right? Across, you know, across risk groups, across PDL-1 status, you know, it’s the totality of data, which drives it. Then you know, certainly as you get, you know, you can see longer-term follow up from either IO-IO or IO TKI’s, you know, it gets, it gets a little complicated than you would imagine my tables that my guys make for me are very extensive and you know, have a zillion columns in the whole. You know, you mentioned the 15 months kind of bouncing around a little bit, I would still focus on the delta.

Again, that’s the important how much additional benefits does the combination gives over, over the control and, you know, if you look at the data from either, you know, the first, the first cutoff which had, you know, had what, 12.8 months follow up or the, you know, the most recent one which had a 27 month, follow up [with 426], you’re talking about a four, you know, four month delta in terms of the median PFS for the ITT, and that’s just – that’s in the ITT population and when you dive deeper into the different risk groups, different PDL-1s that, you know, patient populations it gets, it gets, you know, obviously much more complicated.

So, I look at the whole thing. Look it’s a very important data set. You know, I would never you know, advocate that cross all comparisons are going to make or break, you know, anything because there’s just, that’s an inherently risky proposition, but everyone does it. I do it, we do it because you’re trying to understand, you know, kind of what the data all means and you try to normalize based upon the control, which luckily, everybody has kept pretty constant with sunitinib here.

So, yeah, we’re, look we’re super excited about the data, where, you know, the efficacy, the tolerability, the low discount rate, I think is a real opportunity for us to help patients in a different way in [BMS] had a call at their, you know, one of the arm D-day updates. I think it was this week and they talked about cabo a little bit best-in-class combination with [nebo for 9ER] etcetera. So, you know, our number one priority is to get this file in ASAP, and pending approval, you know be ready to be sprinting on day one after approval. So, lots of work to do. The team is very motivated.

Jason Gerber

Yeah, for sure. What about CR though? I mean, CR was 6.9. Now it’s up to 8% at the most recent ASCO presentation, I would assume that perhaps there is the, perhaps the 2019 presentation, CR may improve over time. I’m just wondering, do you think that that, is there a more appropriate competitor at least on CR in terms of the data cut?

Mike Morrissey

Yeah, again, like I said before, Jason, I look at all the data across all the cuts, all the time. I mean, you can’t focus on – at least I can’t focus on one individual cell in an Excel table that is, you know, got 30 columns and say that’s the important one. It’s all important data, right? It’s the totality of that data really defines the patient experience. CR’s are important. CR’s are probably more important in the academic KOL community than in the, you know, than in the, in the community setting where the vast majority of patients are treated.

You know, just a different world in terms of how, you know, how the, the therapeutic intent differs between those two different kinds of prescribers. You know, somebody who has, you know, 100%, tumor shrinkage versus 90%, tumor shrinkage is that, is that really different? Can the imaging really define that to a certain degree anyway? I don’t know, right. So, but look, you’ll see our data, you’ve seen their data, we’re happy with our data. We think it’s really potentially best-in-class and when it comes out you can opine upon that, as I’m sure you will and let me know if you disagree or not.

Jason Gerber

Yeah. And I think, you know, look the CR obviously comes up a lot just because of the initial success that ipi/nivo had in the frontline RCC setting and even durability of ipi/nivo relative to IO TKI, so we as investors who talk KOLs, we do hear it come up, but again, we probably select for more conversations with KOLs and academics than we do with community oncologists. So, yeah, you know, probably an inherent bias in the conversations that we have as well.

Mike Morrissey

Absolutely. There are thousands and thousands of community oncologists who we talk to a lot who have a different view on that, right, and they have a different view on the totality of that data, which is fine. I mean, certainly, you know, IO combinations have revolutionized frontline therapy in RCC. So, there’s plenty of room for everybody to you know, have an impact and to get involved and we think we have data that will allow us to capture significant market share. So, but again, it’s – you’re talking to a very select small group of KOLs when you make those small costs, right. I think you’ve acknowledged that so I would agree.

Jason Gerber

Yeah. Okay. Do you think you guys are pretty excited about what you’re seeing for your tolerability profile as you’ve just started with lower starting dose and you know what you’re seeing overall in terms of grade [indiscernible] and dropout rates? You know, are we reading between, I guess, plenty of reading between the lines, I think you guys are pretty, pretty open about, openly excited about the data that’s generating around a cabo from a tolerability perspective.

Mike Morrissey

And you’ve seen some of that data. You haven’t seen it for 9ER yet, but you’ve seen the data from cost base that was what 5%, 6% lung. That was about 3% latter at ASCO was 0% dropout rates. So, for TRI’s. So the message here and you know this goes back, you know, a decade or more with how we’ve developed cabo at the higher doses trying to find a sensitive population that then we could refine the dose, and I think our excitement is a reflection on this, you know, 10-plus year journey to find the optimal dose that maximizes, in this case in combination with IO that maximizes efficacy. And we certainly are seeing that with the, you know, with the hazard ratios for PFS and survival.

With tolerability that is, I would say unexpectedly and surprisingly good, right, based upon the history of what we’ve seen at 140 milligrams first and then 100 milligrams in GBM and then 60 milligrams in prostate with a very frail population. So, yeah, so I think it’s been a long time coming. This is the hardest part of the businesses. This is finding the right dose for chronic exposure, chronic benefit, chronic therapy, and I think what we’re seeing with what we published and presented early this year, and certainly what you’ll see in the fall is that starting with cabo at 40 is really the right place. And in that sweet spot, we’ve threaded that needle to be able to maximize clinical benefits with a good tolerability and a low discontinuation rate.

Jason Gerber

Yeah, okay. And, you know, obviously M&A, so do you have the run rate?

Mike Morrissey

No.

Jason Gerber

Okay. Just on the M&A front. You guys have been vocal about wanting to be a multi product company. I think yesterday you’ve made some comments about wanting to be a multi product company like 2025 or five years out. Obviously, M&A plays an important role of that and I’m curious, you know, the sort of team that you have in place to vet deals is coming from the bankers is more internally generated ideas and you know, it seems like with all the cabo indication expansion, your challenges in growth in the near term, I think it’s more a question in investors eyes about durability in the longer-term, so just wondering how you’re thinking about the trade offs of building a solid, sustainable early-to-mid stage pipeline versus late stage assets in bringing those on board. You need to talk about that balance that you’re trying to strike from an M&A perspective?

Mike Morrissey

Absolutely, because that’s the main focus of what we’re doing right now. We really have three different work streams at the company, and you know, it’s, again, stating the obvious, right. Number one is to, you know, build and expand the cabo franchise, cabo 092, we think we’ve got something special there. We’ve got very, I think, great insight into the fundamental biology that is driving that and how do we maximize that now across indications, across lines of therapy, across other combinations doublets, triplets, other modalities besides IO. So, that’s a really important, you know, place where we’re going to invest going forward, right. Our early stage pipeline, you know, we’ve done this effectively with cabo.

One of the few companies out there that’s taken, you know, kind of an homegrown idea made the molecule in the lab developed it, you know, arguably made a lot of mistakes along the way, but has kind of learned and grown to where we’re helping, you know, literally tens of thousands of patients every day with, you know, molecules, a molecule that we designed, we made we developed. And we won’t do that again. And I think we have the right people in the right team, with the right insights both biologically and chemically, chemically broadly, not just small molecules, but also biologics that can do that.

Thirdly, are there existing clinical assets that we can either partner with or acquire, that can help us diversify our offering as we go forward, can catalyze that, can accelerate that in a way that, you know, makes sense. Certainly from the standpoint of our, I think our strong discipline financially, our view on, you know, almost a [indiscernible] view on how we’re going to spend our money, we want to be careful about that. It’s not that we’re risk averse, but we understand the risk profile here, especially in these later stage assets, and want to make sure that any, you know, any deal we do, has the ability to be, essentially monetized commercially. And that’s been at least in my view, where the big risk has been in the last four or five years.

It’s relatively straightforward, because the goal line is pretty clear right now. In terms of getting drugs, never easy, but it’s straightforward. Getting drugs over the goal line in terms of having good clinical data that you can file on and get approved on whether it be through full approval or through accelerated approval. Right, that’s been done in oncology over and over and over again, right. The challenge is for many of these drugs, can you actually sell them right? Are there, do you have enough differentiating data? Is the population big enough, you know, do you have enough traction to be able to actually make that investment pay off relative to, you know, the future kind of forward running, you know, commercial opportunity, and a lot of companies large and small have made big investments and have basically whipped, you know, in that commercial setting.

So, we want to avoid that, for all the obvious reasons. We think we’ve got the right insight into how to ask those questions in terms of looking for clinically differentiating data or the ability to find that, and that’s going to be a big driver. So, we’re going to be careful. We’re going to be aggressive, and we’re going to make hopefully the right moves that will allow us to build all three pillars as we go forward.

Jason Gerber

All right and the last unfair question.

Mike Morrissey

Oh, great. One more. Perfect.

Jason Gerber

And it is totally unfair, right, but it’s the VIP front. I think you only have one filer, which is [indiscernible], you have a ton of IP. It seems like the situation is very ripe to sell. So, I’m just curious if you can comment why not pursue a settlement since there is only one filer? It’s a little odd for drug that’s approaching a billion dollar U.S. sales. They only have one filer.

Mike Morrissey

Yeah. So the question is, what again?

Jason Gerber

Does it not seem like a situation that’s ripe for settlement? So, you know, with, I think it’s MSN, a single filer. Typically, we see 10 filers on day one for a small molecule drug that’s approaching a billion dollars. So, seems like a situation that could be potentially cleaned up pretty easily.

Mike Morrissey

Yeah. So, you’re right, that that’s an incredibly, no I’m just joking. So, for that question, I obviously can’t answer right. And, you know, I don’t want to dive into the details of what our legal strategy is here. We have very strong IP. We have a very high degree of confidence in both composition of matter and the polymorph patents, you know, we’re very committed to maximizing the value of that as we go forward. So, I’ll leave it at that and the team, within legal both internally and externally really have a good handle on this. So, this will play out over time, and you’ll see the result as it unfolds.

Jason Gerber

All right, great. Extremely helpful. I appreciate you taking all the questions fair and unfair, and appreciate all the insights Mike.

Mike Morrissey

All good. Yeah. Hey, thanks again. I really enjoy all your work and talking with you whenever we can. So, all the best.

Jason Gerber

All right. Thanks, Mike and thanks to all the investors who listened to this call today. With that, operator we can wrap it up. Yeah. Thank you.

Question-and-Answer Session

Q –

Source: Seeking Alpha

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