Exelixis Inc (EXEL) 2008 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q2 2008 financial results business update conference call. My name is Emanue,l and I will be your operator for today. At this time, all participant are in listen-only mode. We'll conduct a question-and-answer session towards the end of this conference.

(OPERATOR INSTRUCTIONS.) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Charles Butler, head of Investor Relations. Please proceed, sir.

Thank you, everyone, for joining us on our Q2 2008 financial results conference call. Joining me today are George, Frank and Mike, our CEO, CFO and President of R&D, respectively. George will give some highlights of the quarter, and Frank will walk through the financials, and Mike will provide an R&D update. But before I turn the call over to George, just like to say that we posted our earnings press release as well as our slide presentation that accompanies our prepared remarks on our website. And lastly, before I turn the call over, let me just read our forward-looking statements.

I would like to note that during our presentation today, we will be making certain statements that are forward-looking including without limitation, statements related to the timing and impact of potential compound selections of GSK, the timing and success of business development activity, our year-end financial guidance, the future development and potential efficacy of our compounds, and the timing of initiation of clinical trials. These statements are only predictions and are based upon our current assumptions and expectations, and are subject to risks and uncertainties.

Our actual results and timing of events could differ materially from those anticipated in such forward-looking statements, because of risks discussed in our presentation materials, the comments made during the presentation, and the risk factor section of our 10-Q for the quarter ended June 27, 2008 and our other reports filed with the Securities & Exchange Commission. We expressly disclaim any duty, obligation or undertaking to make any updates, revisions to any forward-looking statements. With that, I will turn the call over to George.

Thanks, Charles. Thanks to all of you for tuning in today. We had a very active quarter with significant data presented on our five of our key compounds at ASCO and at the European Hematology Association meeting (inaudible) of $150 million finance facility to prove our financial position and the announcement that our successful six-year collaboration with GSK will conclude in October.

Also, we recently announced the beginning of a phase 3 pivotal trial for XL184 and the submission of the proof of concept package for to XL184 to GSK. Finally after the quarter, we announced that we hired Frances Heller, formerly head of strategic alliances for the Novartis Institute for Biomedical Research, as our head of business development. Before turning the call over to Frank and Mike, who will provide financial and R&D updates, I want to take a few minutes to discuss these important events and also to provide a snapshot of important upcoming events for the rest of 2008.

First at ASCO, we had seven presentations which is the largest presence at ASCO in the Company's history. Our clinical investigators reported substantial new data on four of our lead compounds, XL184, 765, 647 and 880. The highlights included the following.

There was clear anti-tumor activity for XL184 in patients with medullary thyroid cancer, and 100% disease control rate, hard to get better than that, and a 53% response rate. The data supported initiation of the phase 3 trial of XL184 in medullary thyroid cancer patients. That trial started in July. We have proof of mechanism data for the PI 3 [Cat], PI kinase pathway inhibition by XL765 in both tumor and surrogate tissues from patients or data presented showing an impressive 96% disease control rate for XL880 and papillary renal cell carcinoma. And that compound is now of course in the hands of GSK, and is now known as GSK089.

There was strong evidence supporting the further study of 647 and non small cell lung cancer patients, clinically selected for the presence of activating the GF perceptive mutations. Another ASCO investor briefing, we also described advances in two of our other compounds, XL147, our other PI3 kinase pathway inhibitor for which it also has shown good pathway inhibition in phase 1 trials, and XL2811, a RAF inhibitor which is showing both good target and pathway inhibition in tumors after oral dosing in cancer patients.

In late June, we announced that Exelixis and GlaxoSmithKline have agreed to conclude our successful six-year discovery and development collaboration on October 27, 2008 as scheduled. Under the terms of the collaboration, GSK previously selected XL880 for further development and will be able to choose one additional compound from among XL184, 281, 228, 820 and 844. Exelixis will have the right to develop compounds not selected by GSK either alone or in collaboration with others.

We submitted a proof of content package on 184 to GSK on July 25, and GSK has 90 days from that date until October 22 to decide whether or not to select XL184. If GSK decides not to select 184, they'll then have 30 days from the date on which we submit data packages on the other compounds to make the single selection from the remaining compounds. We expect to submit those packages in the fall.

The collaboration has been beneficial for us and I believe for GSK as well. To-date, we've received approximately $235 million from GSK and up-front milestone, R&D support payments and a loan facility. In return, GSK has acquired rights to 880 and has the right to select a second high quality compound to strengthen their own pipeline.

While the collaboration has been a success, ending it at this time will actually be a good thing for us, because it will define the ownership of the compounds in the collaboration. The GSK collaboration was particularly complicated because of the number of compounds involved and the number of different permutations and possible scenarios, depending on which and how many compounds GSK selected. With the end of the collaboration, our story and our pipeline will be considered simplified. We'll know which compounds GSK selected and those to which we have retained rights. I believe this clarity will be attractive to both investors and potential pharmaceutical partners. And it certainly will allow us to set clear priorities as we allocate resources to the development of our compounds.

We recently announced $150 million funding arrangement with Deerfield Management that significantly increases our financial strength as we continue to engage in multiple business development discussions. Although we're not required to draw down on these funds, they provide us with significant financial security and flexibility in this turbulent economic period. Importantly, the arrangement provides us the flexibility to see our way through a number of important business and pipeline milestones in the second half of the year. Frank will discuss our deal with Deerfield in a little further in a moment.

Now, we received a lot of questions on our plans to take the Company forward. A fundamental facet of our corporate strategy is to achieve the appropriate balance between partnerships which are financially attractive in the short and mid-term and retention of a pipeline of wholly-owned compounds to maximize long-term value. Partner in a compound, not only off-loads the majority of the clinical development expenses, but brings in up-front and milestone payments that can be used to fund the development of proprietary compounds.

As we sit here today, I would note that we have a total of six compounds being developed by partners. We've retained significant equity in the partnered compounds and they offer substantial value for Exelixis with little or no near-term expense. With the clarity that will be achieved through the end of the GSK collaboration, we'll be able to make clear decisions about which compounds to retain, which compounds to partner. And importantly, we can modulate the balance between proprietary and partnered compounds as our financial situation dictates. Certainly, the wealth of positive data we recently presented in seven reports at ASCO puts us in a position of strength with regard to partnering possibilities and opportunities to move compounds into later stage trials. We're currently involved in multiple partnering discussions and are optimistic that we'll be able to successfully conclude at least one of those discussions this year. Importantly, the arrangement with Deerfield will permit us to be judicious in making partnering decisions despite the pressures of the currently difficult financial environment.

Now, the program for 647 is of course part of the overall strategy. 647 clearly has demonstrated activity as a first line agent in non small cell lung cancer patients with an activating mutation and EGF agent, and are planning for a trial comparing 647 to doublet chemotherapy, and that population has proceeded. However, we have to consider this compound and trial in the context of our entire pipeline.

Later this year, we'll have as our proprietary pipeline, XL765, 147, 019, 888 and four of the five compounds in the GSK collaboration which include 184, 281, 228, 844 and 820. Clearly, we'll have more compounds than we can develop alone. Some of the compounds which address focused markets and have short, low-risk development paths are attractive for us to take forward on our own.

Others like 647, which have substantial potential for more complicated development paths, are more suitable for development in conjunction with partners. We've been engaged in a number of partnership discussions which if successfully concluded, will provide the funds necessary to purchase the collaboration from Symphony and further develop the compound. However, at this point, in the absence of a partner, we did not intend to pursue further development of 647 or repurchase the compound.

As we move into the second half of the year, in addition to discussions on new partnerships, we'll have a decision by GSK on which of the remaining compounds they wish to select. We'll clarify the potential of 019 and mild fibrosis. We'll have data on 019 and polycythemia vera. We'll aggressively pursue enrollment of our clinical programs. And we look forward to substantial additional data at the URTC meeting where we have 15 abstracts accepted. These data presentations will include 184, 228, 019, 765, 147, 281 and 647 among others.

The immediate future promises to be highly productive and meaningful for Exelixis. We believe there are real opportunities to increase shareholder value this year through presenting data on key compounds and initiating additional later stage clinical trials, and entering into new partnerships focused on specific compound or on larger strategic relationships. We're working on all of these fronts, and hope to have positive news to report later this year.

Now, I'll turn the call over to Frank for the details of our financials, and then Mike will provide an R&D update. Frank?

Thanks, George. We've made significant progress in advancing our business; and the Q2 financial results reflect this progress and were in line with our expectations. As George mentioned, we're currently engaged in multiple business development discussions that have the potential to bring new cash into the Company and off-load future development expenses. While the exact timing of these deals is difficult to predict, we're confident that we will bring some of our discussions to a successful close.

The Deerfield facility, even with our drawing on it, puts us in a stronger position and gives us the flexibility to see our way through those discussions. It also buys us time to see some important business and pipeline milestones fall into place, such as GSK's decision on XL184 for example, and then determine the proper path forward for us. In all, we're excited about the level of clarity we will be able to provide later this year as it relates to our strategy going forward. And we're confident that we can substantially strengthen the financial position of the Company through new business development activities.

Now, let me turn to the second quarter financial results in detail. And as a reminder, we're reporting our financial results on a GAAP basis only and as usual, the complete press release with our results can be accessed through our website at Exelixis.com. I'll start with revenues. Revenues for the second quarter '08 were $30.4 million, compared to $29.3 million for the comparable period in '07.

The increase from '07 to '08 was primarily due to the conclusion of our collaboration with GSK on October 27, 2008, which shortens the term of which we had historically recognized revenue and therefore, results in an accelerated recognition of revenue until October of this year. This increase was partially offset by the completion of revenue recognition associated with our collaboration with Daiichi Sankyo for our mineral quarter cut receptor program and the exclusion of revenue as a result of the sale of 81.4% of our former subsidiary, Artemis Pharmaceuticals, at the end of 2007.

Research and development expenses for the second quarter '08 were $68.9 million, compared to $56.3 million for the comparable period in '07. The increase from '07 to '08 was in line with our expectations, and primarily reflects the increased development expenses associated with continued maturation of our pipeline and expansion of our clinical trial activity. The majority of the expense increase year-over-year is driven by external, trial-related expenses, a portion of which we would expect to off-load in the future as we put in place new partnerships.

Keep in mind that as our pipeline matures and compounds advance through phase 1 and phase 2, and now also into phase 3, we naturally see an increase in size initiations, patient enrollment, manufacturing and other trial-related expenses. The increase in expenses in fact directly reflects the significant progress we've made in advancing our pipeline as evidenced by the substantial body of new clinical data presented at ASCO this year.

General and administrative expenses for the second quarter '08 were $10.2 million, compared to $11.2 million for the comparable period in '07. The decrease from '07 to '08 was primarily due to the allocation of a greater portion of general corporate costs to research and development which again, mainly reflects the relatively higher growth of the R&D function compared to the general and administrative parts of the Organization. Net loss for Q2 '08 was $45.1 million or $0.43 per share compared to $28.6 million or $0.29 per share for the comparable period in '07. The increase in net loss from '07 to '08 which is again, in line with our expectations, was primarily due to the significant progress in our research and development activity as I just discussed.

Cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, and restrictive cash and investments totaled $189.8 million at the end of Q2 '08. Including the funding facility with Deerfield, cash and committed funding at the end of Q2, therefore, amounted to approximately $340 million.

Let me elaborate for a moment on the financial implications of the decision by GSK to not extend our collaboration. As George pointed out, the collaboration has been a success for both companies, and ending it now on its originally scheduled term, is unquestionably a positive outcome for us. It provides certainty as to the ownership of a substantial portion of our pipeline and it simplifies our story.

Of the five compounds, still encompassed by the collaboration, four will end up as Exelixis proprietary compounds later this year which we are free to develop in any way we wish. This of course opens up significant new partnering opportunities which could result in substantial new funding for Exelixis. We submitted the proof of concept package on XL184 to GSK on July 25. If GSK selects XL184 for further development, we'll be entitled to receive a milestone of $55 million. If GSK selects any of the earlier stage compounds under the collaboration, we would be entitled to an amount of $27.5 million which would, however, not be payable until such compound has achieved proof of content.

These milestones would be recognized as revenue in their entirety upon achievement, but neither of these milestones would have any cash impact to us as they would go towards paying down the loan facility that GSK extended to us. The loan from GSK amounts to $85 million, plus accrued interest, computed at 4% per annum, totaling approximately $100 million as of June 2008. The loan is due in three annual installments starting in October of 2009. The repayment may at our election, be in the form of cash or common stock at fair market value, subject to certain conditions. Keep in mind that the amount owed to GSK may be reduced by a milestone payment associated with GSK selecting its second compound for further development.

Let me finally touch again upon the impact of our revenue, resulting from GSK's decision to not extend the collaboration. As you know, we typically recognize revenue over the term of the underlying agreement. To the extent that any extension options, we conservatively assume the collaboration would extend to the longest contractual period. Which in the case of GSK, was October 2010. Because the collaboration is now concluding in October of 2008, we will accelerate revenue recognition for the remaining deferred revenues through October of this year. As a result, our revenues increased by $8.6 million in the second quarter and we expect the same level of revenue increase on our GSK collaboration for the third quarter of this year.

Let me also expend on the Deerfield facility for a moment. In early June, we signed an agreement for $150 million, fully committed funding facility with Deerfield. We previously discussed this transaction in detail on a separate call and I will therefore, not reiterate the specific terms today. But I do want to make a few key points about the deal.

The Deerfield facility uniquely addresses the challenges faced by pre-commercial biotech companies in a difficult capital market environment. It provides unusual flexibility in how the funds can be drawn and repaid which allows us to better manage our cost of capital and dilution. We're under no obligation to draw on this facility, but yet have this facility fully committed to us, providing access to capital independent of the capital market's environment. It provides, if you will, another tool in our financing toolbox at a moderate up-front cost and importantly, without limiting other financing alternatives.

Moreover, even without accessing this facility, just having it in place strengthens our financial position as we see our way through a number of important pipeline and business milestones, including the emergence of significant new clinical data and potential new partnerships over the next few months. Whether or not we draw on the Deerfield facility, will obviously depend on our financing needs during the 18-month draw period, as well as on how the cost of accessing this facility compares to alternative sources of funding.

In summary, things are progressing very well at Exelixis. We have several important events upcoming over the next few months which will allow us to clearly define our way forward. We're confident that we'll be able to sign new partnerships which have the potential to provide a significant infusion of cash, which we expect to enable us to meet our year-end financial guidance, particularly as it relates to our projected year-end cash balance. With that, I'll turn the call over to Mike for the R&D update.

Thank you, Frank. As George noted, we have recently initiated our phase 3 trial of XL184 a medullary of thyroid cancer or MTC. XL184 is a small molecule [tyres connect] inhibitor targeting METS, RETS,and VEGFR2. We reached agreement with the FDA on this phase 3 registration trial, via the special protocol assessment process and have also discussed the trial design with European regulatory agencies.

The study is now open. The initiation of this trial was based on encouraging data that were presented at this year's ASCO meeting. Safety and clinical activity data were presented from an ongoing phase 1 trial of XL184 in 69 patients with various solid tumors, including patients with metastatic MTC.

These data showed a disease control rate of 100% in the evaluable MTC patients, meaning that all these patients had [positive] or prolonged stable disease for more than three months. In addition of the 17 MTC patients with measurable disease, nine of them were 53% experienced partial responses. Most of the MTC patients in the trial had previously failed other treatments, including PKIs with anti red activity such as [Vandeptive, Seraphanib, or Metespnib].

The phase 3 trial was designed in collaboration with internationally renowned experts in the field of thyroid cancer. It's a randomized placebo controlled double-blind study of XL148 as a single agent in 315 patients with unreceptable locally advanced or metastatic MTC. Patients are randomized in a two to one ratio to receive XL184 or a placebo administered as a daily oral dose. The primary end point is duration of progression for survival or PFS.

In a planned event driven analysis, the study size provides 90% power to detect a 75% increase in TFS in patients with documented progressive disease prior to study entry. Secondary end points will include overall survival, objective tumor respond rate, and changes in the [serembob] marker CDA calcitonin. Additional secondary end points with include the assessment of the potential relationship between Germolene and/or tumor DNA sequence alterations and the efficacy of XL184. We expect that up to 100 sites and up to 20 countries will participate in this study.

We'll take a few minutes now to describe the study designed in a bit more detail. MTC is a relatively slowly progressing disease, but is incurable once it has metastasized. These enrollment criteria as specified, that patients must have documented progressive disease, compared to a prior radiologic examination conducted within 14 months before entering the study.

This timeframe was chosen because patients with MTC typically undergo regular exams on an annual basis. Expected medium PFS in patients selected by those criteria and receive the placebo is about eight months, based upon the experience of our steering committee and their as yet unpublished data. We expect that XL184 will be able to improve this time by 75% based on our emerging data of the duration of response and stable disease in the XL184 phase 1 trial. With a median PFS has not been reached in MTC patients and patients have been progression-free for up to 24 plus months. Patients enrolling in this study may receive any prior therapy including other TKIs.

Finally, the study is designed as a double-blind placebo-controlled trial. There's currently no provision for crossover of placebo patients to the treatment arm, as we want to preserve the unconfined ability to shield a survival benefit in this study with long-term continued follow-up of patients even after disease progression. The population selected per our trial eligibility criteria, the median overall survival is expected to be about two years in the placebo group and a potential overall survival benefit for the XL184 will be assessed in an event-driven analysis.

We're thrilled that the pivotal trial for XL184 is now open and we look forward to rapid accrual of patients with MTC. We're hopeful that the results of this phase 3 will further substantiate the impressive data presented at ASCO in June and support registration of XL184 with the MTC indication. The initiation of our first phase 3 trial for a compound wholly developed at Exelixis is a specific milestone for us, and underscores the growth and integration of our R&D organization.

Several additional studies of XL184 have recently been initiated to complement the pivotal trial on MTC. This is part of our development strategy to rapidly advance compounds in the areas of high unmet medical need while potentially expanding broader commercial markets by demonstrating activity in major tumor types. Phase 1 B2 trial of XL184 as a single agent and in combination with [alotnib] was recently initiated to patients are non small cell lung cancer. In addition, a phase 2 study of XL184 in patients with field blastoma is ongoing. We're also developing detailed plans to study XL184 in additional major tumor types, should GSK choose not to select it for further developments and commercialization.

Other pipelines in our portfolio continue to make good progress and we are building on the momentum from the data release at ASCO in June. In addition to our leadership position in the area of MET inhibition, we continue to advance first-in-class and potentially best-in-class compounds, targeting key pathways that are implicated in tumor growth, proliferation and survival. The two XL inhibitors of the [PF and K] pathway, XL765 and 147 have shown impressive inhibition of pathway signaling in surrogate tissues and tumors from clinical data presented in Chicago in June.

This is one of the most commonly disregulated pathways in tumor biology, and presents an extremely attractive target for chemical intervention in a wide range of tumor histologies. We have initiated and will continue to expand an aggressive program of phase 1 and phase 2 trials for these compounds of single agents, and in combination with a variety of chemotherapeutics, targeted therapies and anti-hormonal agents. We recently initiated a phase 1 B2 trial for our specific [BF can] inhibitor, XL147 is -- in non small cell lung patients and our plan to initiate a similar phase 1 B2 trial, combining XL147 with (inaudible) shortly. Phase 2 study evaluating XL147 as a single agent in [demitro] cancer is also planned start later this year.

For XL765, our dual PF and K mTOR inhibitor, we've also recently initiated a phase 1 B2 study in [glioblastoma] in combination with (inaudible) and we'll soon initiate a phase 1 B2 study in combination with [alloctide]. A single agent phase 2 study will also be initiated in glioblastoma later this year.

XL281, a selective RAF inhibitor and XL518, a selective MET inhibitor, both target keynotes in the MET [primase] pathway and have shown substantial inhibition of activation in both surrogate and tumor tissue in clinical studies.

Under the existing partnership with Genentech, they will assume responsibility for the development of XL518 as soon as we have established the anti-D for the compound in our ongoing phase 1 study. We hope to meet this milestone in the second half of 2008

The phase 1 study for XL281 is ongoing. We intend to evaluate this compound in an extended MTD cohort in patients with tumors where the RAF pathway is known to be activated. This effort would potentially include histologies such as malignant melanoma, [colorectal] cancer, small cell lung cancer, and papillary thyroid cancer. Our highly selective JAK2 inhibitor, XL019 continues to be evaluated in patients with myelofibrosis at doses of either 25 megs daily or 25 megs every Monday, Wednesday and Friday.

As we said in Chicago in June, the early data from this new regimen is encouraging from both an activity and tolerability perspective. We hope to present data from this ongoing study at the upcoming ASH meeting in December. In addition, we have recently initiated a phase 1 study in patients with (inaudible) or PV, where nearly all patients have a gain mutation in the JAK 2 gene. We're pursuing this PV trial aggressively with the hope of presenting data at ASH in December as well.

Finally, we are encouraged by the data collected this far for XL228, an inhibitor of both wild type and mutationally resistant forms of BCR-ABL in patients with CML. These data were presented at the EHA in Copenhagen in June and indicate that well tolerated doses of XL228 provide clinical benefit to CML patients resistant or intolerant to [inmatinib, prostatinib, and allotnib]. We have seen dramatic decreases in white block cell counts in patients receiving once weekly intravenous doses of XL228 at 3.6 or 7.2 megs per [kig] of hydroxy urea was either decreased or discontinued. We continue to be excited by the progress of XL228 as we enroll additional patients. We're planning to submit an abstract for a presentation at ASH later this year as well.

I'll close here by saying that we continue to focus all our efforts to achieve the high priority goals we set in the beginning of the year. Our realignment of the R&D team into a single seamless and flexible organization has enabled us to rapidly generate vital data for multiple compounds and parallels, and to respond to new data in real time allowing us to immediately capitalize on opportunities as they arise. Key development compounds discovered at Exelixis continue to mature at a very rapid pace. Five compounds including XL184, 880, 647, 228 and 019 have shown clinical activity in discreet patient populations. And an additional four compounds including XL765, 147, 581 and 281 have demonstrated significant inhibitory pathways signaling in tumors where -- from cancer patients after oral dosing.

We have also reengineered our early development process to rapidly obtain clinical POC data in the phase 1 setting including pharmacokinetic, safety, pharmacodynamic and any tumor activity data in patients with tumor histologies enriched for deno-types that match the inhibition profile of our compounds. The timeliness and depths of phase 1 for XL184, the speed with which we achieved clinical DOC in the context of our GSK collaboration, and in parallel initiated a registrational trial at MTC highlights the intrinsic value of this approach. We've also integrated broad translational research into our overall development activities.

One highlight I think from the ASCO meeting in June was the oral presentation of a complete pharmacodynamic data set showing on-target [acloid] inhibitory activity of our dual PF and K mTOR inhibitor XL765 in a range of both surrogate and tumor tissues after oral dosing to cancer patients. Our success in both reengineering our R&D process while at the same time advancing a large portfolio of high impact oncology compounds is a direct result of having a low integrated, focused and flexible team that enables us to continuously make data driven decisions which we believe ultimately is our greatest strength and competitive advantage.

I'll stop there and emphasize that none of our progress would have been possible without the hard work of everyone at Exelixis over the last quarter. And speaking on behalf of the management team that's all here today, I want to thank everyone for their outstanding individual and collective efforts. With that, turn the call back to the operator for Q&A. Thank you.

(OPERATOR INSTRUCTIONS.) Your first question comes from the line of Joel Sendek. Please proceed.

I have two questions. Can you just go over what the plan is for XL647? Did you say, you're going to wait to get a partner until you move it? Because the previous plan was to move that into front line lung cancer. Then I have a question on 184 after that.

Yes. I think for 647, we've been in a number of partnership discussions. As we look at our pipeline now, and as it's -- let's say the return of compounds or at least freeing up of the compounds in the GSK collaboration becomes imminent, so that we're looking down the road a few months from now -- a couple of months from ago of having eight or nine compounds in our proprietary pipeline. It is very clear we can't develop all of them on our own. And so we've begun a prioritization process of these compounds, so that we can be focused and allocate our resources toward those compounds that will provide us the biggest return in a reasonable period of time.

Compounds that address -- let's say, whose clinical development path is low risk, short time, relatively low cost to get to the market are attractive ones for us to take forward on our own. Other compounds, certainly not only 647, but including 647, have substantial potential, but have much more complicated clinical development paths. We think those are best suited for development in collaboration with a partner. As we look at 647, certainly the compound has activity in non small cell lung cancer. It can take its place as a compound that treats lung cancer. But I don't think, given where we are today, and given the compounds in our pipeline, it makes -- that 647 reaches or let's say, meets those criteria. As development paths are a little more complicated..

Accordingly, we don't want to begin a development project where we don't want to complete it unless we have a partner. In the absence of a partner, we don't intend to further development 647. We're still having partnership discussions. We think the compound does have merit. If we get a partner, we'll take that compound for it.

I understand. Just quickly, 184, can you give us some feeling for how long the enrollment will take for the phase 3?

We're projecting right now between 14 and 18 months.

Okay. Thank you.

Your next question comes from the line of John Sonnier. Please proceed.

Thanks a lot. It's John Sonnier of William Blair. I appreciate the update. Just another question on 647. I think the original partnering strategy was to try to hang on to U.S. rights if possible.

I'm just wondering if you're now asking a third party to take on a greater proportion of the development burden or are you more flexible with that thinking? Parallel to that, I believe it is also a Symphony compound. If you can help us think about what happens if it is partnered and what happens if it is not with that relationship. Thanks.

Yes. I think implicit in saying that in the absence of a partner, we don't intend to further develop the compound. In the absence of a partner, we won't repurchase the compounds from Symphony. We are having partnership discussions.

Our goal is to establish a partnership in which the up-front milestone payments from the partner can cover the repurchase cost from Symphony and the majority of the clinical development expenses. If we're successful, we'll go down that road. If we're not, then we don't intend to take that compound further.

Thank you.

(OPERATOR INSTRUCTIONS.) Your next question comes from the line of Cory Kasimov. Please proceed.

Hi. This is Mona for Cory, actually. Just a question on 184. RET obviously played a key role in NTC, but as far as other settings such as lung cancer and GBM, could you speak a bit more about the rationale in moving into these settings. It is largely the inhibition of [bedges] that's driving the decision to go there? Also related to that, is there anything you've seen in your pharmacodynamic results with 184 that's shaping your expectations in these other settings?

I think in both non small cell lung cancer, GBM and a wide variety of histologies, the target profile of XL184 which focuses on both VEGFR2 and MET really addresses the genetics of those different histologies in a powerful way. Due to the MET inhibition and the potent VEGFR2 inhibition, we see a very strong potential for the compound in a wide range of histologies. We're doing -- we had a lot of pharmacodynamic data at the ASCO meeting, and I think that -- from my point of view, helped us really set the stage for how that compound is behaving in the clinical study.

That is very helpful. Then just another question actually on the PI3 kinase program. You were presenting some very interesting and exciting data at ASCO. I was just wondering if from a strategic standpoint, what you're seeing in terms of the enthusiasm from potential partners and at what stage would you consider partnering these programs.

Yes. I think your statement that we presented exciting data at ASCO was shared by a number of pharmaceutical companies, as we've had a number of inbound calls subsequent to ASCO. We are having discussions with a number of companies around those PI3 compounds. Those are compounds where, again, the development path is complicated.

The market potential is huge. The number of trials that we would like to do simultaneously is very large in order to maximize the market potential for those compounds. We think those compounds also are very good ones to develop in collaboration with a partner and we're having those discussions.

Thanks very much.

At this time, I would like to turn the call back over to George Scangos.

Thanks. When we talk for a half hour, we wear everybody out. Let me thank everybody for your attention today. I would like to reiterate Mike's comments about thanking all of our employees for their individual and collective work. And thank all of you for your interest. And with that, we'll sign off.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.