Exelixis Inc (EXEL) 2009 Q1 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the 2009 first quarter Exelixis first quarter conference call. I will be your coordinator for today. (Operator Instructions). I would now like to turn the presentation over to Mr. Charles Butler, Executive Director of Corporate Communications and Investor Relations. Please proceed.

Thank you for joining us for Exelixis's first quarter 2009 earnings call. Joining me on today's call as usual is George Scangos, Frank Karba, and Mike Morrissey who will discuss the Company's outlook, review the 2009 financials, and provide an R&D update. Before we get started, I would like to note that during our presentation today, we will be making certain statements that are forward-looking, including without limitations, statements to our expectations regarding goals, timing and success of our business development activities, including with respect to our PI3K inhibitor, XL147 and XL765, our expectations that we will have significant near term cash inflows from further business development activities, our financial objectives, our 2009 year-end financial guidance, our development plans and goals for XL184 and the other compounds in the pipeline, the therapeutic and commercial value of XL184, and our other compounds, and the execution of our business strategy.

These statements are only predictions, and are based upon our current assumption and expectations. Our actual results and the timing of events could differ materially from these anticipated in such forward-looking statements, because of risks and uncertainties discussed in the materials accompanying this presentation. The comments made during this presentation and the risk factor section for 10-Q for the quarter ended April 3, 2009, and our other reports filed with the Securities and Exchange Commission. We expressly disclaim any duty to make any updates or revision to any forward-looking statements. And with that I will turn the call over to George to start.

Okay. Thanks, Charles. And thanks to everyone for joining us on our call this afternoon. Last November we laid out a clear plan that would help us to navigate the current market turmoil. And that involved focusing our development efforts, partnering selected programs, and effectively managing our costs. Since then we have executed well against that plan, and as a result, even in these difficult time, Exelixis has a solid foundation on which we can continue to build our business. In December, we brought in $240 million in committed funding from BMS, we announced another collaboration today with Boehringer Ingelheim, that brought in a $15 million up front payment, and which has additional near-term milestones. We said we intend to sign a substantial collaboration around PI3K programs in the first half of the year, and we are on track to do so. We are having discussions around some other assets, which could lead to yet additional collaborators, later this year or early next. So the cash inflows that we projected, are materializing.

So with the cash on hand and committed funding we have a significant financial runway, I think to facilitate the ongoing development of our key compounds.

Our new collaboration with BMS for XL184 and 281 is off to a great start. The joint team has developed a comprehensive development plan for 184, that is designed to maximum the medical and commercial potential of this promising drug candidate. Suffice to say, this program is important to Exelixis, and we believe it will be a significant value driver in the near future. Mike will provide additional detail on 184 in a moment, but let me say we are encouraged by what the joint team has achieved so this year. A great deal of momentum around this program at BMS and at Exelixis, and I expect that will only increase as we generate additional clinical data. XL147 and XL765 continue to distinguish themselves in the clinic, as the most advanced PI3K compounds in development, and the data generated to date, provides a foundation for the robust partnering discussions that we are having around those compounds.

We are actively engaged in advanced discussions with multiple parties, and are encouraged by the progress we're making. Deals under discussion, include our two clinical compounds, as well as discovery stage PI3K programs. We belief a collaboration around this pathway could be substantial, and allow us to maintain our leadership position. Based on where these discussions are today, I'm optimistic that we will close one of these deals in the near future. And as we have done in the past, we are working on deals that will bring in significant up front and committed cash, and create long-term value for the Company, and enable aggressive development of these compounds that have potential as first-in-class therapies. Again we are pleased with where these discussions stand and hope to be in a position to announce a deal soon.

Now while maintaining a strong financial position and strategically partnering some assets are important components of our strategy, it is important to keep in mind that both of these goals are really the means to an end. And that end, is developing a commercializing novel therapies that will be clinically and commercially successful, and providing meaningful benefit for patients. Everything we do to manage our expenses, identify new partnerships opportunities is done with an eye towards what best enables us to move product candidates aggressively through development, the clinical data we need to support approval in multiple indications. Other compounds including 281 and 228 also are moving forward well, and overall, the compounds in our development pipeline continue to gain recognition and generate excitement within the pharmaceutical industry, and in the clinical community, and I believe that's reflected by the fact we will have seven abstracts covering five compounds accepted this at this year's ASCO meeting.

So with the first quarter of 2009 behind us, we remain on solid financial ground, making progress on our partnering efforts, and advancing our key development programs. That said, we of course continue to be mindful of the current economic environment, and the state of the capital markets. And with the market uncertainty likely to continue, our focus is on increasing shareholder value through advancing clinical programs, signing additional partnerships, and controlling our expenses, keeping a close watch on costs, and managing our operational expenses so that we can navigate the turbulence in the economy, while investing prudently in our key programs. So with that, I will turn the call over to Frank Karba to review the financials for the quarter.

Thanks. As George indicated, we continue to be in a solid financial position. We ended the first quarter with a healthy cash position of more than $230 million, and cash and committed funding of over $400 million. We expect significant cash inflows from further business development activities, and our cost base is decreasing as we realize the benefit of various cost saving measures. Let me now turn to our first quarter results in detail. As a reminder, we are 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 will start with revenues. Revenues for the quarter ended March '09 were $25.3 million compared to $27.9 million for the comparable period in '08. The decrease from '08 to '09 primarily reflects a decrease in revenue, due to the conclusion of various collaboration agreements, most notably the GSK collaboration, which concluded in October '08, and which was partially offset by revenues associated with our new collaboration with Bristol Meyer Squibb for XL184 and XL281.

Research and development expense for the first quarter '09 amounted to $55.3 million, compared to $66 million for the comparable period in '08. The decrease from '08 to '09 primarily reflects the focusing of our development efforts, decreased personnel costs due to our November '08 restructuring, and the impact from other cost containment measures. These were partially offset by increased development activities related to XL184 and 281. General and administrative expenses for the first quarter '09 totaled $8.5 million, compared to $8.7 million for the comparable period in '08. As a result of our new collaboration with BMS for XL184 and XL281, we have a new line item on our P&L called collaboration cost sharing, to account for the sharing of expenses between us and BMS. For the first quarter '09, the net impact of the cost sharing resulted in reimbursements due to Exelixis of $1.8 million.

As we discussed in our last earnings call, we are responsible for the first $100 million of expenses for XL184. However these expenses are netted against costs incurred for XL281, for which BMS is responsible for 100%. For Q1 '09, our costs for XL281 exceeded BMS costs for XL184. As a result, the net impact of the cost sharing was in favor of Exelixis in Q1, and we recorded a $1.8 million reimbursement from BMS. However for the full year, we anticipate that BMS's cost for XL184 will exceed our cost for XL281, and therefore we anticipate to be in a net paying position for the end of 2009. Our net loss for the quarter was $36.2 million, or $0.34 per share compared to $41.3 million, or $0.39 per share for the comparable period in '08. The decrease in net loss is mainly attributable to decreased expenditures resulting from our effort to focus our clinical development efforts, which include discontinuation of XL647, XL844 and XL820, as well as other cost containment measures.

Cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, and restricted cash and investments total $237.7 million at March 31, 2009 compared to $284.2 million at December 31, 2008. Our cash inflows in Q1, included a $20 million license payment from BMS under our new collaboration for XL184 and XL281. Let me now comment briefly on our financial outlook. Our financial guidance for the full-year 2009 remains unchanged. As it relates to the second quarter, I would like to remind you that we are reaching the end of the four-year term with Symphony Capital in June. We do not intend to repurchase the rights to any of the three compounds funded under this transaction, and we expect to incur a loss from the consolidation of SEI of approximately $10 million in the second quarter. As a result of not exercising our repurchase option, we also would, in line with our original agreement with Symphony, issue 500,000 warrants into 25% premium to market, with a five-year term and any remaining cash in SEI would be returned to Symphony.

Finally, I would like to comment briefly on the impact to our financial statements from the collaboration with Boehringer Ingelheim, which we announced earlier today. Under the terms of the agreement, we will receive a $15 million up front payment, and up to $339 million in milestone payments, as well as royalties on the sale of products commercialized under the collaboration. We expect to recognize the up front payment as license revenue in 2009, any milestone payments I expect it to be recognized upon achievement, as contract revenue. So in summary, we continue to operate on a strong financial basis, with cash and committed funding of over $400 million, and a reduced cost base as a result of our ongoing cost containment efforts. Moreover, we expect to bring in more near-term cash through additional partnerships. So all in all, we are well underway in executing our strategy to enable us to operate free of the capital markets, for an extended period of time. And importantly, we have the financial resources to aggressively develop compounds in our pipeline, especially XL184 with our partner BMS. With that, I will turn the call over to Mike.

Thanks, Frank. This is a critical and exciting time for the Exelixis R&D organization and pipeline. As George mentioned, XL184 remains our top priority, and we have several other promising compounds that are being evaluated in the clinic. XL184 is quickly moving into a critical phase of its development, as we in conjunction with BMS, advance the ongoing Phase 3 Trial in medullary thyroid cancer, or MTC, and the Phase 2 Trial in glioblastoma, or GBM. Our PS3K program, which includes the clinical compounds XL147 and 765, in earlier preclinical programs focusing on PI3K isoform selective inhibitors, continues to make significant progress. Our PS3K assets are attracting significant interest from a number of potential partners, and in large part because these compounds are the most advanced clinically from a competitive perspective, and target a pathway that is clearly recognized as an essential mediator of tumor growth, proliferation and survival. Our earlier stage compounds and programs continue to progress as well. The new S1P1 deal we just announced with Boehringer-Ingelheim is a testament of the strength of our direct discovery team to generate a wide variety of high quality compounds. We look forward to working with Boehringer to move the S1P1 program forward.

Our immediate focus is prepping for ASCO that starts at the end of the month. Like last year we will have a significant presence at this meeting, where we are scheduled to present seven abstracts, covering five compounds. It will be three successive poster presentations for XL184 on Sunday, May 30th. These posters will present an update on the clinical data, vascular imaging analysis, and biomarker data from the Phase 2 clinical trial, and relapsed GBM patients. We will also have two oral presentations, and will provide clinical updates on the Phase 1 trial of XL281, which is outlicensed to BMS, and XL228 on Sunday, May 30th.

In addition, oral presentations for our PS3K inhibitors XL147 and XL765, will be part of a special session on PI3K pathway inhibition on Monday, June 1st. I would like to point out this is the second year in a row that ASCO has selected data from our PI3K program for oral presentation, and I think this reflects both the enthusiasm in oncology community around the PI3K as a target for the cancer therapy, and the interest in particular for XL147 and 765. These compounds which are both in Phase IB 2 trials are among the most advanced PI3K inhibitors in clinical developments. We believe that we have established a leadership position in this target class, and I think that will be reflected in the data that will be presented at ASCO later this month, and in the terms of a partnership we expect to sign in the near future. With ASCO coming in a few weeks, I will keep today's R&D update brief . Information about specific presentation dates and times for our various ASCO abstracts are available on the Exelixis website. Our ASCO data briefing will be held on Monday, June 1st, at 6:30 pm. .

Let me turn briefly to XL184, in a little more detail. We are pursuing multiple registration paths that are emerging for this promising compound. The recruitment for the Phase 3 MTC trial is ongoing, and we continue to open additional trial sites in Europe, which should add to our ongoing recruitment efforts. We and BMS, have also agreed on a broad development plan for XL184, that will explore multiple indications with significant commercial potential. We plan to begin rolling out these trials this is summer. GBM is a significant under-served market, and patients have few satisfactory treatment options after surgery, and first line adjuvant chemotherapy. We believe there's an emerging opportunity for XL184 in GBM. FDA grants have accelerated approval of Avastin based on response rate and duration of response. Based on the FDA's decision, and the benefit demonstrated by Avastin, we believe this decision is a positive outcome for other compounds like XL184, that may demonstrate meaningful effective improvements in this difficult to treat (inaudible). We continue to be encouraged by the preliminary data from the ongoing Phase 2 trial of XL184 and GBM. As a reminder, this trial included 46 second and third line GBM patients, with advanced disease that have progressed on prior therapy, that may have included anti-angiogenic therapy. As we stated in our last call, we have amended the protocol to enroll additional patients, and this amendment is currently at multiple trial sites, and we anticipate that enrollment will commence soon. So I will leave it there for now, as we will have several opportunities the next few weeks to discuss our compounds in more detail, as data is presented. And with that, I will turn the call back

Thanks Mike. We are excited about our clinical programs and the opportunities that we will have at ASCO to share more data with all of you and the oncology community. Given our good financial position, and the partnering opportunities on our pipeline, I think we are well positioned to succeed in this quite difficult environment. XL184 is advancing towards multiple registration paths, and our other compounds are moving forward as well. We have a substantial cash position and we continue to be encouraged by our ongoing partnering discussions. Finally, I would like to thank the Exelixis employees for continuing to work hard, and produce at a high level as we implemented our cost containment. I know that these measures generated a difficult environment, and I think the team has successfully navigated the past few months by keeping focused on our mission. I think we are moving into the second quarter with a great deal of positive energy and momentum. So with that, we will stop talking and be happy to open up the call for questions.

(Operator Instructions).

Your first question comes from Edward Tenthoff of Piper Jaffray. Please proceed.

Great. Thank you very much. Just one quick clarification on Frank's comment, the Boehinger upfront, and congrats on that deal guys, will that that be in the second quarter? You said 2009 specifically.

Yes, we expect to recognize the entire up front payment as revenue in the later part of this year.

Okay. Later part of this year. Great. Excellent. And then Mike, you had said that the Avastin approval in glio, certainly interesting based on the data that was presented, you see that as kinds of a positive. How does that change the landscape either for -- specifically for your compound, but just in terms of actually looking at pivotal studies, and past (inaudible) registration, does that actually make it more difficult to enroll patients. or a higher bar? How do you kind of look at it that way?

Yes. Let me just comment on that briefly. I think first of all, the FDA's decision to grant accelerated approval for Avastin in GBM is really great news for patients with the this horrible disease, and their families and care givers. So it is a big step forward for that population. The (inaudible) access clearly plays an important role in the tumor biology of GBM. And certainly Avastin is active in, I guess that access -- I think it is clear to that other target, other pathways are at play there. And we think that MET it is a very important member of that class family of targets that could actually help with GBM. As we have talked about previously, MET is widely expressed and activated in many GBM tumors. And I think importantly it appears to play an important role in the -- really driving that invasive genotype that is seen in many patients with advanced disease. So I think you will see more about that in terms of the role MET might play, in GBM, at our biomarker poster at ASCO in a few weeks. So I guess we weren't overly surprised by the approval that was granted this week. Certainly been tracking that area very closely, even before, even before the ODAC meeting. And based upon last year's ASCO data, it was a pretty strong movement toward that being adopted, as a modality that could work in GBM. I think what, so we expected to see Avastin get accelerated approval based on improved, if you will, looking at historical controls. but still somewhat modest increases in response rates, and duration of response.

So I think from my point of view, we are optimistic that other agents like 184 could fare well in similar trials with equivalent populations, and read outs. And I will mention that again, Avastin has not demonstrated any signal from the point of view of survival. And that is still the gold standard, from the perspective of full approval. So, I guess from our point of view, there's a lot of enthusiasm for 184 in the GBM setting. Certainly investigators, that we have on the Phase 2 trial are behind that ,and we were able to enroll the first 46 patients rather quickly. The amendment is in for the next 100, and we have added more sites there. So I think that will, expect that to go relatively quickly as well. Again if all goes well, in terms of the data that we will get from that trial, we would expect to initiate pivotal trials in GBM, towards the end of this year, or early in 2010.

Great. Well, thanks and I will see you down in Orlando.

And your next question comes from the line of Joel Sendek of Lazard Capital Markets. Please proceed.

Thanks a lot. First, on the partnering front, on the fourth quarter call, you said that if my notes are correct, there are several collaborations kind of baked into your estimates. I am wondering, with BI in the bag, and PI3K deal pretty close, should we expect anything more for the rest of the year? Or is anything baked into the guidance for year?

Yes. This is George. Look. With the, BI deal now done, and the PI3K discussions during the final lap here, we are having a number of other ongoing discussions. We are not in any urgent need of cash, and so we will take those as they come. We have a number of earlier assets, XL228 which will be presented at ASCO, and you will see at ASCO, a very nice data set. That's not partnered. XL888 which is a very nice non-geldanamycin agent P90 inhibitors, is moving forward. We have substantial interest in that compound. XL388 which is a very nice (inaudible) inhibitor, moving forward and a number of early stage discovery capabilities. There is interest in each of those, from multiple parties. We are having those discussions, but we will take them as they come. We don't need to sign anymore near-term. We may, if the terms are right.

Okay. And then two quick follow ups, on the BI deal, how much of the 335 is precommercialization? Or just round numbers if you can help us or percentages.

We haven't broken that out, Joe. So we can't really comment on that.

Okay. Let me try one more. On the data at ASCO for 184, can you tell us how many patients approximately we will see?

The clinical update will contain a full 46 patients that were enrolled in the initial part of that Phase 2 trial.

Okay. Great. My final question is just housekeeping on the cost sharing, that new line that you have in the income statement, you write and/or receive a check each quarter? Or is this a yearly true up? How does that work?

It works on a quarterly basis.

Okay. So --

Quarterly basis.

So that's actual cash that you write out or bank depending on how it breaks down.

That's correct. And in the first quarter we received a check from BMS for $1.8 million.

Okay. Great. Thanks a lot.

Your next question comes from the line of George Farmer of Canaccord Adams. Please proceed.

Hi. Thanks for taking my question. I'm assuming that GBM is one of the indications that you and BMS want to move forward with, with 184, is that correct?

That is one of the indications that we are currently pursuing.

Okay.

As a collaboration and certainly have development plans evolving there, yes.

Okay. And so given the requirements for getting Avastin approved for GBM, it sounds like this Phase 2study, if a sufficient number of patients are treated could be a pivotal study; is that fair, to conjecture?

Well, I wouldn't characterize it as a pivotal study, certainly looking to expand the data sets in the second line GBM setting with the extra patients, and depending upon how that data looks, there is several potential regulatory options. I don't want to go into that right now. It is probably premature from the standpoint of pre-ASCO, pre-data, all of that kind of stuff. But we are certainly looking at it very opportunistically, depending on how the data works out.

Okay, and Frank you have been pretty dead on with your guidance in years past so far. Looking at the run rate, based on the first quarter revenue, and your guidance for 140 to 170, I believe in revenue this year, and then even with the BI deal, it doesn't seem like you're on that kind of, on that on track to hit that guidance. So I'm assuming that these other business developments deals you have in the works are going to make up for that correction, is that fair to assume?

That's a good observations and a correct observation, George. Our revenues on a quarterly basis increase for the remainder of the year, and there will very much be a function of other business development deals to be put in place.

Okay. Great. Thanks very much.

Your next question comes from the line of Joe Pantginis of Merriman Curhan & Ford. Please proceed.

Hi, guys. Congratulations on the BI deal, and thanks for taking the question. When you talked about controlling costs, other than the potential inflow of revenues from new deals, et cetera, do you have any other color as to what you mean by controlling costs? And the second question that I have is, regarding the 228 compound, I know it is in early stage at this point, but do you have any current plans with regard to what the product profile might be. Would you go after CML as an initial indication, or is it too early to tell? Thanks a lot.

As it relates to the first part of your question, in terms of controlling costs, there's a number of elements at play here. The significant one, is if we partner programs, we typically off load the substantial portion of the development expenses associated with it. We have seen that with the BMS deal, where we have offloaded 65% of the expenses for 284, 100 percent of the expenses for 281. With the transfer of 880 over to GSK last year, we obviously off loaded a lot of development expenses. And with deal we just signed with Boehringer-Ingelheim, its the same, we off loaded future development expense on that program. And with respect to the PI3K program, the PI3K deal that we have alluded to, we expect a similar expense off load. On top of that, we have taken a variety of cost containment measures which were initiated last year. They're ongoing, and if you look into our financial disclosures in detail you will see that we have reduction in our cost base across the board. I can tell you our T&E expenses, our lab supply expenses, and so forth, they have all come down as a result of us being much more focused on our expenses.

Great. Thanks a lot. And on the 228 potential product profile at this point?

The current plans right now, the ASCO data will highlight the activity of the compound, and the experience of the compound in patients with solid tumors. We also have a Phase I trial going again, as I mentioned in the refractory CML population. That will not be discussed at ASCO, in a few weeks. We have multiple key cohorts that are going to start enrolling, in terms of the MTD expansion cohort for the solid tumor trial around, not small cell, multiple myeloma, and colorectal cancer, that will allow us in the context of the solid tumor approach, and then coupled with the activity that is going on within CML, to be able to focus developments, hit a -- get to a, go, no-go, and then focus our development activities into one or two of those populations by the end of the year. So works in progress. I think the data set that we will see is very encouraging, and I think by the end of year, we will have enough data in these expansion cohorts to feel good about the plan and moving that kind of forward into Phase 2.

Great. Thanks a lot, guys.

Your next question comes from the line of John Sonnier of William Blair. Please proceeds

Thanks for taking the question, and congrats on a lot of good progress over there. My question is about the Bristol relationship. And I guess it is probably for George or Michael. Just -- 184 is getting a lot more visibility, seems to be gaining momentum, you will be highly visible at ASCO, as this product and others in the relationship mover forward, how are you structured to handle clinical direction, dispute resolution, how much input are you guys going to have in that process, and how should we think about that going forward?

Yes, John. It is Mike. We have a very solid long-term relationship with BMS, that I think covers the entire continuum of activities and components of their business and our business, from an R&D point of view. So we have an exceedingly good relationship to be able to advance the program, in a truly joint fashion. We are talking with them, working with them through all of the formal type of committees, as well a large number of very strong personal relationships that allow us to navigate the complexities of any collaboration around development plans, and things that come from that. So I think the organizations are aligned, and really working as a single team, when it comes to 184, around the same set of goals, and it has been, it has been marvelous the last number of years, and continues to work extremely well as we go forward with this new opportunity. George, you want to comment further?

No we have been working with BMS for ten years just about now, and this is our eighth collaboration with them I believe. So we worked with them for a long time as Mike said, we have a great relationship. I think the teams have done a great job of working together to formulate a development plan for 184. We continue to talk to them frequently as new data comes in, and I don't anticipate any issues there. It has truly been a joint effort, and I expect it will continue to be so.

Okay. I appreciate the that. Thank you.

And your next question comes from the line of [Viad Bakley] of Cowen. Please proceed.

Hi guys. Thanks for taking the question. My question is on the expense line, I know you guys have cut costs a lot in the first quarter. Guidance for operating expenses is still at $290 million, $320 million so that obviously calls for quite a big ramp from Q1, over the rest of the year. I just wonder maybe if you can give us a little more color on why you expect the higher expenses to be coming in.

Yes. We can comment on this. The increase in expenses that you alluded to is expected to come mainly from a ramp up in the 184 program. As you know, with the beginning of the collaboration with BMS, we have been working for the last few months to develop -- the development plans for this compound, and we expect that the significant amount of activity will be initiated in the later part of the year. Keep in mind though, that a large portion of those expenses this year and next year in particular, will actually be born by BMS. The general principle here is at 65% of the costs are covered by BMS, and 35% are covered by Exelixis. And you may recall in the last call, that I said that our operating expense for 2009 may be at the same level in its totality, to what it was last year, but the portion of the operating expense we have to cover ourselves is actually coming down quite significantly. And that's directly an impact of our strategy here to partner more of our pro ramps, and to reflect the structure of those partnerships that we have put in place.

Okay, thanks. A question on 184, can you give us an update on how enrollment is going in the medullary thyroid cancer trial? And maybe also, you talked about investigating 184 in several different indications apart from GBM and thyroid, what else are guys looking at?

Yes So the XL184 pivotal trial in MTC enrollment is in line with our expectations. I mentioned in the prepared remarks, that we continue to add sites in Europe, where we expect to see a good ramp up in enrollment there as well. In terms of the broad development program with XL184, we have a very let me say interesting and broad signal searching Phase 2 program that will roll out in the early summer timeframe, that will allow us to look for signals in a variety of different tumor types, and use that to rapidly consider other histologies, then to move forward in terms of our priority for potential pivotal trials. So again I think the interest in the compound is broad. Obviously, you see a signal in the MTC population, we are certainly excited about what we are seeing to date in GBM. So compound clearly has a level of clinical activity, and we are really, I think very excited to be working with BMS to expand the possibilities from the tumor type perspective.

Maybe I can add something there. We saw and you have seen a lot of the data on the initial cohort of patients from the MTC trial, where the compound had a very high response rate, very good disease control, very long-lasting responses. We are encouraged by the GBM data that will be out at ASCO in a few weeks. From the Phase 1 data there was good, lets say, anecdotal suggestions, that the compound was having beneficial effect on patients with a variety of other tumors. And certainly based on the mechanism of the compound you would expect that to be the case. And so we are quite enthusiastic I would say about the potential of this compound, beyond thyroid cancer, beyond GBM. That's what we will be exploring.

Great. Thanks.

(Operator Instructions).

Your next question comes from the line of Jessica Li of Goldman Sachs. Please proceed.

Thanks for taking my questions. First on going back to XL184 for GBM, just wondering whether you've thought about potential combination with Avastin?

Yes, absolutely. That's one of the, I think many potential, interesting combinations that we have considered, in terms of a variety of targets pathways approaches that might make sense, in the context of the genetic lesions that really appear to drive that tumor type. So that is certainly one that we think might be interesting to pursue.

Okay. Then on your S1P1 agonist program, how is it, how are your compounds different from Novartis compound?

I will answer that question at a somewhat of a high level just to I think respect the, the confidentiality around the program with our partner. I would say that the series of compounds that are now in advanced pre-clinical testing, have the typical Exelixis discovery phenotype of high potency against the target of interest, in this one S1P1R, and a high level of selectivity amongst the different S1P sub- types. Very good exposure when dosed orally, good overall PK properties, long pharmacodynamic duration of action, and I would say good emerging signs of efficacy, from a standpoint of various disease models. So I think overall, we are excited about the profile, and we think selectivity here is relatively important based upon the experience with FTY720. And again we are existed to be able to work with Boehringer to move these compounds forward.

So should we assume that your program or your compounds might be superior to 720?

Well, you know, they look really good pre-clinically. That's the first step in the process, and we have to move them into the next level if you will, to understand how they might behave in that setting as well.

Great. Thank you.

And there are no further questions at this time. I would like to turn the call back to you gentlemen for closing remarks.

Okay. Well, thanks everybody. I appreciate your interest in the call. I know there are a lot of calls going on at the same time and we look forward to seeing you all at ASCO in a few weeks.

Thank you for your participation in today's conference. This concludes the presentation, you may now disconnect. Have a great day.