Exelixis Inc (EXEL) 2011 Q4 法說會逐字稿

Good day, ladies and gentleman, and welcome to the Q4 Exelixis conference call. My name is Kim and I'll be your coordinator for today. At this time all participants are in listen-only mode. We will be facilitating a question-and-answer session toward the end of today's conference. (Operator Instructions) I would now like to turn the presentation over to your host for today's conference, Mr. Charles Butler. Please proceed, sir.

Thank you for joining us this afternoon for our fourth-quarter and full-year 2011 financial results conference call. Joining me on today's call is Mike Morrissey, our President and CEO; Frank Karbe, our Executive Vice President and CFO; and Gisela Schwab, our Executive Vice President and Chief Medical Officer. As usual, Mike will start off with a brief overview and then turn the call over to Frank, who will review our performance over the financial reporting period, then Gisela will provide our research and development update before the team takes questions. As a reminder, during the course of this presentation, we will be making forward-looking statements regarding future events or the future performance of the Company. Actual events or results, of course, could differ materially. We refer you to the documents that Exelixis files from time to time with the Securities and Exchange Commission. Specifically the Company's most recent form 10-Q filed on October 27, 2011.

These documents contain and identify under the heading Risk Factors important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including risks related to the potential failure of cabozantinib to demonstrate safety and efficacy in clinical testing, Exelixis' ability to conduct clinical trials of cabozantinib sufficient to achieve a positive completion, the sufficiency of Exelixis' capital and other resources, and the uncertainty of the FDA review and approval process. With that, I will turn the call over to Mike.

Thank you, Charles, and thanks to everyone joining us on the call today. Fourth quarter of 2011 and the first six weeks of 2012 have been very productive for Exelixis. We continue to maintain our singular focus on advancing cabozantinib, or cabo, for short, in a rational, expeditious, and cost-efficient manner to further our goal to maximize its value for patients, physicians, and shareholders. We're executing across all aspects of the business, including clinical development, manufacturing, business development, and finance. I'll give a quick overview today to start things off, and then Frank and Gisela will follow up with more details in a moment.

The key takeaway message is that we've made significant progress throughout 2011 and during the last 10 weeks since our R&D day in December. The clinical and commercial opportunity for cabozantinib is both deep and broad. As we've highlighted previously, we have seen objective partial responses per resist in 12 of 13 tumor types to date, and we've also seen robust tumor reduction of primary and metastatic disease in lymph nodes, visceral organs, the CNS, and most recently, bone. Our challenge is to maximize the probability of success and ultimately the commercial value of the cabozantinib franchise across the multiple tumor indications in which we've seen activity to date.

As many of you know, metastatic prostate cancer remains the primary focus of our internal clinical development activities. Metastatic CRPC is a large commercial opportunity, and despite multiple recent advances, provides an ideal opportunity to convert cabo's unique clinical profile into a commercially-differentiated product that could potentially bring a range of clinical benefits to patients. Our pivotal trial program in prostate cancer is designed to meaningfully differentiate cabozantinib by quantifying its potential to prolong overall survival and provide rapid and durable pain relief, reduction or discontinuation of narcotics, and to employ a bone scan response as a pharmacologic marker of cabo's clinical activity. No currently approved oncology agent in the CRPC space can make these claims, and it's our goal to make cabo the first.

We plan to achieve this goal by effectively executing our initial pivotal trials in metastatic CRPC, a process that is well underway. As we announced at our R&D day in December, we're currently focused on finalizing the plans for our overall survival trial, previously known as the 307 study, now formally named Comet1, which stands for cabozantinib met inhibition CRPC efficacy trial. We remain on track to initiate that trial in the first half of 2012. As discussed at JPMorgan in early January, we initiated the pain palliation study in December of 2011. We referred to this study in the past as the 306 study, and we're now formally naming it Comet2. Gisela will provide additional details on these prostate cancer pivotal trials in a few minutes.

As the prostate cancer clinical development program moves forward, a growing body of data for cabo and other tumor types continues to provide a signal of clinically-meaningful activity. Our initial Phase 2 efforts, including the randomized discontinuation trial, have successfully identified a wide range of tumor types sensitive to Cabozantinib. Since late last year, investigators have made four presentations outside of the metastatic CRPC indication, specifically on differentiated thyroid cancer, metastatic breast cancer, liver cancer, and most recently, advanced renal cell carcinoma. While we focus our internal efforts on metastatic CRPC, we continue to implement our plans to maximize cabo's potential in additional tumor indications through external collaborations such as our cooperative research and development agreement, or CRADA, NCI's Cancer Therapy Evaluation Program, or CTEP. Gisela will again provide brief recaps on the new data outside of CRPC and update you on our progress with CTEP shortly.

In addition, we have used the last two months to collect and analyze key data from the broad range of cabo development efforts in preparation for the 2012 ASCO annual meeting in June. Nine abstracts were submitted last week covering CRPC and other tumor indications for cabo. While we won't know which abstracts are accepted until mid-March, we're planning to have a significant presence in Chicago this June with a broad update on cabozantinib covering the latest data in multiple indications.

We've also continued to execute on the financial side of the business. In the fourth quarter of 2011, we largely completed our restructuring activities that started early last year. As a result, Exelixis is appropriately sized from a staffing and talent perspective to take cabo through the late stages of development in MTC and metastatic CRPC, while concurrently advancing the range of additional tumor indications through collaborations. Alongside the restructuring, we've also completed our PI3K isoform selective discovery collaboration with Sanofi. This move gives us even tighter focus on the cabo opportunity. Our financial performance has kept pace with the achievements of the cabozantinib development effort. We started 2012 with over $300 million in cash, and Frank will provide the details for the quarter and year-end in a moment.

From a financial perspective, we see multiple avenues to bring in additional cash in 2012, with milestones from existing collaborations, the capital markets, and potential business development activities as viable options to provide additional financial resources to advance our clinical efforts for cabo. So it's been a busy couple of months with the initiation of our first metastatic CRPC pivotal trial, presentation of multiple additional data sets outside of CRPC, and continued financial progress. So with that, I'll turn the call over to Frank to review the Q4 and year-end financials. Frank?

Thanks, Mike. As usual, I will focus my comments on the highlights of our financial performance and refer you to our financial results press release issued earlier today for additional details. In our 10-K, which will be filed within the next few weeks, we will of course include additional information regarding our performance in 2011. So apart from making a lot of progress with cabo in 2011, as you just heard from Mike, we also substantially completed our restructuring activities, which we initiated in 2010. For the end of 2011, our headcount was down to approximately 200 employees, we completed the discontinuation of all development activities other than cabo, we ended most of our collaborations under which we were still performing work at the beginning of the year, we signed two more subleases for excess space, and we out-licensed our PI3K delta program to Merck. These accomplishments are reflected in our 2011 financial results, most notably in a significant decrease in operating expenses, which we accomplished despite a continued expansion of the development program for cabo.

Revenues for the fourth quarter were up substantially year-over-year to $93.3 million, mainly due to the acceleration of approximately $54 million in deferred revenue as a result of the wind-down of the SanofiPF3K discovery collaboration in December 2011. Revenue for the full year also increased substantially to $289.6 million, driven primarily by the acceleration of deferred revenue in connection with the early termination of the BMS collaboration for XL281 in October 2011, as well as the wind-down of the Sanofi collaboration I just mentioned. Obviously, both of these events significantly reduced our deferred revenue balance, which you will see reflected in our revenue guidance for 2012.

R&D expenses for the quarter were down year-over-year by about 27% to $30.8 million, and down 26% to $156.8 million for the full year. Again, I think it is worth pointing out that we were able to accomplish these substantial decreases in expenses despite a significant increase in development costs for cabozantinib. This truly reflects the impact of our restructuring activities in 2010 and 2011, as well as the termination of some of our remaining collaborations that I mentioned a moment ago. Operating expenses were down year-over-year for the quarter by 24% to $41.7 million, and down 28% to $200.1 million for the full year. These reductions again mainly reflect the impact of our restructuring activities.

The increase in revenues and the decrease in expenses for both the fourth quarter and the full year resulted in significant increases to our bottom line. We are earnings-positive for both the quarter and the full year, with a net income of $46.3 million, or $0.35 per share for the quarter, and $75.7 million, or $0.58 per share, fully-diluted, for the full year. We ended the quarter and the year with cash of $283.7 million, including a tax reimbursement from Sanofi of approximately $7 million received in December, but excluding the $12 million upfront payment from Merck in connection with the Pik3delta deal and excluding a payment of $15.3 million from Sanofi in connection with the wind-down of the Pi3k discovery collaboration. Both of these deals were signed in December, but we did not receive the respective payments until January 2012. Taking into account these payment, we started 2012 with over $300 million in cash.

Let me now turn to our financial guidance for the full-year 2012. We expect revenues in the range of $40 million to $60 million. Again, the reduction in revenue as compared to 2011 is mainly due to the reduction in our deferred revenue balance mentioned earlier. We expect operating expense to remain in line with our 2011 expenses in the range of $190 million to $220 million. And with regard to cash, we're targeting to end to the year with at least $200 million, which is based on certain assumptions about cash inflows from new business development activities, milestone payments from existing collaborations, and our potential financing activities, including accessing the capital markets, among other things. And with that, I will turn the call to Gisela.

Thank you, Frank. As Mike said in his upfront remarks, the past few months have been very productive ones for the Exelixis clinical development team. I'll take a few minutes to provide further details on our work on the CRPC pivotal trial program, the rapidly maturing data sets and indications outside of CRPC, and our plans for our CTEP collaboration. Cabozantinib's unique clinical profile allows for strong differentiation, and our pivotal trial program in prostate cancer is designed to give us the evidence needed to differentiate the compound commercially and to make a meaningful contribution to the treatment of prostate cancer. Our planned pivotal trial program is comprised of two studies that we now have named Comet1 and Comet2.

We continue our detailed planning for Comet1. This trial will investigate cabozantinib's ability to prolong overall survival in CRPC patients who have progressed following treatment with docetaxel and Abiraterone or MDV3100. Since R&D day, we have continued our feasibility evaluation, and the study is meeting with a high level of interest from investigators, and we've identified a large number of sites to conduct the trial. The protocol is fully developed, and we are on track to initiate the study in the first half of this year. As you may recall, Comet1 will involve 960 patients who will be randomized two-to-one to receive either 60 milligrams of cabozantinib daily or single-agent prednisone. We are projecting rapid enrollment in the study with top line results for Comet1 in the first half of 2014.

At R&D day, I outlined our rationale for why we believe cabozantinib has the potential to improve overall survival in this important trial. Our belief is predicated on three points. First, we have seen substantial anti-tumor activity across multiple tumor types, including the improvement of progression-free survival in the CRPC cohort of our randomized discontinuation trial, and the profound effect on progression-free survival in our pivotal medullary thyroid cancer trial. Second, emerging data from our non-randomized extension cohort in CRPC support cabozantinib's ability to significantly reduce circulating tumor cells, or CTCs, and convert patients' CTC count from above five to below five. As you know, reductions in CTCs and conversion to below five CTCs in patients with elevated CTCs at baseline have been correlated with improved survival in prostate cancer in other studies.

And finally, pain and anemia have been recognized as important factors predicting for overall survival, as shown by [Hilabli] and others years ago, and observed in more recent studies including the Cougar 301 study. Also, pain improvement has been associated with improved overall survival in the TAX 327 licensure study for docetaxel as reported by Bertolt and others. Our RTD and NRE experience shows that cabozantinib improves pain, narcotic use, and anemia in CRPC patients, as published in ASCO 2011 and AACR-EORTC-NCI in 2011.

As planning and start-up activities continue for Comet 1, Comet2 has been initiated. Comet 2 is the randomized, controlled double-blinded trial that test cabozantinib's ability to deliver a durable pain response in CRPC patients who have progressed following treatment with docetaxel and abiraterone or MDV3100. We initiated the first site in December of 2011, and additional sites continue to come online. We're targeting a total trial enrollment of 246 patients who will be randomized one to one to receive either 60 milligrams of cabozantinib daily or a combination of mitoxantrone and prednisone. Based on our internal planning, we are projecting a readout from the trial in the first half of 2014.

As you heard from our prostate cancer expert panel at R&D day, pain palliation is an unmet medical need in late-stage prostate cancer. Among men who previously received docetaxel, 66% reported pain related to bone metastases, and 90% noted that it interfered with their enjoyment of life. So there's a clear opportunity for cabozantinib to meaningfully impact the lives of prostate cancer patients if the trial is successful. Collectively, Comet 2 and Comet 1 provide an opportunity to commercially differentiate cabozantinib and uniquely position it as an anti-cancer agent with demonstrated impact on overall survival and pain palliation. We believe that this will give us a compelling advantage in the crowded and rapidly evolving CRPC landscape. We are, therefore, focusing on the execution of the Comet pivotal trials with the aim of unequivocally establishing cabozantinib's unique profile in this setting.

We've also continued to evaluate the data on lower doses of cabozantinib. We are close to completing enrollment in the 40-milligram dose cohort of our non-randomized extension cohort, and the low-dose trial currently underway at Massachusetts General Hospital Cancer Center under Dr. Matthew Smith has fully enrolled the 40-milligram expansion cohort. Based on the early data from Dr. Smith's study, demonstrating profound activity at the low dose of 40 milligrams on bone scan response with a greatly improved tolerability profile with no dose reductions, suspensions, or discontinuations, we expect longer-term follow-up data to be consistent with clinical benefit similar to that observed at higher doses.

I will now speak for a few minutes about the rapidly-maturing data sets in our non-CRPC indications. As Mike mentioned earlier, there have been four data updates for cabozantinib outside the CRPC indication in the last few months. These data sets speak to cabozantinib's broad potential in a variety of indications, as well as its differentiated profile. For a brief recap, at the American Thyroid Association's annual conference in October 2011, Dr. Maria Cabanillas and co-authors presented data on a cohort of 15 patients with differentiated thyroid cancer.

Differentiated thyroid cancer, including papillary, follicular and turtle cell cancer, is the most common form of thyroid cancer, which in advanced stages, is typically treated with radio iodine. There's no standard therapy available for patients who fail radio iodine treatment, but tyrosine kinase inhibitors, including sorafenib, have shown responses in approximately 20% to 30% of patients. Dr. Cabanillas reported a 53% confirmed response rate with cabozantinib, and anti-tumor activity was similar in patients who had received prior TKIs, including sorafenib or sunitinib and TKI-naive patients. Importantly, tumor responses were durable.

At the San Antonio Breast Cancer symposium in early December, Dr. Sarah Tolaney of Dana Farber Cancer Institute presented preliminary data from a cohort of 45 patients with metastatic breast cancer participating in the cabozantinib Phase 2 randomized discontinuation trial. This was a heavily pre-treated patient population. Most patients had hormone receptive-positive disease and had received and failed prior hormonal therapy. Additionally, more than 70% of patients had received prior anti-cyclins. Of 44 evaluable patients, there were 6 confirmed partial responses for a 14% response rate. 26 patients had stable disease, and 9 patients had progressive disease as their best response. The [vig]12 disease control rate was 48%.

Next, at the 2012 ASCO GI Cancer symposium in mid-January, Dr. Allan Lee Cohen of the Rocky Mountain Cancer Center presented positive preliminary data from the hepatocellular, or liver cancer cohort, of the Phase 2 randomized discontinuation trial. The data set included 41 patients in the cohort. The vig12 disease control rate made up of partial responses and stable disease was 68%, and evidence of objective tumor regression was observed in 78% of patients. Two patients achieved confirmed partial resist responses during the lead-in phase of the trial, and another confirmed response was seen after the patient completed the lead-in phase and moved to the randomized component of the trial. An additional 32 patients reported stable disease. Importantly, the median progression-free survival was 4.2 months in both sorafenib-pretreated and sorafenib-naive patients, an encouraging result given the advanced nature of the disease in this population.

And finally, just a few days ago at the 2012 ASCO GU conference, Dr. Tony Choueiri of the Dana-Farber Cancer Institute presented encouraging data from an advanced renal cell cancer cohort treated with cabozantinib. The patient population in this study was heavily pre-treated, with 88% having received prior anti-VEGF therapy and 64% of patients having received two or more prior anti-cancer agents. 7 of 25 patients, or 28%, achieved a confirmed partial response, and 13 additional patients had stable disease as their best response. A 72% disease control rate at week 16 was observed. Perhaps the most intriguing result was the median progression-free survival, which was 14.7 months. Importantly, in three indications of these four, in DTC, breast cancer, and renal cell cancer, we observed individual patients with bone metastases achieving bone scan resolution on cabozantinib treatment, and some patients requiring narcotic medication for bone pain associated with their bone metastases experienced alleviation of symptoms allowing for reductions in narcotic use.

So as you have noted, there are some common threads in these interim data sets that I have just described, and those include tumor regression that was seen in the majority of patients with numerous observed, confirmed partial responses and many more cases of stable disease across multiple tumor types. Progression-free survival is generally longer than that would be expected in pre-treated patient populations, and it appears to be independent of prior therapy. Continued evidence of cabozantinib's ability to resolve bone metastases as evaluable by bone scan emerges across tumor indications. These findings are consistent with what we have previously seen in our Phase 2 CRPC cohorts, as well as the low-dose CRPC trial. Finally, an impact on pain associated with bone metastases is observed and patients are often able to reduce or discontinue narcotic medication. We are planning on presenting a comprehensive update on cabozantinib across multiple different solid tumor indications at the upcoming ASCO meeting in June 2012, and have submitted nine abstracts last week.

Now to follow up on the encouraging observations outlined and to maximize cabozantinib's potential on these and other indications, we have instituted a CRADA with CTEP as well as our own investigative sponsor trial programs. On the CRADA front, remember that this agreement allows us through the CTEP funding mechanism to advance further research in a variety of other areas for which cabozantinib has shown promise, while focusing our own internal efforts on medullar thyroid cancer and CRPC. In December, the NCI notified its investigative base of the opportunity to work with cabozantinib and began soliciting proposals for studies. We are excited about the high level of interest, and the steering committee with CTEP and Exelixis' leadership has begun to review study proposals. Two trials have already been approved and will be conducted by the NCI, a single-agent study in bladder cancer and a second Phase 1 study of cabozantinib in combination with docetaxel and CRPC. We are working on reviewing and approving additional studies and it is our hope to include trials in hepatocellular cancer, renal cell cancer, differentiated thyroid cancer, and metastatic breast cancer in the trial roster, along with many other studies.

With regard to our IST program, we have approved 17 clinical trials, two such studies Dr. Smith's study in CRPC and Doctors Higgins and Baselga study in breast cancer are already actively treating patients and yielding important data. Other studies are moving through the IRB and regulatory process, with one trial in chemotherapy-naive CRPC patients and another trial evaluating the combination of cabozantinib and Abiraterone being furthest advanced. So we expect to see the initiation of a number of trials in the short-term.

Now before closing the R&D update, I would like to comment on our progress on our first NDA filing for medullary thyroid cancer. With FDA's approval of a rolling NDA filing, we have initiated the NDA filing in late December of 2011, with the submission of the pre-clinical section of the NDA, and we are on track to complete the filing in the first half of 2012. With this, I would like it turn the call back to Mike.

All right, Gisela, thank you very much. We had a detailed update today, so I'll simply close the call by thanking all of our employees for their hard work and dedication and then open the call up for questions.

(Operator Instructions) Eric Schmidt, Cowen and Company.

First on the medullary thyroid cancer filing, Gisela, do have you had an end of Phase II - I'm sorry, Phase III, meeting with the FDA? What if anything would be rate-limiting on finishing the rolling BLA there - sorry, rolling NDA there?

To your first question, yes, we had a pre-NDA meeting late last year during which we obtained agreement from the FDA to initiate a rolling NDA. And regarding the completion of the filing, we are on track to complete that in the first half of 2012, with the subsequent sections for the CMNC part and the clinical part.

Okay. And then on the COMET-1 trial, did I hear you correctly that you're looking not just at taxotere failures but 3100 - MDV3100 failures and Zytiga failures, or which patients exactly would be eligible for enrollment?

So the eligibility is defined as patients who have received and failed prior docetaxel or Abiraterone or MDV3100, and we are not limiting the numbers of prior therapies, including also cabazitazel or other agents, but these are the ones that are required. So it's Zytiga or MDV3100.

You have to have failed at least one of those, you could have failed both and others?

That is correct.

What - it sounds like the protocol with the FDA is coming along well there. What is actually rate-limiting to enrolling the first patient? Have you had any IRBs or approvals yet?

For the COMET-1 study, we are identifying sites and are moving through the selection of sites. We're anticipating that the study will begin enrolling patients in the first half of 2012.

So is the protocol finished?

The protocol is complete, yes.

Thanks a lot. Congrats on the progress.

Karen Jay, JPMorgan.

This is Karen Jay in for Cory Kasimov. Thanks for taking my questions. I have just a few. First on the Xgeva panel, can you maybe comment on what you thought of the discussions and whether or not there are any takeaways or lessons learned for cabo?

The Xgeva panel, I think clearly this is very fresh from this morning. I think clearly the takeaway that we heard was that the endpoint as such in the trial design seemed agreeable, however, the magnitude of effect on the primary endpoint for denosumab was not sufficient, and it was not supported by evidence of other clinical benefits, such as a progression-free survival, overall survival, and so forth, or symptom alleviation. And for that reason and in view of the safety profile, the panel voted 12 to 1 to essentially not approve the indication. Now with respect obviously to cabozantinib, we're looking at a very different profile from that of denosumab. Cabozantinib has a much broader activity profile. It affects tumor cells as well as bone components, such as osteoblast and osteoclast.

We have seen in our extensive program clear signs of anti-tumor activity with very marked effects on progression-free survival. Now in two separate indications, in MTC and in prostate cancer, we're seeing tumor regression, as I described earlier on. And we've certainly also seen and very rigorously assessed studies the alleviation of bone pain, and that concurrently with narcotic discontinuation or reduction. So a very different picture from what was described this morning. And so I think with that in mind, certainly our clinical trial program as it is planned now is not affected at all by this ODAC panel's position. We are focused on executing on COMET-1 and COMET-2 as the highest priority, as we move those along at a lower priority. We have in the plans also an earlier line of therapy study, but that is not imminent.

Okay. Thanks. And my second question is for Frank. With the filing timeline for MTC, it's possible that you could have approval this year, later this year. Is there any commercial prep factored into your operating expense guidance for MTC?

Yes, there's some commercial costs factored into our expense guidance, but I would characterize it as minimal. And, yes, it's very, very little.

Okay. Thank you.

Joel Sendek, Stifel Nicolaus.

I had a follow-up from (both of those). With regard to the panel today, does it change at all your prospective endpoints on the 308 study, because they really spent a long time talking about the clinical benefit and bone (inaudible -- background noise) survival. Can you comment a little about that, and then I have a question for Frank after that.

Yes, Joel, it's Mike. Let me just be clear here. So the 308 study that you mentioned has been on the back burner and a low priority for us for some time now, and that will be the case as we continue to move forward. Again, our main focus is going to be on the Comet trials to be able to, again, show clinical benefit in terms of both potentially survival, as well as pain relief, narcotic reduction, et cetera in the COMET-1 and COMET-2 trials. So 308 has been on the back burner for a while and it will stay there.

Okay, great. Actually before my question for Frank, another thing that came out from the meeting today anyway ODAC's focus on safety. They spent the majority of the time talking about [ONJ]. In that regard, since you have this very compelling study going on of 40 milligrams, how do you potentially use that data within the current Phase III program? Can you do that at all, or are you convinced that 60 milligrams is the right dose?

Yes, we feel quite good about the 60-milligram dose, and that it's certainly based upon the fact that we have quite substantial information from our RTD studies and the NRE study where patients reduced to 60 milligram, and about 50% of patients reduced from 100 milligram to 60 milligram, and they were able to maintain pain response and activity, and subsequent dose reductions were much less frequent. Now I think it's very encouraging that at 40 milligrams, we see such nice effects on bone scans, as Matthew Smith and others have described and presented at EORTC from the dose ranging study. And so should a patient on 60 milligram have to dose-reduce, they will be able to be exposed to a still-active dose, and I think with that we're in an ideal spot for the dose going forward.

Okay, thank you. Finally, financially, real quickly, I'm wondering, Frank, if the guidance on operating expense, we should consider that to be conservative. If I look at the 4Q run rate, if you back out the restructuring charge, it's only $38 million, and obviously you're going to be depending on these additional clinical trials, but it would seem to me that, especially at the high-end of $220 million, it seems high to me. Can you comment on that?

I would say the guidance is the guidance, that's the range that we feel comfortable with and that we feel comfortable that we can meet. And there's a lot of moving pieces here, of course. Keep in mind, the 301 study and the 203 study are winding down in 2012, but COMET-1 and COMET-2 will start up, so on top of the remaining expenses of the ongoing studies we already have. But the bottom line is we feel comfortable with the guidance, and that's where we expect to come out.

Good. Fair enough. Thank you.

Terence Flynn, Goldman Sachs.

Just one question on the COMET-1 study first. Was wondering if you can provide us with the design with respect to the powering assumptions and then, number two, just on your timing for data in the first half of '14. Looking back, it looks like the Zytiga trial took I think, three to four years to complete. And so I know you guys are going to a slightly later patient population, but what gives you confidence that, that trial will indeed wrap up in the first half of '14?

Sure. Thanks for the question. So regarding your first question around the statistics, the studies plan to enroll 960 patients. It's a 2 to 1 randomization. We're applying an HR of 0.75, or a 25% reduction and risk of death, and for that we need about 570 or so events. We are planning an interim analysis at two-thirds of the events.

And with regards to the timing, obviously this is a sizable study, and we are planning to go out to - up to 200 sites, and enroll the study on a worldwide basis. Now the Cougar study actually enrolled rather quickly, and so we hope to replicate that within about a year or so. And what is interesting is that in this space of right now, there is not much competition in terms of other studies ongoing and we can see that on the interest of investigators who are taking great interest in participating in the COMET-1 study.

And so I mean, what would you expect for the placebo arm survival then?

What we're assuming in the placebo arm is an overall survival time in the late patient population of seven months. That was derived from - in part from the Cougar study also, where a patients was on treatment for with abiraterone for about eight months and then had an overall survival of 15 months.

Okay. Thanks. And can I ask you one question about the ASCO data, not sure how much you can share. But with respect to the NRE data that we're going to see there, can you give us any sense of additional data we're going to see beyond just bone scan response at ASCO this year?

I guess it's a little bit early at this point so we can't really comment on that.

Okay. Thanks a lot.

David Miller, of Biotech Stock Research.

In the assumptions you made for your cash guidance, can you - does this specifically assume a partner for cabozantinib, or is the partnering things you're talking about there for some of your other drugs?

Let me clarify. So our financial outlook is based on a number of assumptions, of which some but not necessarily all are expected to occur. And as I alluded in my prepared remarks, this assumption includes potential [BD] activity, milestones from existing partnerships, and potential financing activity, which could include things such as monetizing our partner pipeline or accessing the capital markets. So subset of these, but not necessarily all of these, we expect to occur.

Okay. So when you're talking about BDs, you're talking about business development for cabozantinib or are you talking about business development for some of your other drugs?

That comment refers to both. But obviously the most valuable asset that we have is cabozantinib.

All right. On the - I want to follow up on Terence's question about the placebo arm survival. Can you walk through again how you got seven months for the post-Abbey MDV population?

Let's me just clarify, it's the post-taxotere, post-Abbey or MDV, population with no restriction on other prior therapy. So it's a late line of therapy. The way we arrived at the seven months of survival, estimated survival time, is just looking at the Cougar experience, and when you look at the patient population on abiraterone, there were on a treatment for about eight months, and then the overall median overall survival was roughly 15 months. So that gives you seven months delta from end of treatment on the drug to death.

Okay. I get that. The - I just want to make sure that in the - in your powering assumptions, you said 2 to 1 randomization in H - or for COMET-1, 960 patients, 2 to 1 randomization, an HR of 0.75, 575 events, an interim at two-thirds, and what was the power percentage?

The power is 90%.

Okay. Great. Thank you very much. Those are my questions.

Ryan Martins, Lazard Capital.

Hi. I wanted to find out what are your thoughts on the updated alpharadin data that we saw at the ASCO GU meeting, and what do you think could be any kind of impact on enrollment globally and also potentially on overall survival for the 307 trial?

Regarding the alpharadin data, can't really comment any further. You've seen the data at the conference, and that is what - the extent of knowledge we have in the data. And your second question again, can you repeat that?

Just what your thoughts are on alpharadin being available and its impact on enrollment in the 307 trial and potentially the overall survival there.

I think clearly the 307 study is starting up imminently, and alpharadin is not even filed, to my knowledge. So it will take a little while. And we hope to enrolled the study quickly, and the study will be enrolled globally so the availability I think of alpharadin will not be given everywhere. And besides, the 307 study is set in a late-line of therapy so patients could have received prior alpharadin if that was the choice of the investigator. And so a subsequent therapy should not confound as much as when you conduct a study in the earlier line of therapy.

Thanks. And are you planning on requesting or have you already requested a priority review for cabo and MTC?

That would be requested at the time of filing, and then the FDA would come back after their review, their initial review within the first 45 days to indicate whether they consider this a priority review.

Thanks. And Frank, one last one for you which is, can you remind us what the debt is that is outstanding?

Yes. There's $80 million outstanding under the Silicon Valley bank term loan facility, and then there's about $91 million outstanding currently under the Deerfield note.

Okay, thanks.

(Operator Instructions) Lee Kalowski, Credit Suisse.

So just to be clear, on the enrollment timeline for COMET-1, it sounds like it hasn't changed very much. So does that mean that the full data set for MDV3100, you don't think that's going to impact the enrollment timeline for COMET-1? And then on COMET-2, in terms of data reporting out in the first half of 2014, does that mean that any pain data will wait for the OS secondary endpoint?

So regarding your question of an MDV3100 impact on COMET-1, as I described, the eligibility allows for prior treatment with MDV3100, and so shouldn't really impact our enrollment in the study. And then the second question was, sorry, with respect to?

COMET-2, in terms of whether pain - the pain endpoint would report out first, or whether that would come at the same time as the OS secondary endpoint.

We are estimating right now that they would report out about concurrently. It might come a little bit late - a little bit earlier, the pain readout, but in about that timeframe, in early 2014.

Okay. So does that mean that enrollment for that trial is going to take longer than COMET-1? Just trying to understand the timing on that, seems like it could be quicker given the size.

Yes, the size is smaller with 246 patients. But it is a different patient population, we're requiring obviously for patients to have moderate to severe pain, which is a proportion of the patients in that line of therapy, not the totality of the patients. And the study's also quite intense in that it collects very stringently pain and narcotic use, and so it puts some burden on the patients as well as sites to collect the data stringently, which is very important for a pure outcome. And for that reason, we're not going out to so many sites. We're going up to 40 sites, not 200 sites, in order to enroll the study.

Okay, thank you.

At this time there are no further questions in the queue, and I'd like to turn the call back over to Mr. Mike Morrissey.

Okay, thanks for joining us today. Appreciate your time and your feedback, and we'll look forward to seeing you all on the road. Okay, bye now.

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