Exelixis Inc (EXEL) 2013 Q4 法說會逐字稿

Good day ladies and gentlemen, and welcome to the Exelixis Inc. Q4 financial results conference call. My name is Whitley, and I'll be your operator for today. (Operator Instructions)

As a reminder this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Charles Butler, Vice President Investor Relations. Please proceed.

Thank you for joining us for the Exelixis fourth quarter full year 2013 financial results call. Joining me on today's call are Mike Morrissey, our President and CEO, Frank Karbe, our CFO, Scott Garland, our Chief Commercial Officer, and Gisela Schwab, our CMO, who will together review our corporate, financial, and development progress for the quarter and year ended December 31, 2013. They also will discuss [party] activities for 2014, and provide an update on ongoing clinical development activities for cabozantinib, and the commercialization of COMETRIQ. As a reminder we're reporting our financial results in a GAAP basis only and as usual the complete press release with our results can be accessed through our web site at Exelixis.com.

During the course of this presentation we will be making forward-looking statements regarding future events or future performance of the Company including statements about possible future developments regarding clinical, regulatory, commercial, financial, and strategic matters. Actual results -- 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, and in particular the Company's annual report on Form 10-K filed today, February 20, 2014.

These documents contain 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 the availability of data at the referenced times, risks and uncertainties related to the initiation, conduct, and result of clinical trials, the risks that unanticipated developments could adversely affect the launch, commercialization, distribution, and availability of COMETRIQ, the degree of market acceptance of and reimbursement for COMETRIQ, risks and uncertainties related to compliance with applicable regulatory requirements and market completion. With that I'll turn the call over to Mike.

Thank you Charles. And thanks to everyone for joining us on the call today. We're off to a busy start in 2014 and continue to focus on our key clinical, commercial, and financial priorities.

We have discussed previously that 2014 is a critically important year for Exelixis as we expect to achieve multiple clinical and corporate milestones that could be truly transformational if positive. Exelixis remains focused on a single mission, to provide new treatment options for patients with many diverse types of cancer including prostate cancer renal cancer, liver cancer, and others, by investigating the potential of cabozantinib as an important oncology therapy. The entire Exelixis team is working with laser-like focus coupled with a high degree of urgency and dedication to help us build a franchise around the cabozantinib opportunity. Before handing the call over to Scott, Gisela, and Frank for a review of our commercial, development, and financial highlights, I'll take a few moments to out line our status at a high level.

First, we are investigating cabozantinib and cobimetinib in six global, randomized pivotal trials. We discovered each of these compounds internally. We wholly own cabozantinib and are evaluating it in five pivotal trials for patients with prostate cancer, renal cancer, liver cancer and medullary thyroid cancer. Cobimetinib, our MEK inhibitor, is partnered with Roche Genentech. It's in the pivotal trial named coBRIM, in combination with Zelboraf in first line patients with BRAF mutation-positive metastatic melanoma.

Second, we expect top line data from four of these pivotal trials in 2014. For cabozantinib we project having overall survival or OS data from COMET-1, and pain palliation data from COMET-2 in 2014, as well as OS data from the MTC exam trial.

In addition , Roche Genentech confirmed guidance on their recent year-end 2013 call, that they expect to have top line data and first do regulatory filings for cobimetinib from the coBRIM study in 2014. Third, we continue to advance an appropriately limited commercial effort for COMETRIQ and progressive metastatic MTC while pursuing additional potentially larger commercial indications.

We remain firmly committed to getting this drug to MTC patients in need of additional therapeutic options on a global basis. We received a positive CHMP opinion for COMETRIQ and MTC in December 2013 and hope to secure EMA approval shortly. COMETRIQ EU MTC marketing and MPU activities will be coordinated by our distributor Swedish Orphan Biovitrum or Sobi, as discussed previously. The MTC commercial effort is an important first step towards building a global commercial presence. It helps us gain valuable experience as a commercial organization so we're ready to launch cabozantinib rapidly and effectively in potentially larger commercial indications if the data from our clinical trials enables us to do so.

Fourth and last, we believe we are in a solid financial position by focusing the Company's activities and operating expenses narrowly and intensely on cabozantinib. Small financing we completed in January coupled with the amendment of the Deerfield financing arrangement that gave us an option to extend its maturity until 2018, has extended our runway for the read-out of the RCC pivotal trial. So we had a productive year in 2013 and are looking forward at 2014 as a transformational year for Exelixis.

Our top priorities for 2014 include first, top line data read outs for the COMET studies. Second, working towards submitting regulatory filings assuming positive COMET data. Third, expediting the enrollment of METEOR, our second line RCC trial, as our highest enrollment priority. And fourth, initiating our commercial build out supporting the prostate cancer indication in the US and EU pending positive COMET data.

Before we go on with the rest of the call I want to welcome Jeff Hessekiel to Exelixis as EVP and General Counsel. With over a decade of corporate and commercial experience specific to the biopharma industry most of it gained in senior roles at Gilead, Jeff has the experience and background to help Exelixis navigate the opportunities and challenges that lie ahead of us as a global commercial organization.

So with that I'll turn the call over to Scott for a review of our commercial efforts in the fourth quarter. After Scott, Gisela will briefly review our cabozantinib development activities, and Frank will wrap up with our financial update. We'll then be happy to open the call for questions. Scott?

Thanks, Mike. COMETRIQ net revenues in the U.S. increased in the fourth quarter by 8% growing from $4 million to $4.3 million. Total worldwide COMETRIQ net revenues in the fourth quarter were also $4.3 million which obviously reflects USproduct sales only, with no additional product purchased by our European distributor, Sobi, in the fourth quarter. Product sales to Sobi to date have been to satisfy request for named patient use which unpredictable.

We expect Sobi to resume purchases in Q1 as the positive CHMP recommendation in December may facilitate the approval of named patient use programs in countries such as France and Italy. Full year worldwide net product revenues were $15 million. We estimate our current penetration in MTC in the U.S. to be approximately 70% to 80%, which is quite high especially for a drug that's only been on the market for about a year. Given our high penetration, we expect MTC growth in the U.S. to remain modest for 2014.

We expect additional growth going forward in MTC will come primarily from Europe. Before moving into additional details around Q4 performance it's worth taking a moment to provide some additional color commentary on the revenue growth seen in the fourth quarter. First let me provide some perspective.

We have been saying all along that MTC is a small market opportunity, and at the risk of stating the obvious, the revenue numbers we've been providing on a quarterly basis reflect that. Of course COMETRIQ is an important treatment option for progressive metastatic MTC patients and we are glad we have an opportunity to provide the drug to appropriate patients. We're talking about small numbers here.

Second, based on our current penetration estimate in the U.S. it appears we got out of the gate quickly and achieved a relatively high penetration early in our approval. As I mentioned earlier I would therefore expect growth going forward to be modest in the U.S. Finally, with a small market --- with a market this small sales will fluctuate quarterly, especially given the unpredictability of named patient use in Europe.

Overall I'm satisfied with our commercial performance in 2013 and we will continue to appropriately drive MTC sales in 2014. My team's focus has shifted towards planning for a prostate so that we are ready to launch cabozantinib rapidly and effectively if the data from our clinical studies and regulatory approval enables us to do so. Now moving back to other measures of our Q4 performance. Our brand awareness amongst target oncologists is now 90%, and overall customer satisfaction remains high for COMETRIQ.

As I mentioned during our last call, market research indicates that 90% of health care practitioners surveyed rated their impressions of COMETRIQ as either favorable or highly favorable. Close to 90% said the drug exceeded their expectations. In addition, anecdotal feedback from prescribers, particularly those with experience using other VEGF TKIs indicates that they are comfortable managing the side effects associated with COMETRIQ. In the fourth quarter we internalized our sales function and we now have 15 sales reps calling on MTC customers. The rest made over 2300 calls on physicians in the fourth quarter, with an average frequency of 2.1 calls.

Payer coverage policies remain favorable for COMETRIQ in the approved indication. Payer reaction to COMETRIQ remains positive and coverage is consistent with our labeled indication and Category-1 NCCN rating. To date payers have covered essentially all MTC scripts submitted for reimbursement. Average patient co-pay to date is approximately $44 with 96% of patients paying less than $100 out of pocket for COMETRIQ.

Recall that we offer comprehensive reimbursement support services through Exelixis access services including co-pay assistance, benefits investigation, appeals support, and referral to independent co-pay assistance charities. Moving to Europe, with the positive CHMP opinion we continue to work closely with Sobi, our distribution partner, to get ready for a potential approval in the EU. Reimbursement dossiers are nearing completion and we have had several positive interactions with national payers in some of the major countries in Europe.

Finally we made significant progress in our internal planning activities for a potential approval in CRPC. We completed a comprehensive CRPC launch plan for the U.S. including market sizing, resourcing and distribution network planning.

We also expect our first commercial hire in Europe to start in March and we have started work on a European launch plan. We will of course share the details of these plans with you when appropriate. And with that I'll turn the call over to Gisela.

Thank you, Scott. In the next few minutes I'll provide an update on the progress of the development program for cabozantinib. Our clinical and regulatory effort is intensely focused on expanding the cabozantinib opportunity across multiple indications.

As we have discussed previously, we have a broad strategy in place for evaluating the compound in a variety of indications. We use internal resources to support Phase III trials, and also work in partnership with a wide array of individual physicians and cooperative groups through our collaboration with the National Cancer Institute's cancer therapy evaluation program, or CTEP, as an investigative sponsor trial program. Our highest priority for 2014 is preparation for a data read out and potential filing for advanced metastatic castration-resistant prostate cancer. So I will start the update with our ongoing COMET trials which are our two Phase III pivotal trials in mCRPC.

As you know, COMET-1 a randomized study of cabozantinib versus prednisone, is focused on the assessment of overall survival as the primary end point. And COMET-2 a randomized study of cabozantinib versus mitoxantrone-prednisone is focused on pain response. COMET-1 reached its target involvement of 960 patients in September of 2013, and COMET-2 continues to involve patients.

Together with our CRO partner our internal team is highly focused on data retrieval. We are fully prepared for a data read out in 2014 and given suitable results we are making preparations for a potential regulatory filing. Considered together, the basic objective of the COMET studies is to evaluate whether cabozantinib demonstrates a survival benefit and improvement of pain associated with bone metastases. If this is the case, we believe this would differentiate cabozantinib from other agents used in the treatment of mCRPC.

In addition to the COMET studies we're also actively working to evaluate the suitability of cabozantinib for use in the earlier line of treatment of CRPC patients prior to chemotherapy. The first study in this setting will evaluate the combination of cabozantinib with abiraterone. This randomized Phase II study commenced in the fourth quarter of 2013. Data from a prior investigative-sposored Phase I CRPC study conducted at the Dana Farber Cancer Institute was published at AACR in 2013.

Data from that small scale study showed that cabozantinib can be given safely in combination with full dose abiraterone, and warranted additional investigation. With that data in hand, we initiated our randomized Phase II study, comparing full dose abiraterone versus cabozantinib given at three different doses of 40 milligram daily, 20 milligram daily or 20 milligram every other day, combined with full dose abiraterone. The patient population is a pre-chemotherapy population of CRPC patients with bone metastases and the primary end point is radiographic, progression-free survival.

A second trial will evaluate the combination of cabozantinib with enzalutamide and is expected to start later in 2014. The objective for this Phase I combination study is to evaluate drug [dose] interaction and resulting impact on pharmacokinetics as well as safety for different doses of cabozantinib, given in combination with full dose enzalutamide.

Regarding the evaluation of cabozantinib in other indications, we are actively working on the execution of two new Phase III pivotal trials in metastatic renal cell cancer and in hepatocellular cancer, or RCC and HCC respectively. First regarding RCC. The Phase III trial in RCC, which we call METEOR, was initiated in May 2013, and is now actively enrolling patients.

Meteor is a 650 patient randomized open label study that is comparing cabozantinib with everolimus in patients who have received and progressed on or following at least one prior VEGFR tyrosine kinase inhibitor, i.e., second or later line therapy. The primary end point is progression-free survival (inaudible -- microphone inaccessible) and the secondary end point, overall survival. We have selected the study sites and now are executing this global study with balanced accrual rated towards western Europe, North America and Australia. At the end of 2013, more than 50% of the sites had been activated, and we are now in the steep part of the curve of site activations and enrollment.

Now regarding HCC, our HCC trial is called CELESTIAL and was initiated in September 2013. It is a 760 patient study in patients who received prior sorafenib. CELESTIAL will compare overall survival between patients treated with cabozantinib and those receiving placebo. Overall survival is the accepted end point in this indication and was the end point used to support the approval of sorafenib as first line therapy in HCC.

We are very encouraged by the enthusiasm for these trials in the medical community. Both studies are off to a good start and we hope to see top line data on RCC in 2015, and on HCC in the 2016 or 2017 time frame . Now to finish, it is a pleasure to share and update on our EU filing for cabozantinib in medullary thyroid cancer. In late December 2013 the CHMP has issued a positive opinion for conditional approval of COMETRIQ for the treatment of adult patients with progressive unresectible locally advanced or metastatic MTC.

Now the application for marketing approval is with the European commission and we expect to receive a decision soon. They are very pleased with our progress towards this important milestone and the news that COMETRIQ may soon be available in the European Union for patients with this devastating disease. We are working with Swedish Orphan Biovitrum, our distribution partner in the EU, for COMETRIQ for MTC to ensure we are prepared for a launch when and if EU approval has been granted. With that I will turn the call over to Frank.

Thank you, Gisela. Let me begin with the fourth quarter and full year 2013 financial results, and then move on to our 2014 financial outlook. As usual I will focus my comments on the highlights of our financial performance refer you to our press release and today's 10-K filing for additional details.

Net revenue for the quarter was $4.3 million, which was entirely related to U.S. sales of COMETRIQ, and $31.3 million for the full year, which $15 million was related to the sale of COMETRIQ.

The gross-to-net discount amounted to 3.8% for Q4 and 4.4% for the full year. R&D expenses for the quarter were $49.6 million and $178.8 million for the full year.

Year-over-year, R&D expenses increased for both the fourth quarter as well as the full year, mainly as a result of substantially increased clinical trial expenses predominantly driven by the ramp up of COMET-1 and METEOR, our Phase III pivotal studies in CRPC and RCC respectively, as well as the start up of CELESTIAL our Phase III pivotal study in HCC. For the year the increase in costs for those trials were partially offset by lower clinical trial costs related to the continued wind-down of various Phase II studies for cabozantinib, most notably the randomized discontinuation trial, as well as the EXAM trial, our pivotal study in patients with MTC. SG&A expenses were $13.6 million for the quarter, and $51 million for the full year.

The increased year-over-year for the quarter as well as the full year was predominantly due to increased expenses in connection with the launch of COMETRIQ, which includes fees for Sobi, our European distributor, and costs in connection with our sales force. On a full year basis, higher legal, patent, and accounting charges, as well as stock-based compensation and marketing expenses also contributed to the increase as compared to 2012.

Restructuring charges decreased by $7.1 million for the quarter, by approximately $8 million for the year. Mainly driven by an impairment charge of $7.1 million in Q4 2012, in connection with having vacated one of our buildings . Total costs and expenses for the quarter were $63.9 million, and $232.1 million for the full year.

In line with our expectations and previously provided guidance. The increase year-over-year for both the quarter and the full year was driven by the higher R&D and SG&A expenses mentioned a moment ago which were partially offset by lower restructuring charges. Non-cash expenses comprised primarily of stock-based compensation and restructuring expense was approximately $16 million in 2013 as compared to $23 million in 2012. [For the] income and expense we incurred net expense of $11.3 million for the quarter, and $44.1 million for the full year. The substantial increase in expenses for the full year was as expected and highlighted in our guidance, primarily due to an increase in interest expense of $18.1 million, in connection with our convertible notes issued in August 2012.

It is important to note that $6.8 million of the interest expense for the fourth quarter and $26.3 million for the full year 2013 reflects non-cash charges . We ended 2013 with $415.9 million in cash. This does not include the approximately $76 million in net proceeds from our follow-on equity offering in January of this year.

Let me now turn to the financial outlook for 2014. 2014 is a defining year for us. As you may imagine the full year financial picture for the Company will to some degree depend on the timing and results of the various Phase III studies we expect to read out this year. With that in mind, please note that our financial guidance provided today includes no assumptions or financial contingencies concerning the outcome of these clinical trials. You can expect that we will update our guidance accordingly throughout the year.

Our expense guidance assumes ongoing broad investments in the cabozantinib development program, which is largely driven by the cost associated with five ongoing Phase III studies. Our expense guidance also includes our contribution to the profit and loss share under our collaboration with Roche Genentech on our MEK inhibitor cobimetinib. So for the full year 2014, we do not expect any significant contract and license revenue. This is for two reasons. On one hand we have fully recognized all revenues from past collaborations and we do not expect any new deals or significant milestone payments in 2014.

As for product related revenue, we will continue our prior practice of not providing revenue guidance associated with sales for COMETRIQ. We expect total costs and expenses in the range of $250 to $280 million including non-cash expenses of approximately $16 million to $18 million, which is primarily attributable to stock-based compensation expense. We further expect interest expenses of approximately $47 million, which includes non-cash charges of $28 million, related to the amortization of the debt discount on the 4.25% convertible notes as well as interest accretion of the (inaudible - background noise) And finally, we expect to end 2014 with greater than $200 million in cash.

With a year end cash balance of $416 million at the end of 2013, plus proceeds from our January equity offering of approximately $76 million, as well as with the amendment to the Deerfield financing arrangement announced in January which gives us an option to extend the maturity date by three years, we are in a strong position to continue the broad development of cabozantinib and to work towards potential build out of our commercial infrastructure. With that I will turn the call back to Mike for his closing comments.

All right thanks, Frank. I will keep my closing remarks brief today so we can get to the Q&A session. As you heard from the team today, we continue to make progress across all parts of our business, and we're vectoring towards an important set of milestones in 2014.

I want to reiterate that we have a singular focus to advance the near-term cabozantinib opportunity in metastatic prostate cancer and to expand into other important oncology indications in the short term given suitable data from our initial set of pivotal trials. Our overall goals are unchanged. To bring new therapies to patients with cancer, and to build value for investors. So we'll stop here, thank you for your time and attention and we're happy to take your questions. Operator?

(Operator Instructions). Your first question comes from the line of Eric Schmidt with Cowen and Company. Please proceed.

Thanks for taking my question and for the call today. Maybe for Gisela, would you expect much of a delay from the time the events in COMET-1 are achieved either at the interim or the final to the time at which you're able to report the outcome to Wall Street investors ?

I think as soon as we know the results and are certain about the results and (inaudible - background noise) reviewed the results and made recommendations we would come forward with the information. So there's no delay, really.

Okay. And then I assume maybe you had to provide the European regulators with an update of the MTC survival data at the time of the CHMP recommendation. Is that -- is that a fair assumption ?

Well, we have provided [exclusively] (backgound noise) to the European regulators, the same information as we have provided to the USFDA, so the filings are essentially identical . And so there is really nothing more to say about that. Any specific question?

So can you talk about what we should be seeing from ASCO if anything on that trial, or can you further narrow it down when we might see the final survival analysis?

Yes, regarding the final survival analysis, we are expecting data in 2014. So follow up on the survival event is ongoing as we speak. And regarding the filing itself, as you probably recall during the review of the file by the FDA we provided 120 day safety update, and in the context of that there was an interim analysis and that's in the documents that the FDA has published on their web site.

Okay. So no guidance on what we might at ASCO see from that -- from the MTC study, or whether we (inaudible -- background noise) at that point in time?

Eric, this is Mike. As usual, we're not going to comment on what [will be] at ASCO until abstracts have been accepted. So it's a little early for that right now. So we'll let that question go until we have more clarity on that going forward.

Okay. Fair enough. Maybe just one last one for Scott, and then I'll sign off. You had COMETRIQ treatment there for about 12 months now. I'm wondering what you learned from the MTC experience either positive or negative that you think you can now apply and learn from when it comes to potential launch in prostate. Thanks.

We've had COMETRIQ out there for about 12 months, and I would say what we've learned in general is what we thought going into it. It's a very small market opportunity. I would say we got out of the gate quickly and I feel good about our ability to execute commercially. That's been great. We've also been able to establish some things around distribution network, and also just some internal processes that I think will bode well for us if we are fortunate enough to be in a situation where launching in prostate cancer, some of that infrastructure already exists and it will help us get out of the gate very quickly right away. I would say generally that's about where we are right now. All in all I'm actually quite pleased with how we have done so far with our commercialization in MTC.

Great. Thanks a lot.

Our next question comes from the line of Joel Sendek with Stifel. Please proceed .

Hi, thanks. I have a couple questions. First, how soon will you be able to file if the COMET-1 interim data is positive? And given the fact that it would be supplemental filing, what type of turn around do you think you would likely could achieve?

Joel, it's Mike. That question and a whole host of related questions are really important ones. I think our view here is to address all those issues if and when we have positive data, and talk much more detailed and explicitly about those kinds of forward-looking events and timing. So it's a fair question. We acknowledge all of those issues are important issues but I think from our point of view we would rather focus on getting the data and then dealing with that once we have the data .

Okay. Just a housekeeping one, I was trying to listen to another call at the same time, Gisela did you say the RCC trial will read out sometime in 2015, is there any more specificity as to when that data might come?

You heard that correctly. We have guided towards 2015 for top line results for RCC and there is no specific guidance as to when in 2015, not at this time. Early in the game.

No change to your previous guidance. Okay. Thank you.

Your next question comes from the line of Ted Tenthoff with Piper Jaffray. Please proceed.

Great, thank you (inaudible) for taking my question. I guess just to round out powering assumptions, I don't think you shared it with the past but I want to ask if there's any update with respect to numbers of events and any incremental information you want to provide around powering assumptions with the interim look, and when we maybe can expect that for COMET-1.

Yes, Ted, we had spoken about the events necessary for the final analysis, which is 578 events amongst the 960 patients enrolled. And so that provides 90% power for an HR of .75 we also have spoken about the fact that we are running an interim analysis at two thirds of the events. And regarding the specific timing on that, we have -- we can't really speak to that at this time.

Okay. We look forward to the data. Can you give us any update on cobimetinib and when we can be expecting some data read outs from Roche on that one?

Again, Ted, it's Mike. All we can really say is what they said publicly and that's been pretty simple, they expect to have top line data and file in 2014, so that's their public communication and that's all we can say right now.

Okay. Thanks a lot, guys.

Thanks, Ted.

Our next question comes from the line of Corey Kasimov with JPMorgan. Please proceed.

Hi guys, this is Whitney on for Cory today. Just wondering if you can remind us of the mechanics of your Sobi agreement and how you're selling drugs to them. Is it at a discount and that's where their cut comes in, or is it strictly fee milestone based to them?

We basically sell product to them based on a transfer price, and that transfer price is consistent with the price that we have in the United States. That product that we've been selling to them so far is strictly for named patient use. We have not disclosed any other details about the arrangement that we have with them but it is a fee based arrangement primarily in that regard.

Got it. And just one COMET question. If you can comment at all whether the event rate and drop out rate are at least tracking within expectations without giving any details obviously?

Yes, it's Mike again, we're not commenting on any aspect of the ongoing pivotal trials right now.

All right. Had to try. Thanks.

Your next question comes from the line of Michael Schmidt with Leerink. Please proceed.

Thanks for taking my question. I just had one on cabozantinib and MTC. What is the average duration of therapy now commercially on the market?

Yes, so it's a bit early to get an official read on duration. As you know treatment duration is a metric that you have to measure when patients finish therapy, and because we're somewhat still early in our launch it would be premature to comment on what we're seeing in the marketplace. I think what we said in the past is what we seen in the exam trial, which was an average treatment duration of ten months.

One point I would like to make about that and actually highlights the point I made earlier around the dynamic nature of treatment duration early in your approval, when we first unblinded exam the average treatment duration for COMETRIQ was six months and at the 120 day update it had grown to ten months. And that gives you an idea of what happens when these patients are on therapy for longer start to pull that average up when you have more mature patient follow up. That's generally where we are. In terms of giving you specifics in the market right now it would be premature to do at this point.

Got it. And I guess a question on COMET-2, where are you in enrollment with that study ?

Enrollment in COMET-2 is currently ongoing, and we haven't commented on the specific numbers on any study.

Okay. Great. That's it. Great. Thanks.

Our next question comes from the line of Biren Amin with Jefferies. Please proceed.

Yes, thanks for taking my questions, guys. I guess if you could provide an update on your efforts on your efforts on (inaudible) for prostate.

We missed that. Say it again?

So I guess efforts for listing cabozantinib in NCCN guidelines for the prostate cancer indication.

Yes, this is Scott. Obviously the NCCN is an independent panel. We don't control that at all, so there isn't a whole lot more to say about the NCCN enlisting in that.

Okay. And I guess could you -- and I know you haven't -- you said that you're not commenting on COMET-1, but can you maybe share where the geographic split has been for COMET-1, the U.S. vs. ex-U. S.

Biren, again, that's a fair question. We're just not commenting on any aspect of that or any other ongoing pivotal trial.

Okay. And I guess, in your press release, Mike, you mentioned in the first bullet that with COMET-1, you had reached enrollment target of 960 patients in September, but enrollment closed in November. How should I think about that? Should I assume that you enrolled more than 960 patients in the study?

What is common is when you close enrollment or give the estimate for when the enrollment will be -- target will be reached there's always a few patients still in screening, so we certainly went over the 960 number. Again the details we will share at the appropriate time, post data

Great. Thanks for taking my questions.

Our next question comes from the line of Lee Kalowski with Credit Suisse. Please proceed.

Thank you. I guess a couple questions on MTC. In light of Sobi not making a purchase this quarter, as we think about next year and I understand you're not giving guidance but I guess conceptually how should we think about ex-US sales coming online as various countries start reimbursing, and can you confirm whether Sobi made a purchase this quarter, Q1?

I'll take the second question first. No, I can't confirm if Sobi's made a purchase in Q1. We'll provide you that information when we do the Q1 earnings call. Back to your first question around how to think about the MTC market ex-US. What we said in the past is that the market is relatively comparable in terms of patient numbers so we've been saying about 500 to 700 patients in the United States and that would be a similar number in Europe. That is for both first and second line patients.

The other thing to think about though as it relates to Europe is pricing obviously is different than the United States. We obviously not set our price for COMETRIQ in MTC but if you look across other indications with other drugs you'll see pricing discounts of upwards of 30%. That's something you'll want to think about. The other thing is it can take time for pricing reimbursement to get set in Europe. It's a much more detailed process and it can take upwards of 12 to 18 months.

The ramp will be different in Europe than it would be in the United States. And I'd just say right now the team here in the United States is obviously happy with what we've done with medullary but we're ramping up our efforts on preparing for potential launch in prostate cancer if and when we have an opportunity to do that.

Okay. And when you say in the U.S. you reached 70% to 80% penetration, can you provide any further details on what the denominator is there? Does that mean you're reaching the upper limit of potential penetration of patients in this indication in the U.S.?

Yes, it does. The denominator is basically the total market opportunity across all lines of therapy, so it's important to realize it's not a market share number and it's not specific to line of therapy so it's cumulative. And it is meant to give you an idea of what the forward-looking growth might be for the United States. I said in my prepared remarks I would expect that to be modest going forward.

Got it. And as you're preparing as you point out for the prostate cancer indication and really gearing up there as we think about the initial labeled indication, so the -- call it the COMET-1 criteria, should we be thinking about Jevtana, the market for Jevtana as the appropriate patient population for COMETRIQ in its initial indication or do you think that it could be larger and if so why do you think it would be larger than -- or where do you think the patients will be coming from who aren't going on Jevtana?

So you know as I mentioned, we have done a lot of work internally on the potential for prostate cancer including very, very detailed market sizing work. It's too early for me to comment on that. We really want to stay focused on MTC and not step into the prostate world -- share that with you until we have an opportunity to share that with you in the future. What I can say is based on the work that we've done, a there's very high medical need in prostate cancer. We know there are roughly 30,000 patients who die each year. There is plenty of room for new therapies they're Is about because patients are not getting cured with existing therapies and I cannot tell you how excited I am about the possibility of being able to compete in that market if and when we have an opportunity to do so.

Okay. Thank you, Scott .

Thank you.

Our next question comes from the line of Echo He with Maxim Group. Please proceed.

(Inaudible) Thank you so much for taking my questions. Just wonder, MTC market, could you discuss approximately how many patients are using this drug in the past quarter?

Yes, for competitive reasons we won't be providing any specifics around how many patients are on therapy. I can just reiterate what we [sold] from a revenue perspective and that was $4.3 million but I don't want to provide any specifics about number of patients at any given quarter.

Okay. I understand. My point is, like that -- I guess just given that 500 to 700 patients in the U.S. that are patient pool you give as a reference, there are approximately was, I think it's less than 50% of patients were on this drug, and you just previously said there were -- the penetration of this drug is already 70% to 80% in the market I'm just asking what was the reason, did some patients stop to use the drug earlier or -- and the doctors -- for some patients doctor did not choose to get on COMETRIQ what was the major reason the doctor did not choose?

I think I know where you're going here. Let me just reiterate a few things about the penetration market and the market size number we talked about in the past. The first thing I want to reiterate is the number of 500 to 700 is a number for both first and second line patients, and that's an important consideration particularly when you think about the fact that patients would not be treated in both lines of therapy by COMETRIQ. That would imply retreatment and we don't do that.

The second thing to think about when you're looking at that number and trying to calculate in any revenue estimates is that it is cumulative since approval, not all patients are on therapy as you would expect, so you need to think about treatment duration, particularly as you try to quarterize that. And the third thing you need to think about, and this is true with any forecast you do, and true of any oral product, is that not all patients are 100% compliant when they take oral therapies or any therapies. And so you'd want to take a look at that in terms of patients taking a drug holiday or patients skipping a dose, et cetera. So I just want to make sure you got to be really careful when you try to make conversions of penetration to revenue forecast. It's much more complicated than it might seem at face value.

Yes obviously it is. What percentage approximately -- what percent of patient data stop the treatment because of toxicity intolerability or those things?

Yes, for competitive reasons I don't want to provide it at this point. What I can point you back to is what we saw in the exam trial, which was something around 16%, 17% of patients, 16% of patients dose discontinued due to toxicity, and what we're seeing in the marketplace, I would say, is generally consistent with that.

Okay. I got you. Thank you so much. That's all.

You're welcome. Thank you.

(Operator Instructions). Your next comes from the line of Terence Flynn with Goldman Sachs. Please proceed.

Thanks for taking the question. Maybe you guys could frame for us how you see the market opportunity in kidney and liver. Obviously kidney to me seems somewhat of a commoditized market where as second line liver is more wide open there given the number of competitor failures, but maybe you could help frame for us those two opportunities. Thanks.

Yes it's Mike. As we discussed previously, the second line renal opportunity is certainly congested with a lot of either VEGF targeting molecules or mTOR inhibitors. Our view of that opportunity and those compounds is that they're roughly similar in terms of their overall activities since they're relatively similar in their clinical data and even inhibition profile against the various targets involved.

So there's not much differentiation in that space right now, and I think the -- certainly the data we've seen with cabozantinib in Phase II with all the caveats that we talked about previously, you know, in the -- in the Phase Ib2 trial for RCC small single agent non randomized, those caveats, you know we've seen potentially differentiating data in terms of PFS response rates those things in a very late line population. So our view is that if METEOR wins, if we're able to come close to the data we saw in the Phase II setting, that could represent an important advance both medically and commercially and differentiates cabozantinib in that indication from the other compounds in the mix.

So and again data speaks for itself and if the data is superior and unique and differentiating, we think we have a very good opportunity from a commercial point of view. We could market on that and be very effective. Liver as you said -- second line liver post (inaudible) on sorafenib is an area that has not seen a lot of success. There's no current standard of care to my knowledge and would be one that again a win there would be very important from the standpoint of providing patients with new options post progression on cabozantinib.

Great. Thanks a lot.

Our next question comes from the line of Michael Schmidt with Leerink. Please proceed.

I just had one on prostate cancer opportunity again. You referenced the 29,000 prostate cancer deaths per year. Do we know what percentage of those die before we see any chemotherapy and how do you think that market evolving over the next few years?

Yes, so I don't know the numbers off the top of my head that have received chemotherapy prior to dying. I know we have done a lot of work and we're actually doing some additional work around that. I guess right now I would say both -- it's premature for me to provide a lot of specifics around the market opportunity. I'm happy to do that if and when the time is appropriate.

Okay great thank you.

There are no further questions in the queue. I would now like to turn the conference over to Dr. Michael Morrissey for closing remarks.

Okay thanks again for your time and interest in Exelixis and I'll be looking forward to our next update in the future. Thank you.

Ladies and gentlemen that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.