Exelixis Inc (EXEL) 2014 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Exelixis first quarter 2014 financial results conference call. My name is Britney and I'll be your operator for today. 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, Miss Susan Hubbard, Investor Relations. Please proceed.

Thank you, Britney. And thank you all for joining us for the Exelixis first quarter 2014 financial results conference call. Joining me today are Mike Morrissey, our President and CEO; Frank Karbe, our CFO; Gisela Schwab, our Chief Medical Officer; Peter Lamb, our Chief Scientific Officer; and Scott Garland, our Chief Commercial Officer, who will together review our corporate, financial, development, and commercial progress for the quarter ended March 31st, 2014, as well as providing specifics around the priority activities for the year.

As a reminder, we're reporting our financial results on a GAAP basis only, and as usual, the complete press release with our results can be accessed through our web site at exelixis.com. During the course of this presentation, we will be making forward-looking statements regarding future events or future performances of the company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results, of course, can differ materially. We refer you to the documents on file with the Securities and Exchange Commission, and in particular, the Company's quarterly report on form 10-Q filed today.

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 the availability of data at reference times, risks and uncertainties related to the initiation, conduct, and results 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 competition. With that I'll turn the call over to Mike.

All right, thank you, Susan. And thanks to everyone for joining us on the call today. The first quarter of 2014 was a busy and productive one for Exelixis. I'll take a few minutes to review several key milestones and then turn the call over to Frank, Gisela, Peter, and Scott for a review of our financial, cabozantinib, cobimetinib, and commercial highlights. First, we achieved a key regulatory milestone during the quarter. At the end of March, the European commission approved COMETRIQ for the treatment of adult patients, with progressive unresectable, locally advanced or metastatic medullary thyroid carcinoma, or mMTC. Although this is a small commercial indication, this achievement is still notable for European patients with metastatic MTC, who are one step closer to gaining access to an important and novel treatment option. This is the constant driving force behind everything we do at Exelixis, to advance the care of patients living with cancer on a global basis.

This also marks the first European approval of an Exelixis compound, demonstrating our growing in-house capabilities to navigate regulatory pathways effectively on a global scale. This critical skill will serve us well as we advance the cabozantinib clinical development program in other tumor types and potentially its commercialization in other indications. As previously discussed, EU marketing for COMETRIQ in metastatic MTC will be coordinated by SOBI. Scott will speak to the details of that collaboration and our near-term plans shortly.

The COMET-1 study also reached an important clinical milestone at the end of Q1. The study's interim analysis was completed in March and the independent data monitoring committee, or IDMC, recommended that the study continue to the final analysis. Advancing COMET-1 to the final analysis doesn't change our confidence or plans for cabozantinib in metastatic CRPC. Exelixis as a whole and specifically our COMET development team continue to do their work with great urgency and focus. We anticipate achieving the events required to conduct the final analysis in 2014. We will be prepared to move quickly and decisively once we have that final data in hand.

Beyond COMET-1, the COMET-2 study evaluating cabozantinib and pain palliation is another important part of the story that will add significantly to our understanding of the drug's potential utility for patients with metastatic CRPC. Looking at COMET-1 and COMET-2 together, we expect, if results are positive, that the data will clearly differentiate cabozantinib from other agents in prostate cancer. We expect top-line results from both Phase 3 pivotal studies in 2014 and we are taking action now to be ready to advance our global regulatory filing plans expeditiously. Gisela will provide more color on the COMET program as part of her development update.

Before I close my intro I would like to share a few thoughts about promising developments in the cobimetinib program. As you know, cobimetinib is a selective MEK inhibitor, discovered at Exelixis and being developed by our partner Roche/Genentech. In the pivotal coBRIM clinical trial, cobimetinib is being studied in combination with vemurafenib in first line BRAF-mutant positive, metastatic melanoma. Based on information provided during their recent earnings call, Roche continues to expect top-line data in 2014. They also announced that data updates from the Phase 1b BRIM-7 study will be presented at two oncology conferences over the next month.

We're pleased with the progress being made in the development of this promising new agent. Peter will provide more details about the cobimetinib program, and the general competitive landscape in this area later in the call. So with that I'll turn the call over to the team for more detailed updates on our progress over the quarter. I will return at the end of our prepared remarks to sum up and close the session by reviewing our top priorities for 2014. So, Frank is up first to review our financial results for the quarter.

Thanks, Mike. As usual, I will focus my comments on the highlights of our financial performance in the quarter and refer you to our press release and today's 10-Q filing for additional details. Net revenue for the quarter was $4.9 million, which was entirely related to the sale of COMETRIQ. The decrease of $4.8 million as compared to Q1 2013 was due to contract and license revenue of $7.8 million in Q1 of last year. Net revenue from the sale of COMETRIQ year-over-year, in fact, increased by $3 million, reflecting that COMETRIQ had only been launched at the end of January last year. R&D expenses for the quarter were $54.8 million.

The increase of $22.1 million as compared to Q1 last year, is predominantly attributable to increases in clinical trial-related expenses by approximately $18 million. About 70% of this increase relates to METEOR, our Phase 3 study in RCC. These increases are driven predominantly by two factors: one, a significant increase in activity for the study - remember that we only began enrolling patients in Q3 of 2013 - and two, the inclusion of approximately $7.5 million in expenses for the purchase of comparator drug. The remaining increase in clinical trial expenses relates mainly to the progress of our other Phase 3 studies, namely, the two COMETs and CELESTIAL, as well as increases in CMC related expenses. The remainder of the increase in R&D expenses for the most part reflects higher personnel expenses, which were also associated with supporting our various Phase 3 studies.

SG&A expenses were $14.7 million for the quarter. The increase of $4.1 million as compared to Q1 last year was mainly driven by higher personnel expenses, primarily due to the expansion of our sales force, higher stock-based compensation expense, as well as an increase in expenses for cobimetinib and our collaboration agreement with Roche/Genentech.

Total costs and expenses for the quarter were $69.9 million, an increase of $26.2 million as compared to the first quarter last year, reflects the increase in SG&A expenses mentioned a moment ago. Other income and expense, we incurred a net expense of $9.6 million for the quarter. The decrease of about $1.1 million as compared to Q1 2013 mainly reflects a gain associated with a mark-to-market evaluation of the new Deerfield Warrants issued in Q1 of this year. As in previous quarters, I would like to note that $7 million of the interest expense incurred in the first quarter reflects non-cash charges. Regarding our cash position, we ended the quarter with approximately $408 million in cash. This cash balance includes net proceeds of approximately $76 million, from our stock offering in Q1 of this year.

It is also worth noting that in addition to funding our normal operating activities in Q1, we satisfied the second and final $10 million mandatory early debt repayment under our Deerfield notes and we purchased comparator drug for METEOR, our Phase 3 study in RCC of approximately $7.5 million. I'll comment briefly on our financial outlook, by saying our financial guidance for full-year 2014 remains unchanged. We continue to expect total cost and expenses in the range of $250 million to $280 million. And we anticipate to end the year with greater than $200 million in cash. Our outlook for the length of our financial run rate also has not changed and we continue to be confident that our runway extends through the readout of the METEOR trial in RCC.

Finally, Mike touched upon the promising development in the cobimetinib program and so we thought it would be helpful to explain again how we deal with Roche/Genentech on this compound. In the U.S., we have a profit share arrangement that has multiple tiers. We're entitled to 50% of profits from the first $200 million of U.S. actual sales, decreasing to 30% of profits from U.S. actual sales in excess of $400 million. For ex-U. S. net sales, we're entitled to low double digit royalties. Let me also remind you that as part of this worldwide collaboration agreement, Exelixis exercised its option to co-promote cobimetinib with Genentech in December of 2013, entitling us to field up to 25% of the U.S. sales force. Finally, Exelixis does not pay any expenses associated with the ongoing or future development of this compound. With that I'll pass the call onto Gisela for development update.

Thank you, Frank. In the next few minutes I will 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've 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 3 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 Programs, or CTEP, and an Investigator-Sponsored 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 3 pivotal trials in mCRPC. As you know, COMET-1, a randomized study of cabozantinib versus prednisone, is focused on assessment of overall survival as the primary end point. And COMET-2, a randomized study of cabozantinib versus mitoxantrone and prednisone is focused on pain response. COMET-1 reached its involvement target of 960 patients in September of 2013 and COMET-2 continues to enroll patients in the United States, the UK, Ireland, and Australia.

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 objective is achieved and we believe this would differentiate cabozantinib from other agents used in the treatment of mCRPC.

As Mike mentioned earlier, in March the Independent Monitoring Committee or IDMC for COMET-1 has conducted the planned interim overall survival analysis for this study, after 386 events have been reached. The IDMC has the following options at this interim analysis: They could have stopped the study for efficacy of pre-specified parameters had been met; they could have stopped the study or recommended modifications if there had been safety concerns; or they could recommend that the study continue unchanged. As is the case with most interim analyses, the COMET-1 IDMC recommended that the study continue to the final analysis without modifications. And as is customary, the IDMC did not share any data with us and the study remains blinded. The final analysis requires 578 events. Together with our CRO partner, our internal team continues to be highly focused on data retrieval and we are fully prepared for a data read out in 2014. In the meantime, we are making all of the preparations for potential regulatory filings, provided we obtain suitable results from the final analysis.

We are looking forward to the final analysis, given the previously presented extensive Phase 2 experience with cabozantinib in CRPC that had shown activity in this disease. Let me just remind you briefly of the Phase 2 experience for cabozantinib in CRPC: The non-randomized expansion cohort has evaluated 144 patients, who have all previously received and progressed on docetaxel, and the majority of whom who had also received additional prior systemic therapy. Therefore, this was a patient population similar to the one involved in COMET-1. In this advanced patient population, we observed a median overall survival of 10.8 months.

Additionally, clinically meaningful pain relief was reported in 57% of evaluable patients, reduction or discontinuation of narcotic analgesics in 55%, warm skin response in 63%, and a reduction in measurable disease in 80% of evaluable patients. The most common grade three or four adverse events were fatigue and hypertension. So in summary, there was evidence of clinically meaningful activity that provided the support for further evaluation of cabozantinib in the ongoing Phase 3 program, including COMET-1 and COMET-2.

Also it is important to remember that there are important examples of larger randomized pivotal studies in CRPC, where a statistically significant and clinically meaningful improvement in overall survival was observed at the final analysis although the trial did not meet the primary endpoint at the interim analysis. The recent historical data in mCRPC is clear in this regard and provides some context for COMET-1. After six pivotal trials that generated positive and statistically significant overall survival data in mCRPC, but ultimately resulted in regulatory approval, only three of them met the primary end point at the interim analysis, including COU-301 for abiraterone, AFFIRM for enzalutamide, and ALSYMPCA with Radium 223. The others, including the TAX-327 study with docetaxel, the IMPACT study with Sipuleucel-T, and the TROPIC study with cabazitaxel were shown to have a significant and clinically meaningful overall survival benefit at the final analysis and each represented an important clinical advance that led to regulatory approval in mCRPC.

Now turning to other important ongoing trials for cabozantinib. In addition to the COMET studies, we are also actively working to evaluate the suitability of cabozantinib for use in the earlier line of treatment of CRPC patients prior to chemotherapy and in our Phase 3 studies in advanced hepatocellular cancer and metastatic renal cell cancer. All of these studies are making good progress.

The randomized Phase 2 study evaluating different doses of cabozantinib in combination with full dose abiraterone in CRPC patients prior to chemotherapy commenced in the fourth quarter of 2013 and is well underway. The Phase 3 study in hepatocellular cancer called CELESTIAL is a 760-patient study in patients who have received prior sorafenib. CELESTIAL will compare overall survival between patients treated with cabozantinib and those receiving placebo. This study is actively involving patients on multiple continents.

And our Phase 3 study in renal cell cancer, which we call 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 endpoint is progression-free survival and the secondary endpoint overall survival. This global study with balanced accrual weighted towards Western Europe, North America and Australia is making very good progress. We now have nearly 90% of the sites activated and we are in the steep part of the curve for enrollment, as a critical mass of sites are contributing to enrollment. The encouraging early phase data with cabozantinib in RCC, the design of the Phase 3 study comparing cabozantinib with an active comparator (everolimus) and the limited number of active competitive studies in the second or later line space in RCC have resulted in a high level of interest in this study.

We are encouraged by the enthusiasm for these trials in the medical community and the progress made today. Both Phase 3 studies are off to a good start and we hope to see top-line data in RCC in 2015 and HCC in 2016 and 2017 timeframe, following the COMET-1 and COMET-2 top-line data that are expected in 2014.

Now to finish, it is a great pleasure to share that on March 21st, 2014, the European Commission has granted conditional marketing approval of COMETRIQ for the treatment of adult patients with progressive, unresectable, locally advanced or metastatic MTC. This followed the CHMP's recommendation for approval. Additionally, the European Commission also followed the Orphan Drugs Commission's recommendation to maintain orphan drug status for COMETRIQ in MTC in Europe. We are very pleased with achieving this important milestone and the news that COMETRIQ will now become available in the EU for patients with this devastating disease.

And lastly, a quick update on planned presentations at this year's ASCO meeting. For ASCO 2014, investigators have received notifications of acceptance for a total of nine presentations that span trials and progress presentations for our ongoing RCC and HCC Phase 3 studies, and there are presentations for studies from our very active IST and CTEP programs. With this I'll turn the call over to Peter to discuss the progress made with cobimetinib--

Thank you, Gisela. I'll provide a brief update on the landscape for the combination of RAF and MEK inhibitors in metastatic melanoma, since there have been interesting new developments regarding the GSK program, and there are upcoming presentations scheduled of data from the BRIM-7 trial of cobimetinib and vemurafenib. Of note, Novartis recently announced their intent to acquire the GSK RAF and MEK inhibitors as part of a larger deal involving GSK marketed and late-stage oncology assets. I will, however, still refer to them as GSK compounds for the rest of my comments.

First, with respect to the GSK program, in January of this year, GSK received accelerated approval for the combination of the RAF inhibitor dabrafenib, and the MEK inhibitor trametinib for the treatment of patients with unresectable or metastatic melanoma with a BRAF V600 E or K mutation. Both dabrafenib and trametinib have previously been approved as single agents in the same patient population based on the results of randomized Phase 3 trials where they demonstrated superiority to chemotherapy. The accelerated approval for the combination was based on Phase 1/2 data that included a comparison of dabrafenib-trametinib with dabrafenib alone. I wouldn't step through the data supporting the accelerated approval, but it is provided on the accompanying slide for your reference.

In March, GSK released the top-line data from a confirmatory randomized double-blinded Phase 3 trial comparing the combination of dabrafenib-trametinib to dabrafenib alone in the same patient population. The Independent Review Committee audited data showed a progression-free survival for the combination of 10.1 months versus 9.5 months for dabrafenib alone, and an overall response rate of 61% for the combination versus 47% for dabrafenib alone. The modest benefit for the combination seen in this study, prompted GSK to issue a "Dear Health Care Professional" letter alerting physicians to these findings. We look forward to seeing more detailed data from this trial at ASCO, which will enable us to better gauge the competitive situation in this rapidly evolving area.

I'll turn now to the cobimetinib development program and specifically to the BRIM-7 trial. As a reminder, the BRIM-7 Phase 1b dose escalation study was designed to evaluate the safety and tolerability of cobimetinib in combination of vemurafenib in patients with advanced BRAF mutated melanoma. Cohorts that met the protocol-specified criteria for maximum tolerated dose were expanded and included both BRAF inhibitor-naive and vemurafenib-progressing patients.

The presentation at the European Society of Medical Oncology Congress last fall of an earlier cut of the data from BRIM-7 demonstrated that while the study was not designed to measure efficacy, the results showed an overall response rate of 85% in the BRAF-inhibitor naive patients, with a median progression free survival that had not yet been reached with a median follow up of 10 months. Updated data will be published as part of an ASCO abstract that describes metabolic tumor responses to cobimetinib-vemurafenib as assessed by FDG-PET in the BRIM-7 trial. The abstract has been accepted for an oral presentation, which is scheduled for June 2nd. Note also that an update on the BRIM-7 trial is on the program at the European Association of Dermato-Oncology in Vilnius on May 7th.

Moving onto the Phase 3 trial. Just a quick reminder about the status of coBRIM. CoBRIM is the randomized, double-blinded Phase 3 study of cobimetanib and vemurafenib versus vemurafenib alone in previously untreated BRAF V600 mutation positive patients with unresectable locally advanced or metastatic melanoma. Roche/Genentech have indicated that the trial is fully enrolled and that the top-line data are expected to be available this year.

Cobimetinib is the subject of five additional combination studies driven and funded by Genentech. We are pleased with the Roche/Genentech commitment to this program and look forward to sharing additional data with you as the compound continues to progress. I'll now turn the call over to Scott, who will wrap up with an update on our commercial progress.

Thanks, Peter. It's been over a year since COMETRIQ was first launched commercially and we're pleased with the acceptance of the product in the U.S. As we've said consistently in the past, MTC is a small market opportunity, and our commercial infrastructure is scaled appropriately with the size of the market. Small scale aside, we've been able to make meaningful traction in driving the uptake of COMETRIQ in the approved indication, and the launch has been extremely valuable for Exelixis in order to gain commercialization expertise in a relatively low cost, low-risk environment. This expertise will be invaluable in terms of helping us ramp up our commercial organization quickly and efficiently should COMETRIQ be approved for additional larger indications.

In addition to providing the usual revenue numbers today, I'll be sharing some interesting insights on treatment duration. While treatment duration is still an evolving metric, given where we are in our launch, we now have now over a year's worth of data on the market that we can analyze. I'll share that data with you in a moment. But first, let me cover the revenue numbers.

As you heard from Frank, total net COMETRIQ revenues were $4.9 million for Q1, representing a 14% increase compared to Q4 of last year. Similar to last quarter, essentially all of COMETRIQ sales came from the U.S., net COMETRIQ sales in the U.S. were $4.8 million, representing an 11% increase compared to Q4 of 2013. U.S. revenues were positively impacted by increases in treated patients and treatment duration.

Let me spend a few minutes now focusing on treatment duration. What one typically sees in a new oncology drug launch, and what was true for COMETRIQ is that a "bolus" of prevalent patients started COMETRIQ right after approval. These patients are typically sicker than average and do not stay on drug for very long. It takes a few quarters for the patient kinetics to begin to normalize and what you start to see is average treatment duration ramp up. This happens for two reasons: one is that sicker, bolus patients begin to drop off therapy, and two, because the cohort of patients that will be on drug for a long time, a group I'll call "long duration patients," begin to pull the average up. The "long duration patients" form an important stable patient base for us to continue to grow revenues. In fact, a key focus for us has and will continue to be identifying appropriate first line MTC patients, because these patients typically stay on drugs for longer periods of time. Another point that's worth mentioning is that these long duration patients show that, through effective dose modifications and adequate [AE] management, some MTC patients can remain on COMETRIQ for relatively long periods of time.

Today, average treatment duration for MTC patients currently taking COMETRIQ is approximately 7.5 months and continues to climb month-over-month. About a quarter of these patients have been on drug for a year or longer. This is generally consistent with what we saw in our clinical studies. In EXAM, 37% of patients were on drug for over a year. In the original Phase 1, 22% were on drug for two years, and 11% of MTC patients were treated for five years. Of the 11 patients in our Phase 1 that were progression free for at least two years, 45% remain on treatment for a median of 4.5 years. When comparing the clinical data to use in the real world, it's important to note that duration is often longer in clinical studies because patients are monitored more closely.

Moving to Europe, now that we have EMA approval, we're busy working with SOBI, our distribution partner, to launch COMETRIQ in the EU. We're finalizing reimbursement dossiers and will begin submitting them to country reimbursement authorities shortly. Securing pricing and reimbursement in Europe can be a time-consuming process and we therefore expect SOBI to purchase a small amount of commercial product in May. We look forward to updating you on SOBI's progress in rolling out COMETRIQ in the EU and their purchasing activities over the course of the year.

Finally, we've begun to meet with Genentech to discuss the potential co-promotion of cobimetinib if approved. It's still too early to comment on specifics, but I can say that the conversations are encouraging. The opportunity to have a second oncology product to promote is an exciting one and not common for a company of our size. Having worked at Genentech for close to ten years, I feel confident that our co-promote relationship will be a positive one. As always, we'll provide more specifics on the commercialization of cobimetinib when appropriate. Now let me turn the call back over to Mike.

All right. Thanks, Scott. I'll keep my closing remarks brief so we can get to your questions. As you heard from the team today, progress continues in all fronts. And we're on the critical path towards a very important set of milestones in 2014. I'll conclude by reiterating our top priorities for 2014. First, top-line data read outs for both the COMET-1 and COMET-2 studies. Second, working towards submitting regulatory filings assuming positive COMET data. Third, expediting enrollment for METEOR in second-line RCC as our highest enrollment priority. And, fourth, planning our commercial build-out supporting the prostate cancer indications in the U.S. and Europe, pending positive COMET data.

In addition, we look forward to the Roche/Genentech release of the updated cobimetinib Phase 1b data from patients with advanced BRAF mutated melanoma at the EADO and ASCO conferences this quarter and to the Phase 3 readout later this year. Collectively and individually, we remain committed to our overall goals to bring new therapies to patients with cancer and build value for our shareholders. I'll end here with a note of sincere thanks to all of our great employees for their superb talents, efforts and commitment in helping us meet our key goals and priorities. So we'll stop here and be happy to take your questions. Operator?

Thank you. (Operator Instructions) And your first in question comes from Ted Tenthoff with Piper Jaffray. Please proceed.

Great. Thank you. Can you hear me okay?

We sure can, Ted. Thanks.

Excellent. Thanks so much for the update. And congrats for European approval. Can you give us a sense and just remind us, with respect to update on timing of COMET, did the interim look come any earlier than internal projections or was that on track with what you were thinking? And what is your updated or continued guidance for COMET-1 overall survival, timing? Then I have a quick follow-up question on cobimetinib if I may.

Sure. The interim analysis, as the final analysis of both event-driven analyses and the interim analyses occurred about at the time that we projected it would occur. And regarding the timing for the final analysis, we continue to expect that to occur in 2014.

Okay. And can you speak to the toxicity profile that's been seen with the Genentech combo of MEK BRAF? How have your -- how have your guys' combo looked so far?

Oh, yeah. This is Peter, Ted. So, yes, it was some data presented on this at the ESMO meeting last fall, where the adverse events from the BRIM-7 trial were first presented. I would say the overall toxicity profile was I would say as expected, based both on the individual toxicity profiles of the compounds and what would be expected for the class in general. The major toxicities seen, or the major -- most prevalent adverse events were things like rash, diarrhea, nausea, photo-sensitivity, for example. So that's an outline of the toxicity profile that's been seen to date.

Well, looking forward to the data at ASCO and then the readouts later this year.

Thank you, Ted.

And your next question comes from Eric Schmidt with Cowen and Company. Please proceed.

Thanks for taking my questions. I'm sorry if I missed it, but I didn't hear any mention of the exam MTC overall survival update this year?

Oh, yes. Eric, we are expecting that to occur in 2014. Again this is an event-driven analysis. And we're tracking events and we'll communicate data as soon as we have the analysis.

Okay. Thanks. And is there any way you would disclose the amount of alpha you spent on the interim analysis, so we can get a sense of how statistically significant the P-value on COMET-1 needs to be at the final analysis?

Right. So we employed, as many people do, a commonly used alpha spending function in the trial that [perceives] spending very little amount of P or the overall P that's available for the analysis, reserving the vast majority of the P for the -- of the alpha for the final analysis. So the interim analysis does not negatively affect or impair the final analysis.

Can you quantify that, Gisela?

We haven't done that, no.

Mike, I guess I was intrigued by your statement that the -- the fact that COMET-1 preceded at the interim to the final analysis doesn't change Exelixis' confidence in the ultimate outcome of the study. Obviously the market feels differently. A little bit of disconnect here. Can you just give us your reasons why you think that nothing has changed?

Just to be clear I think you might have misheard me.

Okay.

What I said was confidence in the compound, in our plans for the compound. We've provided no -- obviously no guidance on the outcome of a pivotal trial that is ongoing. That being said, our confidence in the compound is -- remains to be strong. I think we've got a very intriguing data set in prostate cancer, in renal cancer, in liver cancer, across a variety of other tumor types in Phase 2. And obviously that needs to be confirmed in Phase 3. And that's what the plan is with the broad program that's ongoing right now, with the compound in had five pivotal trials. So we need data. And we've been very clear about that. I think we've communicated in a very consistent and conservative fashion. And that will continue going forward.

Okay sorry if I misparaphrased. Let me probe on a somewhat related topic then. When you provided the interim analyses of the six successful pivotal studies in prostate cancer, those studies all have somewhat different designs for the interims. I can see in the three or four that hit, the three that hit have different interim criteria. Can you talk about which of those other trials COMET-1 has been the most similar to, or which would be the most relevant comparison and why?

Well, I think it's difficult to make inter trial comparisons, because these studies enroll somewhat different patient populations. And COMET-1, as you know, is enrolling a patient population that has received and failed prior docetaxel and abiraterone and/or enzalutimide, so it's a different population from the other studies. In terms of the design, I think it is fair to say that the study is fully powered at 90% for the final analysis. And for an HR (inaudible) and I think with 578 events that is a completely powered analysis. And as I said earlier on, the interim analysis takes away very little of the alpha for the final analysis. So I think we feel this study is appropriately designed and we look forward to the results, in particular given the Phase 2 results that I referred to (inaudible) prior remarks.

Okay. Maybe last question on -- switching topics to the METEOR trial in renal cell carcinoma. Sounds like enrollment is moving ahead fairly rapidly there. What's the next announceable event that you just completed the enrollment?

Yes. I think that would be the next announceable event. Correct.

And you're not going to speculate on when that might happen yet?

No. Not at this time. No.

Okay. Thanks a lot.

And your next question come from the line of Joel Sendek with Stifel. Pease proceed.

Thanks. I'm on the COMET trials. I'm wondering what you guys might have done to guard against protocol violators in the control arm, obviously to avoid the possibility that they might have taken active at some point to increase the survival in that arm. Can you give us any cover that didn't happen or what you did to prevent that from happening?

Yes. I think number one, there's a number of mechanisms in place to ensure adherence to a trial protocol. And obviously the trial protocol and the investigators commit to executing this study in accordance with the trial protocol. There's monitoring ongoing on a very regular basis. And we look at the information emerging from the study. So that would be picked up. And if new anti-cancer therapies started, that would be a reason to discontinue patients from the study. So that's not allowed. And maybe most importantly, the study is a blinded study, so patients and physicians cannot be sure what drug they're on, so they could be on cabozantinib or on prednisone. Does that help?

Yes. Okay. And then on cobi, I'm wondering what the -- if you guys had any insight on the GSK compound and whether its -- or the combination, what kind of penetrance the combination has relative to the single agent at all at this point?

It's Mike. We don't right now have that level of visibility into the market dynamics. That may or may not change over time. But right now can't really help you there.

Okay. And the last question, Frank. Can you give us some sense of the amount of licensing revenue you'll have for the year?

You mean for 2014?

Yes.

Zero. We've guided at the beginning of the year when we provided -- and at the end of the last year, we said already we have burnt through all of the deferred revenue from our past collaborations. Unless we hit some milestones or enter into new collaborations, our revenue will be made up exclusively from the sale of product.

Okay. I must have missed that. All right. Thank you.

Hi, this is Whitney on for Cory today. Quick question on METEOR and CELESTIAL. Are there interim looks in those trials? If so, is the timing you're giving for top line for the interim or the final?

The general timing that I've mentioned is for the final analysis of the primary end point of studies respectively. And remember for METEOR that's PFS, progression-free survival, and for CELESTIAL, that's overall survival. And whether or not -- to your first question, whether there's interim analyses built in CELESTIAL - yes, there's interim analyses built in.

Got it. And then moving over to the EU, and SOBI deal; in terms of how we should be modeling revenue from that or the flow of revenues. Could you remind us of the structure of that deal?

Yes, the deal itself is actually based on Exelixis paying SOBI's certain fees for their commercialization activities. Ex-U. S. we actually booked the revenues. We've said all along that MTC is small both in the U.S. and in Europe. And I think the one caveat I would make to Europe, which I have said on several calls, it just takes longer to secure reimbursement. That can give you a general idea of the revenue kinetics for the European market.

The only thing I would add is that for Europe, we recognize revenue on a selling basis, while in the U.S., we recognize based on the sell-through method.

Got it. Thanks for taking the questions.

Thank you, Whitney.

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

Yes, thanks for taking my question. I was wondering if the company still plans on initiating the expanded combo trial later this year? And if so, do you plan to wait for the COMET-1 readout before initiating this study? Thanks.

Yes. We are working on the protocol and it's final or near final for that combination trial. And we are planning on initiating startup activities later this year. Yes.

Would that occur before or after the COMET-1 readout?

I can't really comment on that right now. We are anticipating for this activity to occur in the quarter three/quarter four timeframe.

Great. Thank you.

And your next question comes from the line of Richard Resnick with William Blair & Company. Please proceed.

Hi guys. Rich Resnick for John Sonnier. A lot of questions that have been answered. Maybe one for the potential for cabozantinib in liver cancer. There's obviously been a lot of new enthusiasm about the potential for new treatments in hepatitis C, which is a cause of liver cancer. I thought maybe you could share some thoughts on how you view this might impact the market opportunity for cabozantinib in liver cancer. Thanks.

So hepatitis C is one of the main reasons for patients to develop ultimately a liver cancer besides hepatitis B and other things like alcohol consumption. And as you know, the course of disease is a very protracted one in the development of HCC out of HCV can extend over 20 years. So the impact of an improved therapy of hepatitis C is going to affect that, the prevalence, if you will of liver cancer over time we hope. But it will take quite a long time.

Okay. Great. Thanks.

(Operator Instructions) And your next question comes from the line of Michael Schmidt with Leerink Partners. Please proceed.

Hi, good evening. Are you still planning to initiate the RET positive non-small cell lung cancer study this year?

Yes. This study is also fully developed and we are anticipating for these start-up activities to occur in the second half.

Okay. And do you expect any meaningful news flow from any of the out-licensed products or programs?

Yes, Michael. It's Mike. I would stay focused in that regard on cobimetinib as the leading compound that we have out-licensed. The others in some shape, manner or form are moving. But I don't think we're expecting a lot of news for any of those compounds in 2014.

Okay. Great. Thank you.

At this time there are no further questions. I will turn the call over to today's host, Susan Hubbard. Miss Hubbard?

Thank you, Britney. Thank you all for joining us today. This is all the time we have now for questions so we welcome your follow-up calls with any additional questions you may have that we were unable to address in today's call.

Ladies and gentlemen, that concludes the presentation for today's conference. You may now all disconnect and have a wonderful day.