Exelixis Inc (EXEL) 2014 Q2 法說會逐字稿

Presentation

Good day, ladies and gentlemen, and welcome to the Exelixis (inaudible) second quarter 2014 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 call over to your host for today, Ms. Susan Hubbard, Investor Relations. Please proceed.

Thank you, Whitley, and thank you all for joining us for the Exelixis second quarter 2014 financial results conference call.

Joining me on today's call are Mike Morrissey, our President and Chief Executive Officer; Scott Garland, our Chief Commercial Officer; Debbie Burke; our Interim Chief Financial Officer; and Gisela Schwab, our Chief Medical Officer, who together will review our corporate, commercial, financial and development progress for quarter ended June 30, 2013, as well as providing specifics around the priority activities for 2014. Peter Lamb, our Chief Scientific Officer, is also with us and will participate in the question-and-answer session of the call.

As a reminder, we are reporting our financial results on a GAAP basis only, and as usual, the complete press release with our results can be accessed through our website at exelixis.com.

During the course of this presentation, we will be making forward-looking statements regarding future events or the future performance of the Company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results, of course, could differ materially.

We refer you to the documents Exelixis files from time to time 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 without limitation the availability of data at referenced times, risks and uncertainties related to the initiation, conduct and results of clinical trials, risks relating to the commercialization of COMETRIQ, risks and uncertainties related to regulatory approval processes and the compliance with applicable regulatory requirements, the sufficiency of Exelixis capital and other resources, 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. We had a busy second quarter, and I'll take a few minutes to review several key topics before turning the call over to Scott, Debbie and Gisela for a review of our commercial, financial and development highlights.

First, our cabozantinib development activities continued to advance, and we expect several important milestones in the second half of 2014, including top line results for the COMET studies, overall survival data from EXAM for MTC, and completion of enrollment in the METEOR study in second-line RCC in anticipation of top line results in 2015.

Gisela will provide additional color on these and other studies in her development update. I'll emphasize here that our main goal with the COMET studies is to generate data which, if positive, will clearly differentiate cabozantinib from other agents in prostate cancer.

Second, we saw a solid increase in COMETRIQ revenue for Q2 2014 over that seen in Q1 2014. While the absolute numbers are still small, reflecting the limited number of MTC patients in need of therapy, we're encouraged with the good quarter over quarter growth.

Scott will update you next on the evolving treatment patterns we've observed this quarter, and share our thoughts about next steps in the MTC marketplace.

Finally, we're pleased with the announcement of positive top line data from the coBRIM pivotal trial with cobimetinib, a selective MEK inhibitor discovered at Exelixis and being developed by our partner, Roche/Genentech.

As you saw 2 weeks ago, the coBRIM trial met its primary endpoint of demonstrating an improvement in progression-free survival for the combination of cobimetinib plus vemurafinib as compared to vemurafinib alone.

Based on information provided during their recent earnings call, Roche expects the results from this trial to be presented at ESMO in September. We are pleased with the progress being made in the development of this promising new agent, and look forward to sharing additional information with you as it becomes available from our partner.

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 to sum up and close the session by reviewing our top priorities for 2014.

So, with that, I'll turn the call over to Scott.

Thanks, Mike. Total net COMETRIQ revenues were $6.6 million for the quarter, an increase of 34% compared to Q1 of this year. Net sales in the US were $6.1 million, representing a 27% increase over the prior quarter. Sales growth in the US was driven by increases in treated patients and treatment duration.

Focusing first on treatment duration, this quarter average treatment duration for active MTC patients was approximately 8 months. About a third of these patients have now been on drug for a year or longer.

We believe that the continued increases in treatment duration we've seen quarter over quarter reflect a growing level of comfort amongst prescribing physicians in managing the side effect profile associated with COMETRIQ.

Our market research supports this point. Close to 90% of surveyed oncologists that have prescribed COMETRIQ report favorable impressions of the drug, and 80% rated their experience with COMETRIQ as more favorable than that with other TKIs.

Furthermore, our latest duration numbers continue to indicate that some MTC patients can stay on drug for relatively long periods of time. In fact, we have several patients that have remained on COMETRIQ since launch.

In addition to seeing a lengthening of treatment duration, we have also seen a solid increase in the number of new MTC patients treated this quarter, as measured by new MTC cartons shipped. We believe this growth was driven by increasing traction made by our sales and marketing team in the second quarter.

Recall, we expanded the sales force from 5 to 15 reps at the end of last year, and they have now collectively been in the field for more than 6 months. These reps made close to 2,000 calls on customers this quarter.

Moving to Europe, our distribution partner Sobi continues to make progress on the commercialization of COMETRIQ in the EU. Sobi's obtained reimbursement coverage for COMETRIQ via the Cancer Drugs Fund in the UK, and began commercialization activities there. In addition, they're in the process of negotiating pricing and securing reimbursement in other European countries.

As I've said on other calls, securing pricing and reimbursement across Europe can be a lengthy process, and consequently we expect ramp-of sales in Europe to be slower than that of the United States.

Finally, our preparation for the potential co-promotion of cobimetinib with Genentech continues to progress nicely. As you know, the melanoma marketplace is becoming increasing dynamic, and we're excited about the possibility of having a product to co-promote in that space. We will, of course, provide more specifics on the commercialization of cobemetinib when appropriate, and as more details become available from Roche/Genentech.

Now let me turn the call over to Debbie.

Thank you, Scott. I'm pleased to provide you with the highlights of our financial performance for the second quarter of 2014. I refer you to our press release and today's 10-Q filing for additional details.

Net revenue for the quarter was $6.6 million, consisting entirely of product revenue from the sale of COMETRIQ. This is an increase of $2.5 million in product revenue over the same period last year.

Net revenue in Q2 2013 included $7.8 million of contract and license revenue from collaborations which were fully recognized in 2013.

R&D expenses for the quarter were $51 million, reflecting a slight increase of $1.9 million over Q2 last year. This increase is primarily due to personnel-related expenses to support our five phase 3 pivotal trials.

SG&A expenses were $16.5 million for the quarter. The increase of $3.3 million as compared to Q2 last year was mainly driven by higher personnel expenses, mostly related to the expansion of our US sales force.

The remaining increases relate to stock-based compensation and marketing expenses, including an increase in expenses for cobimetinib under our collaboration with Roche/Genentech. Total operating expenses for the quarter were $68.3 million. The increase of $5.1 million as compared to Q2 last year reflects the increases in R&D and SG&A expansion -- expenses I mentioned a moment ago.

For other income and expenses we incurred a net expense of $11.7 million compared to $10.9 million in Q2 last year. Included in the 2014 amount is $7.3 million of non-cash interest expense related to the accretion of discounts on both our convertible senior subordinated notes and financing arrangement with Deerfield. We ended the quarter with $352 million in cash compared to $415.9 million at the end of 2013.

I will comment briefly on our financial outlook by saying that our financial guidance for the full year of 2014 remains unchanged. We continue to expect total costs 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 runway also has not changed, and we continue to be confident that our runway extends through the readout of METEOR trial for RCC.

With that, I will pass the call on to Gisela.

Thank you, Debbie. In the next few minutes I will provide an update on the progress of the development program for cabozantinib and the recent news on cobimetinib.

I will start with the cabozantinib program update. As you know, we are intensely focused on exploring and ultimately expanding the cabozantinib opportunity across multiple indications.

We have a broad strategy in place for evaluating the compound in a variety of indications, using internal resources to support phase 3 trials, and working in partnership with a wide array of individual physicians and cooperative groups through our collaboration with the National Cancer Institute Cancer Therapy Evaluation Program, or CTEP, and an investigator-sponsored trial program, to enable a broad program of earlier-stage exploratory trials.

Our highest priority for 2014 is to secure top line data for both phase 3 pivotal studies, COMET-1 and COMET-2, in advanced metastatic castration-resistant prostate cancer.

As you know, COMET-1, a randomized study of cabozantinib versus prednisone, is focused on the assessment of overall survival as the primary endpoint; and COMET-2 is a randomized study of cabozantinib versus mitoxantrone/prednisone, focused on pain response.

Both studies are ongoing, and we continue to expect top line data this year. In the meantime, we are preparing for US and EU regulatory filings to be made, if and when we obtain suitable results from final analyses of the COMET studies.

Considered together, the basic objective of the COMET studies is to evaluate whether cabozantinib demonstrates both a survival benefit and relief from pain associated with bone metastases. We believe such a profile would significantly differentiate cabozantinib from other agencies used in the treatment of CRPC.

Now turning to other important ongoing trials for cabozantinib, in addition to the COMET studies we are also studying cabozantinib earlier in the treatment of CRPC patients prior to chemotherapy, and we are studying cabozantinib in advanced hepatocellular cancer and metastatic renal cell cancer.

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 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. The study is continuing to enroll patients on multiple continents, and top line data are expected in 2016 or 2017.

And our phase 3 trial in renal cell cancer, which is called 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; that is, second or later line therapy.

The primary endpoint is progression-free survival, or PFS; 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 with a critical mass of active sites.

Based on the current complete enrollment rate, we expect to complete enrollment in 2014 and anticipate data from this study in 2015. We are encouraged by the enthusiasm for these trials in the medical community and the progress made to date.

And lastly, a quick update on our ongoing investigator-sponsored trial program and the CTEP program, which together with our Exelixis-sponsored trials span more than 50 ongoing or planned studies.

The objectives of the IST and CTEP trials are as follows. First, signal detection in various new indications including bladder capacity, endometrial cancer and sarcoma.

Secondly, the evaluation of the combination of cabozantinib with different agents including hormonal therapy, targeted therapeutics, or chemotherapeutic agents.

And thirdly, evaluation of cabozantinib in randomized phase 2 trials, building on earlier signals of anti-tumor activity in various indications, including renal cell cancer, non-small-cell lung cancer, ovarian cancer, and ocular melanoma.

The trials are making great progress. In fact, two of the randomized phase 2 trials have already completed enrollment. The first is a randomized trial run by the Eastern Cooperative Oncology Group in second- or third-line EGFR wild type non-small-cell lung cancer patients, comparing cabozantinib versus erlotinib, versus the combination of both agents.

And the second study is a randomized phase 2 trial run by the Gynecologic Oncology Group in platinum resistant/refractory ovarian cancer patients, comparing cabozantinib and weekly paclitaxel therapy. For both studies, we expect data late in 2014 or in the early 2015 timeframe.

Data from the IST and CTEP programs will be important to guide the further late-stage development of cabozantinib beyond our ongoing phase 3 studies.

Now on to cobimetinib. Cobimetinib is a specific MEK inhibitor discovered by Exelixis. Just 2 weeks ago, we and our partner Genentech, a member of the Roche Group, announced positive top line results from coBRIM, the phase 3 pivotal trial evaluating cobimetinib in combination with vemurafenib in previously untreated patients with unresectable locally-advanced or metastatic melanoma harboring the BRAF V600 mutation.

This study is run by Genentech, who informed us that coBRIM met its primary endpoint, delivering a statistically significant increase in progression-free survival for the combination of cobimetinib plus vemurafinib as compared to vemurafinib alone. Adverse events were consistent with those observed in a previous study of the combination.

Roche announced on its earnings call last week that they are planning to present the coBRIM data at the upcoming ESMO 2014 Congress taking place in Madrid, Spain, September 26 through 30, and Roche has stated that they plan to initiate regulatory filings before year end.

We are of course very pleased with these news. If cobimetinib is ultimately approved, patients with advanced BRAF V600 positive malignant melanoma will have an additional, much-needed therapy option available to them.

In addition to the development program in advanced melanoma in combination with vemurafinib, Genentech is also evaluating cobimetinib in various other combinations, including a phase 1 study of cobimetinib with their anti-HER3/EGFR antibody in KRAS-mutated advanced solid tumors, including colorectal and non-small-cell lung cancers; and a phase 1b study of their anti-PDL1 antibody in combination with cobimetinib in locally advanced or metastatic solid tumors.

We are looking forward to the presentation of the phase 3 data in advanced melanoma and further data from the ongoing program in the future.

With that, I will hand the call back over to Mike for his closing remarks.

Okay, Gisela. Thank you. I'll keep my closing remarks brief so we can get to your questions. As you heard from the team today, progress continues on all fronts and we're on the critical path towards a very important set of milestones in the second half of 2014.

I'll conclude by reiterating our top priorities for the year. First, top line data readouts for both the COMET-1 and COMET-2 studies; second, working towards submitting regulatory filings, assuming positive COMET data; third, completing enrollment for METEOR in second-line RCC in anticipation for top line results in 2015; and fourth, planning our commercial buildout supporting the prostate cancer indication in the US and the EU, pending positive COMET data.

I'll wrap up here by thanking all of our great employees for their dedication, their focus and their tremendous work ethic in helping us meet our key goals and priorities. Collectively and individually, we remain completely focused on our key objectives, to bring new therapies to patients with cancer and build value for our shareholders.

So, we'll stop here, and be happy to take your questions.

(Operator Instructions). Ted Tenthoff, Piper Jaffray.

Well, firstly, congrats on the positive top line coBRIM reads. That's a really exciting addition or expansion of the late-stage pipeline, and going to be an exciting opportunity for you guys next year.

I guess my question has to do with market potential there, and maybe some of the competitive dynamics that you guys see in the MEK/BRAF space in general. It might be a little bit early to be asking that since the data hasn't even been reported yet. But maybe you can at least tell us what thoughts are and anything that maybe Roche has shared along those lines.

Yes. Ted, it's Mike. Thanks for the question and your support.

I think it's an important question that you're asking around the melanoma space. It certainly is very dynamic now, with all the different combinations around the MAP kinase pathway, certainly with all the immuno-oncology agents that are emerging there. It's early, right and we're probably not in a great position to say a lot there.

Scott, do you want to provide some color commentary?

Yes. I mean, we know from the American Cancer Society, there are about 76,000 patients that are newly diagnosed each year with melanoma. About 9,600 of them will die each year. So, it's a good-sized market.

I think, as relates to the competitive environment, obviously we're just going to have to wait and see the data, and you guys will get a chance to take a look at the cobi data at ESMO.

What I can say is, we have a great partner. It's -- obviously, Genentech has been around oncology for a while, and it's a company that I know very well. I was there for 10 years. So, we have a great relationship with them and are working very closely, and we look forward to the potential being able to compete in that space.

Excellent. Great. Well, I'm looking forward to the COMET top -- the final COMET data (inaudible). Thanks very much.

Brian Klein, Stifel Nicolaus.

First off, on cobimetinib, I know that you guys don't have access to the data, or you can't disclose the data. But I was wondering if you could give us a sense of what is a meaningful PFS improvement in this patient population, so we can have at least some sense of where we should be thinking about the benefit of the combo therapy.

Yes. Brian, it's Mike. Thanks for the question. Again, I think it's a really important issue. Without having the data come out right now, it's really hard for us to, I think, even opine upon some of the boundary conditions that you're talking about there.

We're, as Scott said, really pleased to be in this space, if you will, by having a positive pivotal trial readout with the combination. And we're certainly looking forward to having the data come out at ESMO in September. So, stay tuned.

Okay. Okay. That's fair. In terms of expenses going forward, as you guys think about the second half of the year and into next year, how much of your expenses are now going to shift over to cobimetinib as you progress, or as Genentech progresses towards regulatory filing and commercialization?

Hi, Brian. This is Debbie. I'll answer that for you. Our agreement with Genentech includes an equal share of the US profits and losses, and the expense that I referred to this quarter represents our share of those expenses for the US commercial costs associated with their launch planning activities. So, the expenses that they've shared with us have been included in our expense guidance for this year.

Okay. Perfect. Thanks. And then lastly, just on cabo, in terms of the data readouts, can you give us a sense of -- obviously, the survival data I think is going to be the paramount piece of information that we're going to have. But how much additive benefit is there with a positive COMET-2 trial? How do you sort of see the market and physicians interpreting a positive COMET-2 trial in the setting of a positive COMET-1?

Yes. I think it's a really -- again, it's Mike. It's a really good question. It certainly, I think, gets to the heart of what we've done with the broad COMET program, to be able to capitalize and utilize the broad phase 2 data set, where we saw, I think, unique in some ways, provocative activity, and try and translate that into data from pivotal trials that we can use to move forward.

So, clearly, we're interested in being able to differentiate the compound with potential survival benefit, pain reduction, narcotic reduction -- really, I think those different parameters speak well to the advancing disease state of prostate cancer, as I think we've all heard from all the various experts. So, that's the overall goal. And I think if we can do that in COMET-1 and COMET-2, we'll be, I think, very, I think, fortunate to then move forward with the compound.

Gisela, Scott, you want to provide some other color commentary?

Maybe just to add to this, we designed the studies in a way -- is in a complementary fashion, right? COMET-1 addressing the overall survival benefit, or overall survival as the primary endpoint; and COMET-2, the pain endpoint. And that is a dedicated study to that PRO -- patient-reported outcome -- of pain, which is obviously complicated to collect.

So, these two studies together could support a product profile that could be importantly differentiated from other compounds.

Scott?

Yes. Maybe just to add a bit, we've done a lot of market research looking at the importance of a differentiated profile in prostate cancer. And what's clear is, physicians tell us they have a number of treatment goals, but their top two are improving overall survival and improving quality of life. And pain is a major influencer of overall quality of life.

So, our research is very clear that physicians deem the potential improvement in pain as very important for us as well. And obviously, we know prostate cancer's a crowded space, and the opportunity to be able to have those from a commercial perspective, jointly, I think is going to give us some additional value.

We know the drugs that are currently approved are good drugs, but they're not curing patients. We know there are 30,000 men who die each year from prostate cancer. We think there's a real potential for us to go out there with these two studies and make a meaningful difference if we have positive data.

Great. Thanks for (inaudible) my questions.

Eric Schmidt, Cowen and Company.

Are you able to talk at all about when we might see data from the cobimetinib combination trials -- the phase 1/2s that Roche is running?

Yes. Eric, it's Mike. We don't have that information right now. Those are trials that were initiated, I would say late -- I think late last year. So, it's still relatively early. They're dose-range finding studies. But we have no feedback from our partner. And they, to our knowledge, haven't communicated any timelines for when they would communicate data from those trials.

Maybe realizing -- again, Mike, this is Roche's design, but can you talk about the mechanistic rationale for combining MEK with, say, an ERBB pathway inhibitor or a PD-1 inhibitor?

Certainly I can't, but I think Peter could do it better, so I'll pass it over to him.

Sure. Thanks, Mike. So, just to speak to the two that I think you mentioned -- first, a very interesting combination, I think, with the PDL1 antibody.

There was actually a very nice preclinical rationale for doing that. There's data that suggest that inhibition of MEK in the setting of tumor immune cell interactions may actually help ameliorate some of the tumor-mediated immune suppression that normally exists under those circumstances, and then therefore complements the activity of a PDL1 antibody quite nicely.

I believe Genentech actually had some data at AACR last year -- very nice preclinical poster demonstrating exactly that, that incorporated some cobimetinib data and showed some nice additional efficacy in a preclinical model when you combined those two modalities.

With respect to the ERBB family inhibitor that they're doing the combination with, that's an agent called a dual acting Fab, or DAF, that targets both the EGF receptor and also targets HER3. Because these receptors are well known to signal through the Ras-Raf-MEK-ERK pathway. And recall that this particular combination trial is actually being done in a patient population that has solid tumors with KRAS mutations.

So, typically, of course, the KRAS mutations will blunt the efficacy of EGFR or HER family acting agents, and in fact KRAS mutations are actually not indicated, or patients with KRAS mutations are not given EGFR inhibitors for this reason.

So, the thinking, again, is -- and I believe this is also supported by preclinical data, is that you -- if you then combine a MEK inhibitor which acts downstream of the Ras mutation with an inhibitor of the HER family pathway, you'll then kind of overcome this kind of inhibitory activity, if you like, of the KRAS mutation. So, all of the trials are really well-founded on, I think, a very strong preclinical rationale.

Great. Thanks for that. Maybe just one quick question. It looks like the COMET-2 study is still enrolling. What's your confidence in wrapping that up by year end?

Again, our guidance, as you heard, I'm guessing several times today and in the past, is that we'll have top line data in 2014.

Okay. And how long after data from COMET-1 and COMET-2 might you be able to turn around a filing, in the event that data sets were positive?

Gisela?

Yes. A filing, obviously, in the case of positive data, would be the highest priority, and we're preparing for it as we speak, at risk obviously. But that would be the highest priority for the Company, and we would execute that as quickly as we can. We haven't guided to a specific timing from final data, but certainly we would aim for that in 2015.

Okay. Thanks, and good luck with those.

Biren Amin, Jefferies.

I guess I'm kind of one and two. Would you disclose data from both trials separately, or would you wait for both trials to complete before disclosing data? Thanks.

Hey, Biren. It's Mike. Yes. As we've said previously, we will disclose data as trials read out. So, there's no need, in our view, to wait. So, that's the plan right now. We haven't guided to the sequence and obviously more precise timing, but our view is that as trials read out, we will get the data out soon thereafter.

And I guess at ESMO are there any plans to maybe disclose baseline data on the COMET trials?

I'm not sure I understand that. Could you repeat (inaudible)?

So, I mean the baseline patient characteristics that you've enrolled into COMET 1 and 2 -- would you have any plans to maybe share with us that data set?

Yes. No. That's something that we would not do. I mean, these are active, ongoing trials, so we would not make any forays into talking about the data until the trials were done.

Got it. And then I guess on the IST data that you're expecting later this year or early next year, can you talk a little bit about, if the trials are powered in second-, third-line non-small-cell lung, and in platinum relapse-refractory ovarian cancer, and what type of differences should we look for? Is it overall survival that's the primary endpoint? Any color that you can provide. Thanks.

Yes. Sure. So, these are cooperative group trials that are run out of GOG and ECOG respectively. These are sizeable phase 2 studies -- randomized phase 2 studies. And they follow a sizing, if you will, that's common in oncology, with about 100-plus patients for randomized phase 2 studies. So, these are pretty robust phase 2 trials. Primary endpoint for both of them is progression-free survival.

Great. Thanks.

Lee Kalowski, Credit Suisse.

First question, just on cabo, and particularly on the US number. Just curious if -- so, if I look at the step-up there, what I'm wondering is if that's all demand related, particularly relating to the step-up in the sales force, or if there was any inventory build ahead of the July price increase, or anything else we should be thinking about as we look at the step-up in the US number from Q1 to Q2.

Yes. Scott, that's probably in your --

Yes. The step-up was entirely demand-driven. Just a reminder, we report revenue on a sell-through methodology, which means we don't count it until it actually gets shipped to patients. The other approach is known as a sell-in methodology, which is where you count it when it gets shipped to a distributor or (inaudible).

So, this was demand-driven. As I said on the -- my opening remarks, it was driven by increases both in new patient starts as well as increases in treatment duration as well.

Got it. Okay. And a question on cobi. Curious what your thoughts are, just as far as having OS data -- how important having OS data is, relative to the evolving landscape in melanoma. And is that something we might see at ESMO, given that it's a secondary endpoint?

Well, the trial is designed with the primary endpoint of progression-free survival, and that was the endpoint that was communicated, that read out to positive. A secondary endpoint is overall survival, but that will take a little longer to follow up to maturity.

Got it. Okay. And last question, Mike, and I think you had mentioned is -- your priorities for the year was building out a commercial infrastructure for the prostate cancer. Just curious if that's something that is already underway, or is that going to wait for final analysis of COMET-1?

Yes, Lee. Again, I think what I said exactly was, we're doing our planning around the commercial buildout supporting the prostate cancer indication. So, all those planning activities are well in hand, and we're dotting the i's and crossing the t's. But obviously, we're going to wait to see the data before we start investing. Right?

Okay. Thank you.

Terence Flynn, Goldman Sachs.

Hi, this is Irene in for Terence. Thanks for taking the question. Can you talk about your combination strategy with cabo for prostate, given you've initiated a phase 2 trial of cabo in combination with Zytiga for chemo-naive prostate cancer patients?

Sure. Yes. You're correct, we have initiated a randomized phase 2 study combining cabozantinib at various dose levels with abiraterone, and that study is ongoing, and it was built upon the data that was published previously from a phase 1 dose-ranging study done at the Dana-Farber Cancer Institute, where the doses were evaluated and cabozantinib was well tolerated in combination with abiraterone at the 20-milligram and 40-milligram dose level.

We are also evaluating -- and that is study one in the CTEP program -- the combination of cabozantinib with docetaxel. So, that is an ongoing phase 1 evaluation.

So, we are planning at this point, and have a protocol in development for combination of cabozantinib with enzalutamide. So, we are evaluating the compound in various different combinations and in various different lines of therapy -- in the later line but also in the earlier line, importantly, before chemotherapy.

Great. Thank you. And maybe just, can you provide an update on the ongoing cabo trials that the NCI's running?

Yes. Sure. The NCI has a broad program ongoing, and that spans about 15 or so ongoing or approved studies. They have been very, very effective in getting studies up and going and enrolling.

And in fact, the two studies that I spoke about a little bit earlier, was the lung cancer and the ovarian cancer study -- these randomized phase 2 studies are run under the umbrella of the CRADA that we have with the NCI. So, I think it's been very effective. The program is moving forward and is going to yield data late in 2014 to -- and 2015.

Thank you very much.

(Operator Instructions). Michael Schmidt, Leerink.

I was wondering, in your agreement with Genentech, who will determine the pricing of cobimetinib? Will it be a joint decision or will Genentech drive that pricing decision?

Genentech will actually drive that pricing decision.

Great. Thanks. And when does the composition of matter patent expire for cobi?

Yes. That's a number that I'm not familiar with right now, or date, so we'll have to get back to you on that.

I can circle back with you on that, Michael.

Okay. Great. Thank you so much.

At this time there are no further questions, and so I will turn the call back over to today's host, Ms. Susan Hubbard.

Great. Thank you, Whitley, and thank you all for joining us today. We look forward to taking any of your followup calls and questions after we wrap up. So, thanks again.

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