Exelixis Inc (EXEL) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Exelixis fourth-quarter and full-year 2014 financial results conference call. My name is Jasmine and I will be your operator for today.

At this time, 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, Jasmine and thank you, all for joining us for the Exelixis Fourth Quarter 2014 financial results conference call.

Joining me on today's call are Mike Morrissey, our president and chief executive officer; Debbie Burke, our chief financial officer; PJ Haley, our vice president of commercial, and Gisela Schwab, our chief medical officer, who will together review our corporate, financial, commercial and development progress for the quarter and year end December 31, 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.

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 and uncertainties related to regulatory approval processes and the compliance with applicable regulatory requirements, Exelixis' ability to maintain its rights under collaborations, Exelixis' financial outlook and the sufficiency of Exelixis' capital and other resources over time and product acceptance in the market, as well as market competition.

With that, I will turn the call over to Mike.

Thank you, Susan and thanks to everyone for joining us on the call today.

We're off to a busy and productive 2015. To begin, I'd like to highlight the key near-term events that could have a major positive impact on our Business this year if successful. We have two significant milestones that are rapidly approaching. First, for cabozantinib, is the METEOR top-line data and second-line RCC, which is projected for the second quarter of 2015.

The second is the potential approval of cobimetinib in combination with Zelboraf in first-line BRAF mutant-positive melanoma projected for the third quarter of 2015. If positive, we will have achieved a notable goal for any biotech company by having two approved products that were discovered in our labs and successfully advanced through pivotal trials in large, underserved and commercially meaningful indications.

With that, I will take a few minutes to review the key drivers of our business for both cabozantinib and cobimetinib before turning the call over to Debbie, PJ Haley, who is leading our commercial efforts now, and Gisela for a review of our financial, commercial and development highlights.

First, let's start with cabozantinib. Enrollment in METEOR, our phase 3 pivotal trial in metastatic second-line RCC was completed last November. The primary endpoint for METEOR is progression-free survival or PFS for the first 375 patients enrolled and we expect top line data in the second quarter of 2015. The second line RCC market represents a relatively mature yet underserved indication, with an approved VEGFR targeting TKI and an mTOR inhibitor available as treatment options, with both having the common liability of offering a relatively short duration of PFS benefit with little objective differentiation.

The market size for second and later-line RCC is large and growing, including about 11,000 new drug-eligible patients annually in the US and nearly 37,000 patients globally. The size of this market represents a large, global commercial opportunity based on reported 2014 revenues of approximately $1 billion for agents used in this setting, even know they provide a short, approximate 4.5 to 5 month PFS benefit in VEGFR inhibitor pre-treated RCC patients.

The potential for cabozantinib in second line RCC if METEOR is positive is notable on two fronts: first, a win in METEOR would demonstrate the superiority of cabozantinib compared to everolimus, the market leader in second line RCC in a large, global pivotal trial and would by itself provide a solid foundation for successful launch, assuming approval.

Second, an improved cabozantinib PFS versus current second line agents would provide the opportunity for an extended duration of treatment that could serve as a revenue multiplier, which could be significant depending on the degree of PFS improvement obtained. We will provide additional details at a later date, but even at this high level of analysis, this is clearly a meaningful opportunity and one that we are excited to advance into the regulatory and commercial setting, provided positive METEOR data.

Other activities with cabozantinib, include ongoing enrollment in CELESTIAL, our pivotal trial for second line HCC, and the large number of diverse IST and CTEP trials that continue to progress. Gisela will provide more details in the development update section of today's call. The CELESTIAL trial for our second line HCC is our current enrollment priority. Currently, there is no standard of care for second-line HCC, representing a significant unmet medical need. And it is reflected by the estimated 700,000 deaths annually from this disease on a global basis.

Now I will note here that due to the potentially large breadth of opportunities for cabozantinib-both near term for RCC and HCC if our pivotal trials are positive, and longer term and other significant oncology indications including non-small cell lung cancer, breast cancer, bladder cancer and a variety of other tumor types-that we have decided to seek a partner for ex-US territories to help us maximize the global commercial opportunity for cabozantinib without making the significant investment required to build an ex-US commercial infrastructure ourselves.

We initiated these discussions in January and are pleased with our progress to date and the interest we have received from leading global pharmaceutical and biopharmaceutical companies. Our intent would be to use the proceeds from an upfront payment, which we would expect to be commensurate with positive top line RCC data to help defray the expense of building our US commercial infrastructure to support a potential RCC launch.

Next, I'll turn to cobimetinib, where we continue to be pleased with the development and regulatory progress made by our partner, Genentech. Based on the positive phase 3 results from the coBRIM pivotal trial, Genentech and Roche have completed both the NDA and MAA submissions for cobimetinib for the use in combination with vemurafenib US and EU, respectively. In the US, cobimetinib has received priority review from the FDA, with a PDUFA date of August 11, 2015. We, and our colleagues at Genentech continue to prepare for a launch in the US later this year, including our involvement in the promotion of cobimetinib, if and when approved. As a reminder, we are entitled to receive revenue from the profit share agreement in place for the US market and double-digit royalties on product sales outside of the US.

The first line BRAF mutant positive melanoma population is an important and growing market with nearly 5,000 new patients each year in the US in need of new therapeutic options. While the competitive dynamics in this area continue to evolve, we believe the total US market for the BRAF mutant positive melanoma population could grow to the $1 billion per year level with the incident population alone.

In addition to the near term opportunity in melanoma, we are excited about the clinical work that Roche and Genentech are pursuing with cobimetinib in combination with other anti-cancer agents, most notably the combination of cobimetinib with their anti-PDL1 antibody, MPDL3280A, which is currently in a phase 1b/2 trial with expansion cohorts in KRAS-mutant metastatic colorectal cancer, non-small cell lung cancer and melanoma. Roche signaled on their recent year-end 2014 call that they expect this trial to read out in 2015.

Other important Roche sponsored cobimetinib combination trials include: first, the vemurafenib, cobimetinib, anti-PDL1 triple combination in metastatic melanoma, second the combination of cobimetinib with RG7597, an antibody targeting EGFR and ErbB3 in KRAS mutant solid tumors and third, a randomized phase 2 trial investigating the cobimetinib, paclitaxel combination versus paclitaxel in patients with first line metastatic triple-negative breast cancer.

We're very pleased with the progress that's been made for cobimetinib on the clinical, regulatory and commercial readiness fronts over the last few months. We will continue to keep you updated as Roche releases additional information. PJ will speak to our efforts to prepare our commercial organization for a potential cobimetinib launch later this year.

With that overview, I would like to close by restating that we're very focused on advancing cabozantinib and cobimetinib through their upcoming major milestones and that positive clinical and regulatory outcomes have the potential to advance us to the next level as a commercial organization.

With that, I'll turn the call over to Debbie to review our financial performance for Q4 and the full year 2014.

Thank you, Mike.

I will begin with the fourth quarter and full year 2014 financial results and then move to our 2015 financial outlook. My comments will be focused on the highlights of our financial performance and I refer you to our press release filed earlier today for additional details. Net revenue was $7.4 million for the quarter and $25.1 million for the full year ended December 31, 2014.

Net revenue in 2014 was derived entirely from product sales of COMETRIQ and was net of the impact of a project management fee of $0.5 million in the quarter and $2.3 million for the full-year, payable to our European distribution partner, Sobi. This compares to net revenue of $4.3 million and $31.3 million for the same periods in 2013. Net revenue in 2013 was derived from both product sales of COMETRIQ and the last remaining portion of license revenue from our collaboration with Bristol-Myers Squibb.

The increases in that product revenue were 69% for the quarter and 67% for the year and reflect the continued ramp up in sales of COMETRIQ following our launch in the US in January 2013 and the European Union approval in March 2014. R&D expenses for the quarter were $39.7 million and $189.1 million for the full year 2014. This compares to $49.6 million and $178.8 million for the same periods in 2013.

The decrease in expense for the fourth quarter is directly related to the cost saving measures we initiated in the third quarter of 2014 following the outcome of our COMET-1 trial. The increase in expense for the year is primarily due to clinical expenses we incurred during the year for the METEOR trial, our Phase 3 pivotal study in RCC, offset by the cost saving measures I just mentioned.

SG&A expenses for the quarter were $9.8 million and $50.8 million for the full-year 2014. This compares to $13.6 million and $51 million for the same periods in 2013. The decrease year-over-year for both the quarter and full year were predominantly due to our cost saving measures initiated in Q3 2014, offset in part by the expansion of our sales force in the US and pre-commercialization expenses for cobimetinib under our collaboration agreement with Genentech.

Restructuring charges for the quarter were $3.5 million and $7.6 million for the full year of 2014. This compares to $0.4 million and $1.2 million in the same periods in 2013. The change in expense in 2014 over 2013 was primarily due to the restructuring activity initiated in Q3 2014 and includes one-time personnel expenses, as well as costs related to building exits and asset disposals.

Total costs and expenses for the quarter were to $53.6 million and for the full year 2014 were $249.6 million, in-line with the guidance we provided during our third quarter 2014 financial results and reflect our focused and rapidly executed efforts to reduce our expenses and preserve our cash.

For other income or expense, we incurred net expense of $11.9 million for the quarter and $44.3 million for the full year 2014. These amounts are consistent with prior year and include non-cash expense of $7.7 million for the quarter and $29.5 million for the full year 2014 related to the accretion of the discounts on both our 4.25% convertible senior subordinated notes due in 2019 and the Company's indebtedness under the note purchase agreement with Deerfield.

With regard to cash, we ended 2014 with $242.8 million, which was higher than forecasted due primarily to our operational changes we made in Q3 2014. Taking into account the expected extension of the Deerfield notes to July 1, 2018 from July 1, 2015 and cash anticipated from product revenues during the year, the Company anticipates that cash, cash equivalents and short and long-term investments will be sufficient to fund our operations through the end of 2015. This guidance assumes no receipt of additional funds from either business development or financing activities.

Turning to other areas of our financial outlook for 2015, we anticipate the second quarter of 2015 will be an inflection point for the Company, given the key milestones that have been described. This will undoubtedly have an impact on our operating expenses for the full year of 2015.

For this reason, we are only providing Operating Expense guidance for the first six months of the year. The Company anticipates that operating expenses for the first half of 2015 to be in the range of $70 million to $80 million. This range includes approximately $5 million of restructuring charges in the first half of the year, primarily related to building exit costs. With that, I will turn the call over to PJ.

Thanks, Debbie.

I'm excited to speak with you today regarding the ongoing and planned commercial activities at Exelixis. By way of brief introduction, I've been with the company for about 4.5 years now, focused on building the commercial infrastructure to launch our first product, COMETRIQ, in medullary thyroid cancer and I've led the commercial organization since last September. Before joining Exelixis, I was with Genentech working on the Avastin marketing team. At Genentech, I focused on lung cancer, glioblastoma and leading the successful US launch of Avastin in renal cell carcinoma in 2009. Having spent a good deal of my career working in GU oncology and specifically in renal cell carcinoma, I hope to be able to leverage this background effectively, helping Exelixis bring cabo to market in the kidney cancer space, pending a positive METEOR outcome.

With regard to the US launch of cobimetinib, I am also glad to be able to deepen our strong and productive collaboration with Genentech by capitalizing on my knowledge of the Genentech commercial organization and the positive relationships I have with former colleagues there.

Moving on to COMETRIQ performance in Q4, COMETRIQ net revenue was $7.4 million for the quarter. This represents an increase of 17% compared to Q3 of 2014. Importantly, we continue to see the duration of therapy for active MTC patients increase. On average, it has now extended to approximately 9.5 months. We are gratified to see patient experience with commercial product approach the duration of therapy we saw in the exam trial where 25% of the COMETRIQ patients remained on therapy for greater than two years.

With regards to Europe, as you know, at the end the year we entered into a new agreement with our distribution partner, Sobi. The payment structure of the partnership has transitioned from fixed fees paid by Exelixis to Sobi, which supported the initial build-out of the COMETRIQ European commercial infrastructure to a sales margin- based approach. Sobi continues to make progress on the commercialization of COMETRIQ in the EU. COMETRIQ is now commercially available in Germany, the United Kingdom, Sweden, Finland, Denmark, the Netherlands, Norway and Austria. Sobi anticipates launches in additional countries of the EU during the course of 2015 and beyond as pricing and reimbursement are achieved. As we have said on previous calls, securing pricing and reimbursement across Europe can be a lengthy process, and consequently, we expect the ramp-up in sales in Europe to be slower than in the US.

With regards to cobimetinib, we are very excited to continue to work closely with Genentech to prepare for the potential launch.

As you know, the FDA recently set the PDUFA date for the approval of cobimetinib to August 11 of this year. Preparations for launch are well underway and we are very pleased with the work and progress that Genentech is making. Given the extensive experience that Genentech has with vemurafenib in this market, coupled with their collaborative approach to the partnership, we have a great deal of confidence in the future of cobimetinib.

The BRAF positive metastatic melanoma market represents a sizable opportunity for cobimetinib. In 2014, there were approximately 5,000 first-line BRAF mutation-positive melanoma drug treated patients in the United States. This market has been dynamic over the past couple of years. In fact on a global basis, the combined revenue from the three key approved drugs in the BRAF mutation-positive space has grown from approximately $250 million in 2012 to approximately $650 million in 2014. This represents more than 150% growth in that time period.

Given the size of this market opportunity, we will be shifting the focus of our sales force to cobimetinib upon its approval. As we pivot to cobi, we will remain cognizant of the importance of supporting COMETRIQ for MTC and are committed to continuing to do so both for the patients and the physicians and healthcare providers who treat them.

Now let me turn the call over to Gisela.

In the next few minutes I will provide an overview of the development program for cabozantinib. I will focus on the progress of our phase 3 programs in RCC and HCC and also cover some of our key collaborative studies in the IST and NCI-CTEP programs. I will close with a brief update on XL888, our HSP90 inhibitor.

Before moving to the progress update, a brief word on upcoming presentations of the COMET 1 and COMET 2 results at the ASCO GU conference taking place in Orlando later this week.

As you know, we had announced the top-line data for these trials, metastatic CRPC, in the second half of last year, following which, we discontinued exploring the potential of cabozantinib in the treatment of metastatic CRPC. We believe it is important to share with the oncology community the details of results from a study-positive or negative-as they may help shape future clinical trial design.

In order to preserve the integrity of the presentations, we will not be going into a detailed description of the data today, but we will say that both the efficacy and safety data in the cabozantinib arms were generally consistent with prior observations in phase 2. Ultimate reasons for the studies not meeting the primary endpoints are likely multifactorial and include development of resistance of disease and a relatively high rate of subsequent anti-cancer therapies.

I will now move to the study progress update, starting with our highest priority, the renal cell cancer program. We completed enrollment in our phase 3 trial METEOR, in November 2014. Top line data for the primary endpoint of progression-free survival are expected in the second quarter of 2015.

I'd like to briefly review the trial design and assumptions for you. The study is evaluating cabozantinib versus everolimus in a randomized open-label fashion. The patient population is second or later line metastatic renal cell carcinoma. Patients must have received and failed at least one prior VEGFR tyrosine kinase inhibitor. Enrollment is stratified by the number of prior VEGFR inhibitors, one prior therapy versus more than one prior therapy and risk factors according to the MSKCC classification. The primary endpoint is Progression Free Survival or PFS and secondary endpoints include response rate and overall survival. PFS is assessed by an independent radiology committee that is blinded to the treatment assignment of the patients.

650 patients were planned to be enrolled in this study; the primary analysis is based on the PFS observed among the first 375 patients enrolled. This will ensure sufficient follow up and a PFS profile that is not weighted predominantly towards early PFS events, which could happen if the whole study population of 650 patients that is required for the assessment of all overall survival served as the denominator for the PFS analysis.

The 375th patient was enrolled in June 2014 and the median patient in this group was enrolled in April so that the approximate median follow-up is about 10 months. Given the rapid progress on the trial, the team is highly focused on collecting the data and preparing for an analysis of the primary endpoint and we continue to expect top-line data in the second quarter of 2015.

Another important study in the first line treatment of advanced renal cell cancer is currently ongoing in the cooperative groups known as The Alliance under the CTEP IND. This is a randomized phase 2 study comparing cabozantinib versus sunitinib in the first line therapy of intermediate or poor risk patients per the standard risk classification. The primary endpoint is progression-free survival and the study has a targeted enrollment of 150 patients, which is now nearing completion. Given the historical PFS duration in patients with intermediate or poor risk RCC in the first-line setting, we are expecting data sometime in 2016. We look forward to updating you on results at the appropriate time.

I'd now like to turn to our phase 3 study in hepatocellular cancer or HCC called CELESTIAL. This 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. Patients are stratified by geographic region, HCC etiology, that is hepatitis B or C or Alcohol or other and the presence of extrahepatic spread or macrovascular invasion.

Patients are randomized two to one to receive cabozantinib or placebo. The study's continuing to actively enroll patients on multiple continents including the important market of Asia, where the incidence of HCC is high and we continue to expect topline data in the 2017 timeframe.

Next, I will provide a quick update on our ongoing investigator-sponsored trial program and the CTEP program, which together with our Exelixis-sponsored trials span more than 45 ongoing or planned studies. The objectives of the IST and CTEP trials are threefold as follows:

First, signal detection in various new indications including bladder cancer, endometrial cancer and sarcoma. Secondly, the evaluation of the combination of cabozantinib with different agents, including hormonal therapy, targeted therapy or chemotherapeutic agents.

In the next few weeks we are expecting the initiation of a new combination trial of cabozantinib with the PD-1 inhibitor, nivolumab or the combination of nivolumab and ipilimumab in patients with genitourinary cancers including bladder cancer.

This follows encouraging early observations of anti-tumor activity of single agent cabozantinib with an objective response rate of about 16%, as well as reported single agent activity with PD-1 and PDL-1 antibodies in this indication. Additionally, clinical data from the single agent cabozantinib study in bladder cancer suggests that cabozantinib results in a more immune permissive environment by downregulation of T-regulatory cells, and consistent with this, in pre-clinical tumor models that cabozantinib decreases T-reg numbers and function and increases CD8 positive T-cell infiltration into tumors. Once [cellurability] is established, the combination of cabozantinib with immuno-oncology compounds could also be of interest in other indications including non-small cell lung cancer and renal cell cancer in addition to bladder cancer. The third objective of the program is the evaluation of cabozantinib in randomized phase 2 trials, building on earlier signals of anti-tumor activity in various indications.

These include the previously mentioned first line RCC trial and trials in the second or third line treatment of non-small cell lung cancer and recurrent or persistent ovarian cancer following platinum-containing chemotherapy and the trial in ocular melanoma.

The trials are making good progress; in fact, two of the randomized phase 2 trials in non-small cell lung cancer and in ovarian cancer have already completed enrollment and the trial in the first-line treatment of renal cell cancer is close to completing enrollment as mentioned earlier.

The first randomized phase 2 study to report our data is the ECOG/ACRIN study E1512, which is designed to enroll 117 patients with second-or- third line EGFR wild-type non-small cell lung cancer who have failed at least one prior chemotherapy. In this three-armed study, patients were randomized one to one to one to receive erlotinib at 150 milligrams daily, cabozantinib at 60 mg daily or erlotinib at 150 milligrams plus cabozantinib at 40 milligrams daily.

The primary objective of the trial is to determine whether single agent cabozantinib or combination therapy including cabozantinib extends progression-free survival when compared to single agent erlotinib for this patient population. Secondary objectives include estimation of overall survival, best objective response and toxicity.

Earlier in 2014, 125 patients were randomized in E1512 and we announced in November 2014 that during a pre-planned interim analysis for futility, it was found that the trial met its primary endpoint of improving progression-free survival with cabozantinib alone and also with the combination of cabozantinib plus erlotinib as compared to erlotinib alone and the results were highly statistically significant. Safety data were consistent with those observed in other trials of cabozantinib. At the time of analysis, the median follow-up was 5.9 months and overall survival data were immature.

We look forward to the presentation of the detailed results from this phase 2 study at an upcoming scientific conference in the first half of 2015. We are also hoping to hear about data from the randomized phase 2 trial comparing cabozantinib versus weekly paclitaxel in patients with recurrent or persistent ovarian in the first half of 2015 and will update you on the outcome when we have the results.

We are excited about the progress of these programs and about working with the investigators on potential future studies. Data from the IST and CTEP program will provide important guidance to further late stage development of cabozantinib beyond our ongoing phase 3 trials.

And lastly, a couple of words on our XL888 program: XL888 is another wholly-owned compound that was discovered by Exelixis. Results from a phase 1 investigative-sponsored study evaluating the combination of vemurafenib and XL888 in patients with advanced melanoma were presented at the Society for Melanoma Research in November 2014. The study showed that the compounds were combinable and resulted in an objective tumor response in 11 of 12 or 92% of evaluable patients.

On the basis of these data and given the encouraging data with the cobimetinib and vemurafenib combination in co-BRIM in advanced melanoma, the Moffitt group is planning to initiate a triple combination of vemurafenib, cobimetinib and XL888 in this indication in the next few months.

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

All right. Thanks, Gisela. I will keep my closing remarks brief so we can get to your questions.

In summary, we are rapidly moving towards another inflection point for Exelixis in the months ahead. Our resources are streamlined and allocated to support the next significant drivers for the business-the readout of the METEOR study expected in the second quarter of 2015 and the potential approval of cobimetinib in combination with Zelboraf in metastatic BRAF mutant-positive melanoma expected for the third quarter of 2015.

I will close by thanking our entire team here at Exelixis for their unwavering dedication and superb efforts over the last quarter on behalf of patients with cancer everywhere. We're all very excited about the possibilities that lie ahead and we look forward to keeping you up to date on our continued progress.

Thank you for your time today and your interest in Exelixis and we are happy to now open the call for questions.

(Operator instructions)

Ted Tenthoff, Piper Jaffray.

Congratulations on the progress. It's been an exciting year for you. Real quickly with respect to the commercial costs for ramping up for the cobi launch, how much additional cost should we be anticipating beyond what you are already spending on COMETRIQ and can you give us a little bit more color on some of the prep that you're doing there?

Hi Ted, this is Debbie. I will take the first part of that call.

So we've been given a budget from Genentech for our share of the cobi cost for 2015 and have factored that into our budget, which is reflected in the half-year guidance we've just given in our OpEx. Genentech has an infrastructure in place. Their expenses looked reasonable to us. They are more than we saw in 2014, but it is exactly as we expected. As we get more data, we can update our guidance.

How many total reps will there be detailing it between Genentech and Exelixis. I apologize if you already mentioned that.

Hey Ted, it's Mike.

We're not quite ready to lay out that level of detail about the overall launch and plans there. So give us some more time. It's a fair question, it's a good question, we're just not quite there yet in terms of where we are in the rollout of the plan. That will come a little bit later.

Fair enough,looking forward to seeing the METEOR data and hearing more about the cobi launch.

Eric Schmidt, Cowen and Company.

Thanks for taking my questions. Mike, it sounds like you're a little bit more keen on partnering out ex-US rights for cabo, assuming that METEOR trial hits. Could you remind us how you might separate out the indications between MTC, which I guess is already partnered to Sobi in Europe versus other opportunities like renal cell?

The Sobi relationship covers explicitly only MTC in Europe and in the MPU phase broadly globally. So it's a very clean cut along that line. How we manage that going forward, time will tell.

Again, we have capsules for MTC and we're planning to have tablets for RCC and other indications moving forward. So it's probably a relatively easy split, if we need to, from the standpoint of the different drug configurations, to be able to track it one way or the other.

On the renal cell trial on METEOR, Gisela, can you remind us were clear cell patients allowed to be enrolled and do you know what percent of study was clear cell?

Sure, it is focused entirely on clear cell histology, so all patients have to have a clear cell component.

Thanks for that.

In terms of the PFS looks, I understand that the first 370 patients will drive the initial results, but is there a requirement to come back later and look at the totality of the study?

We are planning, obviously, to focus on the primary analysis of PFS based upon the 375 patients. We also will be assessing the total PFS, as well for the entire population.

Is that required for filing or for approval or anything like that?

That is the secondary endpoint that we're just providing, as well.

So would that hold up the filing, the follow-up on the further 375?

No, it would not. It would not. Obviously, we need to pull in a lot of data across the entire trial and that then ultimately leads to the locking of the database, and that allows for these reads to occur.

And lastly, in terms of German reimbursement, have you gone through pricing discussions with GBA yet? MTC?

It's Mike.

Those discussions are ongoing right now. Stay tuned.

Michael Schmidt, Leerink.

Thanks for taking my question.

I'm trying to better understand guidance you provided. You said that you expect cash burn of around $70 million to $80 million in the first half of the year with cash sufficient to fund operations through the end of 2015. Does that mean there will be a significant uptake in cash flow in the second half?

Michael, it's Debbie. Just to repeat, the $70 million to $80 million guidance was our OpEx for the first half of the year, not cash. Our cash, we ended the year with roughly $243 million and we said that that along with our product revenues received during 2015 will fund our operations through the whole year 2015. So that's the way we split that out.

On the METEOR trial I was wondering, you talked about the powering assumptions. How do you account for the dosing difference, or do you account for the dosing difference between phase 2 and phase 3 in your powering assumptions for the trial?

In the powering assumptions for the trial, no, we're not accounting for that. We have obviously done broad assessment of dosing and we are conducting all our phase 3 studies and also the phase 2 program that I mentioned through RCC and CTEP at the 60 milligram dose and that dose was based upon the median average dose received by patients in earlier studies, including the RCC study where patients dose reduced and ultimately received 75 milligrams per day as a median average dose, which is close to the 60 milligrams.

Okay. Makes sense. Great, thank you so much.

(Operator instructions)

Stefan Quenneville, Morningstar.

Thanks for taking my question.

I was wondering about the pricing strategy for cobi and how much input you have on what the final pricing is going to be? Or is most of that decision going to be in Roche's hands?

This is Mike, thanks for the question.

The pricing decision is purely in the hands of Roche Genentech and they will make that decision based on their analysis and then we will execute upon that.

Brian Klein, Stifel.

Thanks for taking my question.

In the second quarter, when you report the top-line results for METEOR, do you also anticipate reporting an initial overall survival, or perhaps some idea of how the survival is trending at that same time?

Yes, the plans for the analysis, we see an interim analysis for overall survival that is pre-planned in the trial at the time of analysis of the primary endpoint of PFS. So the answer is yes, we will have an interim look at that point in time.

And it's Mike.

Just a reminder, there is no crossover in the study, either one-way or two-way, just to be clear about that.

Have you disclosed any of your estimates in terms of survival for either the cabo arm or the comparator arm?

The comparator arm is known to have a median overall survival of about 15 months. That is widely published for everolimus and we are assuming an improvement ultimately at the final analysis on the cabozantinib arm to 20 months.

If that's the case, doing some quick math here, you had mentioned, Gisela, that the median number of months of observation would be about 10. Can we expect that the survival numbers that we will see will be relatively small?

Yes, for overall survival we need more events, and so therefore, the final analysis for overall survival is planned for later on. The interim analysis will be run with the events that are currently available and that is a smaller number to be anticipated, yes.

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

Great. Thank you all for joining us today. We welcome your follow-up calls with any additional questions you may have that we were unable to address on today's call.

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