Exelixis Inc (EXEL) 2016 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Exelixis first-quarter 2016 financial results conference call. My name is Ronya, and I will be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to introduce your host for today's conference, Ms. Susan Hubbard, Investor Relations. Please proceed, ma'am.

Thank you, Ronya, and thank you all for joining us for the Exelixis first-quarter 2016 financial results conference call. Joining me on today's call are Mike Morrissey, our President and CEO; Gisela Schwab, our Chief Medical Officer; PJ Haley, our Vice President of Commercial; and Chris Senner, our Chief Financial Officer, who will together review our corporate, development, commercial, and financial progress for the quarter ended April 1, 2016, as well as recent key development and corporate events. Peter Lamb, our Chief Scientific Officer, is also with us and will participate in the question-and-answer session of this 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 and the future performance of the Company. This includes statements about possible developments regarding clinical, regulatory, commercial, financial, and strategic matters. Actual events or results could, of course, differ materially.

We refer you to the documents Exelixis files from time to time with the SEC which, under the heading Risk Factors, identify important factors that could cause actual results to differ materially from those expressed by the Company verbally and in writing today including, without limitation, risks and uncertainties related to commercial planning, product commercial success and market competition, uncertainties related to the availability of data at the referenced times, risks and uncertainties related to regulatory review and approval processes, risks associated with conducting clinical trials and compliance with applicable regulatory requirements, risks and uncertainties associated with Exelixis's dependence on its collaboration partners and ability to maintain its rights under existing collaborations, and risks regarding Exelixis's financial outlook and the sufficiency of the Company's capital and other resources over time.

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. I'll provide a brief overview of the key events from the last few months and then turn the call over to Gisela, PJ, and Chris, who will give more details on our development activities, initial feedback on the CABOMETYX launch, and our Q1 financials, respectively.

Obviously, it's been a very busy and highly productive time for the Company. I think it's safe to say that we have reached a critical inflection point in the Company's history, and we're ready to take things to the next level as we move forward into the second quarter and beyond.

Key events from the first quarter and April include, first, our partnership with Ipsen for the ex-US, ex-Canada, and ex-Japan rights for cabozantinib, in which we gained an experienced and enthusiastic partner and a $200 million upfront payment. Second, the build-out of our commercial group in the medical affairs team, allowing us to be launch-ready by April 1. Third, the acceptance of 18 abstracts featuring Exelixis-discovered compounds for presentation at ASCO. And fourth and finally, the FDA approval for CABOMETYX in advanced RCC on April 25, with the concomitant release of the METEOR overall survival data in the USPI.

We are delighted to be able to provide CABOMETYX, the brand name for cabozantinib tablets, to patients with advanced RCC and their physicians now that we have secured FDA approval. We are very pleased with the CABOMETYX label, which includes robust overall survival data, completing the trifecta of benefit in all three key efficacy endpoints -- overall survival, progression-free survival, and objective response rates -- as Gisela will discuss shortly.

With that foundation in place, our last nine months have been a period of very intense growth across the organization. Our RCC commercial and medical affairs teams are fully staffed, extensively trained, and now in the field, meeting with physicians. We are thrilled with their experience, expertise and energy, and we believe we are in an ideal position to compete aggressively in the RCC marketplace. Simply stated, we have built a great team that complements the great data obtained from the METEOR trial.

Following up from our approval call last Monday, I'm pleased to tell you today that we had CABOMETYX in the distribution channel and filled the first CABOMETYX prescription within three days of approval. I want to congratulate our manufacturing, procurement, market access, and sales teams for moving at nearly light speed to get this done in record time for a company of our size.

Also given the approval of CABOMETYX, we feel it's now the appropriate time to share more details on our prior experience with cabozantinib as a treatment for patients with advanced RCC. Both PJ and Chris will provide additional color on this topic shortly.

Before they do, however, I'd like to place the information on our accumulated cabozantinib RCC experience in context. First, I want to be very clear that the spontaneous HCP prescribing of cabozantinib for RCC has occurred without any tactical or strategic influence or initiative on the part of Exelixis. We do not, and we will not, promote our products outside of the FDA-approved labeling. Also, we do not intend to update this information on a regular basis.

Since the initial data on cabozantinib's activity in advanced RCC patients emerged from our Phase 1b drug-drug interaction study, we have seen significant spontaneous interest from a wide range of physicians in prescribing cabozantinib for RCC. As a matter of fact, the first prescription to be filled after cabozantinib's approval for MTC was actually for a late-stage RCC patient. This spontaneous RCC prescribing offered the team a valuable opportunity to understand this market, setting the foundation upon which we are now starting to build with CABOMETYX.

The Company is energized by the approval of CABOMETYX and excited to bring a novel medicine to RCC patients in need. CABOMETYX data is robust and provides a compelling platform for us to compete in the advanced RCC market. We'll be working hard to help literally every available and appropriate patient with every new script, every new fill and refill, on every day going forward.

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

Thank you, Mike. I will begin my update with a brief overview of a very recent notice of approval for CABOMETYX for the treatment of patients with advanced RCC who have received prior anti-angiogenic therapy. I will also cover the current status of our ongoing development program with cabozantinib and then focus on the upcoming presentations at ASCO in early June 2016.

CABOMETYX was approved by the FDA on April 25 of 2016 for the treatment of patients with advanced RCC who have received prior anti-angiogenic therapy. The starting dose is 60 milligrams daily. As Mike said earlier, we are very pleased with the label and believe it will allow physicians and patients with advanced RCC to consider CABOMETYX in the context of other therapies.

The approval of CABOMETYX is based on data from METEOR, the randomized, open-label global Phase 3 pivotal trial comparing cabozantinib and everolimus in 658 patients with advanced RCC who had previously received at least one prior VEGFR TKI. Patients could have received other prior therapies, including cytokines and antibodies targeting VEGF, the PD-1 receptor or its ligand, PD-L1. And there was no upper limit on the number of prior therapies.

The USPI, which can be found at www.cabometyx.com, covers all three efficacy endpoints, showing statistically significant and clinically meaningful improvements with CABOMETYX compared with everolimus in the METEOR trial. The primary endpoint of PFS assessed among the first 375 patients randomized showed a highly significant improvement in median PFS for cabozantinib, with 7.4 months, compared to everolimus with 3.8 months, with an HR of 0.58 and a p-value of less than 0.0001.

The secondary endpoints of objective response rate and overall survival were both assessed among the ITT population; that is, all 658 patients involved. Both objective response rate and overall survival showed highly significant and clinically meaningful improvements for CABOMETYX compared to everolimus. The median overall survival on the CABOMETYX arm was 21.4 months compared to 16.5 months on everolimus, for an HR of 0.66 and a p-value of 0.0003. This equates to a reduction in the rate of death of 34% and a 30% extension in the duration of survival.

The safety profile as shown in the USPI is reflective of the profile previously published in the New England Journal of Medicine, and the most frequent all-causality adverse reactions observed in greater than or equal to 25% of patients were, in order of decreasing frequency, diarrhea, fatigue, nausea, decreased appetite, hand-foot syndrome, hypertension, vomiting, weight decrease, and constipation.

In summary, the US approval of CABOMETYX represents a very important advance for the clinical community that treats advanced RCC. For the first time, a therapy has demonstrated robust and clinically meaningful improvements in all three key efficacy parameters -- overall survival, progression-free survival, and objective response rate -- in a large pivotal Phase 3 trial of advanced RCC.

At the same time, we believe CABOMETYX has a predictable side-effect profile that physicians are familiar with and know how to manage through dose reductions to help patients stay on therapy.

Let me now turn to the development of cabozantinib in other indications. Our ongoing Phase 3 study in second-line treatment of hepatocellular cancer, or HPC, continues to accrue patients globally. The trial, called CELESTIAL, is a randomized, placebo-controlled study evaluating cabozantinib versus placebo in patients with advanced HPC who have received prior sorafenib. The primary endpoint of the trial is overall survival, and we continue to expect results for the study in the 2017 timeframe.

Additionally to our in-house development efforts, our ongoing Investigator Sponsored Trial, or IST program, and the CTEP program span a total of 45 planned or ongoing trials. These include randomized Phase 2 trials as well as single-agent studies and combination studies with targeted agents as well as immune checkpoint inhibitors in a variety of indications.

A randomized Phase 2 study in first-line advanced RCC is currently ongoing in the cooperative group known as The Alliance under the CTEP IND. The CABOSUN trial compares cabozantinib versus sunitinib in first-line therapy of intermediate or poor risk patients per the standard risk classification. The primary endpoint is progression-free survival, and the study achieved its target enrollment of 150 patients in March of 2015. Given the study's conducted independently by a cooperative group, we don't have the exact details on timing of data availability, but are expecting results for the study in the 2016 timeframe, based upon the historical duration for PFS in a new setting. While this trial is not designed to be a label-enabling study, it may provide insight into the potential of cabozantinib in the intermediate or poor risk population in the first-line setting.

In addition, our CTEP collaborators are conducting a Phase 1b study evaluating the combination of cabozantinib plus nivolumab with or without ipilimumab in patients with genitourinary cancers, including RCC. This study was opened for enrollment in July of 2015 and continues to actively recruit patients. Data on the tolerability and anti-tumor activity of the combination studied in this early-phase trial could set the stage for later-phase evaluation, not only in the genitourinary setting, but in other areas as well, like non-small-cell lung cancer and histologies that appear sensitive to both agents. We anticipate the data from this study will be available this year as well.

Results from the CTEP program and our ongoing IST trials are expected to inform prioritization of our future development efforts, and we are looking forward to updating you on progress with these trials as appropriate. In fact, some of these trials will be the subject of presentations at the upcoming ASCO conference in early June.

At the 2016 ASCO conference, there will be a total of 18 abstracts covering Exelixis-discovered compounds. Nine abstracts will cover cabozantinib results. Importantly, there will be the oral presentation by Dr. Tony Choueiri on June the 5th during the GU oral presentation session. And this presentation will cover the details, including patient subgroup analyses, on the overall survival results from the METEOR Phase 3 study.

Other cabozantinib presentations will highlight PFS subgroup analyses of the METEOR study, including a presentation by Dr. Escudier on the subgroup of patients with bone metastases, a presentation by Dr. Powles on the subgroup of patients by prior therapies, and that is patients with either sunitinib or pazopanib as their only prior VEGFR TKI therapy, and patients who had previously received PD-1 or PD-L1 inhibitors, and a presentation by Dr. Lacy on population pharmokinetics and exposure response modeling based upon the METEOR trial results.

Additionally, there will be various presentations of IST and CTEP trial results, including results from Phase 2 studies of cabozantinib in bladder cancer by Dr. Apolo, and endometrial cancer by Dr. Neesha Dhani, and of the combination of cabozantinib and panitumumab in colorectal cancer by Dr. Strickler.

Dr. Duda will present data on the effect of cabozantinib treatment on circulating immune cell population in patients with metastatic triple-negative breast cancer. And Dr. Somwar will present on MDM2 amplification to mediate cabozantinib resistance in patients with advanced RET-rearranged lung cancers.

Further presentations of clinical trial results of Exelixis-discovered compounds include eight presentations covering cobimetinib results, including an oral presentation of results on clinical activity and safety for the combination of cobimetinib and atezolizumab in colorectal cancer, four presentations and additional analyses of cobimetinib and vemurafenib in the BRAF-mutant melanoma program, and initial results from the ongoing Phase 2 trial of cobimetinib and paclitaxel in triple-negative breast cancer.

And lastly, there will be a presentation by Dr. Zeynep Eroglu on results from a Phase 1b study of XL888, our oral HSP90 inhibitor, in combination with vemurafenib in advanced BRAF mutant melanoma. We look forward to updating you at ASCO in detail on those clinical trial results, and we are planning on providing an overview at ASCO during an investor briefing on Sunday, June the 5th. This event will be webcast live for those who would like to listen in.

And with that, I will hand the call over to PJ.

Thank you, Gisela. As you know, we are just beyond a week out from the approval of CABOMETYX in RCC. And while very early, with the successful first week of launch, our conviction continues to be reinforced that CABOMETYX will achieve rapid uptake in the marketplace. We are very pleased that the first prescription of CABOMETYX was filled on April 28, a mere three days after approval. CABOMETYX is now fully accessible in our distribution channel, which is actively processing and filling new prescriptions that have come in over the last week.

Before providing more detail on the CABOMETYX launch, I will spend a few minutes discussing our cabozantinib experience in RCC in order to set expectations for COMETRIQ moving forward, now that CABOMETYX has been approved for advanced RCC.

To reiterate what we said on the approval call last week, Exelixis only promotes cabozantinib for its labeled indication, which until April 25, was progressive metastatic medullary thyroid cancer. However, as you know, physicians in the United States have the independent discretion to prescribe medicines outside their labeling. Going forward, given that the FDA-approved label for CABOMETYX states that COMETRIQ and CABOMETYX are not interchangeable, we believe the vast majority of new RCC patients will be treated with CABOMETYX.

As you will hear from Chris, we had strong demand for RCC in Q1 without any promotion. This helps us understand a great deal about the RCC market. MTC demand was flat in the first quarter, as it has been for the last three quarters.

We have observed utilization of cabozantinib for the treatment of RCC for many years now. To date, more than 300 healthcare providers have prescribed cabozantinib for the treatment of their late-line RCC patients. Following the simultaneous presentation of the METEOR results at the ECC ESMO meeting in Vienna and publication of the data in the New England Journal of Medicine, we have seen significant growth in both the number of cabozantinib RCC prescribers and new patient starts.

In fact, approximately three-quarters of the cumulative prescribers of cabozantinib for RCC wrote a prescription for the first time since the ECC ESMO meeting, and in the last two months alone, approximately 100 healthcare professionals wrote their first prescription. Based on the METEOR data in November 2015, the NCCN guidelines were updated to include cabozantinib with a category 1 recommendation, which has led many insurance plans to update their coverage policies.

In the roughly 30 weeks since the data were presented, we have seen more than a sixfold increase in new patient starts and over a sixfold increase in new physician adoption relative to the same time period leading up to ECC ESMO. This experience with cabozantinib in RCC gives us perspective on some key performance metrics, such as duration of therapy, which is often difficult to predict for newly launched products. The duration of therapy we are seeing for RCC patients in the commercial setting is similar to the duration of therapy observed in the METEOR trial, which was 7.6 months for the cabozantinib ITT population at the time of the primary analysis.

Furthermore, we have seen dosing trends demonstrating that approximately 95% of cabozantinib scripts in RCC since ECC ESMO are being written at the recommended starting dose in the METEOR trial of 60 milligrams. The bottom line is that we have learned a great deal about the advanced RCC market and expect to build on the early momentum as we move forward.

Let's now move on to review the details on the very early phases of the CABOMETYX launch. As I mentioned, it was very gratifying to see our first script filled and shipped to the patient within the first three days of approval. Our sales force began calling on customers last Tuesday. We are very pleased with the access to accounts we are achieving, both with academic and community practices, and the feedback we are receiving from physicians on the data in our label is very positive.

Physicians and other healthcare professionals are impressed with the overall survival data and are welcoming the approval of CABOMETYX, as it is the first and only therapy in second-line renal cell carcinoma that has demonstrated in a randomized Phase 3 trial significant improvements in the trifecta of efficacy endpoints -- namely, overall survival, progression-free survival, and objective response rate.

This is consistent with our market research that indicates that the METEOR data and the unique mechanism of action of CABOMETYX are highly differentiating in the marketplace and very compelling to physicians. This research consistently indicates that overall survival and progression-free survival are the most important product attributes in selecting a therapy for advanced RCC.

The recently published Decision Resources report on RCC also confirmed this finding. Sixty surveyed oncologists gave OS and PFS ratings of 9.2 and 8.5, respectively, in terms of importance on a scale of 1 to 10, demonstrating that both endpoints are very important efficacy attributes.

From a marketing perspective, we have all of our promotional tools ready to promote CABOMETYX across multiple channels and media. Thanks to the tireless work of our team, many of these tactics have been rolled out in the first week of our launch. In fact, we had a very effective promotional presence at the Oncology Nursing Society annual meeting this past weekend in San Antonio, at which we had a promotional booth and conducted a successful and well-attended product theater on CABOMETYX. Exelixis also has comprehensive plans in place to take full advantage of the upcoming ASCO meeting as an opportunity to reach and educate a large number of oncologists during the crucial early phase of the CABOMETYX launch.

I would like to remind you that patient access and assistance is an extremely high priority for Exelixis, so we will, of course, continue to provide assistance through our Exelixis Access Services, or EASE program, to patients. Through EASE, we provide co-pay assistance to qualified commercially insured patients to help minimize out-of-pocket costs. We provide free drug to uninsured patients that meet certain financial criteria. And we make contributions to independent co-pay assistance foundations to help patients that don't qualify for our co-pay assistance program. We also provide comprehensive reimbursement support services such as prior authorization support, benefits investigation and, if needed, appeals support. The programs have been designed to be best in class, as ensuring patient access to our drugs is a top priority for Exelixis.

So in summary, we're pleased to have made CABOMETYX a commercially available therapy for patients with advanced renal cell carcinoma and thrilled that we shipped drug to our first patient within three days of approval. I would like to sincerely thank our commercial team for the tireless work preparing for and executing the launch. We are excited to compete for every eligible patient so that CABOMETYX can address the significant unmet medical need in advanced RCC. With its unique MOA and differentiated data, the trifecta of improvement in overall survival, progression-free survival and objective response rate in our label, CABOMETYX is well positioned to achieve rapid uptake in the marketplace.

Now I will turn the call over to Chris.

Thank you, PJ. Net revenues for the quarter ended March 31, 2016, were $15.4 million compared to $9.4 million for the comparable period in 2015. As a reminder, in the first quarter of 2015, we changed our revenue recognition from sell-through to sell-in and included approximately $2.6 million of deferred revenue in the first-quarter 2015 results.

Net revenues for the first quarter of 2016 consisted of $9.1 million of net product revenue related to the sales of COMETRIQ, $5 million of contract revenues for a milestone earned for Merck related to their worldwide license of our PI3K-Delta program, and $1.2 million of license revenues as a result of the amortization of the $200 million upfront payment we received from Ipsen under our collaboration and license agreement.

First-quarter 2016 COMETRIQ net product revenue declined by approximately $800,000, or 8%, when compared to fourth-quarter 2015 net product revenue. As I mentioned on the fourth-quarter earnings call, wholesale inventory increased by approximately 160 cartons from the third quarter of 2015 levels. In the first quarter of 2016, the wholesaler reduced their inventory by approximately 160 cartons, which was the primary driver in our net product revenue decline. This wholesaler inventory reduction was partially offset by an increase in demand.

I'd like to take a moment to give you a bit more insight into the increase in demand during the first quarter. We experienced an overall 33%, or an approximate 200-carton, increase in US demand for COMETRIQ as compared to the fourth quarter 2015, which was primarily driven by demand -- by an increase in prescriptions filled by patients with advanced RCC. In the first quarter of 2016, there were approximately 400 cartons shipped to US RCC patients. Meanwhile, carton demand for US thyroid patients remained relatively flat when compared to the first quarter and fourth quarter of 2015.

Research and development expenses for the quarter ended March 31, 2016, were $28.9 million compared to $22.3 million for the comparable period in 2015. The increase was primarily related to an increase in stock-based compensation expense for performance-based stock options and an annual bonus made to our employees in the form of fully vested restricted stock units; an increase in personnel-related expenses resulting from an increase in headcount, primarily related to a build-out of our MSL organization; and an increase in consulting and outside services for medical affairs and drug safety.

Selling, general, and administrative expenses for the quarter ended March 31, 2016, were $34.9 million compared to $9.5 million for the comparable period in 2015. The increase was primarily related to an increase in personnel-related expenses resulting from an increase in headcount, the majority of which is a result of the expansion of our US commercial organization; higher marketing expenses, which includes a portion of the COTELLIC commercialization expenses under the collaboration with Genentech; consulting and outside services expenses, which includes an accrual for termination fee due to Sobi, our European distributor of COMETRIQ; and stock-based compensation expense for performance-based stock options and an annual bonus made to our employees in the form of fully vested restricted stock units.

Other income and expense net for the quarter ended March 31, 2016, was a net expense of $12.2 million compared to $12.4 million for the comparable period in 2015. The net expense is comprised primarily of interest expense, which includes $7.2 million of non-cash expense related to the accretion of the discounts on both the 4.25% convertible senior subordinated notes due 2019 and the Company's indebtedness under the Deerfield notes for the quarter ended March 31, 2016, as compared to $7.7 million for the comparable period in 2015.

Net loss for the quarter ended March 31, 2016, was $61.3 million, or $0.27 per share, compared to $35.2 million, or $0.18 per share, for the comparable period in 2015. The increased net loss for the quarter was primarily due to increases in selling, general, and administrative expenses and research and development expenses, partially offset by an increase in net revenues.

Cash, cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totaled $407.6 million at March 31, 2016, which increased from $253.3 million at December 31, 2015, as a result of the $200 million upfront payment we received from Ipsen in connection with our February 29, 2016, license agreement.

Now turning to our financial guidance for 2016, we are reiterating our guidance provided on the Q4 2015 call, that total costs and operating expenses for the full year will be between $240 million and $270 million. This guidance includes $30 million of non-cash costs and expenses related primarily to stock-based compensation expense. And with regards to our cash in 2016, the upfront payment and anticipated milestones from Ipsen has put us in a very strong position.

As we outlined on our fourth-quarter 2015 call, we will not be providing cash guidance for this year because revenue variables make it extremely difficult to predict our final cash position. We are on the cusp of an anticipated dynamic launch of and revenue contribution from CABOMETYX in advanced RCC here in the US and receiving meaningful royalty revenues from COTELLIC. With the cash we had to start the year, disciplined expense management, including the costs associated with launching CABOMETYX in the US for advanced RCC and the anticipated milestones from Ipsen, we are projecting that we'll be in a very healthy cash position at year end.

I'm pleased with where the Company is sitting currently from a financial perspective. We now have an even clearer path to becoming cash flow positive. We look forward to updating you with our revenue and overall financial performance over the course of this year.

And with that, I'll turn the call back over to Mike.

All right, thanks, Chris. The first quarter of 2016, along with April, have been similarly productive and have witnessed the achievement of major milestones that have already begun to dramatically shape our future. The approval of CABOMETYX in advanced RCC represents substantial progress in our vision to build a broad cabozantinib franchise that addresses unmet medical needs in commercially meaningful markets. With the resources we have in hand, we are in a strong position to execute on the next key drivers of our business, specifically --

First, the continued launch of CABOMETYX in advanced RCC in the US. This includes fully leveraging the opportunity that ASCO 2016 provides, further reaching the oncology treatment community at this critical stage.

Second, support of our partner Ipsen as we prepare for the EU approval of cabozantinib in advanced RCC.

And third, accruing patients into the CELESTIAL trial in HCC to reach our target for data in 2017.

We are making very significant strides in our efforts to bring new therapies to people with cancer who we individually and collectively aim to serve. And I am personally very excited about what 2016 could look like going forward from today.

Before we close, I want to again thank everyone in Exelixis for their individual and combined efforts in helping us reach the important milestones that we discussed today. I'm especially pleased to welcome all of our new employees and look forward to working with them and the rest of the team as we together take our Company, our culture, and our business to the next level.

So thank you for your time this afternoon and your interest in Exelixis, and we're now happy to open the call for questions.

Thank you. (Operator Instructions.) Eric Schmidt, Cowen and Company.

Thanks and congrats on all the recent progress. Maybe for PJ, it sounds like you have a fair bit of insight based on the soft label experience for COMETRIQ in RCC. Do you know things like the compliance rate, the line of therapy that the drug is typically being prescribed in, what type of physician prescribers are utilizing the therapy?

Yes, thanks for the question. I'll first say just we're very pleased with the launch. The data on the label, which is very differentiated in terms of our trifecta of efficacy improvements in overall survival, progression-free survival, and objective response rate, what we're hearing generally in the field, although it's very early days, is that this is being really well received by physicians.

So as far as some of the metrics go, what we have seen in the cohort of patients, and I emphasize that it's an early look into things, is that since ECC ESMO -- as I mentioned, the dose being used is 95% at 60 milligrams, and we've seen a compliance rate in that same cohort -- again, which is preliminary -- of about 90%. So we're getting a good sense of that data and how it's playing out in the commercial setting, so we're very confident in that. And as I mentioned earlier, the momentum we're seeing in it is certainly encouraging with regards to a sixfold increase in new prescribers and new patients in the post-ECC ESMO setting relative to that similar time period before ESMO ECC, which is also very encouraging.

We're also happy that our distribution channel is up and running and filling prescriptions. And what's been gratifying is that we've seen and heard many stories already about physicians wanting to fill the drug and our team working together to make that happen, in some cases collectively across sales and market access within 24 to 48 hours, which is fantastic. We've had our first commercial co-pay assistance script filled, which is great news. And our team just continues to fight for every patient, every script, every day.

So the average duration of therapy that you quoted of around 7.6 months that was also observed in METEOR -- is that the average duration for all off-label COMETRIQ patients, or is that specifically for the second-line population?

Yes, so I'll say that's specific to RCC, generally speaking and what we've seen in our commercial experience, but we're not really breaking that out by line of therapy.

Can you say whether you've seen predominantly second or third or a mix of the two lines?

Well, I guess what I'd say generally -- I referred to this in the prepared remarks -- is our historic use prior to our approval last week, we believe and hear it anecdotally that it's primarily in later lines of therapy, so third, fourth line and beyond. So that's what we understand.

Okay. Well, that's encouraging, then, if you're still in those later lines and you're not sacrificing anything in duration. Maybe just one last quick one for -- this is either for PJ or Chris -- just on the MTC sales for COMETRIQ. Would you expect to see that decline substantially in the next few quarters? And to what extent, if you can help us?

This is Chris, Eric. So the way we're looking at it, so we gave you all the metrics that are around the RCC demand that's going on. So we did see a 200-carton increase in demand from the fourth quarter to the first quarter. We saw approximately 400 units prescribed in the first quarter for RCC patients. And the way we're looking at it is, as PJ mentioned and I mentioned, that the thyroid demand has remained relatively flat for the last several quarters, or going back to even the first quarter of last year. And we feel that you have all the numbers there to come up with what the COMETRIQ demand is outside of RCC.

Just one other thing, too, is we did this in order to give everybody insight into the demand that's happening with COMETRIQ, and we don't feel there's an obligation going forward that we're going to update this information. But we just wanted to make sure everybody had a good understanding of what the market dynamics are for COMETRIQ.

Thank you very much.

Stephen Willey, Stifel.

I appreciate all the commentary around the pre-launch utilization. Just wondering if you guys are anticipating there would be a meaningful stocking benefit, that is, in the Q2 number, just given the recent shipment to wholesalers. And then also along those same lines, if there's anything on the revenue recognition front that we should be aware of during your early stages of launch.

Yes, Steve, it's Mike. You're breaking up a little bit. There's some pretty serious background noise there. I think Chris can probably try to answer both those. Chris, did you get those questions?

Yes. So, Steve, I think what your question was, will there be significant stocking? And also, what is our revenue recognition?

So two things. So to answer both of those things, we don't expect large stocking to happen in the trade. It's going to be through, primarily through specialty pharmacies, so we don't see that there will be a large stocking in those. We have product at our distributor, and it can be out to the trade, both the specialty pharmacies and specialty distributors, pretty quickly. So we don't expect a large stocking.

Now, on the revenue recognition, we are still working through some of that with our auditors. And we'll be able to update you more, obviously, in the next quarter call when we start recognizing revenue. But we are working through that with our auditors at this point in time.

Okay, thank you. And sorry for the background noise. And then just one last question with respect to cobimetinib and whether or not you can just provide any color around what the profit share or perhaps gain may look like in 1Q. Thanks.

Steve, this is Chris again. So the actual -- there was a loss in the quarter, $7.3 million. There was some current period cost in there, which was approximately $4 million. And then there was some catch-up from prior periods that we accrued for that we were charged by Genentech in the quarter. So overall, again, $7.3 million in the quarter loss that we ran through our SG&A line (inaudible).

Okay. And maybe just a follow-up with respect that, just wondering as you helped to co-promote this drug, where you're seeing the most amount of traction, just with respect to adopting. There was obviously another BRAF/MEK combo that's already in the marketplace, and we hear from physicians, that some of the hierarchy issues are kind of unmanageable, and they're looking for another treatment option in that regard. But just wondering if what you're seeing is initially, and I understand it's early day. But if you're seeing a lot of utilization as a result of similar tolerability issues or if you actually can (inaudible) front-line regimen of sorts. Thanks.

Yes, thanks for the question. I'd emphasize for the COTELLIC launch, also relatively early days. And as we've talked about historically, it's certainly the BRAF-positive metastatic melanoma market is very competitive, with multiple PD-1 immunotherapies available, ipilimumab, and as you mentioned, the competitor combination from Novartis.

So what we've seen is solid uptick. It's a little early to really tell what type of patients we're getting, as it's only really been a few months. But pyrexia has certainly been an issue, to an extent, for the competitor. But as we're out talking about the data and educating physicians, I'd say we're making progress, although it's steady and, as we've talked about, it's a relatively small and competitive marketplace.

Operator, why don't we do ahead and take the next question.

(Operator Instructions.) Michael Schmidt, Leerink Partners.

Congrats on the launch as well. Maybe a brief follow-up on Cobi. You gave your guidance for the year. Do you assume a loss for Cobi for the full year?

Yes, Michael, it's Chris. Yes, we're assuming a loss for Cobi for the full year. It's included in our total SG&A guidance, or our total guidance, and it's included in the SG&A line for this year.

Okay, thanks. And then just to clarify, how many vials, I guess, or patient supply is in a carton of CABO?

Yes, so a carton is the unit for COMETRIQ, and a carton is -- CABOMETYX, sorry. CABOMETYX is a bottle, and that's a 30-day supply, 30 tablets in a bottle for any given dosage strength.

Okay, and for COMETRIQ, how much is one carton?

A carton of COMETRIQ, again, a 28-day supply in that case.

I see, so one month. Okay, got it. And then another question, I guess more philosophically, you have a lot ongoing with CTEP, (inaudible) get sponsored studies. And just want to get your sense of how high the hurdle is now to potentially run some company-sponsored trials as data emerges from those studies.

I think the CTEP and IST two program spans a total, as I mentioned earlier, of around about 45 ongoing or planned studies. And these are, for the most part, Phase 2 studies. They're single-arm studies or combination studies or randomized Phase 2 studies and also Phase 1b studies. So I think these studies provide a very nice portfolio to help us prioritize indications and perform initial signal searching in additional indications and can provide the basis for future late-stage development.

Yes, Michael, it's Mike. Maybe I can provide a little bit more color. I think the gate here for us moving from what we have in the CTEP portfolio into company-sponsored, either larger randomized Phase 2's or potentially pivotal trials -- that gate is dependent upon, obviously, good data, the right analysis around competition, the commercial opportunity. So the full picture on what that investment might look like and entail, including whatever upside could result from that.

So we've got a full team in place now between developments, regulatory, commercial, and finance to be able to put together, I think, a very strong business case based upon our generic expertise at the Company. So we'll be doing a full analysis on any opportunity going forward, with the bigger picture in mind. And that's where we're at right now. I think we're very excited about that and we're ready to start doing that now that we've got some of these very important milestones behind us.

All right, great. Thank you very much.

And at this time, there are no further questions. I would now like to turn the call back to Ms. Susan Hubbard for any further remarks.

Thank you, Ronya, and thank you all for joining us today. We welcome your follow-up calls with any additional questions you may have.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a wonderful day.