Exelixis Inc (EXEL) 2026 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Exelixis third-quarter 2026 financial results conference call. My name is Tawanda, and I will be your operator for today. 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, Mr. Andrew Peters, Senior Vice President of Strategy and Investor Relations. Please proceed.

Thank you, Tawanda, and thank you all for joining us for the Exelixis third-quarter 2026 financial results conference call. Joining me on today’s call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; Dana Aftab, our Executive Vice President of Research and Development; and P.J. Haley, our Executive Vice President of Commercial, who will review our progress for the third quarter 2026, ended September 30, 2026.

During the call today, we will refer to financial measures not calculated according to generally accepted accounting principles. Please refer to today’s press release, which is posted on our website, for an explanation of our reasons for using such non-GAAP measures, as well as tables deriving these measures from our GAAP results.

During the course of the 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 discovery, product development, regulatory, commercial, financial, and strategic matters, potential growth opportunities, and government drug pricing policies and initiatives. Actual events or results could, of course, differ materially. We refer you to the documents we file from time to time with the Securities and Exchange Commission, 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 product commercial success, market competition, regulatory review and approval processes, conducting clinical trials, compliance with applicable regulatory requirements, our dependence on collaboration partners, and the level of costs associated with discovery, product development, business development, and commercialization activities.

With that, I’ll turn the call over to Mike.

All right. Thank you, Andrew, and thanks to everyone for joining us on the call today. Exelixis had a strong third quarter and continues to advance the key components of our business. The company is well-positioned to deliver on our strategic objectives and tactical goals for 2026 and beyond, as we aspire to become a company with a diverse pipeline of potential oncology franchise assets and opportunities.

Most importantly, zanzalintinib is positioned to drive the next phase of growth for Exelixis as our second franchise molecule, potentially first with the third line plus CRC opportunity, followed by several waves of pivotal trials that we’ll highlight today. Cabo’s strong third quarter performance reinforces our confidence in its long-term revenue growth trajectory.

We saw solid year-over-year growth in both the RCC and NET indications in Q3 and are excited with the potential of the cabo NET indication, which serves as the foundation of our future expanded NET franchise with zanzalintinib and other molecules in our pipeline.

The bottom line today is that we remain laser-focused to advance Exel to the next level with numerous opportunities as we build new oncology franchises through discovery, development, commercial, and business development activities while we reinforce our existing cabo franchise.

Key highlights for the third quarter 2026 include, first, zanza is in the spotlight as our next potential franchise opportunity. Zanza remains our number one R&D priority, and we are advancing key objectives across the program. Beyond our current pivotal trials, we are actively advancing a second wave of potential pivotal trials that could further expand the scope, reach, and long-term value of zanza in GU, GI, and other indications. Our goal is to build a durable franchise with stacking capabilities that could drive growth for years to come.

Second, we continue to see substantial growth from the cabo franchise. Cabo remains the leading TKI for RCC and the market leader for the oral second-line-plus NET segment.

Third quarter 2026 US cabo franchise net product revenues grew approximately 11% year-over-year to $605 million. Continuing its role as the worldwide leading TKI, global cabo franchise net product revenues generated by Exelixis and its partners grew approximately 11% year-over-year to $818 million in the third quarter 2026.

Third, our commitment to rigorous expense management and capital allocation is unwavering as we invest in our mission-critical R&D priorities while returning cash to shareholders with our share repurchase program. We believe our expense management and capital allocation strategy is an important corporate differentiator and positions us to create both short-term and long-term shareholder value while maintaining strategic flexibility.

Our third quarter and year-to-date progress underscores the strength of our oncology franchise strategy as we advance zanza towards becoming a major franchise, develop our broad portfolio, grow the cabozantinib business, and maintain disciplined capital allocation. With that, please see our press release issued an hour ago for our quarterly financial results and a comprehensive summary of key corporate milestones achieved during the period.

With that, I’ll turn the call over to Chris.

Thanks, Mike. For the third quarter 2026, the company reported total revenues of approximately $659 million, which included cabozantinib franchise US net product revenues of $605 million. CABOMETYX net product revenues were $603 million and included no clinical trial sales. As a continued reminder, clinical trial sales have historically been choppy between quarters, and we expect this to continue into the future.

Gross-to-net for the cabozantinib franchise in the third quarter was approximately 29%, which is lower than the gross-to-net we experienced in the second quarter. This decrease in gross-to-net deductions in the third quarter is primarily due to lower 340B discounts when compared to the second quarter.

Additionally, we’re updating our estimate for full year 2026 gross-to-net deductions, and we’re now projecting that’ll be approximately 30%. Our CABOMETYX trade inventory was down at 1.8 weeks on hand at the end of the third quarter when compared to the second quarter. Total revenues in the third quarter also include approximately $52 million in royalties earned from our partners, Ipsen and Takeda, on their sales of CABOMETYX.

Our total operating expenses for the third quarter of 2026 were approximately $390 million, compared to $380 million in the second quarter. The sequential increase in these operating expenses was primarily driven by higher legal and advisory fees, marketing expenses, and higher cost of goods sold, which were offset by lower license and other collaboration costs. Provision for income taxes for the third quarter 2026 was approximately $64.7 million, compared to approximately $50.6 million for the second quarter of 2026.

The company reported GAAP net income of approximately $218 million, or $0.88 per share basic, and $0.85 per share diluted for the third quarter 2026. Company also reported non-GAAP net income of approximately $240 million, or $0.97 per share basic, and $0.94 per share diluted. Non-GAAP net income excludes the impact of approximately $22 million of stock-based compensation expense net of the related income tax effect. Cash and marketable securities for the quarter ended September 30, 2026, were approximately $1.4 billion.

During the third quarter 2026, we repurchased approximately $250 million of the company’s outstanding common stock, resulting in the retirement of approximately 4.5 million shares of the company’s outstanding common stock at an average price per share of $55.77.

As of the end of the third quarter 2026, we had approximately $348 million remaining under the $750 million stock repurchase plan authorized by the company’s Board in May 2026. Finally, we are updating the full year 2026 financial guidance, reflecting changes to our cost of goods sold and our tax rate estimates, which are detailed on slide 13 of our earnings presentation.

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

Thanks, Chris. Our unified strategy in R&D is focused on developing multiple franchise molecules in oncology. Therefore, we continue to be focused on maximizing our productivity with disciplined investment in high-value opportunities for zanza, as well as the rest of our portfolio. Our strategy is based on our experience with cabo, where 14 completed pivotal trials and eight approvals firmly cemented its franchise status and brought tremendous value to patients across a spectrum of different cancers.

We are taking a similar approach with zanza, where we now have seven ongoing trials that are potentially label-enabling, which we refer to as Wave 1. Those trials address just a subset of the potential opportunities for zanza, and we are now well underway on planning and executing our Wave 2 pivotal studies for zanza. All of these activities are aligned with our strategy, which prioritizes development of zanza as a multidimensional solid tumor oncology franchise molecule.

The STELLAR-316 trial is a key component of this strategy and is designed to entrench zanza in the GI franchise. This is a pivotal phase III trial investigating zanza with and without subcutaneous pembro in patients with resected stage 2 or 3 colorectal cancer who, following definitive therapy, have tested positive for molecular residual disease and have no radiographic evidence of disease.

I’m happy to say that sites in this trial are now activated and enrolling participants. We are particularly excited about this trial, not only because of its potential to improve outcomes in CRC patients at an earlier stage of disease than was addressed in the STELLAR-303 trial, but also because it utilizes the Signatera test to select patients with the greatest need. Regarding the NDA based on STELLAR-303, our updated PDUFA action date is March 3, 2027.

In the neuroendocrine tumor indication, STELLAR-311 is our global phase III trial evaluating zanza compared to everolimus as an initial oral therapy in patients with pancreatic or extrapancreatic neuroendocrine tumors. STELLAR-311 positions zanza to potentially become the first and only small molecule to be randomized against an active control in a pivotal trial in this indication, which, depending on the data, could potentially position zanza to broadly displace other oral agents in the frontline setting. Thus, we are very enthusiastic about STELLAR-311, and that sentiment is also shared by investigators and patients based on the continued robust enrollment we’ve observed in the trial since its activation.

In the GU tumor franchise, STELLAR-304 is our first pivotal trial for zanza in kidney cancer, evaluating the combination of zanza plus nivolumab versus sunitinib in patients with non-clear cell renal cell carcinoma. We completed enrollment in STELLAR-304 last year, and we now expect top-line results from the study to be available in the first quarter next year. If positive, those results could lead to our second NDA filing for zanza.

In clear cell RCC, progress continues with regard to the two pivotal phase III studies that Merck is running to evaluate zanza in combination with belzutifan, with LITESPARK-033 investigating the combination in the frontline setting and LITESPARK-034 in the second-line plus setting.

Finally, for our Wave 1 trial updates, STELLAR-201 is our Phase II trial evaluating zanza in patients with recurrent meningioma who are no longer responsive to or eligible for local therapies, and enrollment in the trial continues to exceed our initial projections. This indication represents a very high unmet need in neuro-oncology, which we believe is a factor in the robust enrollment we’ve observed. Pending favorable results and given the absence of any approved systemic therapies in this setting, the STELLAR-201 trial could be an important opportunity for zanza to become the first systemic therapy that could improve outcomes for these patients.

We’re excited to see these seven ongoing Wave 1 trials continuing to move forward, and we believe that zanza’s differentiated profile has the potential to translate into meaningful benefit for patients in other tumor settings and/or combinations with additional molecules and mechanisms of action. To realize that potential, we are actively pursuing the next wave of potential pivotal trials or Wave 2 for zanza.

A primary focus for Wave 2 is to continue investigating zanza combined with established immunotherapies given the demonstrated clinical differentiation we’ve observed with zanza paired with atezo in CRC and with nivo in RCC, which we believe strongly supports zanza’s potential to be the TKI of choice for combinations with immune checkpoint inhibitors.

A clear fit within this strategy is STELLAR-202, our phase II trial in squamous non-small cell lung cancer that’s investigating the addition of zanza to pembro in the maintenance phase after induction with pembro plus chemotherapy. I’m happy to announce that STELLAR-202 is now initiated and enrolling participants.

In addition to STELLAR-202 in lung cancer, we’re also planning combinations with established checkpoint inhibitors in other tumor types in Wave 2, including bladder cancer. We are especially interested in and planning for a potential trial for bladder cancer patients previously treated with enfortumab vedotin plus a PD-1 immune checkpoint inhibitor.

Our cohort in STELLAR-002 evaluating zanza in this setting has enrolled extremely quickly, affirming the substantial unmet need in this setting. Beyond established IO molecules, the mechanism of action of zanza clearly supports combinations with newer generations of IO-based therapy as well. To that end, we’ve begun enrolling a cohort combining our novel bispecific immunotherapy XB628 with zanza in our XB628 phase I trial. The primary focus of this cohort is safety, and patients across a range of cancers are being enrolled.

We expect to begin enrolling expansion cohorts soon to focus on our key tumor franchises, including GU and GI. We’ve also been engaged in discussions with potential collaborators to plan studies combining zanza with their novel molecules and mechanisms of action to address unmet needs across a spectrum of cancers, primarily focused in GU and GI indications.

We plan to give further updates on these activities as we get closer to launching the trials. Beyond immunotherapies, we’re also exploring the combination of zanzalintinib with chemotherapy, specifically docetaxel, in patients with metastatic castration-resistant prostate cancer who have measurable disease.

This combination is being investigated in an expansion cohort in STELLAR-002, which is actively enrolling patients. The rationale for this cohort is based on data with cabo, where a small phase II study showed favorable outcomes when cabo is combined with docetaxel in patients with metastatic CRPC.

If zanza in combination with docetaxel is shown to be safe and active, that could open up a number of opportunities across a range of solid tumors where docetaxel, other chemotherapies, or ADCs carrying cytotoxic payloads remain the standard of care, such as in second-line non-small cell lung cancer and CRC. Accordingly, other studies combining zanza with cytotoxic modalities to be potentially included in Wave 2 are in the planning stage to allow us to move quickly dependent on the data that emerge.

Finally, our early clinical pipeline continues to progress, and we’re also advancing new small molecule and ADC programs toward IND filings and development candidate nominations. In this regard, I’m happy to announce that we have a new development candidate in our pipeline, XL558, a selective somatostatin receptor 2 agonist, which has recently been nominated and for which we plan to submit an IND later this year.

I look forward to sharing more details on this and other pipeline programs as they advance. With that, I’ll turn the call over to P.J.

Thank you, Dana. The CABOMETYX franchise continues to show strength after more than a decade since its initial launch. With seven indications predominantly in the GU and GI solid tumor space, CABOMETYX is a best-in-class TKI across these therapeutic franchises.

Exelixis has built and refined significant commercial capabilities throughout this time, including a foundation of success in the community setting. As Dana detailed, the zanzalintinib franchise is positioned to build on the foundation of CABOMETYX in both GU and GI oncology and beyond with its extensive development program with what we believe to be a superior molecule. We are excited about the potential approval of zanza in colorectal cancer as our first indication in a large tumor type with significant unmet medical need.

CRC is largely treated in the community, which provides an opportunity to leverage the strength of our capabilities in that setting. We are thrilled with the results of STELLAR-303. Pending regulatory approval, we believe that these data would provide Exelixis with a compelling commercial opportunity in one of the big four tumors. The third-line plus CRC setting consists of approximately 23,000 patients in the US and represents an overall market opportunity of approximately $1.5 billion in terms of contemporary pricing.

Our market research and advisory boards demonstrate positive feedback and excitement for the STELLAR-303 data. Physicians reiterate the significant unmet medical need for patients in the third-line setting and are excited for the potential to have a regimen that includes an immune checkpoint inhibitor available for the broader population of CRC patients.

The analysis of CRC prescribers demonstrates a significant overlap with CABOMETYX prescribers at approximately 70%. When including co-location of addresses, the overlap increases to 90%. This overlap and the fact that the majority of CRC is treated in the community, position us well for the potential launch of zanza.

Turning to CABOMETYX. Net product revenue grew 12% year-over-year for Q3 2026 compared to Q3 2025, while showing strength across all facets of the business. RCC continues to grow as we have a strong promotional focus on our first-line 9ER data, where we maintain a high market share as the number one TKI plus IO combination, in addition to being the number one prescribed TKI in renal cell carcinoma.

The net business continues to grow as CABOMETYX continues to be the number one prescribed oral therapy in the second-line plus setting. The prescription data in the oral TKI market basket of cabo, lenvatinib, axitinib, sunitinib, and pazopanib convey the strength of cabo relative to the competition.

Looking at the TRx comparison of Q3 2025 to Q3 2026, CABOMETYX grew 3 share points from 46% to 49%. Additionally, CABOMETYX TRx volume grew 13% in Q3 2026 compared to Q3 2025, outpacing the growth rate of the market basket, which was 6% for the same period.

In RCC, CABOMETYX continues to show strength with demand growth and first-line combination market share, where CABOMETYX plus nivolumab is the number one TKI plus IO combination. The CheckMate -9ER data continue to resonate with prescribers across the various clinical characteristics of RCC patients. The CABOMETYX business showed continued strength in the community setting, which is reflective of oncologists’ comfort and experience with cabo.

With regard to NET, we are pleased that demand continues to grow, and we see further penetration into the community setting. CABOMETYX second-line plus new patient oral market share continued to increase and is now greater than 50%, extending the brand’s leadership position in the space. We continue to see the benefit of more patients on therapy as refills are driving more demand, and given the higher new patient market share, we expect refill to continue to increase going forward.

Our expanded GI sales team has now been deployed in the field for a second full quarter, providing greater reach into the community. In addition to driving continued momentum and new patient market share, the team is increasing the breadth of prescribers with now over 1,000 unique NET prescribers activated since launch.

The CABOMETYX business remains strong, with growth being driven by both RCC and NET, as our team’s sole focus is maximizing the impact of our promotional efforts across all customers and tactics. cabo remains well-positioned as the number one TKI and TKI plus IO combination in RCC, as well as the number one oral therapy in the second-line plus NET market.

Looking forward to zanza, our internal team is in full launch preparation, and the excitement around these efforts is palpable. We look forward to the opportunity to launch the next Exelixis franchise to be able to help appropriate patients with colorectal cancer. Beyond STELLAR-303, we are enthusiastic about the significant development plan for zanzalintinib, which could position the zanzalintinib franchise to far exceed cabo in terms of the number of patients who can be impacted across tumor types and settings. With that, I will turn the call back over to Mike.

All right. Thanks, P.J. I will close by thanking the entire Exelixis team for a strong first 9 months of 2026. As we finish the year and look ahead to 2027, we are proud of our progress and focused on achieving more. It is a potentially transformational time for Exelixis, with zanzalintinib taking center stage in development and commercial planning. We are proud to be part of one team, united in improving outcomes for cancer patients and building value for shareholders.

Advancing zanza as our second potential franchise remains our top priority, supported by revenues from cabo’s growing business as we invest in our pipeline and return value to shareholders through our share repurchase program.

I want to thank everyone at Exelixis for their great focus and unwavering teamwork as we work together to advance our mission to help cancer patients recover stronger and live longer. We look forward to updating you on our progress in the future. Thank you for your continued support and interest in Exelixis, and we are happy to now open the call for questions.

(Operator Instructions)

Andy Hsieh, William Blair.

Great performance overall across all the different business units. So congratulations on all the progress there. One bigger picture question, if you do not mind. Can you comment on the 340B program? It seems like there is some evolution there, and just how that would impact the, obviously, the existing cabo franchise and also zanza going forward.

Yeah, Andy, it is Mike. Yeah, there is a lot going on in the 340B world. It has, to our knowledge, very little impact on us. So we continue to have our integrity agreement in place to make sure that we can track claims and reduce essentially double counting when it comes to other programs. But we are really on top of that, and our market access team is obviously very engaged there in doing the full court press across the board. But we are seeing that stabilize in the business, which is great to see, and we continue to, again, make it a focus as we go forward.

Asthika Goonewardene, Leerink Partners.

Thanks for taking my questions and good to speak to you from the new platform. Just wanted to talk about the zanza FDA discussions that are underway right now. Have you reached labeling discussion stage of the interactions with the FDA?

Asthika, thanks for the question and great to hear from you again. Dana, you want to take that one?

Sure, yeah. Beyond what I said in the prepared remarks around our PDUFA date now being in March next year, for obvious reasons, I am not going to speculate further on anything, especially regarding our interactions with the agency during an ongoing review.

Akash Tewari, Jefferies.

Hey, this is Manoj on for Akash. Just two from our end. Are the overall and arm specific adverse event related dropout rates in STELLAR-304 tracking in line with your original design assumptions? Also, you previously mentioned about 5-8 month median PFS in the control arm. Is that still unchanged given the delay in the readout?

Yeah, we had a hard time hearing you. I think the first question was around event rates and then the control arm estimates. Dan, do you want to --

This is in 304.

In 304, yeah.

Yeah. Thanks for the question. First of all, we are really excited about the 304 study. It represents the first Phase III global randomized controlled trial for patients in this setting. It really has the potential to not only establish a level 1 evidence-based standard of care for patients, but also to set new standards because all of the data right now that exists are from small single-arm studies, regionally restricted studies.

Just regarding our announcement today about the top line results being available in Q1, we are not going to get into details around enrollment or event rates or anything like that, other than to say that based on the events coming in, we are now close to a clinical cutoff date, and that is driving our expectations around Q1 for the top-line results.

Sean Laaman, Morgan Stanley.

Hey, Mike and team. Hope everyone is well, and congrats on the numbers. Just on 304, there has been a bit of a delay there, but how large could non-clear cell RCC ultimately become within the broader zanza franchise relative to CRC?

Sean, thanks for that question. Great to hear from you. PJ, you want to take that one?

Yeah. Thanks for the question, Sean. As Dana mentioned, we are really excited about the 304 study particularly since it is the first randomized Phase III to really look at this patient population. This population is about 20% of the renal cell carcinoma population. So we are excited about it, but I think it is important to note that when we think about all of our zanza studies, Dana talked about in Wave 1, this is actually the smallest of those. So our excitement for the program is really great.

I think the other thing we think about with regards to 304 is it is really just our first study in kidney cancer, which is obviously something we are very focused on. We have the two LITESPARK studies with Merck ongoing. I think we are very focused on other combinations with zanza, as Dana referred to with orthogonal MOAs. If you look at the LITESPARK-012 study being negative, which was reported at ESMO, that leaves an opportunity in the first-line setting.

So we are very much looking at that as a potential opportunity going forward. We have been very successful, as I referred to in my remarks with CABOMETYX with our market share, et cetera, being the market leader in the 20s. Our vision and our goal is to make zanza the market leader in the 30s. I think with the renal program, the GI program we are working on Wave 1, and now the trials we are working on in Wave 2 and beyond set us up very well to do that.

Michael Schmidt, Guggenheim.

I had another one on wave 1 zanza opportunity, this one in clear cell RCC. I am just trying to understand the size of the LITESPARK-034 opportunity, which could be the first study to read out, perhaps relative to Merck’s LITESPARK-011, which is similar in some ways. Then also on LITESPARK-033, the other study. Yeah, curious how you think about the recent adjuvant belzutifan approval and how that might impact that patient population. Thanks so much.

Thanks, Michael. P.J., you want to take a shot at that?

Yeah. Thanks for the question, Michael. As I was just referring to, we are really excited about the zanza program broadly. At ESMO, lots of excitement and engagement with KOLs there about it, generally speaking.

With regards to those LITESPARK studies 33 and 34, LITESPARK-033 is in the frontline in the post-adjuvant setting. So even more and more patients are receiving adjuvant therapy. As far as the LITESPARK-022 study, we will have to see how those data evolve with further follow-up and see what the impact of that is on the adjuvant setting. But I think generally speaking, with more options, you can only have more patients treated. Then certainly we are excited about LITESPARK-034, where the design of that is adding zanza to belzutifan.

I think in that sense, it’s a bit differentiated from some of the other studies out there, and has the potential to have some good data and be impactful in the second-line plus population in kidney cancer, which we’ve proven before with METEOR and beyond that you can have a very substantial business in that setting.

Silvan Tuerkcan, Citizens.

Yeah, hello. Congrats on the great quarter with CABOMETYX, and thanks for taking my question. I just wanted to ask maybe if you can give us your ESMO 2026 kind of overview here, kind of what you thought was exciting for maybe the CABOMETYX franchise in RCC and any learnings that you might have had from the failed LITESPARK studies there, and maybe nivolumab, the bispecific here that’s coming late line. And then also, have you learned anything at ESMO for zanza and colorectal where we had that c-Met ADC data from AbbVie in late line as well? Any color would be helpful. Thank you.

Silvan, yeah, thanks for the question. Great question, actually. PJ, Dana, why don’t you guys tag team that one? PJ, why don’t you start?

Yeah. Thanks for the question, Silvan. Certainly, and I was referring to it earlier, ESMO was a great meeting for us. Really busy. Lots of discussions with KOLs, with investigators, both on the GU and the GI side, which is always rewarding as we’ve continued to build these relationships.

The feedback we’re hearing generally about the zanza program, the excitement about it is really a lot of excitement, and very palpable as these studies are enrolled quickly, and as we move closer to potentially to market with STELLAR-303. Overall, from the data presented, I think there wasn’t really a lot new there in terms of impacting cabo today.

I think significantly, we did see the data from LITESPARK-012, which we knew was negative, as I referred to earlier, which I think is providing basically the fact that there’s an opportunity now in the broad first-line population with those triplets failing to have the potential to have a regimen raise the standard of care beyond doublets in first-line RCC. So that’s something we’re very interested in and thinking a lot about in terms of our development plan.

Great. Dana?

Yeah. So Sylvain, thanks for that question. We were obviously at ESMO and tracking all the developments there very closely. And we feel that all the data coming out, especially on some of the newer IO mechanisms, all of these are mechanisms that are orthogonal to zanzalintinib. It feeds right into our strategy for developing zanza as the TKI of choice to really become the backbone of any IO combination across the spectrum of GU and GI, and even in some indications outside of those key franchises.

From a development perspective, we are really focused on that aspect of evaluating any potential combination partner with zanzalintinib, and especially in Wave 2, we are considering lots of potential combinations there. I would say stay tuned, but we were certainly looking at those data.

Jason Gerberry, Bank of America Securities.

Just one on STELLAR-304, and just a question on the protocol, which says, I think, if I have got this right, that patients who drop out will continue to be followed for OS. I am just trying to get a better sense of whether those patients would be censored or not for OS. If a lot of patients on Sutent discontinue randomization if they want to get on a PD-1 TKI, I am just wondering if that would at all be a factor confounding the OS analysis. Just wondering if you could comment on that protocol point. Thanks.

Yeah. Thanks for the question, Jason. This is Dana. Regarding STELLAR-304, as I mentioned, we are excited about this because the opportunity to deliver the first level one evidence for these patients and patients with high unmet need without any type of study like this to generate that type of evidence for a new therapy. Regarding the specifics of the trial, I do not want to get into details there, and I do not want to speculate on the potential for dropout or anything else like that. As I mentioned, we are close to data cutoff now, which is what is driving our Q1 top-line results expectation.

Gregory Renza, Truist Securities.

Hi, guys. It’s Anish on for Greg. Congrats on the quarter, and thanks for taking our questions. Just on cabo and NETs, I know you guys gave some color on the call with oral class share now above 50%, but we wanted to know how starts and time on therapy are translating into patient accumulation relative to last quarter and perhaps your previous expectations. What is the maintained revenue guide assumed for that build in the fourth quarter? Thanks so much.

Thanks for the question. PJ, want to take that one?

Yeah. Thanks for the question. As you mentioned, referred to in our prepared remarks, we’re really excited and pleased with the business with regards to our NET indication. We had continued demand growth. As you referred to now, our new patient market share in that second-line plus oral setting is now over 50%, which is great, and obviously, we’re seeing continued refills, and with increased patients on therapy, we expect to see more continued refills going forward.

We talked about last quarter, the kinetics of patients coming on therapy. That’s just really a function of the disease. It continues to be, but I think the flip side of that more indolent nature of the disease is that you tend to have really strong duration of therapy in the NET setting. We’re pleased with that, and we see continued strength and growth going forward with the NET business.

Leonid Timashev, RBC.

Hey, guys. Thanks for taking my question. I wanted to ask on STELLAR-316 and maybe how you’re thinking about expectations there. Given that there’s a pembro arm and then a zanza pembro arm as well, how are you thinking about the relative signal that you might see between those two arms, and then how physicians or how you’d envision physicians might want to choose if both are successful? Thanks.

Thanks for the question. Dana, take that one?

Sure. Thanks, Leonid, for the question. Yeah, the cohort design in STELLAR-316 is really designed to address contribution of components. This is in a microsatellite stable population of CRC patients. There really isn’t an expectation of pembro alone being active. We could see activity of zanzalintinib as a single agent, certainly. Then pembro plus zanza, we expect to perform the best, obviously.

It really just comes down to the data. We can’t really speculate on data we haven’t seen. But once those data come out, that will really help drive adoption of either single agent zanza or zanza plus pembro. But again, we can’t get ahead of ourselves and try to game the potential readouts from those various cohorts.

Kalpit Patel, Wolfe Research.

Yeah. Hey, good afternoon, and thanks for taking the question. With cabo sales growing about 6% quarter-over-quarter and the continued momentum you have in NET, I guess, can you comment on the decision to maintain the guidance for fiscal year '26? Does the guidance include any impact, potentially from the LITESPARK-011 regimen? Thank you.

Chris?

All right. Thanks, Kalpit. Thanks for the question. As you heard from P.J. today, the business is doing really well. As you heard from Dana today, the pipeline continues to grow. So, the business continues to be strong. But, as we talked about last quarter, when we adjusted our revenue guidance down, it was because of the temporal nature of the NET indication and the revenue growth associated with that. That continues today.

Etzer Darout, Barclays.

Thanks for taking the question. Just one quick one for me. Just curious, your thinking about metastatic CRC versus adjuvant CRC. If you can maybe talk through the relative contribution you see longer term for zanzalintinib in an adjuvant CRC population relative to the metastatic CRC population would be great. Thank you.

Right. P.J.?

Yeah. Thanks for the question, Etzer. In terms of the metastatic setting, I think the main things we think about there are kind of the significant unmet medical need in that third-line-plus setting where we’re potentially bringing with approval the first IO plus TKI combination where many others have failed in this setting, so that’s exciting. Patients and physicians are very much looking forward to the opportunity to have access to immunotherapy in that broader CRC population. As I mentioned, that’s 23,000 patients in the US, and in current contemporary pricing dollars, about a $1.5 billion TAM.

Now, in terms of that post-adjuvant population, the STELLAR-316 population, it’s a very exciting study, as Dana referred to it. Area of significant unmet medical need. These patients, studies have shown, who have this increase in circulating tumor DNA, sadly, their disease is recurring very quickly, six to eight months.

With the opportunity to potentially prolong that disease-free survival, that would be highly meaningful and clinically meaningful to these patients. They could be on therapy for quite some time. It is a significant population there, and a potential significant patient impact. But as Dana said, we will have to really wait to see the data there.

David Lebowitz, BMO Capital Markets.

Thank you very much for taking my question. I have a question actually on guidance, specifically, and I apologize if I missed it earlier. What's happening with the effective tax rate in the fourth quarter that has led to the shift in guidance, and how should we look at that going forward after the fourth quarter?

Yeah, thanks, David. Every year, the months turn, and you get past your tax return filing in October, and you are able to essentially take into your tax rate items that you had reserved for in prior periods, and we did that this year, we did that last year. I would say that we are not giving guidance longer term, but our longer-term expectation is tax rate will be at the federal rate or thereabouts.

Ash Verma, UBS.

Oh, hi. Thanks for taking my question. I wanted to ask about the zanza launch opportunity in CRC. It seems like in earlier line CRC, there is quite a bit of activity. We saw the pembrolizumab plus chemo data from Genmab, atezo, and there are a few upcoming PD-1/PD-F agents that have data as well. When you think about these programs in earlier line, could that change the 23,000 addressable patient population that you outlined for zanza as an opportunity? Thanks.

Yeah. Thanks for the question, Ash. I think the patients are there as it is, and I think folks are really excited to have the opportunity, as I mentioned, for this potential regimen to be approved. We are excited about it, and as I mentioned, physicians and patients are excited about it, and it is sizable. We have the opportunity to really leverage the capabilities we have built with CABOMETYX over the last decade. We have a strong presence and focus in the community setting, and the majority of colon is treated in the community setting.

As I mentioned, we have prescriber overlap estimated with our CRC targets with regards to CABOMETYX of about 70%, and it goes to 90% if you include the same addresses. The way we are looking at it is a very big opportunity, and we are excited to bring this to patients where there is a significant unmet medical need.

Yaron Werber, TD Cowen.

So maybe just a couple of questions. The first one is, with the ARC-20 data being presented at ESMO, it showed a really favorable 15 months PFS and 44% ORR with cabo in second line. What do you draw from that data, both as potential impact, maybe even a tailwind on cabo in second line with longer duration of therapy in RCC or potentially to the belz-cabo in front line?

And then secondly, for the next slew of wave one studies with zanza, can you give us maybe just a little bit of a view of what dose of zanza are you testing? Are you going down to 60 mg as a starting point? Thank you.

Okay, so let’s parse that out. PJ, want to start with the first one?

Yeah. Thanks for the question, Yaron. I think with regards to the data, it is obviously early data, and there is multiple combinations there. I think, simply put, if there is a positive study that includes the cabo in the regimen, we would certainly be excited about that. And obviously, a positive study and an approval could provide incremental opportunity for cabo in the space.

Yeah, and sorry, this is Dana, just regarding your question on dose. A lot of work goes into selecting dose for a trial based on extensive modeling from the perspective of exposure response, looking at either tumor response or safety. And we really have to look at each indication separately based on what combination partner we are using, what is the tumor indication, what line of therapy. So, I cannot tell you right now what the different doses are, and it really depends on each individual case and situation.

Andy Hsieh, William Blair.

Thanks for taking the follow-up. Just a quick one for STELLAR-002 in the bladder cancer post PADCEV and pembro. Very interested in the new and growing opportunity. I am just curious about what is the standard of care there, just given the rapidly evolving field there, and what is the clinical efficacy bar?

And then maybe another one with XL558, the oral SSTR2. Just given the different mechanism, small molecule versus peptide, curious if you could tell us about your TPP versus the injectables out there. Obviously, the injection site reaction might go away, but any other things that you are looking for, just given the different way of antagonizing that receptor? Thank you.

Great. PJ?

Yeah, I can start with the bladder piece, Andy. I think, obviously, EV-pembro, great data there, has done very well for patients with metastatic bladder cancer. Dana alluded to we are very excited about looking at zanza in that space, and that cohort is enrolling well. It is kind of a new data-free zone. That is a great opportunity to pursue from a development perspective. Folks there are just getting typically different single-agent chemo regimens. Again, those are just older therapies that they are using because they have been approved for some time.

Okay. Yes, and this is Dana. Just to opine on that a little further. EVP is really being used a lot in the adjuvant setting as well, in the muscle-invasive setting, and there was some new data presented at ESMO on another regimen there. So EVP or IOev is moving early and earlier, creating a lot of opportunity both in the frontline setting, post-adjuvant therapy, as well as in the metastatic setting.

As I mentioned in my earlier remarks, we have seen that there is a tremendous unmet need for these patients. This is one of the fastest enrollments we have ever seen in a phase I cohort, which really kind of validates that these patients really have nothing out there. So we are doing everything we can to address that need with some really innovative ideas, again, using zanza as a backbone for either combinations or as a single agent. Okay.

Thank you. Ladies and gentlemen, at this time, there are no further questions. I will turn the call over to today’s host, Andrew Peters. Mr. Peters?

Thank you, Tawanda, and 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 during today’s call. Have a great rest of the week.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.