Conference Transcript - EXEL 2026-06-09

Paul Choi, Analyst — Goldman Sachs

Great. We'll continue with the next session. I'm Paul Choi, and I cover the SmidCat biotech sector here at the firm. It's our pleasure to have Excelixis join us for this session. To my left is Andrew Peters, who heads up strategy and IR. Maybe what we'll do is kick it off and let Andrew maybe describe the company's priorities and strategy for the balance of 2026 and going into 2027, and then we'll go into Q&A after that.

Michael Morrissey, CEO

Yeah, sounds good, and thank you for the invite. always a great conference good meetings this morning and looking forward to the rest of the day just as a reminder i'm getting me making some forward-looking statements today so please see all relevant disclosures around the risks to our business and regulatory filings so yeah i mean uh 2026 is an important year for xlexis um you know big picture i think the way that we tend to think about the world is through the lens of franchises and kind of what i mean by that is you know it's kind of multi-dimensional so the um you know the idea say take something like cabo rosanza where we're investing broadly uh in those molecules with multiple indications um within uh within each uh drug and then within each of those indications say either rcc or crc or nets um kind of going broadly as well so not only was zanza with multiple trials say ongoing um with uh in crc but say xb371 our tissue vector targeting adc um some other areas as well and then kind of broadly speaking um you know franchises within adcs franchises within small molecules franchises within multi-specific antibodies. So that sort of thing. So from a big picture strategic perspective, I think really what we're doing is transitioning from a single franchise company to a multiple franchise company. And what that means is we're going to maximize the value of kind of the Cabo franchise, keep our eye on the ball, and make sure that we're executing, focusing every day, every minute, every hour on getting Cabo to patients. while also getting ready for the launch of ZANSA in third-line plus CRC, and then executing from a clinical development perspective the remaining six pivotal studies that we have ongoing there, while we're also investing in our earlier stage pipeline, while we're also looking externally to potentially build out that third and that fourth molecule, and then just lastly taking kind of those cash flows that we're generating and investing in kind of the internal bucket that I mentioned before externally and then focusing on some kind of more shareholder-friendly activities like buybacks. So, you know, big picture, the strategic question that I get a lot is that sweet spot, but it really is kind of that transition from a single franchise to a multiple franchise company and all of the individual things that are encompassed within that.

Paul Choi, Analyst — Goldman Sachs

Great. Maybe let's start with your current commercial franchise with Cabo and maybe more specifically the addition of the net indication in the past few quarters and how that's contributed to growth. Can you maybe help us understand what percentage of the mix is that now and sort of how do you envision that, I guess, at steady state as you look forward here?

Michael Morrissey, CEO

Yeah, so, you know, as we talked about in the last quarter, now that we're kind of one year post-launch, you know, frankly, for competitive reasons, we're no longer kind of breaking out specifically that net contribution. What we have said is that when we reiterate a guidance again on the first quarter call, we expect growth to come from both the RCC segment and from net. The net indication, you know, is one we're really excited about. It's, you know, a high-priority franchise for us, not only kind of the Cabo investment that we're making, but also kind of what we're doing with Zanza and then some of our earlier stage studies. You know, so I think it's that dynamic that we're really focused on. The only other thing I'd add there just on the net side, as you know, we added to our sales force earlier this year in part to continue to maximize the effectiveness and momentum around the launch and the net indication, but also to kind of hit the ground running, so to speak, ahead of a potential ZANSA approval later this year as well, kind of in that similar space. And so it's a little bit of a

Paul Choi, Analyst — Goldman Sachs

two-pronged effort. Right. Build it ahead of ZANSA coming up here. Great. I am curious, though, So, you know, can you provide some color on where you're seeing the most capital utilization in that, you know, versus label, where are you seeing in terms of settings, you know, versus chemo and radiopharmaceuticals in any particular, you know, patient subgroup, whether it's pancreatic or extra pancreatic?

Michael Morrissey, CEO

Yeah, I mean, as PJ has talked about in the last couple of earnings calls, the launch is going really well. You know, it's the number one oral now and kind of a new patient starts in that, you know, second line plus. segment and so it's really reflective of the data and if you looked at cabinet broadly I think you know one of the things that's most encouraging about it is just the robustness across each of those subcategories or subsegments of patients and so we're really seeing use kind of across the board it's a you know nothing in particular jumps out but that's kind of the benefit of having such a broadly robust data set.

Paul Choi, Analyst — Goldman Sachs

You also mentioned earlier, and this, I think, continues to surprise investors this many years into the launch, is that you're continuing to see RCC growth in what people sort of write off as a much mature market, but you continue to gain share sequentially quarter after quarter. You're approaching about half the market, roughly speaking, in terms of market share. And so can you maybe articulate for us where this growth continues to come from? Is it from duration of therapy? Is it just more share gains versus other small molecules? Increased utilization of IO and NTK? Maybe just some color there would be helpful.

Michael Morrissey, CEO

Yeah, I mean, as we've talked about, kind of the data that we've provided is additional share gains. And we go out and fight every day for the incremental share point because we understand what that means from a value and from a revenue perspective. But someone asked the other day, like you know why or how and it's really you know simple good data and good team and you know the data that we've generated and the data that we continue to generate say kind of long-term five year data and all of these updates that you see at conferences like ask it to you or you know when they're presented that gives an opportunity for our commercial organization for our reps to go out and have conversations with clinicians about why we think that Cabo Nivo should be the preferred option for these patients. And, you know, having the right team in place to then go out and have those conversations and interactions with prescribers is really, at the end of the day, the recipe for success. And that's something that, you know, our maniacal focus on Cabo and the success of Cabo, we're not distracted by a million other different things, is something that I think makes us relatively unique and is something that, as you mentioned, we're seeing continued growth this far after approval. It's something we're really proud of. Great. I want to turn to Zanza

Paul Choi, Analyst — Goldman Sachs

here and um you know we were uh all at uh esmo last year and so maybe could you briefly recap the the stellar 303 data for us and then contextualize you know what do these data imply for its use in sort of um uh previously treated uh metastatic crc here yeah so so the the stellar 303 really

Michael Morrissey, CEO

you know interesting study um you know kind of strong foundation let's say to help build uh zanza where we think it could go to ultimately be candidly bigger than cabo um you know so that study was looking at zanza plus a tezo versus regorafenib which is the standard of care in that kind of third line plus space um you know showed a statistically and clinically meaningful um improvement uh over the standard of care on overall survival which is the gold standard in oncology and i think the the important part of that you know roughly 11 months you know 10.9 versus um you know nine-ish months on in the control arm is really that consistency of data and that consistency of benefit uh across the board that's something that has stood out um in all of our market research not only around the different patient populations but even say looking at things like prior treatment with, say, Avastin, where other studies, say, may have seen a little bit of a different dynamic, different efficacy, you know, across whether patients had seen prior Avastin or not. So that consistency of benefit is something that stands out. Maybe adding to that, you know, we had a poster at this most recent ASCO conference talking about contribution components, and we think we had a pretty elegant way to, you know definitively answer that question and um one of the the dynamics there and it shows that the combination of you know zanza tezo does have an additive benefit for patients um just the only other thing i'd add is kind of the 303 study was the latest in a series of up until then unsuccessful attempts uh to get io into this patient population and you know if you compare it to say prior studies like LEAP-17, at the end of the day, the biggest differentiating factor was probably ZANSA. So it does, at least to me, show that ZANSA is a differentiated best-in-class TKI. And that's why we're so excited, not only about the 303 opportunity, but as I mentioned before, using that kind of as that foundation to build on from there. I want to double-click

Paul Choi, Analyst — Goldman Sachs

on something you just mentioned here, which is use of IO in this particular patient population. I think, you know, people who treat colorectal are, you know, familiar with using Keytruda and other IO agents in the MSI high population, but it hasn't really been used in this particular later line population, let alone in combination. And so can you maybe share your thoughts on whatever physician feedback has been, both since that ASCO poster that you referenced and ESMO, with regard to use of combination therapy here from the KOLs?

Michael Morrissey, CEO

Yeah, I mean, that's actually something that has consistently jumped out in market research and conversations that we've had. I think if you take a little bit of a step back and think about the CRC market in general, one of the things that's a little bit different about CRC, say, than some of other tumor types, is it tends to be a little bit more community-based than kind of academic, say, KOL-based. And what that functionally means oftentimes is these clinicians, these prescribers, are treating CRC patients and lung cancer patients and RCC and kind of across the board. So what that inherently means is they all have this high degree of familiarity with checkpoint inhibitors. And so up until now, you know, their patients have come to them and said, you know, hey, I just saw this commercial on the Super Bowl for this thing. Can it help me? And, you know, unfortunately, no, it's not approved for your type of cancer. Well, if Zanz is approved later this year with Atezo, you know, the answer can be yes. And so that dynamic around patient awareness, physician familiarity, you know, frankly, the chemo-free option for patients who have had a relatively long journey in CRC, you know, with multiple prior rounds of chemotherapy, all of those things kind of build into this, you know, market dynamic around an excitement around the doublet. And so it's something that, you know, you're right to point out, certainly comes up, but, you know, we're, at the end of the day, we're eager to help launch this and get it into patients.

Paul Choi, Analyst — Goldman Sachs

Great. Maybe one more question on KOL feedback before we move on is, any sense from either the physician community at ESMO or more recently at ASCO if there's a particularly readily identifiable patient population where an IO plus Zanzai combination would be most initially used, I guess, based on either the patient backgrounds, demographics, or just sort of appetite to try an IO combination here?

Michael Morrissey, CEO

Yeah, I mean, I mentioned it before, but one of the things that's most encouraging, I think, about the data set is just the consistency across subgroup. One of the dynamics that you can often see is, in other studies at least, maybe an effect size in one particular subgroup driving the overall activity, we don't see that same dynamic here. And so, you know, as we've gone out to the market and kind of done a lot of this research ahead of time, you know, that theme has actually played out, that it doesn't really seem like, you know, it's just one particular group that seems most likely or most, you know, most appropriate for this. Frankly, it's, you know, our goal, our job, is to ensure that Zanza, Tezo's used in the widest group possible. again if you take a step back and think about kind of the the overall crc landscape you know what we've said is it's about a billion five kind of total market but that's relatively evenly split between say the sunlight regimen tkis and then kind of a mix of chemos and some other things so our goal you know frankly is really to penetrate across all three of those segments as broadly as possible, because we do think that this is really a new novel combination that really has the potential to help these patients live longer.

Paul Choi, Analyst — Goldman Sachs

Great. Your PDUFA is coming up for XANSA in December here. And so I guess one question is, would you launch immediately upon approval here in the calendar year, or would you sort of wait for the turn of the calendar given the rough holiday timing? And then my second question is, you know, how do you think about pricing here, given the data you have, and maybe some of what your pair of conversations have suggested in terms of what the market can support?

Michael Morrissey, CEO

Carefully. I mean, I think it's something that we haven't, you know, discussed, you know, widely publicly. But I think pricing of any medicine is an important consideration, and it's something that we're spending a lot of time with. As it relates to your question on launch timing and preparedness, we're going to be ready to launch kind of, you know, day one. When that happens, we're going to be ready. And so it's certainly not something that we're going to want to wait until the new calendar year, because at the end of the day, you know, our job at Exalexis is ultimately to help patients live longer. And we want to get this new medicine into the hands of prescribers and ultimately to patients candidly as soon as possible because we really do think that this has the potential to right shift that survival curve and benefit patients. And so we're going to be ready from day one. If it happens on the PDUFA and it happens earlier, you know, there's always that possibility. we want to make sure that we're not going to be the limiting step here for patients great

Paul Choi, Analyst — Goldman Sachs

historically you've partnered your cabo sales in terms of ex-us markets but can you maybe you know first update us on your regulatory plans for sort of the key ex-us markets for zanza here and then sort of the commercial strategy you know as you advance on the regulatory side for for

Michael Morrissey, CEO

Zanza, at least initially here in CRC? Yeah, so it's something that, again, we spent a lot of time on kind of internally thinking through all of those different dynamics. As you can appreciate, there's a lot of, you know, inputs to say going into that. You know, one of the, you know, frankly, most relevant ones is just understanding the MFN dynamic and how pricing ex-US is going to potentially play a role in the U.S. as well you know so as you know we own rights to Zanza globally we have yet to kind of decide on what we're gonna do you know with kind of that ex-US market you know outcomes range from you know do we want to launch it ourselves do we want to find a European partner do we We want to find a global partner, kind of ex-US as opposed to, say, what we've done with Cabo with Ipsin, you know, ex-US, ex-Japan, and then our partners Takeda with the Japanese rights. So, you know, there's all of those different dynamics around it. But I think what we want to ensure is we get that U.S. launch right first, understand all of the relative dynamics around MFN and ex-U.S. pricing and its potential influence on the U.S. market, and then we'll kind of come to a real decision around what we're going to do with the rest of the world.

Paul Choi, Analyst — Goldman Sachs

But there's also obviously the consideration of indication expansion there as well, which we can address in a moment. But you talked earlier about sort of the three segments within MCRC. But as you look at sort of commercial analogs here, there have been one or two launches in the small molecule space in CRC here in the U.S. in the past couple of years. but is there anyone that you would probably call out as sort of the best analog for a Zanza launch here and I guess also on the commercial side how much of your current CABA whether it's on the RCC or NET side prescriber base overlaps with a potential CRC prescribing population?

Michael Morrissey, CEO

Yeah, probably tough to speculate on kind of what's the most similar launch dynamic. I mean, candidly, I think the way we view it is our goal, our job is to maximize penetration as quickly as possible into that segment that I mentioned before, you know, either the billion five total market or the three different patient buckets. And so, you know, that's frankly our goal is to kind of maximize the value there as quickly as we can. You know, as it relates to kind of this commercial footprint and overlap with the sales force is I mentioned before getting those boots on the ground focusing initially on kind of maximizing the net launch while also gaining familiarity with the customers gaining familiarity with our own internal systems that's an important that's an important driver And so our goal, if you fast forward the clock a couple of years, is to have much more of an equally balanced GI and GU footprint, whereas now we're much more GU than GI just based on kind of RCC and its relative maturity to net. But as we layer on, you know, Zanza CRC and additional indications, and kind of Cabo continues to build out in net, we see that kind of, you know, GIGU as ideally more 50-50 split. One of the things we talked about ahead of the net launch, and again, this kind of plays into the dynamic, one, of the breadth of Cabo, but two, the community versus academic space. at the time of the net launch you know we saw a really high amount of existing cabo prescribers you know something like 75 80 percent of net prescribers already wrote cabo for another indication and the remainder were generally co-located in sites that you know in an office next door for example tended to to to give cabo and so that's the the you know foundation or the the kind of base point um to where we're going to grow from commercially for zanza great if there

Paul Choi, Analyst — Goldman Sachs

any questions in the audience please raise your hand and we can get a mic to you um in the interim i want to turn to the to the stellar 304 study which uh in uh in which you're evaluating nevo plus zanza in the non-clear cell rcc population um the studies i believe uh scheduled to top line the second half of this year and so maybe as we think about non-clear cell rcc you know how do you guys you know forecast or estimate the potential tam here versus um uh versus the

Michael Morrissey, CEO

the clear cell market yeah i mean if you look at kind of just purely the epi it's about 20 percent of RCC so that's a reasonable proxy I guess kind of plus minus depending on a bunch of different factors but you know just looking purely on you know the segmentation of patients I think that's

Paul Choi, Analyst — Goldman Sachs

a good starting point. Maybe just to provide an overview how are these patients sort of more or less currently treated are they allocated to any particular therapy or directed any way in terms of current treatment approaches. And as you think about your 1L study, this will be sort of the first, you know, directly focused study, I believe, in this population. How could that, I guess, in your view, potentially change prescribing behavior in this category? Yeah, that's one of, I think,

Michael Morrissey, CEO

kind of the more interesting dynamics around, you know, frankly, any indication is we've looked at it um when we first started discussing that the non-clear cell opportunity it really was at the end of the day pretty surprising that there had never been a pivotal study run in that indication for a variety of historic reasons basically approval in the non-clear cell space is done somewhat by inference um you know every drug that's approved in clear cell is also approved in non-clear cell the label it reflects both despite the fact that non-clear cell hasn't really been studied in that robust way so right now use is somewhat guidelines driven and those guidelines again are kind of informed by single arm unrandomized you know potentially selected relatively small and studies and all of the inherent challenges and limitations with those sorts of things. Someone, you know, mentioned to me recently that use and utilization in the non-clear cell space can be something akin to, like, which unrandomized study do you trust more sort of thing, and so the result of that is utilization is a little bit more mixed than I think one would expect. You know, there's not a lot of great market share data because we don't necessarily have all that information is this a clear shell script or a non-clear shell script we just you know it's it's somewhat imperfect um from that perspective and so you know our sense is that if we can come to market with robust data showing in um you know compelling treatment effect against a current standard of care um then that provides an opportunity to really establish what that standard of care is you know kind of planted a flag in the ground so to speak

Paul Choi, Analyst — Goldman Sachs

and um you know really kind of uh go from there great um one question i have is um given that you're doing a combination therapy with with a checkpoint inhibitor how central you know sort of to the commercial outlook here is is hitting on the os secondary endpoint uh to your view to driving adoption of this combination in non-clear cell rcc yeah i mean you know candidly i think

Michael Morrissey, CEO

it's somewhat of a statement of the obvious the more robust data we have the better you know one of the lessons from 9er is hitting that response rate pfs and ultimately survival have certainly helped adoption you know can't speculate on what the data is going to be but you know again our hope is we want to be able to come to market with as compelling of a you know story to again help patients um live longer without cancer and ultimately live longer great um assuming the

Paul Choi, Analyst — Goldman Sachs

data are positive from from 304 can you walk us through um what timelines might be to you know either presenting the detailed data and and filing the smda you know how does this you know maybe compare to maybe some some cabo analogs if that's appropriate or do you think you can move more quickly here given uh you'll you'll be launching at zanza in the not too distant future yeah i mean

Michael Morrissey, CEO

I think the short answer is probably as soon as possible. Again, one of the through lines that we talked about at the company is live longer and recover stronger is a motto at the company. And so at the end of the day, if we're able to show positive data, we want to do everything we can possibly do to get it in the hands of prescribers

Paul Choi, Analyst — Goldman Sachs

and ultimately patients, because that's what we're here for.

Michael Morrissey, CEO

And so I think we certainly have a history of being able to move quickly, being able to prioritize effectively and efficiently to either present the full data or submit at an accelerated pace. So something we're going to hope to do, but we'll see based on the data.

Paul Choi, Analyst — Goldman Sachs

And we've just touched on two of the pivotal programs for Zanza here, but you have multiple other studies going on, including one in MRD-positive CRC, which I think is super interesting, and we're just trying to scratch the surface on that one, as well as combination studies with Merck's Wellyreg in post-adjuvant IO front-line RCC, as well as a second-line population, and then also in neuroendocrine tumors. so i guess you know first uh you know you have a lot going on in terms of multiple programs which you know i guess if you were to guesstimate could potentially be completed uh completed earliest and the second question is you know as you think about resourcing and just sort of assessing you know the scenario of wins for these uh potential studies um you know how do you think about you know resourcing and likelihood of success here yeah i mean i i think that's something that

Michael Morrissey, CEO

you know hopefully differentiates Xlexis from a lot of other companies is that we're trying to be particularly strategic and thoughtful around indication selection and clinical trial you know design and development in that at the end of the day we want to run positive studies and positive studies in large market opportunities. And so if you look at the seven pivotals that we have ongoing or announced right now, you know, they're all in relatively large market opportunities and they're all in areas that I think are, you know, relatively high probability of success studies. And we're running them in a way to be capital efficient. You know, a model that we liked with Cabo that we've now incorporated into Zanza is this idea of finding clinical collaborators. So you take, say, our relationship with Merck, which you mentioned before. We're running three studies now with them. Functionally speaking, kind of the way that the economics work is the costs are split basically 50-50 across the three studies. And so that's a really capital efficient way for us to interrogate broadly the zanza opportunity but also have a chance to work with you know probably the best oncology drug developer in the world um who's also frankly our biggest competitor and so it's this kind of interesting dynamic where um we're able to efficiently allocate that incremental investment dollar in zanza um to ultimately broaden that revenue opportunity but in a way that we think all have high probability of success whether it's you know 316 where either zanza alone or zanza plus pembro is randomized against watch and wait or placebo just given the dynamics of that indication or you know looking at say the the post adjuvant rcc or a later line rcc all these things kind of we take each study individually as something that we think is a smart investment to make because it's ultimately, as I've mentioned multiple times today, our goal, our job is to establish a new standard of care for patients. That's why we're here. And so if we're able to do that, we believe that'll translate to meaningful revenue. And if we can generate meaningful revenue, we can generate value for all stakeholders in the company.

Paul Choi, Analyst — Goldman Sachs

We have a couple minutes left here, but maybe turning to your earlier stage pipeline, can you maybe, for investors who are not as deep, call out one or two earlier stage assets that may have a nearer term clinical readout versus what gets or gets most excited? I think DLL3 looks super interesting. There's been some progress there most recently at ASCO, but if you were to call out sort of one or two near-term catalysts, what would you point investors to?

Michael Morrissey, CEO

Yeah, I mean, you know, without kind of getting into the specifics of timing, you know, the way we view our early stage pipeline is we want to generate as much data as quickly as possible to help get us to that go, no go decision. And what we mean by that is, is there an asset that's going to raise its hand with data and say, invest in me in a pivotal study? we're not in the business of kind of dragging something along to show 10 patients here worth the data and say okay look how great this is go raise some money and raise blah blah blah you know that's all too common probably unfortunately in biotech but that's just the reality of how our business works we're in the you know fortunate position where we don't need to go out and kind of potentially over-promise, what we're going to do is essentially show a profile of this is what, say, XP628 is versus what this is what it could be. And so we're going to, you know, present data when it's mature, stable, and a sufficient cohort to get a sense of what that is. But the way, again, coming back to kind of the beginning of the conversation to view our early stage pipeline is through that franchise space so take xb371 the tissue factor adc that we you know conceived of as a crc asset to kind of build upon that foundation with zanza similarly with xb628 so that's our pdl1 nkg2a by specific you know that one has really interesting novel biology you know looking at bringing in both the adaptive and the innate immune system but really kind of the crux of that is asking the question well does that mechanism does that combination have the potential to combine well with say something like zanza so again that's kind of this franchise build-out mode of building on you know and further enabling zanza across all those those different um indications and so that's kind of the best lens to to view the early pipeline whether it's the sstr program you know same thing that has the ability to meaningfully you know be meaningfully drive uh utilization something like nets and so that's probably the best way to view the early pipeline is through this franchise lens and maximize value kind of across these multiple different you know factors great we're up on

Paul Choi, Analyst — Goldman Sachs

time here so I think we'll end it on that note my thanks to you Andrew for sharing you know how xlexis is evolving from a sort of one product story into a multi-product multi-modal story thanks great thank you thank you