Conference Transcript - EXEL 2026-05-27

Jeffrey Walsh, Analyst — Bernstein

Hi, my name is Jeffrey Walsh. I co-lead the U.S. biotechnology coverage at Bernstein. Very excited today to have a nice fireside chat with Michael Morrissey, Ph.D., President, and Chief Executive Officer of Exalexis. Look forward to the conversation, and thank you for attending.

Michael Morrissey, CEO

All right. Great to be here. Thanks for the invitation today, and looking forward to it. We had a great day, looking forward to a great conversation. Before I begin, let me just state that I'll be making four looking statements today. So people listening should see our SEC filings for a description of the risks that we face in our business.

Jeffrey Walsh, Analyst — Bernstein

That's perfect. And Michael, I really appreciate you and the team coming out today. We've had you attend multiple of these conferences and I really appreciate always hearing your story. And personally, I'm excited to have this conversation today. I worked with your company back when I was at Bristol-Myers Squibb, so no XLX as well from my time as a drug developer. Collaborators. Yes, collaborators on the Abdulleg program. So look forward to a nice conversation and love to hear about your strategy and what you're sort of thinking. I mean, maybe just as a high level to kick us off, maybe just give an overview of XLX's multi-franchise strategy approach.

Michael Morrissey, CEO

Yeah, for sure. And I think it's what drives everything we do tactically in terms of how we look at building the business, how we've built the business so far on the strength of Cabo's Antidiv, but how we're looking to really take the business to the next level or two in terms of how we approach really every aspect of biotech R&D, commercialization, the intersection of all those different aspects together. Look, we're all in the same business to a certain degree. We want to help patients. I think we have an overriding focus on improving the standard of care for patients with cancer, and that is largely informed by, you know, the success of Cabo that we've had over the years. You know, it's, you know, getting a p-value can sometimes be really challenging. Other times it can be relatively straightforward, but a p-value in a successful pivotal trial doesn't necessarily mean you're going to be a commercial success, and the way you drive commercial success is you basically change standard of care you you you make it such that your offering uh therapeutically is um is moving the needle for patients in a way that uh prescribers payers and even patients you know need to stand up and acknowledge and and want to be part of so so we've done that um i think pretty well with cabo i mean we've we've learned a lot we've done a lot we don't always knock it out of the park in terms of you know some of the indications we've chosen and combinations that we've chosen but we've really I think been able to funnel our view of what success looks like for a company like us and it's really franchises and we as we talked about previously we made it our big focus of our R&D day back in December we really think about that in terms of you know different dimensions right in terms of how we view a franchise obviously you can have a franchise within a single molecule like like Cabo you can you can reinforce franchises in indications we focus in the GU and GI space we don't focus on all of he mock we don't focus on all the solid tumors but we're really focused on I'm moving the needle for GU and GI patients with cancer and then we have a I think a pretty not strict but focused view on modalities. We want to be able to put basically drug product into a bottle and then make that bottle available commercially. So it really focuses where we want to play relative to the modalities from a manufacturing point of view. We're a relatively small company. We can only do so much heavy lifting from a manufacturing point of view. We obviously have great depth and expertise in small molecules and now biologics as we've moved in that direction, but, you know, we have to stay focused, and that's, I think, one of the things that we've tried to strive as a management team is to really focus and prioritize, and, you know, strategy often comes down to not really so much what you're doing, but what you choose not to do, and to have that discipline to be able to really narrow the focus to, again, bring benefit to patients and shareholders, but at the same time have the right level of focus so you can and you can move the needle virtually every day. So that's how we're operating, and we do that from the standpoint of how we look at targets for discovery, how we look at molecules that we can combine with relative to indications that we want to pursue within the GU and GI space. And we obviously have some flexibility. I think you've seen that with the ZANSA program where we're looking at peripheral indications outside of GU and GI, I say like lung maintenance or men and genoma that don't really fit into that kind of strict category, but we have such interesting potential and activity that we can flex a little bit. Again, look for data and kind of a surveying effect and go. But I think the team is really well organized and very focused along these kind of lanes of thought and lanes of research, and our job is to execute every day with Cabo and Zanza and the pipeline and assets that we can find from external sources.

Jeffrey Walsh, Analyst — Bernstein

That's great. I mean, and you've said before that sort of you have this product strategy, the modality strategy, the tumor franchise strategy. What would you say sort of distinguishes your approach between the three? How are they similar? How are they different? How you approach

Michael Morrissey, CEO

each of these three? Yeah, so I would say they're all, I think they're all interrelated, right? You really have to be able to, you know, in the most simplistic terms, kind of the Venn diagram view of the world uh you know the more overlap the better right and uh and that i think from our point of view then is just kind of dimensionalized on multiple levels uh in terms of what we're doing by ourselves what we can do in collaboration right we've talked about this in bms that i mean that that interaction that collaboration which goes back for literally decades is a good example where sometimes we collaborate sometimes we compete sometimes we're collaborating with the competition in terms of say some of the you know early Cabo Nevo work you know it's all part and parcel with the the focus and the priority for us is what's the right science what's the right biology to kind of embrace and then and then what are the right you know clinical work that we need to do to be able to again move the needle for patients and I think with that focus on again we're not looking at nano niche indications because I think history has shown that I mean that can certainly you can certainly help a small number of patients but the upside can be limited to a certain degree so again we're focused on big indications of both the GU and GI space you know renal cancer colon cancer prostate cancer etc where you know we really think we have the opportunity to do well by patients and also drive value for the company and shareholders

Jeffrey Walsh, Analyst — Bernstein

yeah and I've seen the collaboration firsthand and think it's a great part of XLXIS anything in terms of collaboration, anything that you look for, anything in terms of the benefits that the company has from that, or when you think to collaborate with other companies, what are some of the things that you're looking

Michael Morrissey, CEO

to achieve? Yeah, you know, it's always, you know, the common language of our, do we have aligned goals and philosophies around what success looks like, number one. Do we have the right scientific, I would say, both overlap and complementarity that we need to really in some ways synergize what each side can bring to the table and then provide even even you know super additive if not synergistic value to patients so it's that it's that kind of special place where you're kind of working above the fray of the noise that normally happens kind of in the background and able to operate in a way that again allows you to move and I think that you know a lot of the collaborations that we had in the early days on the discovery side were just fantastic in terms of being able to you know have a situation where one plus one was five equals five as opposed to two or one and a half which is often the case on clinical side too I mean you know the the the nine ER study that we did you know as I've said previously it's kind of in the ROI Hall of Fame in terms of you know we had Cabo and Nevo two leading single agents that were actually had initial single agent top-line data literally on the same day and then from that day on in terms of a second line second line studies people ask the question well if they work so well by themselves both have a survival advantage both move the needle for patients what happens when you combine them and it was it was certainly a very rewarding process then to collaborate between the two companies the top KOLs in a way that was has really allowed us to move quickly and dramatically and to win on response rate, PFS, overall survival, and quality of life together. It set us up really well to continue to move Cabo up in terms of being a market leader for RCC. So we're super excited about that. And I think that's success. And that comes after the typical kinds of failures that happen in this game. But it certainly builds a level of focus, of resilience, of conviction that, you know, we've done this, we can do this again. And then, you know, get out there and make the whole process work from asking the right questions on the discovery side or on the combination side, and then doing the right level of clinical work to be able to, again, to really get over the goal line time and time again. So, done that with Cabo, it's a molecule that has, I think, eight different indications or eight successful pivotal trials that led to a very broad label. Obviously, it's a commercial success across different indications. We think Zanza is probably a better next-gen molecule based upon some of the early data. First trial in third line plus CRC was successful in enhancing overall survival. that comes on the back of four failed checkpoint-based trials. So different kind of clinical phenotype, if you will, getting a lot of positive feedback in terms of the market potential. And we're under review right now. So it's one that we're really excited about. And, again, we think it really kicks off the opportunity for Zanzo, which I'm sure we'll talk more about today. But, you know, it's indicative of how we think about building a franchise, right? The right combinations, the right indications, the right lines of therapy, really pushing the needle in terms of where you're in hyper-competitive space indication-wise versus maybe what's kind of wide open right now and pushing that envelope. So it's how you expand in a measured fashion and doing that in a way that I think reflects how we view running the business because we run the business like a business. We've been profitable, I think, since 2017 or so. You know, we're very convinced that, you know, buying back shares right now makes a lot of sense than we have for the last several years because we just think we're undervalued based upon how the street views Zanza currently. But if we think over time that will change, you know, we have seven ongoing or soon to start pivotal trials with the first wave. And I think the next wave kind of forming as we speak. So there's lots of moving pieces with Zanza following on the success of Cabo and then the question is what's potentially the third franchise molecule? What's the fourth franchise molecule? In our view, that's how you build really important growth in the story and how you kind of change the vector each time in terms of what growth in terms of impact on patients, in terms of revenue, in terms of market cap can be. So that's the focus. Team is lean and mean and I'm really excited about where we're at and what our future looks like, and we just committed to executing every single day. Absolutely, and

Jeffrey Walsh, Analyst — Bernstein

on the point where you ended, so what do you think of how the pipeline is situated for future pan-tumor leadership? Anything in particular you want to highlight? Anything you'd like to talk about? Yeah, so we

Michael Morrissey, CEO

have four molecules in the clinic now. We've got a few more on the way. Obviously, Zanza is leading the charge. We've stopped really investing in Cabo, per se, and we've talked about that for the last few years now, why we're doing that, but we think ZANS is the right molecule to, you know, put a lot of energy behind right now, and from a pure resource allocation point of view, that gets fed first relative to how we're doing it. We're, you know, and we have consistently embraced the idea that if you want to be a leader, if you want to move the needle for patients, you've got to, you know, belly up to the table and, you know, invest in and run and execute on pivotal trials. That's the only way the p-values that you hope to get are the only way to move the needle and get the attention of regulators and payers and HCPs down the table so a lot of companies certainly in our where we were ten years ago were hesitant to do that because it's a big gulp moment in terms of you know do I really want to spend a hundred two hundred million dollars doing this we do that readily once we've done the analysis of the situation both clinically and commercially if it makes sense to us within that analysis, and we have the data supporting it. We understand you've got to be able to put that risk capital to work to be able to generate value for patients. So we do that readily, and we do that in a way that, again, gives us the conviction that we can do that again and again and again. And it's picking your fights to a certain degree, right? So obviously, we're a leader in renal cancer with Cabo, and we certainly, you know, plan to, you know, try to maintain that. With Zanza, we've got three pivotal trials going right now, and probably we'll have more on the way, you know, in the future. You know, we think colon cancer is another good example of an indication that is ripe for innovation, and certainly the Stella 303 success really underscores that. You know, we have a trial called Stellar 316, looking at really post-adjuvant kind of therapy for high-risk patients based upon the Terra, Signatera technology where you can pre-select high-risk patients based upon their MRD status. Again, there's no standard of care for those patients there. They just kind of, you know, they get surgery, they get chemo in either order depending upon if it's colon or rectal, and then they just kind of watch and wait, right? And if there's a way you can identify, pre-select these high-risk patients, as has been done recently in, say, Bladder, with a very well, I think, just elegant technology, it really brings potentially a lot of value to patients. And, you know, 303 and 316 kind of travel together. We're constantly getting talk about one with a KLO, and the other one comes up, and vice versa. So it really reinforces the idea that that's how you build leadership in a given area, in a given franchise, whether it be a molecule or an indication or a modality. You just keep investing in a very thoughtful, pragmatic way. You use data. You use your insights. You certainly, you know, whatever conviction you have to be able to kind of push that ball, if you will, move that ball downfield in the football analogy. And that's something that we do, I think, really well and have the conviction that, you know, more often than not, if we make the right choices and we execute well, we'll be successful. So, but the pipeline is full, early stage. We have four compounds in phase 1, phase 1B, a couple of ADCs, USP1 inhibitor, and bispecific XL628 that we're just starting to look at ZANSA combinations with. So that's super exciting. and looking to do more. We've got a couple of INDs kind of on the way with DLL3 and an oral SSTR2 antagonist, so those should be at the IND stage this year. And we're looking, I think, pretty aggressively for potentially later-stage assets in the GUGI space. We've got a great balance sheet. Again, we're profitable, lots of cash flow, so we have room to maneuver there as well. But we're looking at doing the right investments based on the right data, based upon the right view of the commercial opportunities in these indications. And I think more often than not, we're gonna be successful, so.

Jeffrey Walsh, Analyst — Bernstein

Any of those ADCs in particular that you wanna highlight?

Michael Morrissey, CEO

Yeah, I think, I mean, they're both really interesting and there's more on the way, but I think XB371 is a tissue factor targeting ADC with a topo warhead. You know, it's designed kind of de novo to play in the CRC, in the colon cancer space, where we want to build. So you can imagine getting to a point where whether we have single agent or we have combinations with ZANSA, combinations with ZANSA in a checkpoint, just building off the foundation of 303, and that's kind of building a franchise and that indication across molecules, in this case, across modalities as well. So it's that kind of multifactorial view of what's the best way to bring value, additional value, change standard of care for patients. And again, part of it's obviously empirical. You've got to generate data. Part of it is very clear looking at, if you looked at that example of 371 ZANSA and say a checkpoint, right, you've got three orthogonal MOAs, which arguably, kind of at least de facto, should have minimal kind of AE overlap liabilities. and the question is do you have the right are you picking the right pathways are you picking the right if you will warheads are the right agents to be able to bring maximal benefit at the right level of therapeutic index

Jeffrey Walsh, Analyst — Bernstein

so it's

Michael Morrissey, CEO

theoretical you look at the situation you look at the genetics you look at the evolution of how that indication is actually from a standard of care point of view how it's treated and then And you've got to look downfield two years, five years, ten years and say, okay, how am I going to move the needle in that time frame? So it's a bit of, you know, kind of putting the Karnak hat on and asking some important kind of forward-looking questions. But we're not doing anything to change standard of care today. It's always what happens in three years, five years down the road because everything is moving so quickly. You've got to almost pre-select kind of where you think the bar is going to be and then try to beat that, right? But yeah, there's a lot going on, and it's fascinating to watch the technology advancements on the translational side, certainly on the discovery side. We have our own cryo-EM that the structural team is just, I mean, the rapidity and the depth of data we can generate on new areas of research, see in the RAS space or in the SSTR2 space is just, it's amazing to be able to, you know, have an idea, you know, make a molecule, get some data, solve the structure, say, oh, well, I guess I was wrong on that, but it does bind. It just binds this way or that way, and then be able to, you know, modify your thinking and then go forward. So, so it's, you know, it's, it's a full core press and with multiple inputs from multiple, if you will, perspectives, but I think that's what makes XLX just so strong is that we can pull all that together with the right team and the right

Jeffrey Walsh, Analyst — Bernstein

approach and, you know, move things forward. And you've talked a lot about CRC so far and RCC and also neuroendocrine's the focus. And I'm just curious what you're thinking for your SSTR2 and your DLL3. They sound very small cell neuroendocrine type focus. Maybe you could just expand just in general neuroendocrine. Well, yeah, so exactly. So that's, I mean, that's a franchise

Michael Morrissey, CEO

and we talked about this in December where, you know, we're just starting kind of scraping the surface with Cabo. Based upon a cabinet study, we've got the Stella 311 study that's ongoing, currently recruiting, looking at Zanza compared directly to Everolimus, which is kind of standard of care. Second line plus, first line plus, and that's in that situation as usually before Cabo, the first oral therapy that was used. So cabinet looked at Cabo against placebo in later line patients this is this is going kind of going one or two steps up in terms of line of therapy but also against an active control so you would imagine if that wins it really kind of opens up a lot of additional leeway for us in terms of how that might be used right you know the the mainstay of of neuroendocrine tumors is is really you know ssa's somatostatin agonists right which are all you know, peptidic and parenterally administered, having an oral therapy that could displace those being used in the front line setting is a huge opportunity for patients. These are all sub-Q injections. You know, big needles can be painful. To be able to, you know, have an oral therapy that they can take once a day, you know, at breakfast or at night would certainly simplify, not only simplify administration, but, you know, from a PK, PD point of view, really kind of even things out from the standpoint of, you know, getting away from some of the valleys that, you know, in more advanced patients can certainly cause problems from a symptoms point of view. So, but I guess that's a good example of, you know, it's still early. We're still kind of wrapping up GLP talks, and hopefully we'll be in man later this year. But it kind of really shows to us the important perspective we have from a commercial point of view, which very few biotech companies have unless you've got a big commercial molecule that can inform how you evolve your strategy quickly in terms of asking the right questions about where's the maybe either underappreciated or unexpected opportunity, and then what's the best way to navigate that and what's the best way to use our financial depth to be able to build a leadership position. So I think that's a good example that it's actually a really big indication. It's just kind of under the radar for a lot of big companies. And, you know, it's one that we think we can build. And I think the estimate says that it could double or triple in size over the next 10 years. So, you know, we want to be part of that growth because if we're successful in helping that indication grow, then it means we're helping a lot more patients. And if we can do that with more than one molecule, if it's Cabo, if it's Zanza, if it's, you know, the SSTR2 story, if it's DLO3, if we can be part of that and own, you know, own pieces of that pie as opposed to one pie as it's growing and helping that many more patients, then, you know, we can check a lot of bops in terms of, you know, we've helped patients, we've improved standard of care, we're driving value creation. and we can then take those revenues and reinvest those in R&D and really move the next generation forward because from our point of view, value creation is all about building franchises and building one after another and two is better than one, four is better than three and the math just kind of gets

Jeffrey Walsh, Analyst — Bernstein

very, very appealing after a while. I mean, the core of XLX is I think also RCC is at the core as a starting point. Maybe going back to that, what do you see as key highlights, key next steps as you expand and grow with an RCC and sort of take it from where you were.

Michael Morrissey, CEO

Yeah, I know. It's a really interesting kind of look back in terms of where it was back in, you know, the early teens, you know, first-gen molecules, second-gen molecules were kind of percolating along. I think we, you know, I think we really changed the landscape there by asking Some very fundamental questions about tumor biology at the most basic level. And simply ask the question with Cabo, can you inhibit the primary driver of tumor angiogenesis and the resistance mechanisms at the same time? Okay, that was a simple hypothesis, right? You're able to make the molecules that did that. As we profiled them further, we learn more about their direct any tumor activity. We learn more about their impact on both sides of the immune system. And, you know, in some ways, you know, we ended up with a molecule and a class of molecules that, you know, had an impact on literally every cell type in the tumor microenvironment. Part of it on purpose. Part of it is kind of, you know, by accident it came along with the ride. But I think that serendipity and that empiricism is an important part of the process. People don't like talking about that. But that's just the reality of the situation. You know that from your days, right, in pharma. So, and then we just went from there, right? And we did a lot of work ourselves, a lot of work in collaboration with other companies, and got some great collaborations as part of our creative with the NCI. And fast forward, we have the leading TKI for RCC. It's the leading TKI in frontline IOTKI combinations. It's the leading TKI in second line plus leading oral therapy PN2 line plus net because we've been able to generate standard of care moving data and then be able to monetize that and kind of make that happen from the standpoint of our commercial depth and heft. So that's something that we're focused on. Obviously, Zanza, we've got a lot going on there. The 304 trial is looking at non-clear cell RCC in combination with Nevo. No one's ever done a pivotal trial in that subpopulation of RCC, so we're super excited about that. We've got a couple of different trials going with Merck now in terms of the ZANZO-Bilsudafan combination, looking at post-adjuvant patients as well as second, third-line-plus patients in both combination with Bilsudafan. And we're very, very focused on being able to come up with approaches for frontline RCC as well. And I think that's, you know, the learnings from all the different, you know, kind of competitive machinations over the last few months has really reinforced in our mind, certainly in my mind, the importance of I think asking the question a little bit differently is can we, by doing a broad survey clinically, can we find orthogonal MOAs, mechanisms of action, that can give us arguably better activity with ZANSA in a checkpoint, either as a single agent modality, so a triplet, or as part of a bispecific kind of like 628, right? Where we've got, you know, PD-L1 and NKG2A, the natural killer cell ligand, to be able to, you know, kind of find the right balance of additional potential activity, okay, without having a lot more tox. Because if you're talking about, again, we and others together, you know, the whole industry-wide effort, we've really moved the needle in terms of patient benefit for RCC and by looking at new MOAs new ways of approaching the problem and then doing the right combinations and this is then going to the next level but you're working at a much higher base than you were before so you've got to really throw the needle and whatever you do has to have the tolerability and the activity for going to the next big increment in terms of whether it be PFS and or OS, right? So it's a heavy lift. And, you know, as we've seen with, you know, I.O. in general, right? You know, I mean, these things,

Jeffrey Walsh, Analyst — Bernstein

there can be a long increment between breakthroughs, right?

Michael Morrissey, CEO

You know, you have I.O. 2, and then you wait 25 years, and you have, you know, P.D.1s and C.T.L.A. 4s, and now we've waited another 15 years. And people are trying a lot of stuff, and it's all great science. It just hasn't worked out, right? So every time you improve standard of care, it actually gets more difficult, which is why for us, I think it's really important that we are committed to our leadership in RCC. We're investing there. We're doing it the right way in terms of sharing the costs, if you will, with our collaborator. But we're also looking in areas like NET, like CRC, you know, managenoma, you know, whatever, that, you know, kind of spreads the risk and has, you know, significant upside all by itself. So, again, before the fact, and we've seen this with Convo, you know, you can design trials that you think are going to work. Most of them do work. Some of them are commercial blockbusters. Others are, you know, a little bit less compelling. But doing that all before the fact, there's so many factors that you just can't control for. You've got to have the right mix of trials and combinations and lines of therapy to be able to cover all the bases. And then when you do see breakout data, then you've got to capitalize on that with great speed and great conviction.

Jeffrey Walsh, Analyst — Bernstein

I mean, just hearing you talk about the bar and thinking about, you know, this is where Keytruda and Keytruda slash Pembro, how it evolved to going against chemotherapy. It was a lower bar, and now, as you say, we waited a long time to see what can now go head-to-head and be Keytruda. And on that point, when you think about the trials you guys are conducting, how do you sort of stack the deck? You've got great data. You're now thinking what trial to do. What do you do? What do you think to really increase your PTS? Nothing's ever de-risked, but just curious.

Michael Morrissey, CEO

Well, it's a combination of both, and I think we're a thinking, learning, self-reflecting organization. And I think the part of the charm that we, I think, have been able to execute on is looking at what has worked and what hasn't worked and then ask some of the hard questions about, okay, what have we learned? Because you can learn a lot more from a failure than you can from a success sometimes, right? If you're not totally myopic, right? And I think that's where asking the right question around combinations is so important. So we have a phase two that we talked about, Dana talked about on earnings about a month ago in terms of looking at a second line maintenance of Zanza plus Pembro in a squame population post basically chemo Pembro. And I think that's a good example where, you know, could we actually improve patient outcomes in the maintenance phase by combining with Pembro? Same thinking goes, you know, we've done a lot of work, say, you know, prostate cancer with Cabo. We had a trial in second-line lung cancer with Cabo and Atezo. Those have all failed. What have we learned from that? Well, with Zanza, maybe we have the opportunity, instead of trying to beat those attacks head-to-head, which is still used, you know, a ton in all kinds of different tumor types because it's really hard to beat. It's truly standard of care. Do we have the right molecule with Zanzan from an activity tolerability point of view that we can actually combine with dosotaxel? And so that doublet against dosotaxel could be a really interesting way to go. So that's part of the next wave. And we're doing, we actually have a trial going right now looking at that combination in later line prostate cancer to understand tolerability and PK and those kinds of things and initial activity. But you can imagine if we can actually see benefit there. So that could apply to prostate cancer. That could apply to second-line non-small cell lung cancer. We ask the question, could you combine, say, Zanza with standard chemo in front-line CRC? So kind of reinforcing this whole paradigm paradigm around you know building franchises across lines of therapy and like we've done with you know with um with with Cabo and RCC so it's a constant I think examination of what's the best place to put our efforts to make our investments based upon the data based upon our vision for how

Jeffrey Walsh, Analyst — Bernstein

things will evolve over time yeah earlier in the conversation you mentioned how strategy isn't just what you choose to do it's the things that maybe you don't do things that you sort of either or avoided or didn't dive too deep into? Is there anything that, as you reflect on your time that you're running XLXIS, anything that you are maybe happy you didn't wade into, whether you were considering it or not, things that you feel maybe weren't?

Michael Morrissey, CEO

Yeah, well, I would say it's a great question. So I think I've been, in terms of my scientific career, more tend to focus than be broad because I think that's always the best way to marshal the resources you've got, the critical thinking you have access to, either internally or externally, you know, KOLs or through collaborations. You know, I think the focus that we've done has been partly organic, right? We have activity in GU and GI cancer, so let's double down there. We've got a, you know, commercial organization that's built to excel in GU and GI, so it makes sense to build in there, right? You know, we've dabbled in other areas with Cabo in the past, other molecules in the past, as we were signal searching, and those did not work out as well as we would have liked, so then to re-double down where we're active, where we're successful, it makes a lot of sense. But, you know, I think that one of the most important things we did early on was not, you know, looking at heme-onk and saying heme is so competitive. They're so deep there. The combination approach is so successful. Really asking the question, what do we have to offer there that could be different and could, again, improve standard of care? And I think the conclusion that we've made was, you know, probably not a lot. Let's focus in on solid tumors where, you know, it's just a much tougher go in terms of both pharmacodynamics, right, in terms of genetics, and certainly then in terms of the actual pharmacology you're trying to impart there. So I think that's the right move. Lots of important work's been done, you know, in thoracic oncology and breast cancer, you know, those kinds of things. I don't think we could be as effective as we are in GU and GI if we were more broadly based, right? So look, we'll double down. We always have the option if our MOAs and our pharmacology overlaps with biology and another tumor type, we can always go there. We're doing that now, and part of it is opportunistic, part of it is mechanistic, so nothing stops us from doing that. But I think to keep everybody focused on what we're trying to do, because, I mean, there's literally millions of patients in this subsection that if we're successful, we can bring a lot of value to and can, you know, again, grow the company and build shareholder value with as we go forward. So focus is a good thing for us, for sure.

Jeffrey Walsh, Analyst — Bernstein

Absolutely. And maybe just thinking forward looking, what do you see of success for Exalexis and maybe a five-year timeline? Whatever that metric looks like, what do you sort of look forward and say if I'm happy with this?

Michael Morrissey, CEO

Yeah, yeah, no, it's a good question. It's something that we think about a lot. I think about success on a log scale, not a linear scale. And that from the standpoint of any kind of quantitative metric, numbers of patients you treat, patient years you can improve upon all that drives revenue and it's kind of the big circle one drives the other. But again, I think the multi-franchise pipeline or franchise molecules kind of plays to that theme. We want to jump up and half log units as quickly and as often as we can, because that's the way you bring value to patients, and that's the way you bring value to shareholders. The two are intimately connected in a way that one goes with the other, and the value isn't just another molecule, but it's improving standard of care. So for me, you know, again, I'm not an oncologist. I'm a scientist by training. You know, over the years, that's become kind of a very, very clear guide for me. If we're not actively changing standard of care, then we need to ask the question, what are we doing? Why are we doing it? What are we doing? Do we want to invest here or someplace else? Because ultimately, that's the goal. If we do that well, everything just kind of flows from there. And that's true, I would say, in general within the industry, right? You change checkpoints. I mean, they dramatically change standard of care. now it's taken another 15 years to go to the next level but that's the business we're in this is a tough business everybody who plays in this space can appreciate that as I know you can on a very personal level because it's hard you fail more than you succeed you understand less than you think the factors at play when I was dabbling in antibiotics or antivirals from a pure genetic point of view compared to what's happening with solid tumor oncology where you can have in one organ, and this has been proven by autopsy, you can have a liver post resection that has got six different, ten different tumors with ten different genotypes, right? I mean, it's tough, and you really need to bring every MOA to bear, every approach to bear, sometimes every modality to bear to move the needle. So I think it's with a great, any success you have to be humble about because it's tough. And that success was hard-earned and maybe a little bit of luck was involved as you go, but you've got to be able to capitalize that and build foundations that you can then build companies and bring more success to patients. Yeah, for sure.

Jeffrey Walsh, Analyst — Bernstein

And that's wonderful. And we've talked a lot with RCC, talked about neuroendocrine. Maybe just give a little bit of time for CRC, too. When you think of your strategic vision for CRC and the trials and the things that you'd like to do there, anything you'd like to highlight?

Michael Morrissey, CEO

Yeah, so we talked about that a lot already. I think that, you know, certainly having a foundation of success with 303, you know, in a later line population, checkpoint-based kind of regimen along with ZANSA, really interesting, again, that's been an area that's been heavily invested in by a number of companies all met with lack of success because it's just a tough place to play. So we're very fortunate to be able to win there. We have some data at ASCO, which I think is going to be pretty interesting around contribution of components that I would refer people to because it really highlights, I think, some of the way we view science in a way that I think is very novel as well but yeah so so the foundation of success there you know can we can we take the same general approach where we have activity in terms of improving survival with you know with measurable tumors right yeah patients with metastatic disease as you can see radiographically and can you go up in the line of therapy to this to the 316 opportunity where you've got basically no metastatic, no visible, imageable metastatic disease, but you have high-risk patients post-surgery and in chemo who are bound to progress based upon longitudinal data within six or so months. So the question is, will the same MOAs that, you know, appear to work in measurable disease, work in, in, in, you know, tumors that you can't, that, that micrometastases that you can't visualize radiographically, right? So, so I think it's a fascinating kind of connection between those two ends of the spectrum. You know, the fact that we're, you know, we've had success with, with ZANSA checkpoint, I think gives us a lot of confidence using, again, as I mentioned before, using the Natera technology to select the right patients is the way to play the game, right? You want to, you know, not everybody needs this. A lot of patients are cured with surgery and, you know, chemotherapy, and that's fantastic for them. But those that aren't, we need to get in there, and for whatever reason, genetically, they need an extra boost. And, you know, if we pick the right combination and the right, you know, kind of details around how that works, Can we convert what is a relatively short time period to then kind of real problems in terms of metastatic disease? Can we lengthen that? So that's a – look, for me, that's a noble enterprise, and obviously we're in it to run a business and ultimately drive shareholder value, but there's a lot of patients. There's thousands of patients every year that could benefit from that. And that's a big benefit, both physically and, I mean, think about it, psychologically.

Jeffrey Walsh, Analyst — Bernstein

There's no, I mean, they're just waiting.

Michael Morrissey, CEO

There's no standard of care for that right now for those high-risk patients post-surgery and chemotherapy. So to be able to, you know, if we're successful, have something to offer them, I mean, that's very motivating and inspiring for everybody at the company. So we're serious about this stuff. We understand the stakes that are there for patients, And we're doing everything we can to move the needle quickly and confidently and with high quality every single day.

Jeffrey Walsh, Analyst — Bernstein

Well, we've talked about several different tumor types, CRC, RCC, neuroendocrine. Is there any other tumor type that you think would be worth highlighting? If not, we can talk about maybe any other modalities that you think we have.

Michael Morrissey, CEO

Yeah, let's move to the modalities. I think that's actually a good time. And we talked about ADCs, right? You know, we obviously have a strong small molecule approach by specifics. You know, I think one of the things that we've done over the last few years is, you know, we were traditionally a small molecule-focused shop, and on the research of our discovery efforts, you know, understood that the more breadth we could bring into our discovery world, and from a biologics point of view, you know, the better in terms of covering more MOAs, is getting away from potential overlapping toxicities of having small molecules kind of play in the same structural space, if you will. And that's been a real successful operation from the standpoint of we haven't invented new technologies but I think we've aggregated technologies across the board. The execution has been absolutely phenomenal from a target identification to kind of drug elaboration, if you will, optimization, both with bispecifics as well as ADCs, for example. And we've been able to transition that from small-scale to at-scale for GLP and then GMP applications. And that's all happened in a very seamless, focused fashion. And the team is just first rate, right? We can go from concept to molecule to assays to scaling up either internally or externally and kind of turn that crank in a really impressive sort of way. So I'm really pleased about that. And it just gives us that much more kind of therapeutic and pharmacological breadth to be able to ask important questions. Now, unlike a couple of years ago, pre-expanding into these biologics, we were like, okay, who do we collaborate with to find this? Now we can say, okay, if we're looking at the biology correctly, we need something here and something here. This is a small molecule. This is an ADC. This is a bi-specific. Let's go do it, right? And we can do that as well as anybody, right? And then the scale up, you know, I mean, making things on a milligram scale can be easy. Making things on a kilogram scale, you've got to have the right people and the right opportunity with the right interest and the right vision to be able to get that done in real time. So I've been super pleased how fast we've built that and the expertise is just first rate.

Jeffrey Walsh, Analyst — Bernstein

That's amazing. And you talked earlier in our last couple minutes here, you talked earlier about you have great financial positions, stock buybacks. I mean, we haven't talked too much about the financial commercial side of the company we must be focused on drug development so maybe just in the last couple minutes anything from the commercial side finance side that you think is important to talk about the strategy and how you execute yeah I would say at the highest level it's it's

Michael Morrissey, CEO

it's all integrated we have one strategy we have one focus obviously we have different groups and different different responsibilities and accountabilities in terms of how that works but everything everything works together and the way we're organized, the way we're co-located, you know, the commercial people, the competitive intelligence people, the discovery people, that leadership operation is talking on an hourly basis, right? And that's the way it has to be, right? You know, having people in silos sitting in their offices, you know, drawing structures and thinking about whatever just doesn't that doesn't work right you've got to have the right level of insight and certainly whether it be on you know you know internal programs but also looking at you know external assets right you know we need to have a full view of of what the opportunity is and you know we're fortunate to have you know this this fully enabled commercial team that has you know achieved and overachieved and competed with all the big guys all the time right so um so to be able to have that depth and that breadth and having that mindset that says a good idea but you know a tiny indication or a good idea but don't forget about this competition or not so good idea I mean having that analysis is now just it's it's just kind of it happens automatically almost I don't I don't need to organize it it just happens with the people are talking and there's the right level of engagement and accountability about making that work so it in that regard it's it's it's super fun to watch it's that easy and you know sometimes there's there's just things we don't know and we have to be able to model effectively and then make you know you know we're paid to make decisions without having perfect insight into all the you know all the different variables and that's and that's part of the job too so but I think from a financial point of view the depth we've got and the modeling capabilities we've got no it helps us do them a long way so great team everybody works together really well I'm super excited about where we're going

Jeffrey Walsh, Analyst — Bernstein

and we just need to continue to keep our heads down and just keep cranking, which we do. Well, that's amazing. I mean, this has been a great conversation. I really appreciate the chance to learn from you and I'm sure everyone else listening has as well. So thank you for sharing your strategy, your future vision, and really appreciate your time today.

Michael Morrissey, CEO

Fantastic. It's been a great day. Appreciate the invite and look forward to seeing you again soon.

Jeffrey Walsh, Analyst — Bernstein

Okay, thank you.