Good day, ladies and gentlemen and welcome to the Exelixis’ Third Quarter 2014 Financial Results Conference Call. My name is Chris and I will be your conference moderator for today. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. And now, I would like to turn the call over to your host for today, Ms. Susan Hubbard, Investor Relations. Ma’am, you may proceed.

Thank you Chris and thank you all for joining us for the Exelixis third quarter 2014 financial results conference call. Joining me on today’s call are Mike Morrissey, our President and CEO; Debbie Burke, our Chief Financial Officer; and Gisela Schwab, our Chief Medical Officer who will together review our corporate, commercial, financial, and development progress for the quarter ended September 30, 2014. Peter Lamb, our Chief Scientific Officer is also with us and will participate in the question-and-answer session of the call. As a reminder, we are reporting our financial results on a GAAP basis only and as usual the complete press release with our results can be accessed through our website at exelixis.com. During the course of this presentation, we will be making forward-looking statements regarding future events or the future performance of the company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results of course could differ materially. We refer you to the documents Exelixis files from time-to-time with the Securities and Exchange Commission and in particular the company’s quarterly report on Form 10-Q filed today. These documents contain and identify under the heading Risk Factors important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including without limitation, the availability of data at the reference times, risks and uncertainties related to the initiation, conduct and results of clinical trials, risks and uncertainties related to the regulatory approval processes and compliance with applicable regulatory requirements, Exelixis’ ability to maintain its rights under collaboration, the sufficiency of Exelixis Capital and other resources and market competition. With that, I will now turn the call over to Mike.

Alright, thank you Susan and thanks everyone for joining us on the call today. We had a busy third quarter and I will take a few minutes to review the three key drivers of our business before turning the call over to Debbie and Gisela for a detailed review of our financial and development highlights. First, the enrollment in METEOR, our Phase 3 pivotal trial in metastatic second line RCC is nearly complete. We are now confident that we will meet our enrollment goal of 650 patients in the coming days, which allows us to be more specific about our timelines for when we expect this study to read out. We now expect top line results for that trial’s primary end point progression free survival in the second quarter of 2015. Gisela will provide more details in the development update section of today’s call. Second, we continue to be pleased with the development and regulatory progress made with cobimetinib by our partners Roche and Genentech. The positive Phase 3 results from the coBRIM pivotal trial evaluating cobimetinib in combination with Vemurafenib in first line BRAF mutant positive metastatic melanoma were recently presented at ESMO. Based on these data Roche has completed the MAA filing for the combination of cobimetinib and Vemurafenib in the EU. In the U.S. cobimetinib has received Fast Track designation from the FDA and Genentech expects to complete its NDA filing for the combination before the end of this year. We and our colleagues at Genentech continue to make progress in our U.S. commercialization planning, including our involvement in the promotion of cobimetinib if and when approved. As a reminder we are entitled to receive revenue from the profit share agreement in place for the U.S. market and double-digit royalties on product sales outside of the U.S.…

Thanks Mike. I am pleased to provide you with the highlights of our financial performance in the third quarter of 2014. I will refer you to our press release and today’s 10-Q filing for additional details. Net revenue for the quarter was $6.3 million consisting entirely of product revenue from the sale of COMETRIQ. Product revenues for the third quarter is net of $1.8 million project management fee due to our European distribution partner Sobi with an additional $600,000 expected to be recorded in the fourth quarter of this year. These fees are tied to our expectation that they will have purchased a targeted amount of COMETRIQ by the end of 2014. And beyond that there are no further fees of this nature expected in the future despite the unusually large offsets for Q3 ‘14 COMETRIQ net sales increased 32% over the same period last year. Sales growth in the U.S. was driven by increases in treated patients as well as extended treatment duration per patient. R&D expenses for the quarter were $43.6 million versus $47.4 million for the same period last year. The decrease of $3.7 million in R&D expenses is primarily due to cost saving initiatives we launched following the negative COMET-1 results that we reported in September. The savings are primarily due to personnel related expenses, in particular the reversal of the company’s bonus accrual for 2014 and a reversal of stock-based compensation expense previously recognized in connection with the performance options issued in anticipation of positive COMET-1 data. SG&A expenses were $9.9 million for the quarter versus $13.6 million for the same period last year. The decrease of $3.7 million as compared to Q3 last year was primarily due to lower professional fees, including lower patent costs, lower personnel related savings similar to the R&D personnel…

Thank you, Debbie. I will focus my cabozantinib development based on our Phase 3 trials as renal cell cancer, prostate cancer, medullary thyroid cancer, and hepatocellular cancer. And for the press release we issued along with our earnings release today, I will also provide an update on progress in our CTEP program evaluating cabozantinib in non-small-cell lung cancer. At the end of my remarks, I will provide a brief update on XL888, our wholly-owned HSP90 inhibitor that is being evaluated in BRAF mutated malignant melanoma in combination with vemurafenib. As you know, we are intensely focused on exploring and ultimately expanding the cabozantinib opportunity across multiple cancer indications. We have a broad strategy in place for evaluating the compound in a variety of indications, using internal resources to support Phase 3 trials and working in partnership with a wide array of individual physicians and cooperative groups through our collaboration with the National Cancer Institute’s Cancer Therapy Evaluation Program or CTEP and an investigator-sponsored trial program to enable evaluation of cabozantinib in earlier stage exploratory trials. So, starting with renal cancer, the completion of enrollment in our Phase 3 trial METEOR is the company’s highest priority in 2014. Top line data for the primary endpoint of PFS (Technical Difficulty). I am pleased that enrollment in this study has proceeded very well. The trial was initiated about 15 months ago and is now nearing completion of enrollment. Patient screening has stopped recently and the last patients are now entering the study. So, we expected to complete enrollment of the required 650 patients within the next few days. I would like to briefly review the trial design and assumptions for you. The study is evaluating cabozantinib versus everolimus in a randomized open label fashion. The patient population is second or later line metastatic…

Alright, thanks, Gisela. I will keep my closing remarks brief, so we can get to your questions next. While the third quarter of this year was clearly a challenging time for the company, we move decisively and rapidly to effect the change necessary to focus all of our resources on the next significant driver for the business that is the readout of the METEOR study now expected in the second quarter of 2015. We’ve laid there milestones on the horizon between now and then, including potential regulatory progress with cobimetinib and we look forward to updating you on this progress. So, we will stop here and I thank you again for your interest in Exelixis and we're happy to open the call for questions.

Thank you. (Operator Instructions) And our first question comes from the line of Edward Tenthoff (Piper Jaffray). You may proceed.

Ted, are you there?

Yes, can you hear me?

We sure can.

Okay, great. Thanks for the update on all the programs, including cobi as well as our cabozantinib and the other programs. I guess my question has to do a little bit around the erlotinib data. And please take this in the right way, because we have seen multiple Phase 2 hits here if you will that then we see move into Phase 3 studies where we don’t see necessarily the study read-out positive. So, what is it that we need to do or that we need to see to replicate some of these Phase 2 findings to get some – to get a win with cabo, for example, in lung cancer as we just saw the top line data or some of the other indications as that might crop up from the CTEP studies?

Yes, thank you. The study results, which is very recently shared with us by ECOG-ACRIN and so we can’t really discuss the data in detail at this point in time, and it will take a while to digest the data and discuss further plans if any as we go forward with – and speak with the investigators about the data.

Hey, Ted, it’s Mike. I think it's probably best if we delay answering that question, which is a good one, until we actually have a data available to be presented. I think in that context, once you see the data it'll make that next discussion of what we do next, how we operate next trials I think a much more relevant discussion.

Fair enough. And when should we expect that?

I think it’s up to the investigators to figure that one out. Again, the data is relatively fresh, so once we know and they make that public, we'll share that with you.

And then just last question if I may, on cobi, what are next steps and when should we anticipate that filing?

So, next steps are, as I mentioned in the prepared remarks is to have the filing completed with the FDA and Genentech and Roche continues to guide that will happen in 2014. So that's our expectations. We are having very good discussions with them around kind of pre-commercial launch type activities, in discussions and as we know more and as we can say more based upon their public announcements, we'll share that with you as well.

Great. I appreciate it Mike. Thanks so much.

You bet. Thank you.

And next question comes from the line of Eric Schmidt (Cowen & Company). You may proceed. Eric Schmidt - Cowen & Company: Thanks for taking my question and thanks for all the updates. Maybe just on COMET-1, you’ve had the data now for a few months. Is there anything you’ve learned by going over the results that can help you understand maybe the shortcomings of the trial design or the drug and make you think differently about it or might be applicable to how you conduct BDR going forward?

Yes, I think it’s fair to say, we still are working through the data to launch trial basically and a lot of data coming in. I think – but we’ve said in the past, it’s holding true to the state and that is that the cabozantinib ARM performed very much in line with what is expected from the prior experience in the non-randomized extension study. The placebo ARM performed better than anticipated, and we're looking at all the aspects of subsequent anti-cancer therapy, etc. and that could have contributed to that. And we're anticipating that we will present full data at an upcoming meeting in 2015. Eric Schmidt - Cowen & Company: And then on EXAM, do you have the data broken out for these non-RET mutant subsets, was there any trend in survival in that group and if not should the drug only be reserve for RET mutant patients?

So, the group that did the best in the subset analysis is the RET 918T subset and that is consistent with what has been observed in the interim analysis, be as well and the survival difference between treatment ARMs was 25.4 months, a quite considerable for this 40% of the patient population. In the other subgroups, we did not see decrement in overall survival and as you know the drug was approved on the basis of progression free survival, received full approval in the United States and the progression free survival was quite pronounced of 2.8-fold between treatment arms. So, that holds true still. So, I think most striking to us is the market gain and overall survival in the RET 918T population. Turning to your question, should patients be tested prior to receiving the drug that is currently not the standard and not in the United States and not in Europe, that is being done for research purposes mainly, but not for clinical trial decisions and that’s an evolving field I would say. Eric Schmidt - Cowen & Company: And then as you look toward METEOR, again, I know the primary endpoint is PFS, but in your discussions with the FDA, is there you think a need to show either a trend or statistical significance on the survival of secondary endpoint?

So, progression-free survival as you know has been the basis of approval for many drugs and several drugs in renal cell cancer and we have certainly had discussions with FDA and other regulatory bodies and found that to be acceptable. We are following patients for overall survival and the expectation in the – about the regulators and our hope is that there will be no decrement and that is the package that would go forward. Eric Schmidt - Cowen & Company: Thank you very much.

Next question comes from the line of Brian Klein (Stifel). You may proceed.

Hi, guys. Thank you for taking my questions. So, first on the lung cancer trial, which you just reported some positive data on, just wondering how relevant is the usage of Tarceva in the wild-type second line and end plus population and how frequently is Tarceva being used in that setting?

So, Tarceva is approved regardless of the status in terms of EGFR mutations and was in the basis of BR.21. I think it’s fair to say in the second line and later line setting of EGFR wild-type non-small cell lung cancer patients, multiple agents are being utilized and those include the traditional agents such as docetaxel or Alimta or Tarceva for that matter. And in terms of the frequency, I couldn’t quote that off the top of my head.

Okay. Just I am wondering how relevant is that comparator arm in the current treatment paradigm?

I think it’s one of the main treatments utilizing the population. So, it is a relevant comparison and there are others such as docetaxel that perhaps resulted in similar progression free survival duration as has erlotinib.

Okay. And then I am just following up on Eric’s question given prior experience with tivozanib AVEO’s compound, which showed a positive PFS benefit within an overall detriment and survival, has there been any specific communication with the FDA regarding survival data at the time of the submission. Would that be required for you to file your NDA in renal cell pending positive PFS data?

So, the plan is the overall survival, much likely for the EXAM study, the overall survival data would be mature much later than the PFS stage it would be. So, the expectation and the discussed revenue forward is that this trial was (Technical Difficulty) interim analysis at that point in time for overall survival and that would be part of the package. Also importantly, I think as you know, there is no crossover built into this study as patients progress. So, there is no systematic crossover as was done in the TIVO trial.

Did that answer your question? Operator, can we go ahead now to the next question then, please?

Our next question comes from the line of John Sonnier (William Blair & Company). Please proceed. John Sonnier - William Blair & Company: Thanks for taking the question and thanks for the update. It sounds like its early days with the lung data, so I will stick to what is more of a design question, Gisela, it’s really around the use of the log rank test and was the determination to use that methodology based on the small cohort sizes, A. And B, do you know if they ran other statistical test to confirm significance?

The log rank test is a commonly used statistical methodology and the 0.1 cutoff is a commonly used cutoff in Phase 2 obviously the hurdle in Phase 2 is a little bit lower than in Phase 3, so as to come to conclusions with the smaller sample size. John Sonnier - William Blair & Company: Got it. Okay. That’s kind of what I thought and do you know whether or not they ran other tests I mean it might have been interesting to look for example the two monotherapy arms on a t-test is to see if the p-values were close?

The details of the data are – we are not privy to at this point in time, so these details would be revealed I think and discussed in future presentations. John Sonnier - William Blair & Company: Okay. And the other observation and it might be one you can comment on from a biological standpoint was if I am reading this right, this exponential survival analysis, it looks like there was just a lack – a complete lack of interaction when the two drugs were combined at least on that outcome and the question is whether or not that would have been expected?

So, what you are referring to is deputed both arms the cabozantinib single agent arm and the combination showed a highly statistically significant benefit over the… John Sonnier - William Blair & Company: Well, 4.8 months, right it looks like when you did…

But the assumption you are right, that was the assumption going in. John Sonnier - William Blair & Company: That’s the assumption going on?

Yes, that was the design assumption going in. That’s not the real data. That’s the design assumption going in. John Sonnier - William Blair & Company: Got it. Okay. Thanks for the clarification.

Sure.

Our next question comes from the line of Biren Amin (Jefferies). You may proceed.

Yes. Thanks for taking my questions. I just wanted I guess ask some questions around COMET-2, how many patients were enrolled when the study was halted in September and you make a statement saying that there may be path forward depending on totality of data I guess what type of a situation will that be? Thanks.

Sure. In terms of the numbers of patients we haven’t communicated details in the study we would anticipate doing so when we actually come to data before the end of the year when we have a top line outcome of the study. Regarding the package that might not support regulatory pauses, I think it’s a little bit premature to say, so just prefer to wait for the data and then assess the totality of the data and go forward and determine a regulatory path if any really.

Okay. And then, Mike maybe a question on XL888, how do you think about this compound strategically would you try to develop this on your own or would you look for a partnership?

Yes. So it’s certainly very interesting compound we have had in our stable of compounds for a few years now. We are certainly excited about having the data come out in a few weeks in Zurich. I think it’s best to answer that question once we have the data out, but certainly we are looking at all options and considering a number of different pads for that compound.

Great. Thanks.

Next question comes from the line of Terence Flynn (Goldman Sachs). You may proceed.

Hi, thanks for taking the questions. Maybe one on cobi and one on cabo, so on cobi just wondering in terms of the sales force sizing that you are thinking about as you head into next year and just want to be sure that was inclusive of your comments with respect to cash usage. And then the question on cabo is with respect to the lung cancer trial I know you can’t give a lot of details here obviously but can you tell us if the combo arm was better than cabo mono arm? Thanks.

Yes. Again, I will answer the second question first. We can’t provide any additional details on the ECOG lung study until that data comes out. So appreciate the question, just bear with us. In terms of the cobi question again the details of the plans around launching commercialization we will get those out to you once – again following Roche’s lead around communicating the plans for sales force sizing, those kinds of things. That being said, we have taken into account in terms of the guidance we gave today for 2015, I think a pretty healthy basis for the cobi expenses as well. So, we think we have that covered and we will go from there.

Thank you.

(Operator Instructions) And our next question comes from the line of Michael Schmidt (Leerink). You may proceed.

Hi, it’s actually Jonathan Chang stepping in for Michael Schmidt. Thanks for taking my questions. First, for the E1512 trial, can you tell us about any biomarker analysis that was conducting the trial, for example, was RET mutational status evaluated?

So, there are – excuse me, a biomarker program associated with this study in particular as it relates to MET and data with regard to that will be presented at a future date.

Great. And then lastly on cobimetinib are you considering or have you considered monetizing your stake in cobimetinib? Thanks.

Yes, it’s Mike. Yes, our position right now is to move forward with a co-promote. We think it’s a very valuable asset not only in the context of the combination with Vemurafenib in this first melanoma indication, but certainly looking at the broader program that Roche and Genentech are pursuing, including a combination with their PDL1 antibody. So, we are excited to have a second compound. In the mix here, we are looking forward to having the NDA filed by Genentech in the U.S. in 2014 and then to push forward with hopefully commercializing the drug in being involved in that promotion in 2015.

Hey, operator. Do we have anymore questions?

At this time, there are no further questions. And I would like to turn the call back over to today’s host, Ms. Susan Hubbard. Ma’am?

Okay, thank you very much and thanks everybody for joining us today. We appreciate all of your calls and your attention and we are happy to take any follow-up questions you may have after we conclude this call.