Good day, ladies and gentlemen and welcome to the Exelixis’ Fourth Quarter and Full Year 2014 Financial Results Conference Call. My name is Jasmine and I will be your operator for today. At this time this call has been recorded for replay purposes. I would now like to turn the call over to your host for today, Ms. Susan Hubbard, Investor Relations. Please proceed.

Thank you Jasmine, and thank you all for joining us for the Exelixis’ fourth quarter 2014 financial results conference call. Joining me on today’s call are Mike Morrissey, our President and Chief Executive Officer; Debbie Burke, our Chief Financial Officer; PJ Haley, our Vice President of Commercial; and Gisela Schwab, our Chief Medical Officer who will together review our corporate, commercial, financial, and development progress for the quarter and year ended December 31, 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 Web site 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. These documents contain and identify under the heading Risk Factors important 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 the compliance with applicable regulatory requirements, Exelixis’ ability to maintain its rights under collaboration, Exelixis’ financial outlook and the sufficiency of Exelixis’ Capital and other resources over time and production acceptance in the market as well market competition. With that, I will now turn the call over to Mike.

All right. Thank you Susan and thanks everyone for joining us on the call today. We're off to a busy and productive 2015. To begin I'd like to highlight the key near term events that could have a major positive impact on our business this year if successful. We have two significant milestones that are rapidly approaching. First the cabozantinib is the METEOR top line data and second-line RCC which is projected for the second quarter of 2015. The second is the potential approval of cobimetinib in combination of with Zelboraf in first line BRAF mutant-positive melanoma projected for the third quarter of 2015. If positive, we will have achieved a notable goal for any biotech company by having two approved products that were discovered in our labs and successfully advanced through pivotal trials in large underserved and commercially meaningful indications. So with that, I’ll take a few minutes to review the key drivers of our business for both cabozantinib and cobimetinib before turning the call over to Debbi, PJ Haley who is leading our commercial efforts now and, Gisela for a review of our financial, commercial and development highlights. First let’s start with cabozantinib. Enrollment in METEOR, our Phase 3 pivotal trial in metastatic second-line RCC was completed last November. The primary endpoint for METEOR is progression-free survival or PFS for the first 375 patients enrolled and we expect top line data in the second quarter of 2015. The second-line RCC market presents a relatively mature yet underserved indication with an approved VEGFR targeting TKI and an mTOR inhibitor available with treatment options. With both having the common liability of offering a relatively short duration of PFS benefit with little objective differentiation. The market size for second and later line RCC is large and growing, including about 11,000 new…

Thank you, Mike. I will begin with the fourth quarter and full year 2014 financial results, and then move to our 2015 financial outlook. My comments will be focused on the highlights of our financial performance and I refer you to our press release filed earlier today for additional details. Net revenue was $7.4 million for the quarter and $25.1 million for the full year ended December 31, 2014. Net revenue in 2014 was derived entirely from product sales of COMETRIQ and was net of the impact of a project management fee of $0.5 million in the quarter and $2.3 million for the full year payable to our European distribution partner Sobi. This compares to net revenue of $4.3 million and $31.3 million for the same periods in 2013. Net revenue in 2013 was derived from the product sales of COMETRIQ and the last remaining portion was licensed revenue from our collaboration with Bristol-Myers Squibb. The increases in net product revenue were 69% for the quarter and 67% for the year and reflect the continued ramp up in sales of COMETRIQ following our launch in the U.S. in January 2013 and the European Union approval in March 2014. R&D expenses for the quarter were $39.7 million and $189.1 million for the full year 2014. This compares to $49.6 million and $178.8 million for the same periods in 2013. The decrease in expense for the fourth quarter is directly related to the cost saving measures we initiated in the third quarter of 2014 following the outcome of our COMET-1 trial. The increase in expense for the year is primarily due to clinical expenses we incurred during the year for the METEOR trial, our Phase 3 pivotal study in RCC, offset by the cost saving measures I just mentioned. SG&A expenses for…

Thanks Debbi. I'm excited to speak with you today regarding the ongoing and planned commercial activities at Exelixis. By way of brief introduction, I have been with the Company for about 4.5 years now, focused on building the commercial infrastructure to launch our first product COMETRIQ in medullary thyroid cancer and I have led the commercial origination since last September. Before joining Exelixis, I was with Genentech working on the Avastin marketing team. At Genentech, I focused on lung cancer glioblastoma and leading the successful U.S. launch of Avastin in renal cell carcinoma in 2009. Having spent a good deal of my career working in GU Oncology and specifically in renal cell carcinoma, I hope to be able to leverage this background effectively, helping Exelixis bring Cabo to market in the kidney cancer space pending a positive METEOR outcome. With regard to the U.S. launch of cobimetinib, I am also glad to be able to deepen our strong and productive collaboration with Genentech, by capitalizing on my knowledge of the Genentech commercial organization and the positive relationships I have with former colleagues there. Moving to be COMETRIQ performance in Q4, COMETRIQ net revenue was $7.4 million for the quarter. This represents an increase of 17% compared to Q3 of 2014. Importantly we continue to see the duration of therapy for active MTC patients increase. On average it has now extended to approximately 9.5 months. We are gratified to see patient experience with commercial product approach the duration of therapy we saw in the exam trial where 25% the COMETRIQ patients remained on therapy for greater than two years. With regards to Europe, as you know at the end of the year we entered into a new agreement with our distribution partner Sobi. The payment structure of the partnership has transitioned…

Thank you, Peter. In the next few minutes I will provide an overview of the development program for cabozantinib, our focus on the progress of our Phase 3 programs in RCC and HCC, and then also cover some of our key collaborative studies in the IST and NCI-CTEP programs. And I will close with a brief update on XL888 our HSP90 inhibitor. But before moving to the progress update, a brief word on upcoming presentations of the COMET-1 and COMET-2 results at the ASCO GU Conference taking place in Orlando later this week. As you know we had announced the top-line data for these trials, metastatic CRPC in the second half of last year, following which we discontinued exploring the potential of cabozantinib in the treatment of metastatic CRPC. We believe it is important to share with the oncology community the details of results from a study positive or negative as they may help shape future clinical trial design. In order to preserve the integrity of the presentations, we will not be going into a detailed description of the data today, but will say that both the efficacy and Phase 2 data in the cabozantinib arms were generally consistent with prior observations in Phase 2. Ultimate reasons for these studies not meeting the primary end point are likely multi factorial and include development of resistance of disease and a relatively high rate of subsequent anti-cancer therapies. I will now move to the study progress update, starting with our highest priority, the renal cell cancer program. We completed enrollment in our Phase 3 trial METEOR in November 2014. Top-line data for the primary end point of progression free survival are expected in the second quarter of 2015. I would like to briefly review the trial design and assumptions for you. The…

All right, thanks Gisela. I'll keep my closing remarks brief, so we can get to your questions. In summary, we are rapidly moving towards another inflection point for Exelixis in the months ahead. Our resources are streamlined and allocated to support the next significant drivers for the business, the readout of the METEOR study expected in the second quarter of 2015 and the potential approval of cobimetinib in combination with Zelboraf and metastatic BRAF mutant positive melanoma expected for the third quarter of 2015. I'll close by thanking our entire team here at Exelixis for their unwavering dedication and superb efforts over the last quarter on behalf of patients with cancer everywhere. We're all very excited about the possibilities that lie ahead and we look forward to keeping you up to date on our continued progress. So thank you for your time today and your interest in Exelixis and we're happy to now open the call for questions.

(Operator Instructions) And our first question comes from the line of Ed Tenthoff with Piper Jaffray. Please proceed.

Congrats on the progress. It's going to be an exciting year for you guys. Just one quickly. With respect to the commercial costs for ramping for the cobi launch, how much additional cost should we be anticipating beyond sort of what you're already spending on COMETRIQ, and maybe can you just give a little bit more color sort of some of the prep that you're doing there?

Hi Ed, this Debbie. I'll take the first part of that call. So we've been given a budget from Genentech for our share of the cobi costs for 2015 and I have factored that into our budget, which is reflected in the half year guidance we’ve just given in our OpEx. Genentech has an infrastructure in place. Their expenses look reasonable to us. They are more than we saw in 2014 but it is exactly as we expected. So as we get more data, we can update our guidance.

Great, and how many total reps will there be detailing it between Genentech and Exelixis? I apologize if you’ve already mentioned that.

It’s Mike. Yes, so we’re not quite ready to lay out that level of detail about the overall launch and plans there. So give us some more time. It’s a fair question. It’s a good question. We’re just not quite there yet in terms of where we are, kind of the rollout of the front. So that would come a little bit later.

Our next question comes from the line of Eric Schmidt with Cowen & Company. Please proceed.

Mike, it sounds like you’re a little more keen partnering out ex-U.S. rates for Cabo, assuming the METEOR trial hits. Can you just remind us how you might separate out the indications between MTC, which I guess is already partnered to Sobi in Europe versus other opportunities like renal cell?

Yes. So the Sobi relationship covers explicitly only MTC in Europe and the MPU phase broadly globally. So it’s a very clean cut along that line. How we manage that going forward, time will tell. Again we have capsules for MTC. We’re planning to have tablets for RCC and other indications moving forward, so it’s a probably a relatively easy split if we need to, from the standpoint of the different drug configurations to be able to track it one way or the other.

Then on the renal cell trial in METEOR, can you remind us, were clear cell patients allowed to be enrolled and do you know what percent of the study was clear cell?

Sure, it is focused entirely on clear cell histology. So all patients have to have a clear cell component.

And in terms of PFS looks, I understand the first 370 patients will drive the initial results, but is there a recruitment to come back later and look at the totality of the study?

We are planning obviously to focus on the primary analysis of the PFS based upon these 375 patients. We also will be assessing the total PFS as well for the entire population.

Is that required for a filling or for approval or anything like that?

That is a secondary endpoint that is that we are just providing as well.

So would that hold up the filing or the follow-up on for those 375?

No it would not, it would not. We obviously need to pull in a lot of data across the entire trial that then ultimately leads to the locking of the database and that allows for these reads to occur.

Okay, and lastly in terms of Germen reimbursement, have you gone through pricing discussions with GBA yet? The MTC?

It’s Mike. Those discussions are ongoing right now. So stay tuned.

And our next question comes from the line of Michael Schmidt with Leerink. Please proceed.

I'm just trying to better understand guidance you provided. So you said you expect cash to end up around $70 million to $80 million in the first half of the year with cash sufficient to fund operations through the end of 2015. Does that mean there will be a significant uptick in cash during the second half?

Michael, its Debbie. So just to repeat, the $70 million to $80 million guidance was our OpEx for the first half of the year, not cash. Our cash, we ended the year with roughly $243 million and we said that that along with our product revenues received during 2015 will fund our operations through the whole year 2015. So that’s the way we split that out.

Okay and on the METEOR trial, I was wondering, you talked about the powering assumptions. How do you account for the dosing difference or do you account for the dosing difference between our Phase 2 and Phase 3 and your powering assumptions for the trial?

In the powering assumptions for the trial, no, we’re not accounting for that. We have obviously done broad assessment of dosing and we are conducting all our Phase 3 studies and also the Phase 2 program that I've mentioned through RFPs in detail at the 60 mg dose and that dose was based upon the median average dose received by patients in earlier study, including the RCC study, where patients dose reduced and ultimately received 75 mg per day as a median average dose, which is close for the 60 mg.

(Operator Instructions) And our next question comes from the line of Stefan Quenneville with Morningstar. Please proceed.

I was wondering about the sort of pricing strategy for cobi and how much input you guys have on what the final pricing is going to be? Or is that -- most of that decision will be in Roche’s hands?

Yes this is Mike. The pricing decision is purely in the hands of Roche Genentech, and they will make that decision based on their analysis and then will execute upon that.

And our next question comes from the line of Brian Klein with Stifel. Please proceed.

In the second quarter, when you report the top-line results for METEOR do you also anticipate reporting an initial overall survival or perhaps some idea of how the survival is trending at that same time?

Yes, so the plans for the analysis, we see an interim analysis for overall survival. That's pre-planned in the trial at the time of analysis of the primary end point of PFS. So the answer is yes, we will have an interim look at that point in time.

And it's Mike. Just a reminder, there is no crossover in this study, either one way or two way, just to be clear about that.

Have you disclosed any of your estimates in terms of survival for either the cabo arm or the comparator arm?

Well the comparator arm is known to have a median overall survival of about 15 months. That is widely published for Everolimus and we're assuming an improvement ultimately at the final analysis on the cabozantinib arm to 20 months.

So if that's the case, just doing some quick math here -- you had mentioned Gisela, that the median number of months of observation would be about 10. Can we expect that the survival number that we'll see will be relatively small?

Yes. for overall survival we need some more events and so therefore the final analysis for overall survival is planned for later on. The interim analysis will be run with the events that are currently available and that’s a smaller number to be anticipated yes.

At this time there are no further questions. And so I will turn the call over to today’s host, Susan Hubbard. Ms. Hubbard?

Great. Thank you all for joining us today, and we welcome your follow-up calls with any additional questions you may have that we weren't able to address on today’s call.