Good day ladies and gentlemen, and welcome to the Exelixis' Third Quarter 2015 Financial Results Conference Call. My name is Eric, and I will be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host for today Ms. Susan Hubbard, Investor Relations. Please proceed.

Thank you, Eric, and thank you all for joining us for the Exelixis' third quarter 2015 financial results conference call. Join me on today's call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; and Gisela Schwab, our Chief Medical Officer who will together review our corporate, financial, and development progress for the quarter ended September 30th, 2015, as well as recent key development and corporate events. P.J. Haley, our VP of Commercial, and Peter Lamb, our Chief Scientific Officer are 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'll be making forward-looking statements regarding future events and the future performance of the company. This includes statements about possible developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results could, of course, differ materially. We refer you to the documents Exelixis' files from time-to-time with the Securities and Exchange Commission, which under the heading Risk Factors identifies important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitation, risks and uncertainties related to the timing of data presentations and the regulatory approval pathways for cobimetinib and cabozantinib. Clinical trial risks, risks connected with compliance with applicable regulatory requirements; the uncertainty of Exelixis' ability to maintain its rights under existing collaborations and enter into new collaborations; risks regarding Exelixis' financial outlook and the sufficiency of the Exelixis' capital and other resources to fund its operations over time; and the risk of product commercial success and market competition. Now with that, I will turn the call over to Mike

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. Exelixis has had a very busy and impactful third quarter marked by the achievement of several significant milestones including first the topline release and subsequent data presentation from METEOR, our Phase 3 pivotal trial for cabozantinib and second line RCC at the Presidential Symposium of the European Cancer Congress in Vienna on September 26th. Second, the concurrent publication of the METEOR data in The New England Journal of Medicine. Third, the granting of break through therapy designation by the FDA for cabozantinib and for advanced RCC which expedites our NDA filing timelines to 2015. And, fourth, the completion of a financing where we raised approximately $146 million net which helps us implement our plans to commercialize cabozantinib for advanced RCC in the U.S. pending approval. Since the end of the third quarter, we have continued to make an important clinical and regulatory progress for both cabozantinib and cobimetinib including first the initiation of our rolling NDA filing with the FDA for cabozantinib and advanced RCC; second, CHMP's recent decision to grant accelerated assessment status to our future MAA for cabozantinib and advanced RCC in the EU. We expect to complete that filing in early 2016. Third, announcements from Exelixis and Roche-Genentech, coBRIM, met its second end points demonstrating a statistically significant and clinically meaningful increase in overall survival for patients receiving the combination of cobimetinib and vemurafenib as compared to vemurafenib alone. These data will be presented at the Society of Melanoma Research Meeting next week. And finally we announced today with our partner Roche-Genentech that the FDA approved cobimetinib in combination with vemurafenib for the treatment of patients with BRAF mutant positive melanoma. cobimetinib will be sold as Cotellic and is the second…

Thank you, Mike. I'll begin with a review of our third quarter 2015 financial results and then provide an update on our 2015 financial outlook. Comments will be highlights of our financial performance and I refer you to our press release and Form 10-Q filed earlier today for additional details. Net revenues for the quarter ended September 30th, 2015 were $9.9 million compared to $6.3 million for the comparable period in 2014. Net revenues for the third quarter of 2015 consisted of $6.9 million of product revenue related to the sales of COMETRIQ and $3 million of contract revenues for milestone payment received from merge related today worldwide license of our PI3K delta program in December of 2011. Research and development expense for the quarter ended September 30th, 2015 were $26.1 million compared to $43.6 million for the comparable period in 2014. The decrease is primarily related to net decrease in clinical trial costs related to the comment media trial and to a decreases in personnel related expenses resulting from an overall reduction headcount. Those decreases from partially offset by an increase in non-cash stock base compensation expense of $6.6 million due primarily to performance based stock options that vested as a result of the positive topline data received from METEOR. Selling, general, and administrative for the quarter ended September 30th, 2015 were $17.8 million compared to $9.9 million for the comparable period in 2014. The increase was primarily related to non-cash stock-based compensation expense of $4.7 million, due primarily to the vesting of performance based stock as a result of the positive topline data received from METEOR and higher marketing expenses including expenses for cobimetinib under the company's collaboration agreement with Genentech. Those increases are partially offset by decrease in facilities cost and consulting and asset services. Other income…

Thank you, Chris. The last few months have been very busy following the positive results from METEOR, our Phase 3 trial comparing cabozantinib an Everolimus in advanced RCC patients with experienced disease progression following treatment with at least one VEGFR TKI. We were very excited to the see the trial succeed and meeting its primary endpoint of improving PFS for cabozantinib as compared to Everolimus and to also observe a strong trend in overall survival at the planned interim analysis. In addition, cabozantinib was generally well-tolerated with a low rate of discontinuations for adverse events not associated with disease progression. The METEOR results were presented in September at the ECC Conference in Vienna and concurrently published in The New England Journal of Medicine by the Principal Investigator for the trial, Dr. Toni Choueiri. Both the presentation and publication of the METEOR results were back to back with the nivolumab study that also met its primary endpoint in the second or later line RCC setting. All studies achieving their primary endpoint is certainly good news for RCC patients. METEOR's primary endpoint was a progression-free survival. The analysis of progression-free survival per the independent radiology showed a highly statistically significant benefit for cabozantinib with an HR of 0.58 and 95% confidence interval of 0.45 to 0.75 and a key value that was less than 0.0001. cabozantinib nearly doubled the median PFS with a 7.4 months as compared to 3.8 months with Everolimus. cabozantinib treatment reduced the risk of disease progression or death by 42%. In METEOR, we have now seen a clinical meaningful and statistically significant improvement in the primary endpoint PFS compared with Everolimus. The PFS results consistently favored cabozantinib across the subgroup analysis used for stratification including the number of prior VEGFR inhibitor therapies one versus two or more and…

All right. Thank you, Gisela. The third quarter of 2015 marked one of the most eventful in Exelixis' history, as evidenced by multiple clinical and regulatory achievements. With these significant milestones in place, we have now turned our complete focus to executing on the next drivers of our business. First, the completion of filings for cabozantinib and advanced RCC in both the U.S. and EU. Second, the continued preparation for commercial readiness in support of the potential U.S. launch of cabozantinib and RCC next year, and third supporting our partner Genentech with the U.S. launch of our second commercial product Cotellic in combination with cabozantinib in patients with mutant BRAF positive melanoma. I'll now take a moment to commends and offer my sincere gratitude to those whose contributions have led us to this point. Our current and past employees, our clinical investigators and their stuff and the patients with cancer we individually and collectively aim to serve. So thank you all for your time and interest today in Exelixis and we're now happy to open the call for questions.

Thank you. [Operator Instructions] And your first question comes from the like of Eric Schmidt from Cowen & Company. Your line is now open.

Thanks for the update and for taking my question -- or questions. Mike, you mentioned that you hope to be launch ready by April 2016 for cabo and RCC. What's special about that date?

It's April Fool's Day. Look, I think it's an important milestone for us from the standpoint of making sure that we have all the infrastructure and certainly all the capabilities in place to launch a full scale launch. So, I think from the standpoint of how we view progress in terms of the trial, in terms of our filing it's the point in time when we want to be launch ready. So, and we're making good progress in that regard.

Okay. And then it's been a couple months now since you received the break through designation from the FDA in that indication. How have things changed or how do you perceive the FDA's urgency to move forward over the last few months?

Yeah, maybe Gisela can take that question.

Yes. We're making very good progress regarding advancing our efforts towards this filing and we have initiated as I mentioned earlier on the rolling NDA submission which is part obviously of the break think therapy designation that enables that and we are working hard to complete the filing before the end of the year and we are on track with that so things are going pretty well there.

Okay. Maybe a better question for Roche, but perhaps the answer do you guys know when we might get pricing information on Cotellic?

So, Eric, its Mike. Let me take that question. That information has been -- has been shared and let me start by saying first and foremost that we are very pleased with today's announcement not just because it's our second approved drug from Exelixis, but because it's really an important new treatment options for patient with cancer and that's why we come to work every day, that's why we work as hard as we do as to really help patients with cancer. So, we're very excited about that and very proud of that, first and foremost. Secondly, as Gisela mentioned in some detail we're very pleased with the label and the opportunity to have the updated both progression fee survival and overall data survival in the label. We think it's very competitive and provides a very good foundation to launch the drug and market the drug in I space that has seen certainly a lot of progress and a lot of competition over the last few years. So, in terms of pricing, let me get to the facts first. So, again, per our contract with Genentech, they have the sole authority to set the price for Cotellic and any combination product that contains cobimetinib and another drug which in this cases is the situation in terms of the BRAF positive melanoma indication. So, we were informed this morning by Genentech that the monthly price for Cotellic would be $6,590 and that is I think put in the context relative to the price for zalberac [ph] which currently is $11,000 per month. So, the price of the combination product therapy would be about $17,500 a month, which is priced at approximately about an 8% discount to what is currently available for the trametinib-dabrafenib combination which is being sold now by Novartis. So, again, it's a competitive label. Certainly with the updated PFS and OS data in place it's competitively priced to be able to deal with that issue as well and, again, the broad development plan that is being instituted by Roche relative to the wide number of combination trials that are being examined right now as Gisela mentioned is certainly a good sign of the interest in the drug, the interest indifferent combinations and different tumor types and one that we think has the potential to potentially expand the size of the Cotellic franchise as alluded to in the Roche Investor Call last week.

Great. Thanks very much.

Thank you

Thank you. And our next question comes from the line of Stephen Willey from Stifel Financial. Your line is now open.

Yeah hi. Thanks for taking the questions and congrats on the approval and all the progress. Mike, maybe just a question with respect to your thoughts with regard to how penetrated you believe the BRAF MEK market to already be. I think if you look at trametinib and dabrafenib sales I think as reported by Novartis it looks to -- that combo looks to be run-rating I guess at something close to 550 million or 600 million a year and just kind of wondering based on the work that you've done with some of your co-promote activities to-date if -- if you think that there's considerable expansion opportunities kind of beyond where the market is already.

Yes, Steve. Thanks for the question. That's certainly our view as well based upon the initial look at the Novartis numbers from again the Q3 run-rate. If you look at the epi in terms of patient numbers, there's about 5,000 patients with the mutant BRAF positive can type in the U.S. similar number probably in Europe. You can do the math there in terms of how much they cover versus what's left in terms of upside or potential places where this could grow in general terms. Certainly the PD-1 antibodies are used in this space and KOL community is certainly very bullish on those modalities for either the mutant BRAF wild-type or positive population. So, again, we're excited with the label. Certainly, the -- having the PFS and OS in the label puts us in a -- I think a pretty strong position to be able to engage now and the -- our sales force is fully integrated with that from Genentech and Daiichi and we're ready to go. So, we're excited about that and again, we've got a new Head of Sales and Infrastructure there that is going to help reinforce that and we're really, really excited about being able to engage now from a marketing and promotional point of view with the approval and think we've got a lot to talk about.

Okay. And with regard to the kind of the expansion of the franchise-based on some of these additional studies that Genentech is running with Cotellic, I know, obviously been implicated in NRAS melanoma which is a sizable chunk of melanoma itself and I think there has been some discussion regarding the traction of the immunotherapy as we gain there. So, do you have any clarity from Genentech at this point as to whether or not they intend to initiate Cotellic study in NRAS and I guess specifically in the context of I think Roche talking about Cotellic as being one of the less immunosuppressive mix that are out there.

Yeah, Steve. Thanks for the question. We're really not in a position to really comment on some of the thoughts and plans beyond what they have talked about publicly and they -- I was -- we were all pleased to see Cotellic play a prominent role in their Investor Day last week and I think the dialogue they presented in the slides I think really reinforced their interests and how they're a to a large agree pursuing that opportunity with different combination partners. We just go I don't understand what they basically have said so far. So, I will refer you back to them if you want to pursue that question, but we've got to kind of stuck with the party line here.

Understood. Attend maybe just one quick cabo question. With respect to the MCI C cup study, the Phase 1, I know that it's investigator initiated, but do you have any idea as to the number of RCC patients that may be included in that trial and if there's any kind of cap to make sure that there's an RCC representation amongst all of the GE malignancies that you are allowing to enroll? Thanks.

Yeah. Great question. Gisela can you answer that?

Sure. The initial part of the Phase 1 study is in dose rate and cohort study in which patients with any tumor can be include. There's no cap as to RCC. And then in the second part of the study once the optimal doses have been identified, there are expansion cohorts and that include patients with different types of urothelial cancer and their plans to also add RCC.

Okay. And do you know if the initiation of those expansion cohorts are based on some threshold response level that needs to be achieved in the dose-escalation or are those already pre planned?

It's not dependent upon a threshold of response. It's dependent upon the choice of dose having been made and soon as its safe and optimal dose has been identified then the expansion cohorts can go ahead.

Okay. Thanks for taking the questions.

And the next question comes from the line of Michael Schmidt from Leerink Partners. Your line is now open.

Hi. This is Varun Kumar and on behalf of Michael Schmidt. My first question is on Kobe what is expected timeline for the launch? And can you guide us what is the current at-home status on Kobe?

Yeah. P.J. is here from Commercial, you want our comment on the Kobe launch time?

Yes. Absolutely. So, thanks for the question. So, the sales force is in place so our team is very excited to begin promoting Cotellic immediately now that we have the label in hand. We've been working closely with Genentech now for some time preparing for the launch and as you know Genentech very seasoned in bio oncology in these launches, so we feel very good about partaking in this opportunity with Genentech. So, our teams are ready to go to start promoting tomorrow and drug is going to be available within the next couple weeks. So, really all things are starting off tomorrow and we're really excited to have this opportunity.

Okay, clear. And the patent status do you have any idea about when it is set to expire?

Yeah. My recollection and somebody can correct me if I'm wrong here is that it is -- the loss of exclusivity is 20, 30 for the composition of matter pattern.

Okay, great. And the second question would be on the cabo. So, you have S2 study going on in wet positive lung cancer. Do you plan to continue the single therapy beyond Phase 2 or is the priority going to be combining with immunotherapy going forward in lung cancer?

Yes. Thanks for the taking question. For the cabo -- cabozantinib single agent study that positive small cell lung cancer that is an investigator sponsored study that is conducted out of MSKCC, Alex Drilon is the lead investigator here and he also presented the data at the recent ASCO meeting showing very nice and encouraging response rates of 38%. That study is continuing to accrue patients as it has expanded into its second phase or stage. And regards to further development in lung cancer, there are various possibilities that are under discussion and we certainly are interested in continuing work in lung cancer and are particularly interested given the potential for cooperative activity that I spoke about earlier on in combining cabozantinib and immunooncology agent and that is in discussion that is also ongoing with the [Indiscernible] cooperative group as well.

Okay. Thank you. And congrats on will be approval. Thank you.

Thank you.

[Operator Instructions] And the next question comes from the line of Stefan Quenneville from Morningstar. Your line is now open.

Hi. Thanks for taking the question and congrats on the approval today. I'm sorry if this has been asked already. I just -- I was jumping on and off. How comfortable are you with Roche's guidance on the market opportunity for the Cotellic BRAF combo of I think they categorize at R&D day as small with sales up to 500 million for the combo and I guess with the pricing you gave, where you're getting about a third of the combined economics is that consist with what you're thinking or do you have a -- a differing view there in.

Yeah. I wouldn’t -- this is Mike, I wouldn’t want to speculate further on kind of their take on this whole thing from their Investor Day last week. I remember the graph or the slide you're talking about and it was kind of segmented across compounds and indications and those kinds of things. So, you know, again that was their view, that was their data. They're really the senior partner here driving the Cotellic marketing launch and they're certainly able to put that together so.

Okay. Fair enough. That's a very good political answer given they're the managing I guess leading the launch of the how would you find other opportunities for it outside this combo, given its been tested a number of different indications? How do you feel that would be even qualitatively relative to the opportunity of melanoma?

Yeah. I think there's a lot of very exciting work going on right now across again different combination partners, a wide variety of tumor types. We're certainly very excited about the opportunity that is presenting therein terms of what those combinations could do to help patients and certainly expand again using the Roche terminology the Cotellic franchise. But that's all data-dependent and we will take certainly some more time to work through the Phase 1b/2 data and then move whatever looks good into pivotal trials an we're very fortunate and happy to have a partner like Genentech and Roche with certainly a lot of experience there from both an obviously development and regular perspective. So, again, we're focused primarily on developing an moving cabozantinib forward with our internal development capabilities and regulatory capabilities and we're very pleased to have a partner like Roche-Genentech that can again do the heavy lifting with cobimetinib and Cotellic to again bring value to patients and to our different stakeholders.

Great. Thanks.

Thank you. And at this time, there are no further questions. So, I will turn the call over to today's host, Susan Hubbard. Ms. Hubbard.