Good day ladies and gentlemen, and welcome to the Exelixis’ Second Quarter 2016 Financial Results Conference Call. My name is Brain, 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 Hubbart, Investor Relations. Please proceed.

Thank you, Brian, and thank you all for joining us for the Exelixis’ second quarter 2016 financial results conference call. Joining me on today’s call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; P.J. Haley, our Vice President of Commercial; and Gisela Schwab, our Chief Medical Officer who will together review our corporate, development, commercial and financial progress for the quarter ended July 1, 2016, as well as recent key development and corporate events. Peter Lamb, our Chief Scientific Officer is also with us and will participate in the question-and-answer session of this call. During the course of this presentation, we will 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 identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitation, risk and uncertainties related to product commercial success and market competition, regulatory review and approval processes, availability of data at the reference time, conducting clinical trials in compliance with applicable regulatory requirements. Exelixis’ dependence on its collaboration partners and ability to maintain its rights under existing collaborations, cost associated with commercialization research and development and any other activities and the sufficiency of Exelixis’s capital and other resources overtime. With that I will turn the call over to Mike.

Alright thank you, Susan and thanks to everyone for joining us on the call today. We had a very eventful second quarter and I’ll start today with a brief overview of our key milestones from the last few months before turning the call over to Chris, P.J. and Gisela who will provide additional details on our Q2 financials, the CABOMETYX launch and our development activities respectively. The key milestones from the second quarter of 2016 includes first the FDA approval of CABOMETYX to treat patients with advanced renal cell carcinoma or RCC who have received prior anti-angiogenic therapy. Second, the well executed the initial phase of the CABOMETYX launch in the U.S., which resulted in the recording of the first sales of this new drug during the final nine weeks of Q2. Third, the presentation of 18 abstract featuring Exelixis’s compounds at ASCO, including noteworthy updates on the METEOR overall survival data and the cobimetinib, atezolizumab combination data in the cohort of advanced colorectal cancer patients. Fourth announcement of positive top-line results from CABOSUN the randomized Phase 2 trial of cabozantinib in patients with previously untreated advanced RCC demonstrating a statistically significant and clinically meaningful improvement in progression free survival compared with sonitinib in patients with intermediate or poor risk RCC. And finally fifth we announced just a little more than a week ago that we have continue to make progress with our partner Ipson on the regulatory review for CABOMETYX in Europe with the receipt of a positive opinion from CHMP, which will be reviewed by the European Commission in the coming months. Spend a few minutes providing a bit more color around the launch and initial sales numbers before passing the call over to Chris. Let me reiterate that executing a product launch is a challenging undertaking especially…

Thanks, Mike. Before I start I want to note that I’ll be speaking to the financial data referenced on slide 8 through 14 in our earnings presentation. These slides include comparisons to both the second quarter of 2015 and the first quarter of 2016 for your reference. Net revenues for the quarter ended June 30, 2016 were $36.3 million compared to $8 million for the comparable period in 2015. Net revenues for the second quarter of 2016 includes $31.6 million of net product revenue compared to $8 million for the comparable period in 2015. Product revenues for CABOMETYX and COMETRIQ are both recognized using the sell-in method of revenue recognition. The increase in net product revenues for the three months ended June 30, 2016 as compared to the same period in 2015 reflects the impact of the commercial launch of CABOMETYX, as well as the increase in the COMETRIQ revenues. Net product revenues for CABOMETYX and COMETRIQ were $17.6 million and $14 million respectively for the quarter ended June 30, 2016. Net product revenues during the quarter were impacted by approximately $6.5 million to $7 million related to channel inventory build during the initial launch period for CABOMETYX. Net revenues for the quarter ended June 30, 2016 also includes $3.6 million of license revenues recognized from the upfront payment we received from Ipson under our collaboration and license agreement and $1 million of royalty on ex-U.S. net sales of COTELLIC. We recognized COTELLIC royalty revenue on a one quarter lag and consequently the COTELLIC royalty revenue for the quarter ended June 30, 2016 relate ferocious first quarter 2016 ex-U.S. COTELLIC net revenue. No such royalty or license revenue during the comparable period in 2015. Research and development expenses for the quarter ended June 30, 2016 were $23 million compared to…

Thank you, Chris. We are very encouraged with the initial launch phase of CABOMETYX. Our commercial organization was fully enabled, trained and ready to go at the time of approval in April and sales team immediately began calling our customers including oncologists, nurses, physician assistance and pharmacist. Given the fortuitous timing Exelixis had a robust promotional presence at ASCO and we are able to maximize the opportunity of the conference to educate a significant number of physicians METEOR data, for which there was a high level of interest. Since approval CABOMETYX is experiencing rapid and broad uptake in the marketplace. Although it is early in the launch we are seeing encouraging trends in prescriber adoption. Approximately 75% of prescribers are new to CABOMETYX in the sense that they hadn’t previously written COMETRIQ. The rapid new prescriber adoption that we are seeing appears to confirm our conviction that CABOMETYX addresses a significant unmet medical need in advanced renal cell carcinoma. In fact the feedback we are hearing from our customers regarding the METEOR year and the trifecta of improvement in the efficacy endpoints of overall survival, progression free survival and objective response rate is positive and encouraging this is leading to adoption trends across various segments of the market, including both the academic and community prescribers. It is important to note that we are seeing strong uptake of CABOMETYX across both the second and third line settings. I will now turn to market access, our channel is fully functioning shortly after approval and we are encouraged that all our channel partners have begun reordering on a regular basis. On the payer front our team has had productive conversations with our target payers representing the vast majority of covered lives. Similar to physician feedback payer feedback has been positive based on the…

Thank you, P.J. I will focus today on a brief regulatory update for CABOMETYX in advanced RCC, I will then speak about recent top-line data from a randomized Phase 2 trial in the first line therapy of RCC and I will also provide an update on our other ongoing trials for cabozantinib. Before that I would like to comment on the recent ASCO meeting in early June. 18 presentations featured results from studies of Exelixis discovered compounds of this contract, most notable was the oral presentation by Dr. Toni Choueiri of the overall survival results from METEOR showing a highly statistically significant and clinically meaningful improvement and overall survival for cabozantinib as compared with everolimus. These results were also concurrently published in the Lancet Oncology [ph]. Other presentations on cabozantinib focused on important subset analysis from METEOR, as well as Phase 2 data from studies in bladder cancer and endometrial cancer performed by our collaborator in the NCI­CTEP program. Cobimetinib the Exelisis discovered MEK inhibitor that is being developed by our partner Genentech was also featured in multiple presentations. Most notable were the results from a Phase 1b study of cobimetinib and atezolizumab the PD-L1 antibody in previously treated patients with advanced colorectal cancer. This study showed anti-tumor activity with a 17% objective response rate and tolerability of the combination. And these data provided the basis for the now ongoing Phase 3 study COTEZO of cobimetinib combined with atezolizumab or atezolizumab alone versus regorafenib in the third line treatment setting of colorectal cancer patients. Now I’d like to turn to a brief regulatory update for CABOMETYX. We have filed the NDA for CABOMETYX in December of 2015 with the FDA and in January of 2016 we filed the MAA with the European Medicines Agency or EMA. EMA granted CABOMETYX accelerated…

Alright. Thank you, Gisela. In closing we could not be more pleased with our progress thus far in 2016 and remain focused on the opportunities and significant milestones that are ahead of us. The Exelixis team consistently demonstrates our passion, work ethic and commitment to helping patients with cancer whether that is to further development of our compounds in areas of unmet medical needs or by ensuring there are no barriers for patients who could potentially benefit from access to our medicines. This quarter’s achievements and financial results represent an important milestone for the company and our goal to drive the business to positive cash flow is more tangible than ever. Future financial success, would give us the opportunity to invest in our business, reinvigorate our organic research efforts, as well as potentially in license and/or acquire compounds were appropriate. We are fully committed to this vision while maintaining a strong sense of disciplined expense management where new R&D initiatives are aligned with robust growth in product revenues. We look forward to updating you on our progress as we go forward. Thank you for your continued support and interest in Exelixis. And we are happy to now open the call for questions.

Thank you. [Operator Instructions] Our first question comes from Eric Schmidt with Cowen & Company. Please proceed.

Hello, good afternoon and congrats on a great start with CABOMETYX. Maybe just on the launch P.J. it looks like if I do the math subtracting out the inventory filled, but adding back some of the sales that you got on the COMETRIQ side the total RCC sales numbers maybe somewhere in the $15 million to $20 million range for the quarter just maybe if you could confirm that. And then two, is there any evidence that that’s a bolus of any sort or that we shouldn’t expect continued growth of that figure?

Hi, Eric. Thanks for the question. It’s Chris. So I guess I mean I think you are in the right ballpark $15 million to $20 million is around -- is about that number and referring to the bolus I mean you could expect a bolus. But in our instance since we had COMETRIQ out there previously We don’t think there was any bolus of patients waiting for product. They had the ability to be treated on COMETRIQ prior to the launch of CABOMETYX.

Okay. And then maybe for Gisela, just couple of trial questions first, as the interim analysis of the Celestro HCC study occurred yet and it's not what you have let us know when you are planning or when that might happen.

Eric, what we’ve communicated is that the studies accruing globally and continues to do so. We are expecting results from the study in 2017. There are two interim analysis build into the trial at 50% and 75% rate of the event and we will inform when we have achieved such milestone. So we haven’t guided on the timing around that.

So you haven’t achieved 50% of the events yet, is that correct?

We haven’t guided on the timing of the interim analysis so.

But you would have told us that you achieve 50% of the events taken the interim.

Hey Eric it’s Mike. When we do the interim we will be transparent about the results in some formats so stay tuned.

Okay, thanks. And just a couple of quick ones then is there a timeline for when we might hear back from the FDA on potential filing strategy around CABOSUN and also a timeline for data from the -- I know it’s not your trial but a CTEP trial that [indiscernible] plus CABO trial in genitourinary cancers.

Yeah this is Gisela. We have initiated the dialog with regulatory agencies regarding the CABOSUN results and potential path forward towards a filing strategy and further development and first line setting of RCC. As soon as we have more definitive information we will certainly make that available. At the current time these are ongoing conversation. So also working with the alliance to access the data and we’re expecting the full results to be presented later in the year. And regarding the combination study as I mentioned the combination of cabozantinib plus nivolumab plus minus ipilimumab is expected to be presented at the upcoming ASMO conferences. So that will be the next public occasion if you will for the study.

Thanks and congrats again.

Thanks, Eric.

Thank you. Our next question comes from the line of Steven Willey with Stifel. Please proceed.

Yeah, thanks for taking the questions and congratulations on great start. I guess one question maybe to follow-up on the prior with respect to CABOSUN and regarding your characterization of what’s occurring now in terms of just being in dialog with FDA. I think you’re also talking about the potential development path forward. So just wondering if you can confirm whether or not that may or may not include confirmatory study or if you would perhaps think about expanding the development program to perhaps look at something like CABOMETYX against maybe [indiscernible] within poor risk patients specifically.

Yeah as I said earlier we have initiated the dialog that is around obviously the CABOSUN results. And as we achieved more results later in the year that are then also going to be public this will be further discussed. I think in terms of the development strategy, I think it’s a little bit premature to comment at this current time, but certainly working through a number of scenarios and I think as soon as we have arrived to the conclusion and from path forward we will communicate that.

Understood. And then just maybe with respect to some of the tractions that you’re seeing thus far in the market I think Pfizer just recently reported but look to be about a near 20% decline of in light of sales within the U.S. So just curious if you’re seeing any strength specifically in either maybe second or third line or dose uptake between the two lines of therapy appear to be pretty equivalent at this point.

Yeah thanks for the question. With regards to second and third line we’re very pleased to be seeing a strong uptake in both settings. So we’re happy with that. Additionally I’d say we’re very pleased to see uptake in adoption across position segments, really including community oncologists, KOLs and academic oncologists. And we’re also seeing significant uptake in new prescribers, 75% of those who wrote CABOMETYX last quarter were actually new to the brand in the sense that they hadn’t written COMETRIQ previously. So we’re seeing a significant number of positive trends that we’re really excited about.

Understood. And maybe just one final question for Gisela. Just do you have any insight as to whether or not the [indiscernible] CABO data that’s going to be presented later this year may also include biopsy data?

So in the trial protocol there are number of translational endpoints built in and we’ll see at the ASMO conference whether that can be addressed, so it will also be addressed in the presentation. At this current time we don’t have that information.

Okay, thanks for taking the questions.

Thank you, Steve.

Thank you. [Operator Instructions]. Our next question comes from the Michael Schmidt - Leerink Partners. Please proceed.

Hey, guys thanks for taking my questions and also congrats to great CABO launch in RCC. And thanks for the details provided around some of the metrics. I had a couple of follow ups. So the metric tick up in sales, is it fair to assume that most or all of this is due to RCC demand as oppose to inventory buildup for COMETRIQ?

Yeah hey Michael its Chris so as P.J. stated I mean we see the MTC demand being stable. So you can infer from that that the RCC demand continues to be there and support the product. We don’t -- we didn’t see an increase in inventory that was any material amount.

Okay. And for CABOMETYX would you expect additional inventory build in the third quarter?

We're not providing guidance on that, but I mean I think there is enough inventory in there that we wouldn’t expect that.

Sounds good. And in terms of gross to net for CABOMETYX here in the launch do you have any color on that?

So not specifically on CABOMETYX, but overall our gross to net is in the 10% range and we’ve actually detailed that in our 10-Q. And so that’s what we estimated and that’s what we experienced in the second quarter.

Great thanks. And then I noticed you have a fairly large balance for NOL carry forwards in terms of just of tax forecast and just wondering how much of that you could potentially realize and then when those expire?

Off the top of my head I think they start to expire in the 2018-2019 range and they go out I think the 2030 range. And the NOLs are just north of $1.3 billion. So we can start utilizing them when we become profitable and we’ll continue to be utilize them as we are profitable.

Thanks. And then one last question, in your agreements, partnership agreements with Roche and Ipson are there any major change in control provisions that could be important?

Michael this is Chris. So there is nothing there is no major change in control provision that are important.

Great, thanks so much and congrats on a great launch.

Thanks, Michael.

Thank you. We have follow-up questions from the line of Steven Willey with Stifel. Please proceed.

Yeah just taking the follow-up. I was just curious if you could tell us what percentage of SG&A this quarter reflects the net loss coming out of the COTELLIC co-promote? And then another question I guess as you think about atezo and COTELLIC moving through Phase 3 and potentially securing a label in colorectal. Just wondering I guess how the additional staffing in terms of co-promoting the colorectal opportunity would occur in terms of the commitment of resources on the Exelixis side? Thanks.

Yeah Steve it’s Mike why don’t we have Chris take the first part and I'll take the second part okay?

So Steve yeah this is Steve, the COTELLIC loss for the quarter was just around $3 million and that’s what’s running through SG&A.

Good. In terms of future possibilities about commercializing COTELLIC and other indications. Certainly you’ve highlighted one of the key indications that was noteworthy at ASCO generate a lot of interest both when it was presented and afterwards in terms of the atezo, COBI combination in late-line CRC. But there is others too as well that are moving along. So it’s very important asset to us and one that we would like to be able to participate in going forward obviously. From the standpoint of how the commercial expenses and headcount would scale in the future. It’s really hard to speculate on that right now and I certainly wouldn’t want to speak ahead of data and ahead of any kind of clinical and regulatory success. But we are watching it very closely and we are excited about the activity that we've seen to-date and looking forward to see more as we go forward.

Alright. I appreciate the follow up. Thanks.

Yes.

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

Thanks, Brian and thank you all for joining us today. We welcome your follow-up calls with any additional questions you may have that we were unable to address on today's call.

Thank you. Ladies and gentlemen this does conclude today’s program and you may all disconnect. Everybody have a good day.