Good day ladies and gentlemen and welcome to the Exelixis' fourth quarter and full-year 2016 financial results conference call. My name is Tikia and I will be your operator for today. As a reminder, this conference 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 Tikia and thank you all for joining us for the Exelixis' fourth quarter and full-year 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 Senior Vice President of Commercial, Gisela Schwab, our Chief Medical Officer and Peter Lamb, our Chief Scientific Officer who will together review our corporate, financial, commercial and development progress for the quarter ended December 31, 2016 as well as recent key developments and corporate events. 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 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 we file 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, market competition, regulatory review and approval processes, conducting clinical trials, compliance with applicable regulatory requirements, the availability of data at the reference time, our dependence on collaboration partners and our ability to maintain our rights under existing collaborations and the level of cost associated with commercialization, research and development and other activities. Now with that I will turn the call over to Mike.

All right. Thank you Susan and thanks to everyone for joining us this afternoon. We have a lot to cover on today's call. So I will start with a brief summary of the key events for the fourth quarter and early 2017 and then turn the call over to Chris, P.J., Gisela and Peter who will review and provide extensive update for our Q4 financials, the ongoing Cabometyx launch and development activities for both cabozantinib and cobimetinib. Key highlights include first, the strong fourth quarter commercial performance of Cabometyx in advanced RCC resulting in $51.9 million of cabozantinib franchise product revenue. Second, our continued success in monetizing cabozantinib ex-U.S. by achieving $30 million in upfront and milestone payment from Ipsen in the fourth quarter and also receiving an additional $50 million from the Takeda upfront payment in 2017. Third, the expanded development activities for both cabozantinib and cobimetinib including the agreements announced today with BMS and Roche to broadly explore potential of cabozantinib in combination with immunotherapies. In addition three new cobimetinib Phase 3 trials were initiated or announced by Genentech in the last nine months, highlighting this important progress. As we look forward, we expect to have an extremely busy 2017 and anticipate filing an sNDA for cabozantinib in first line RCC as well as data from the CELESTIAL pivotal trial of cabozantinib in second line HCC. As you will hear from Chris, we ended 2016 in a sound financial position and we began 2017 with a healthy cash balance and greatly reduced debt. Our success in monetizing cabozantinib ex-U.S. added $340 million in nondilutive cash to our balance sheet over the last year. Coupled with robust Cabometyx U.S. revenues, wee plan to further optimize our balance sheet of supporting the expanded development of the cabozantinib franchise through I-O combinations and exploring the appropriate strategic investments to expand our pipeline beyond cabozantinib through a measured restart of our in-house discovery efforts and targeted in-licensing activities. In closing, Exelixis had a strong fourth- quarter across all components of our business and is on track for a productive 2017. So with that, I will turn the call over to Chris who will provide more details on our fourth quarter and full year 2016 financials.

Thanks Mike. Total revenues for the quarter ended December 31, 2016 were $77.6 million compared to $9.9 million for the comparable period in 2015. Total revenues for the year ended December 31, 2016 were $191.5 million compared to $37.2 million for the comparable period in 2015. Total revenues for the quarter ended December 31, 2016 include $51.9 million of net product revenues compared to $9.9 million for the comparable period in 2015. Net product revenues for the year ended December 31, 2016 were $135.4 million compared to $34.2 million for the comparable period in 2015. The increase in net product revenues for both the quarter and year ended December 31, 2016, as compared to the same period in 2015 primarily reflects the impact of the commercial launch of Cabometyx in late April 2016. Total revenues for the quarter ended December 31, 2016 also includes two $10 million milestones achieved for the first commercial sales of Cabometyx by Ipsen in Germany and the United Kingdom. Total revenues for the year ended December 31, 2016 also includes the recognition of $20 million of revenue for milestones from to our collaboration partners, Daiichi Sankyo and Merck. Total revenues for the quarter and year ended December 31, 2016 also includes $1 million and $2.8 million respectively of royalty revenues from Ipsen and Roche and $4.7 million and $13.3 million respectively of license revenues related to the amortization of the upfront and approval milestones from Ipsen. In comparison, during the year ended December 31, 2015, we recognized $3 million of contract revenues for a milestone payment received from Merck. Research and development expenses for the quarter ended December 31, 2016 were $23.8 million compared to $23.5 million for the comparable period in 2015. Research and development expenses for the year ended December 31, 2016 were…

Thank you Chris. We are very pleased with the progress of the Cabometyx launch and the Q4 cabozantinib franchise net revenue of $51.9 million. Q4 Cabometyx net revenue of $44.7 million compares favorably with the Q3 net revenue of $31.2 million, representing growth of approximately 45%. The success of the launch underlying this revenue growth is being driven by two key factors. First, demand trends are robust in terms of both volume of units shipped and new patient starts. Second, the breadth of the demand as measured by growth in prescribers in ordering outlets such as hospitals and oncology clinics is encouraging. Demand for Cabometyx increased by approximately 40% in Q4 relative to Q3 in terms of units shipped. During the same time period, we saw an increase of new patient starts of approximately 20%. We are also pleased with the trends that demonstrated the breadth of this demand increased in Q4 relative to Q3. In Q4, the prescriber base of Cabometyx increased by approximately 60% through the specialty pharmacy channel. Additionally, we are very encouraged by the growth we have seen in the specialty distributor channel of our business. In addition to strong volume growth in this segment, the number of outlets that have ordered Cabometyx increased by 50% in Q4. This growth is coming from dispensing community oncology practices, hospitals and academic institutions as well as government facilities. We are particularly pleased with the growth in community oncologists dispensing clinics as we have deployed tactics and resources to drive growth in these key practices. Taken together, these data depict solid fundamentals and momentum of the Cabometyx business. We are gratified to see that our strategy and approach to the RCC marketplace for producing impactful results. RCC is a mature market with a relatively small number of high-volume prescribers…

Thank you, P.J. I will provide an overview of the development and regulatory progress in the quarter and cover progress towards a regulatory filing for first-line RCC on the basis of CABOSUN, the status of CELESTIAL, an important new development plans for combining cabozantinib with immune checkpoint inhibitors that have been announced earlier today. Let me start with CABOSUN, a randomized Phase 2 trial that compares cabozantinib and sunitinib in the first-line treatment of intermediate or poor risk RCC patient. Results of this trial were presented at the ESMO conference last September and published in the Journal of Clinical Oncology later in 2016. This study is being conducted by The Alliance for Clinical Trials in Oncology in collaboration with NCI-CTEP. The trial met its primary endpoint of significantly improving progression free survival as assessed by investigator in the cabozantinib arm compared to sunitinib. The results showed a clinically meaningful and significant improvement for cabozantinib as compared to sunitinib in PFS and objective response rate and a trend in overall survival, a secondary endpoint in the study. With this positive outcome of the study, we are intensely focused on all activities supporting a planned supplemental NDA filing for cabozantinib in first line RCC as our highest priority. As a reminder, given that this was an externally sponsored study, much of the work we would typically have underway in advance of receiving the final endpoint analysis was only started upon on our receipt of all of the relevant data. So we are working on such aspects that are needed to support a filing including source data verification and preparation of the data sets we have now received from The Alliance, consistent with expectations for the regulatory filing. This requires extensive programming work before we can perform the analyses with these prepared data…

Thanks Gisela. So I will turn to cobimetinib or cobi, for short, the Exelixis discovered MEK inhibitor that's being developed by our partner Genentech. 2016 was a very active and exciting year in terms of the evolution of cobi development and resulted in three new Phase 3 trials being initiated or announced, all based on encouraging signals from earlier phase trials. All of these studies incorporate a combination of cobi with an immunotherapy, namely Genentech's PD-L1 antibody atezolizumab. So I will start with an overview of the preclinical rationale to support this approach. Innovation of MEK has positive effects with respect to the immune microenvironment on both tumor cells and immune cells, notably T-cells. On tumor cells, MEK inhibition leads to an increased expression of class 1 MHC on the cell surface rendering the cells more difficult the immune system. Increased MHC class 1 expression facilitates presentation of tumor specific antigens to immune cells and increases the vulnerability of tumors to immune mediated killing. This effect has been documented in a tumor from patient taking cobi with the pretreatment biopsy sample showing low levels of MHC class 1 but the post-treatment biopsy showing significantly elevated levels. Second, MEK inhibition increases the number of effected T-cells in tumors by protecting them from death as a result of chronic stimulation. Repeat tumor biopsies from patients enrolled in cobi clinical trials have also shown an increase in CD8+ T-cell following cobi treatment. Consistent with this in a preclinical tumor model, the combination of a MEK inhibitor and a PD-L1 antibody was more effective than either agent alone. These data supported the initiation of a Phase 1B trial combining cobi and atezolizumab that enrolled patients into one of four expansion cohorts following the establishment of an appropriate combination dose. Each cohort was initially intended…

All right. Thank you Peter. In closing, 2016 was an important year for Exelixis and proved to be inflection point for the entire organization. As pleased as we are with our progress, we remain steadfast and focused on the critical opportunities that are ahead of us. On a personal note, I am most proud of the amazing we have here at Exelixis. Both individually and collectively we work hard every minute of every day to help patients with cancer. This is a tough business where success is never taken for granted. We continue to strive to push both our science and our business forward with great deal of urgency as we tackle the challenges that we face going forward. The achievements and financial results for 2016 highlight the significant progress we have made towards driving the business to positive cash flow. We look forward to the opportunity to reinvest in cabozantinib development and to rebuild our pipeline through internal R&D efforts as well as to potentially in-license and/or acquire compounds where appropriate. Our unwavering focus on disciplined expense management where new R&D initiatives are aligned with robust growth in product revenues will continue to be our guiding principle as we move forward in 2017 and beyond. We look forward to updating you on our progress. Thank you for your continued support and interest in Exelixis. We are happy to now open the call for questions.

[Operator Instructions]. Your first question comes from the line of Eric Schmidt with Cowen & Company. Your line is open.

Thanks to my questions and congrats on the progress. Maybe for Gisela or Mike, it sounds like you have got a little bit greater confidence in a filing for cabozantinib on RCC indication yet it was not clear to me at least what's driving that confidence as I don't think you have done much to complete your independent reviews. Is that correct? Or could you clarify?

Yes. Absolutely. This is Gisela. We are working very hard as the highest priority really throughout entire organization to complete the filing on the time line as specified which is, we are seeing in the third quarter of 2017. We are working as one of the work streams on collecting the images from The Alliance sites to enable an independent radiology read. So that has not been completed but we have made good progress towards collecting the images and continue to work along those lines. There are also other work things that are ongoing and I mentioned a source data verification programming efforts in preparing the data sets for a regulatory filing. So we are certainly pleased with the results that we have seen from this study as were presented at ESMO and also published in the JCO. So we are really focused now on pulling everything together for the sNDA filing in the third quarter.

Okay.

Yes. Eric, this is Mike. Let me add a little bit more color here. Again, our confidence in the filing hasn't changed at all since the Q3 call. Again, at ESMO in 2016, we gave at our investor briefing very clear guidance that we intend to file an sNDA and that is still the case. Obviously, we have had more time. We have generated the additional data as we have gotten the data sets in-house and the data in-house. So we are talking more about it today and providing more clarity on our progress and the timelines for submission. But our confidence has been and remains high.

Okay. Thank you. For PJ on sales trends, clearly you are optimistic for additional share gains, maybe even optimistic for some duration gains. We have seen that you have been able to add about $10 million to $15 million on a quarter-to-quarter basis to aggregate sales of Cabometyx in the U.S. Is that a reasonably steady kind of outlook for the drug in 2017 in the absence of any real guidance?

Yes. Thanks for the question, Eric. What I will say is, we are very pleased with the quarter that we just had in Q4 and the growth that we had relative to Q3 as we had net revenue growth of approximately 45% over Q3 and the demand growth was approximately 40%. I guess sort of beyond that, we are really pleased with the breadth of the business metrics that we saw around that seeing 60% new prescribers through RSP channels, seeing at 50% increase in outlets in our specialty distributor channel and we really do see opportunity for continued growth moving forward as we continue to differentiate Cabometyx from the competition, particularly in the second line setting and also with the numerous prescribers who have yet to prescribe Cabometyx.

Well, maybe I will the question differently. You really didn't mention any challenges or potential concerns in your future outlook for the drug. Should we take that to mean that there isn't any restriction on the steady growth that you have been projecting??

Eric, this is Chris. The way I would look at it is this. We are very happy with what we have seen so far from a revenue point of view, but were definitely not satisfied. And we are going to continue to invest in the product for the future growth. But it is still really early in the launch phase. As I mentioned, we just completed our second full quarter and to a large degree, there is still a lot of competition out there. There is 11 products, as P.J. mentioned. And three of those products have all launched essentially in the last 12 months. So we are confident of where we are and we are confident of where we are going, but we are not going to provide you guidance at this point in time.

Okay. That's fair. Chris. One quick one for you and then I will hop off. In terms of the OpEx guidance for 2017, can you give any kind of a breakdown between SG&A and R&D? And I assume that guidance includes a healthy lever of investment around the nivo collaboration and maybe also the atezolizumab collaboration as well as the change in Cotellic accounting going forward?

Yes, it does. So I will break that down for you a little bit here. So if you look at where we ended 2016, you have got to remember also that on an as reported basis, our 2016 expenses were lower because we had the $23 million of Genentech expenses we took back to the P&L. Now if you look at it, about half of our increase on as reported basis will come from R&D and a lot of that increase or much of that increase is coming from the investments that we are assuming from cabozantinib I-O combination trials and those will ramp as we look at the back end of the year. Those locals expenses will start to ramp up. It will be slow in the first part of the year, but they will ramp up in the second part of the year. And then when you look at SG&A expense which is the other half essentially, that will come back to say earlier 2016 levels in the first quarter and then they will grow as we get in the second, third and fourth quarter.

Great. Thanks and congrats on progress once again.

Okay. Thanks you Eric.

Thank you. Your next question comes from Stephen Willey with Stifel. Please proceed.

Yes. Thanks for taking the questions and congrats on all the progress here. Just maybe a question for Mike. Just wondering if you can maybe elaborate a little bit on the strategic decision making process behind the collaborations that you announced this morning. There's obviously a lot of overlap/redundancy on the GU malignancy front between Roche and Bristol. So just kind of wondering if there was maybe exclusive option that was on the table? Or if this was just kind of a strategy whereby the company wanted to, get its chips right across the table.

Yes. Steve, thanks for the question. I would frame it as we have talked about publicly in the past. Again we are looking at, I would say, the broad opportunity to combine cabozantinib across arguably sensitive tumor types to both single agent Cabo and single agent PD1 or PD-L1 molecules. That's been shown in the past. And then also across the different I-O opportunities. So I talked about that previously as a matrix, if you will. Sensitive histologies on the x-axis and the different I-O opportunities on the y-axis. And our goal ultimately is to fill in as much of that real estate as we can in a P&L friendly fashion. And I think today's announcements with both BMS and Roche really I think are the first step in that regard in terms of working with two of the leaders in the I-O space in tumor types that we think are sensitive and important and certainly have some important unmet medical need that we would like to be able to address. On the RCC side, I think that's the simplest when you look at the Phase 3 profile for both Cabo and nivo in the second line space. Those are the only two agents that have improved overall survival in a global pivotal trial. So it really begs the question to combine those and ask the question of what that can do and then with the idea of adding even ipi on top of that. So again, we are agnostic in terms of where we are going to go from here. We would like to work again across that matrix as much as we can to continue to build value for patients and for our shareholders as we move those trials forward.

Okay. So maybe just a follow-up on the Bristol collaboration. We just saw refractory data in combination with nivo in refractory bladder setting and just wondering if you are comfortable enough, I guess, with the activity of the drug at this point to maybe think about initiating a frontline bladder study as part of the Bristol collaboration, specifically a registrational study?

Yes. Good question. I will pass it over to Gisela.

Yes. I think the bladder cancer space is certainly evolving as we speak with approvals for various agents coming through in bladder cancer and we feel there is certainly remaining unmet medical need, both in the frontline setting in different patient population as well as in the later line of therapy. And as we are moving forward with formulating our thoughts on the design of these trials, we will certainly provide updates and share our thoughts with you.

Okay. And then maybe just another one for either Mike or Chris, just with respect to the ongoing arbitration with Genentech. You have obviously cleared up things on the cost-sharing side. I know that there was some prior mention around a discussion regarding pricing. And just wondering if you can provide us an update as to maybe where that conversation stands and when we may be able to anticipate some kind of resolution there. Thanks.

Yes, Steve. Fair question. You are correct. We certainly made some progress on the cost allocation variable of that complex equation in January. I am really not in a position to provide any more details around the overall process. That's a confidential process, one that we are certainly pursuing very seriously. But we want to maintain that confidentiality going forward. It's not possible to speculate on timing for overall parts of the process either. So unfortunately, I just can't provide a lot more information for you today, except to say that as we get definitive feedback, we will be able to share that with you then. Okay. So fair question. Stay tuned.

All right. Thanks for the color.

Thank you. Your next question comes from the line of Michael Schmidt with Leerink Partners. Please proceed.

Hi guys. Congrats on a good quarter and thanks for the detailed update. I had a couple of follow-on questions. Maybe one on the Bristol collaboration. So it sounds like you are in pretty advanced stages in terms of ramping up or getting ready for the frontline RCC trial. Just want to confirm that you said you anticipate to start that in the first half of this year? And the follow-up question is, what is the gaining factor to initiating the other planned trial with Bristol? Is there additional Phase 1 work that's necessary? Or are you basically ready to go?

So, yes and this is Gisela. Regarding the first line RCC effort, we are hoping to see that initiate in the first half of the year of 2017 and there is certainly work ongoing towards that and we will provide updates as we proceed along those lines. We are also looking obviously at other tumor types and those are discussions that are ongoing at this point. We mentioned bladder cancer. We also mentioned hepatocellular cancer, where both cabozantinib and nivolumab has shown single agent activity. So both agents are being evaluated in Phase 3 studies where an initial study could evaluate the preliminary activity and safety and tolerability of the two agents. So those are the near-term goals for this collaboration and there is certainly opportunity for other tumor types as well where single agent activity has been seen for both agents.

Okay. So it sounds like you will have the front line combination study initiated by the time you will submit the sNDA with the CABOSUN trail. And I guess the follow-up question is, where do you stand with conducting additional survival analysis in the CABOSUN study? And would you be able to include that in the sNDA filing potentially?

Yes. The Alliance and specifically the PI for the CABODUN study, Dr. Choueiri, had mentioned at ESMO and also that The Alliance would eventually conduct additional analyses for overall survival. We don't have any timing guidance at this point regarding the findings. We will submit the most up-to-date data that we are in possession of, at the time.

Okay. Thanks. And then a housekeeping question on the Cabometyx quarter. Did you see any changes in gross to net adjustment and/or an inventory channel changes?

Yes. Michael, thanks, this is Chris. So we didn't see any change in inventory. It still in the three to four week range which is consistent to the way we ended the third quarter. And on a gross to net basis for Cabometyx, we didn't see a big change. We are still in the 10% or so, 10% to 11% range of gross to net on Cabometyx and we see that as the percentage going forward as of now.

Okay. And one more, if I may. So you did provide several metrics, market uptick metrics. And it seems like you have a focus, a strong focus on addressing or targeting community physicians. And I guess my question is, can you provide us with some information, I guess what percentage of the overall target in a prescriber base has prescribed Cabo at this point?

Yes. This is P.J. I will take that question. We are really focusing on expanding our business by broadening the prescriber base in the community. We have talked about previously, there is really a small number of really high-volume KOLs or academic prescribers and that's really on the order of hundreds of prescribers where there is broader opportunity among the community oncologists, where there is thousands of oncologists that do see RCC patients of the metastatic diagnosis on a yearly basis. So really, it's a small percentage that are sort of high-volume academic KOLs and really a much bigger percentage in the community and we believe we have continued opportunity to increase that which is why we are deploying tactics across sales, marketing, nonpersonal promotion, digital marketing, GPO group purchasing organization tactics to really continue to get our message in many ways to the community oncology setting.

Okay. Well, great. Thank you and congrats on the progress.

Thanks, Michael.

Thank you. Your next question comes from the line of Ted Tenthoff with Piper Jaffray. Please proceed.

Great. Thank you very much. I have a couple of quick questions, if I may. First, for Chris. I just want to make \sure I am getting this right. So the way you describe it, in the fourth quarter you actually have a net gain from Cotellic and Roche. So is that what was included in the royalty line?

No. Ted, this is Chris obviously. So the royalty we received from Cotellic is only for ex-U.S. Any of the profit share or loss and we had a loss for the year of around $4.5 million runs through the SG&A expense. However, I will say that when we looked and I think Eric asked this question too, when we look at 2017, the expense guidance assumes that the Cotellic profit or loss P&L will be a profit in 2017 and therefore we will be recording that as collaboration revenue as of up to 2017.

Great. Excellent. That's helpful. Cool. And then one for Gisela. With respect to CELESTIAL, do we have any clearer timing on readout about when that may come this year? And also any comments on current duration of therapy for Cabo?

The CELESTIAL, as you know, is a blinded study and it's ongoing enrollment, as I mentioned, is continuing. We are expecting data in 2017. We haven't really guided towards any specific time in the year. We will certainly update you as we get closer. So, given that it's a blinded study, we are not looking at Cabo duration on treatment.

I am sorry. So Cabo in RCC, any update on --

I am sorry. I thought you -- I didn't hear you there.

Yes. Ted, this is P.J. I can discuss that with regards to duration. So for duration in the commercial setting, it is a bit early to get an update to have a retrospective look at duration of therapy. We are really closely monitoring our refill rates and the persistence of therapy and we are really pleased with the data that we are analyzing at this point. And as we were moving forward into Q4, we had more second line patients which were healthier which could potentially have a better persistency rates than later line patients relative to earlier in the launch. So we do believe that as that trend continues and we see more early line of therapy patients a.k.a. second line we could have a little bit of upside in the persistency.

Okay. Cool. It would be great to get some clarity on that, if you can ever share. Thanks so much.

Thanks Ted.

Thank you. Your next question comes from the line of Andy Fae with William Blair. Please proceed.

Hi. This is Andy Fae, on for John Sonnier. Congrats on the year progress and a very successful quarter. We have two questions. First question is for Mike. Would you mind mapping out for us the company's growth strategies in the mid and longer-term? And second question is for P.J., as you are changing the commercial initiatives, were you able to correlate what you are doing you i.e. focus on doctors who have not prescribed Cabo and changes in script trends, especially given the fact that there seems to be an apparent acceleration starting in January? Thank you.

Okay. Why don't I start. I will give you some sense of our aspirational goals as we go forward. Look, we are very focused on building value, again for patients and shareholders. We made a decision five or so years ago to focus on cabozantinib to really help fully catalyze the transition from a development stage company to a commercial company. Again, that wasn't a strategy, per se. We didn't wake up one morning and say, let's be a Cabo only company because that's a good strategy. It was a tactic to be able to really advance the company forward to, if successful, be able to generate free cash that we could then organically invest in the business and grow the business based upon that free cash flow really driving our investments going forward. And that's, I think, has happened or starting to happen now. Certainly we see growth potential in cabozantinib and certainly the announcements today I think would start to lay the foundation for that. How we then generate the next wave of pivotal trials. Obviously first-line RCC would come first, but we are certainly excited about the possibility of doing more in the short to mid term as warranted by data. Beyond that, certainly cobimetinib is going to play a very important role potentially in driving the growth of our business. Again, as we talked about previously, we don't pay for any development that is going on with that compound. And obviously with the discussion that Peter had today and you heard from our friends at Genentech and Roche about what they are doing, how they are investing in different cobi combos, especially cobi and atezo combos. There is a big program going there that we are excited about and certainly would benefit from success from a commercial point of view if those different trials in colon, in melanoma, maybe others were successful. And beyond that, as we talked about today several times, we are looking very closely at either generating a pipeline of compounds through our restart of internal discovery, which Peter is leading and/or through in-licensing and/or acquisition efforts around early-stage clinical compounds that we can then develop broadly and move into product. So again, it's a pretty broad strategy. It's one that we are excited about. It's one that we think we have really made that transition from development stage focused to a commercial focus and now we can come back full circle around internal discovery to allow us to build a portfolio of products that our very well will trained experienced sales team that can go out and sell at the appropriate time. So lots of work to do but we certainly like our momentum going forward. Okay. P.J.

Yes. Thanks Andy. I will address your question to me. With regards to broadening sort of our prescriber base in the community, one of my comments on what we saw in Q4, with regards to that, what we know is the data, the METEOR data from market research, advisory boards, et cetera are very compelling and when physicians see it, they do want to prescribe the drug. As it's really the second quarter of the launch and really early innings of the launch, so to speak, we are just really starting to get our marketing tactics out to the broader community base. So I think a lot of those physicians don't see as much renal cell carcinoma, but as they hear the message, that's what kind of led to that 60% increase in prescriber growth that we saw in Q4. And there are still many physicians who have yet to prescribe the drug. So I think it's really they good data and a good strategy and marketing mix. It's getting the data out there more broadly in the second half of the year and as we continue to differentiate from the competition through our trifecta of efficacy with the only drug in a global pivotal Phase 3 trial that's yielded overall survival benefit, progression free survival benefit and objective response rate benefit that really resonates with physicians and gives us hope that we can continue those trends as we continue to get more physicians to prescribe the drug and broaden our prescriber base as well as grow our market share, particularly in the second line setting.

Thank you. Your next question comes from the line of Andrew Peters with Deutsche Bank. Please proceed.

Hi guys. Thanks for taking my questions and congrats on the progress as well. So I guess I just wanted to focus on a couple of things. I guess first, the language in that Bristol press release earlier today and some of what you have discussed today talks about expanding Cabo combinations into other indications beyond RCC and HCC. So I just wanted to get a better sense of the limiting steps to getting those studies off the ground. For example, would you likely need to run some kind of Phase 1/2 studies first similar to the NCI bladder study? Or would you potentially go straight into pivotals? And then just secondly, as you think about that frontline RCC study, how do you kind of think about the competitive dynamics there as you are thinking about use of capital with kind of many other ongoing large Phase 3 frontline RCC trials? How do you think about incremental differentiation of Cabo plus nivo or the triple relative to those? Thank you.

Hi Andrew. This is Mike. Thanks for the question. Why don't we have Gisela take the first one and I will take the second one.

Yes. I think the combination has been evaluated now in phase 1 through the NCI study of cabozantinib and nivolumab and also cabozantinib, nivolumab and ipilimumab. Doses for recommended Phase 2 doses have been established with 40 milligrams of cabozantinib and full dose of the other compounds. And so I think we can take those forward into new trials. We have obviously with RCC indication where both modalities have shown very nice activities, showing survival benefit in the second line setting and so here we have a lot to go on and to move forward into Phase 3. We have, as you know, with cabozantinib a single agent activity across a wide variety of different tumor types. We have had results and we have talked about those previously. For instance, in lung cancer generated a randomized Phase 2 study erlotinib where cabozantinib either as a single agent or in combination with erlotinib more than doubled PFS and overall survival, compared to erlotinib. So there is clearly a single agent activity. There is clearly single agent activity for the immuno-oncology compound. So in such indications, we think we have a lot to go on to move forward into later stage trials and certainly more discussions will follow on that.

As a follow up on your second question, I think the whole goal behind these cost-sharing arrangements in these pivotal trial, especially for example, with first-line renal was to be able to share the cost and share the risk and then be able to do more, broadly speaking, across different tumor types, different I-O, a combination opportunity. So very consistent with our past discussions on the topic. This is a starting point and it's one that we hope to build on the go forward.

Okay. Thanks. So just to make sure that I understand. Based on the previous monotherapy activity you have seen before and in indications like lung, you would expects to be able to move straight into pivotal trials instead of, say, running a smaller lead-in Phase 2, for example? Is that correct?

Yes. I wouldn't go that far, just to clarify. We are not giving any guidance on what our plan is here and we are not going to speculate on any specific trials or combinations, any details until we are ready to announce that. I think what Gisela said is correct. We will look at each situation carefully in the context of the data we have got, what we see as our risk profile and certainly do that in the conjunction of a new collaborator with their own views on these topic as well. So I would just say, stay tuned, right. We are going to look at this very carefully. We have done, I think, a pretty good job of evaluating the risk and moving forward with some pretty good trials in the past and we will continue to do so in these collaborations as we go forward.

Okay. Great. And then just one on that the commercial side. I think if I heard you correctly, you mentioned you have roughly around the 27% market share right now. Should we think about kind of the quarterly sales run rate as what you would expect with a kind of 27%-ish share drug in second, third line RCC? Or how do you think about kind of the way you view market share as it translates to the commercial opportunity? Thank you.

Yes. Andrew, it's Mike. Look, it's a far question. It's a good question. It's one that gets ultimately to the guidance going forward and we are just not comfortable giving that perspective today. I am sure you can appreciate. We are still relatively early in the launch. As Chris and P.J. both said, it's a very competitive space. I can assure you that we are working very, very hard from a commercial sales, marketing, market access point of view to really reach every possible patient that we can and as we go forward you will see the numbers as we generate them and from the public sources and just stay tuned. Okay.

Great. Thank you.

Thank you. [Operator Instructions]. Our next question comes from the line of Asthika Goonewardene from Bloomberg Intelligence. Please proceed.

Hi guys. Thanks for taking my question. And again, congrats on the quarter. So let me start off with one on cobimetinib. The data that we have for reimbursement of the drug looks pretty good and besides a detailing effort, I am curious to know what are the catalysts that you guys have in the year that could help drive volume growth?

Well, thanks for the question. This is P.J. I will say a few things. Obviously, we are pleased as we have discussed today with regards to the growth we have seen going from Q3 to Q4 with regards to revenue, volume and prescriber growth. I think you mentioned reimbursement. We are actually very pleased at the last call, we had about 224 million covered lives. Now, we were up to about 250 million covered lives. So very pleased with coverage of the drug. We are working very hard with our Exelixis Access Services program to ensure that appropriate patients have therapy and we are happy that that's going very well. So I think as we look forward, we have the opportunity to grow as we get more prescribers, many who haven't yet written the drug to prescribe the drug and continue to differentiate in the second line setting to really drive market share there in that patient population.

Great, P.J. Is there any other data presentations that you are expecting this year? Maybe at certain conferences that could help stimulate growth a little bit more?

Yes. It's Mike. Look, there is a number of international medical meetings, oncology meetings that we normally are at. It's a little bit too early to prospectively talk about what will have at those meetings. So as those abstracts are submitted and accepted, our practice is to get that information out. But there is plenty of opportunity between ASCO and ESMO and things in between to be able to continue to talk about the data, talk about the compound. Certainly the milestone around the sNDA filing is an important milestone for us internally that we are working towards very carefully. So thanks for the question.

Excellent. Thank you. And one last one for Gisela, if I may. ClinicalTrials say that the CELESTIAL study is still recruiting, but the last update on that was, I think, in August. Is that an accurate representation of the trial's recruitment status?

Yes. The study is still recruiting globally. That is correct.

Okay. Lovely. Thank you guys and congrats again for the quarter.

Thank you.

Thank you. At this time, there are no further questions. And so, I will turn call back over today's host, Susan Hubbard. Ms. Hubbard.

Okay. Great. Thanks Tikia 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.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.