Good day, ladies and gentlemen and welcome to the Exelixis’ First Quarter 2015 Financial Results Conference Call. My name is William 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 William and thank you all for joining us for the Exelixis’ first quarter 2015 financial results conference call. Joining me on today’s call are Mike Morrissey, our President and CEO; Debbie Burke, our Chief Financial Officer; Gisela Schwab, our Chief Medical Officer who will together review our corporate, financial, commercial and development progress for the quarter ended March 31, 2015. PJ Haley our Vice President of Commercial and Peter Lamb, our Chief Scientific Officer are also here with us and will participate in the question-and-answer session of the call. As a reminder, we're reporting our financial results on a GAAP basis only, and as usual the complete press release with our results can be accessed through our website at exelixis.com. During the course of this presentation, we will be making forward-looking statements regarding future events or the future performance of the Company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters. Actual events or results of course could differ materially. We refer you to the documents Exelixis files from time-to-time with the SEC. These documents contain and identify under the heading Risk Factors important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including without limitation, the availability of data at reference times, risks and uncertainties related to the initiation, conduct and results of clinical trials, risks and uncertainties related to regulatory approval processes and compliance with applicable regulatory requirements, Exelixis' ability to maintain its rights under collaboration and enter into new collaboration, Exelixis' financial outlook and the sufficiency of Exelixis' capital and other resources over time and product acceptance in the market as well as market competition. With that, I will now turn the call over to Mike.

All right. Thank you, Susan and thanks to everyone for joining us today. Our call this afternoon will be relatively short as we focus on our key milestones that lie ahead over the next few months including first, the media topline results for cabozantinib in second-line RCC, second the potential approval and launch of cobimetinib for metastatic melanoma and third, the ASCO Annual Meeting where we expect to have numerous presentations for both cabozantinib and cobimetinib. We're obviously extremely busy right now and working hard to complete the activities necessary to achieve these important milestones for cabozantinib and cobimetinib. If successful, 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. I’ll give a brief and high level status update on the key milestone for cabozantinib and cobimetinib before turning the call over to Debbi and Gisela for a review of our financial and development highlights. First let’s start with cabozantinib; reporting topline results for METEOR, our Phase 3 pivotal trial in metastatic second-line RCC remains our top priority, METEOR is a head-to-head trial against Everolimus, the current market leader in second line RCC. The primary endpoint for METEOR is progression free survival or PFS determined for the first 375 patients enrolled. While we have noted that the event rate has slowed over the last few months we are very close to having achieved the required 259 PFS events and are in the final steps of data collection, data cleaning and source data verification before running the final analysis. We now expect to report top line results in late Q2 with the possibility it might extend if necessary into early Q3. Partnering discussions continue and…

Thank you, Mike. I'll begin with a review our first quarter 2015 financial results and then provide an update of our 2015 financial outlook. My comments will be focused on highlights of our financial performance and I refer you to our press release and Form 10-Q filed earlier today for additional details. Net revenue was $9.4 million for the first quarter of 2015 compared to $4.9 million for the same period last year. Net revenue for both periods consisted entirely of product revenue from the sale of COMETRIQ. In 2015 net revenue includes the positive impact of a one-time adjustment of $2.6 million from the conversion of the sell-through to the sell-in method of revenue recognition for our domestic sales. By comparison, our foreign sales have historically represented net revenue on the sell-in method. With this adjustment, our sales from COMETRIQ moving forward will be reported on the sell-in method of revenue recognition. R&D expenses for the first quarter of 2015 were $22.3 million compared to $54.8 million for the same period last year. The 59% decrease in expense is due to lower clinical cost, predominantly due to decreases in the COMET trials and the impact of a $7.5 million comparative drug purchase that took place last year at this time, as well as lower personnel related expenses. SG&A expenses for the first quarter of 2015 were $9.5 million versus $14.7 million for the same period last year. The 35% decrease year-over-year is primarily due to lower personnel related expenses as well as consulting and outside services, legal and patent expenses. These decreases were offset by an increase in marketing expenses which included our share of cobimetinib expenses. Restructuring charges for the first quarter of 2015 reflects a credit of approximately $400,000 primarily due to gains recognized from the sales…

Thank you, Debbie. In the next few minutes I will provide a status update on our Phase B program for cabozantinib in renal cell cancer, a brief update on the IST and CTEP program and then focus on a preview of presentations for both cabozantinib and cobimetinib at the upcoming ASCO Meeting at the beginning of Q2. I will start with providing a steady update on our highest priority, the renal cell cancer program. As you know, we completed enrollment in our Phase 3 trial midyear in November 2014. The availability of topline data for the primary endpoint of progression-free survival or PFS is expected in the next few months as mentioned earlier in the call by Mike. I would like to briefly review the trial design and assumptions for you. The study is evaluating cabozantinib versus Everolimus in a randomized open label fashion. The patient population is second or later line metastatic clear cell renal cell carcinoma. Patients must have received and failed at least one prior VEGFR tyrosine kinase inhibitor. Enrollment is stratified by the number of prior VEGFR inhibitors. One prior therapy versus more than one prior therapy and risk factors according to the MSKCC classification. The primary end point is PFS and secondary end points include response rate and overall survival. PFS is assessed by an independent radiology committee that is blinded to the treatment assignment of the patients. 650 patients were planned to be enrolled in the study with the primary analysis based on PFS, which is defined as disease progression exist observed among the first 375 patients enrolled. This will ensure sufficient follow-up and a PFS profile that is not rated predominantly towards early PFS events, which could happen if the whole study population of 650 patients that is required for the assessment of…

All right. Thanks Gisela. I'll add a couple of closing remarks before we can get to your questions. We're rapidly moving towards two key milestones for Exelixis in the months ahead. Our team and network of collaborators are completely focused on the next significant drivers for the business, including the topline data for METEOR as well as potential approval for cobimetinib in combination with Zelboraf and metastatic BRAF mutant positive melanoma. We're all excited about the possibilities that lie ahead and we'll keep you up to date on our continued progress. I'll close now by thanking our entire team here at Exelixis for their unwavering dedication and great efforts over the last quarter on behalf of patients with cancer everywhere. Thank you for your time today and your interest in Exelixis and we're now happy to open the call for questions.

[Operator Instructions] And our first question comes from the line of Brian Klein from Stifel. Your line is now open.

Hey thank you very much for that detailed update. Just a few questions. First on cobimetinib just wondering who sets the price once it's approved and how do you distinguish in terms of commercialization cost from the U.S. between promotional activities for cobi separate and distinct from Zelboraf?

Yes Brian its Mike. Thanks for the questions. Again as we talked about previously, the price will be set by Genentech. So that's their sole right and certainly as time goes on and if approval happens, we would -- I would expect that to be able to announce that price at some point of time in the future. In terms of the financial question Debbie you want to take that?

Sure. Our expectation is that those costs will be split as the co-promote agreement calls for and that's how I understand the budget was set and how we layered it into our numbers.

Okay. So just to be clear, are you considering that because that has to be given in combination, the co promotion of the two products occurs simultaneously and then you just split the cost, so you're effectively subsidizing the commercialization with Zelboraf or I am still not clear exactly how that works?

Yes, no, no, no, our expectation is we will only pay half of the cost associated with cobi directly. We should have no cost associated with Zelboraf.

Okay. Got it and given your current cash position, I know that it's tough to give any guidance, but just thinking specifically about cobi is your current financial resources sufficient to launch that product irrespective of what you're doing with cabo?

Well the guidance we gave with our cash run rate through Q1 '16 includes our share of those costs, the cobi cost based on the budget Genentech gave us.

Great, thank you for taking my questions.

Sure, Brian thank you.

Thank you. And our next question comes from the line of [Christina] [ph] from Cowen & Company. Your line is now open.

Hi thank you for taking my questions and congratulations on the progress. This is a question on RCC. I was wondering in the doctor's office, how is the decision made, which your patients goes on to the mTOR inhibitor versus the TKI that are right now on the market? And I have a follow up thank you.

So in the trial, patients in the doctor's office are participating sites are being evaluated with their eligibility for the trial and then if eligibility has been confirmed patients are being randomized and there is no involvement as such in the choice on the part of the study personal at the site. They receive assignment and the treatment for that patient.

Christine, I just wanted to clarify…

This is not about the trial. This is just about in the market in general.

Yeah. Okay so let's move to different question PJ you want to take that question.

Yeah, I think so generally when patients are typically in the commercial setting receiving a second treatment when it progressed on typically a VEGFR, TKI in the first setting and then physicians are like many oncology indications are tumor types are making, complicated clinical decisions based on the number of factors including the data from all the other agents, which could be the progression free survival response rate safety and toxicity profiles as well as the mechanism of action. So there, it’s a complicated decision process where they're weighing a lot of different factors into that therapeutic choice.

I see. So basically when -- if [it come] [ph] on the market for RCC then it would be looking to take market to share only from a sunitinib is that correct?

Well, actually we believe that we would be able to be eligible obviously depending on what the label would be for any patient who is progressed on a prior therapy or certainly a VEGFR TKI. And while our trial would have head to head data with the sunitinib that would certainly be the low hanging fruit, but I believe it would certainly be possible for us to take share from other agents.

Okay. Great.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Michael Schmidt from Leerink. Your line is now open.

Thanks for taking my question. I just had a bigger picture question Michael, how do you see the market opportunity for targeted agent such as cabo or cobi change now with the PD-1 inhibitors being recommended? Really line of therapy for instance and melanoma we've now seen you NCCN Guidelines recommending PD-1 inhibitors first line, what’s your view bigger picture wise on that topic as in kidney cancer. Thanks.

Yeah, Michael thanks for your question, certainly the entire oncology landscape is evolving very quickly, excuse me as new data comes out with the checkpoint inhibitors. I think the most recent examples with the melanoma data that you mentioned and certainly some of the lung data that's coming out now is very encouraging and great for patients and provides, I think an opportunity for, I think two important nuance going forward and those really revolve around the standard of care for sequencing. What’s the optimal sequential approach, there is a lot of excitement around the small number of patients in these different tumor types who are functionally cared, but that’s still are relatively small number and there is a lot of patients that progress in some shape, manner or form and need additional therapies and the question is what’s best then to follow with those patients after they've going through their progression event. The other important story here is novel combinations and that’s when they were certainly very excited about with both cabozantinib and cobimetinib, You heard Gisela mention the work with CTEP and the NCI with Dr. Paulo looking at the first combinations of potentially cabozantinib plus nivolumab plus minus Ipilimumab that’s I think the first step in defining the dose tolerability early activity. And you could imagine situation where we see good data from that trial than being able to explore potential Phase 2 trials in renal and bladder and lung. So I think the opportunities there are very broad and the same thing goes with cobimetinib in melanoma. As we talked about previously, Genentech is looking at various combinations with cobimetinib with their PD-01 antibody as well in melanoma and other tumor type. So, yeah so it's an exciting time in the oncology world and we have a lot of work to do and we're very excited to be part of that with our two lead compounds.

All right, great. Thanks so much Michael.

Thank you. And we have a follow up question from the line of [Christina] [ph] from Cowen & Company.

Hi thank you for taking my follow up. I was just wondering from your talks with physician, do you have an idea of how much better the PFS for cabo needs to be to capture a significant market share from the PFS inventory?

Yes Christie I think it’s a good question. I think it’s a bit premature for us to speak about the data until we see it and have the opportunity to fully understand what the impact would be in the marketplace. Gisela, do you want to say a few words there too.

Sure. So the trial is designed with the assumption that the PFS for Everolimus would be five months, which is what it has been in prior studies. In this patient population and we're assuming that the cabozantinib arm would have a medium PFS of 7.5 months or better. So these are the underlying assumptions for the trial and that certainly has been welcomed in indoors, but the physicians participating in the study.

Great and for the sunitinib trial, do you know what the underlying assumption for PFS is there like 11 month that sunitinib showed.

So for the sunitinib study, I presume you presume you're referring to the cabozantinib Phase 2 randomized study? Is it correct?

Yes.

Yes, sure. So that is the study in the first line setting of advanced renal cell cancer and the patient population chosen here is one with intermediate or poor risk renal cell cancer and they have a little bit less short of PFS if you will compared to the overall population and that varies depending on the presentations and publications between 5.6 and 8 months for sunitinib.

Sorry did you say I understood eight months, what is the number?

That varies different publications for this and the outcome varies between 5.6 and 8 months.

Okay. Thank you so much.

Sure.

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

Thank you, William and thank you all for joining us today. We would be happy to take any follow up calls that you have with additional questions once we conclude.

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.