Good day, ladies and gentlemen, and welcome to the Exelixis Third Quarter 2017 Financial Results Conference Call. My name is Brian and I'll 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, Executive Vice President of Public Affairs and Investor Relations. Please proceed.

Thank you, Brian and thank you all for joining us for the Exelixis third quarter 2017 financial results conference call. Joining me on today's call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; Gisela Schwab, our Chief Medical Officer; and P.J. Haley, our Senior Vice President of Commercial, who together will review our corporate, financial, development and commercial progress for the quarter ended September 30, 2017 as well as recent key developments and corporate activities. As you will soon hear Gisela has quite a head cold, so should her voice give out on her I’ll step into finish her prepared remarks. 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 SEC 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. Risks and uncertainties related to regulatory review and approval processes, product commercial success, market competition, conducting clinical trials, compliance with applicable regulatory requirements, the availability of data at the reference times, our dependence on collaboration partners and the level of costs associated with the commercialization, research and development and other activities. Now 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 productive third quarter with strong operational performance across all components of our business. We achieved numerous critical developments and regulatory milestones which puts us in the position to end 2017 with significant momentum as we head toward potential launches of two additional cabozantinib indications in 2018 for first line RCC and second line HCC. I’ll begin today by providing a brief summary of the key events for Q3 and then turn the call over to Chris, Gisela and P.J. for update on our Q3 financials and all the activities for cabozantinib and cobimetinib and finally recent CABOMETYX commercial activities. Key highlights for Q3 2017 includes first, our continued financial performance with approximately $153 million of total revenue including net product revenue of approximately $96 million for the cabozantinib franchise and $45 million in new developments and regulatory milestones from Ipsen for first line RCC. Second, we made significant regulatory progress for cabozantinib with the filing and acceptance of the sNDA based on the CABOSUN trial for first line RCC. With priority review and a PDUFA action date of February 15, 2018. This important milestone follows the ESMO presentation of the CABOSUN IRC, PFF data which confirmed a primary endpoint of investigator determined PFS with a hazard ratio of 0.48 favoring cabozantinib over sunitinib. Third, we recently announced at the global stage 3 CELESTIAL trial [Technical difficulty].

Ladies and gentlemen, please stand by. Your conference call will begin momentarily. Once again, please stand by your conference call will begin momentarily. Thank you.

Hi there, I apologize we got cut out for a second. So, I’ll let Mike continue.

Okay. I’ll go back to where I was in terms of our key highlights for Q3 2017 and those include first our continued financial performance with approximately $153 million of total revenue including net product revenues of approximately $96 million for the cabozantinib franchise and $45 million in new development and regulatory milestones from Ipsen for first line RCC. Second, we made significant regulatory progress for cabozantinib with the filing and acceptance of the sNDA based on the CABOSUN trial and first line RCC with priority review and a PDUFA action date of February 15, 2018. This important milestone follows the ESMO presentation of the CABOSUN IRC PFS data which confirm the primary endpoint of investigator determined PFS, the hazard ratio of 0.48 favoring cabozantinib over sunitinib. Third, we recently announced that the global stage 3 CELESTIAL trial met its primary endpoint of improving overall survival with cabozantinib demonstrating a statistically significant and clinically meaningful improvement in OS compared to placebo in patients with advanced HCC. Achieving these important corporate milestones provides a strong foundation for continued growth, as we build momentum in our business with strong financial commercial and development performance. We posted another profitable quarter on an operating basis with diluted earnings of $0.26 per share while at the same time continuing to manage our expenses carefully. As discussed previously, we remain focused on running the business to generate positive cash flow to expanding product and milestone revenues. With the goal of reinvesting the resulting free cash into advancing additional late stage trials for cabozantinib and rebuilding our product pipeline. So, with that I'll turn the call over to Chris who’ll provide more details on our Q3 2017 financial. Chris?

Thanks Mike. Total revenue for the third quarter 2017 was $152.5 million with diluted GAAP earnings per share of $0.26 compared to total revenue of $62.2 million and basic and diluted GAAP loss per share of $0.04 for the same period last year. Product revenue for the quarter was $96.4 million an increase of 126% year-over-year and 10% sequentially. The year-over-year and sequential increase in net product revenue is primarily driven by the continued US commercial uptake of CABOMETYX in the second line later advanced RCC study. Total revenue for the quarter also includes $56.1 million of collaboration revenue. This collaboration revenue includes two milestones from Ipsen totaling $45 million related to the EMEA’s acceptance of a variation to their marketing authorization for CABOMETYX for the first line treatment of advanced RCC in adults. Total revenue also includes $11.1 million in revenue from our collaboration agreements with Ipsen, Takeda and Genentech. We are excited to see the continued sales growth of CABOMETYX in the Ipsen territory. Last week, Ipsen reported CABOMETYX sales of EUR14.3 million for their third quarter. The accumulative Ipsen sales since launch are approaching the top of the first cumulative royalty [ph] and therefore we are projecting to be in the 12% percent tier in the fourth quarter of 2017. Research and development expenses for the quarter were $28.5 million an increase of 41% compared to the same period in 2016. The increase in research and development expenses were primarily result of increases in personal expenses, clinical trial costs and consulting and outside services. Selling general and administrative expenses for the quarter were $38.1 million compared to $32.5 million for the comparable period in 2016. The increase in selling general and administrative expenses was primarily a result of increase in our market activities and in personal expenses…

Thank you, Chris. I'm pleased to provide an update on the progress of the cabozantinib development program in the quarter. I will cover the regulatory filing for first-line RCC on the basis of CABOSUN, the status of CELESTIAL, our randomized Phase 3 study in second-line HCC, and our development program combining cabozantinib with immune checkpoint inhibitors. I will close with a brief update on the cobimetinib development. First, I'll start with CABOSUN. The randomized Phase 2 trial conducted by the alliance for clinical trials in oncology in collaboration with NCI-CTEP that compares cabozantinib and sunitinib in the first-line treatment of intermediate or poor-risk RCC patients. Results of this trial were first presented at ESMO in 2016, the trial met its primary endpoint of significantly improving progression-free survival as assessed by investigator in the cabozantinib arm compared to sunitinib. At this year ESMO Conference in Madrid, the principal investigator, Dr. Toni Choueiri from the Dana-Farber Cancer Institute, presented the PFS analysis based on the independent radiology committee review of the radiographic images from the trial which confront the highly significant improvement of progression-free survival with cabozantinib as compared to sunitinib. The median PFS was a 6-months on cabozantinib and 5.3-months on sunitinib with an HR of 0.4H and a P-value to 0.0008. On the basis of these results, we completed the supplemental NDA filing for first-line RCC in mid-August and the filing was accepted by FDA mid-October with priority review and a PDUFA date of February 15, 2018. We are delighted with this progress and we'll update you as appropriate in the future. Second, I'll provide a brief update on CELESTIAL; our Phase 3 study in second-line HCC. The randomized, placebo-controlled study was designed to enroll patients who have previously received sorafenib with a total of two prior systemic therapies allowed…

Thank you, Gisela. We continue to see strong performance from the cabozantinib franchise with total net product revenue of $96.4 million. Q3 CABOMETYX net revenue of $90.4 million compares favorably with the Q2 net revenue of $80.9 million representing growth of approximately 12% quarter-over-quarter. CABOMETYX end customer demand increased by 9% in Q3 relative to Q2. Wholesaler inventory increased by approximately one week and is in the range of three to four weeks on hand. Demand growth was driven by increases in new patients starts, refills for patients already on therapy and continued expansion of the CABOMETYX prescriber base. New patient market share in the second line plus setting increased to 38% as we continue to compete effectively with both oral and IV agents. The total number prescribers who have written CABOMETYX through the specialty pharmacy channel increased in Q3 by more than 20% and the number of ordering accounts through the specialty distributor channel increased by more than 10%. RCC is a mature market with a relatively small number of high volume prescribers and beyond that there are a large number of low volume prescribers. Our data indicate that we've been competing effectively in the high-volume segment of the market since CABOMETYX launched. So, we believe the continued growth we saw in Q3 adoption was driven primarily by community oncologists suggesting that our promotional efforts are broadening the prescriber base which continues to be a key strategic focus for the team. Approximately 95% of our growth in Q3 came from the community segment. Our experienced team has generated a very competitive, if not market leading share of voice and is executing at a very high level as we work to ensure appropriate patients with advanced RCC at the opportunity to benefit from CABOMETYX. Given the milestones that Gisela described,…

Alright. Thanks P.J. I’ll close by saying that we made significant progress across the organization in Q3 and continue with the solid performance in all aspects of our business. Highlights from the quarter include the continued strength of the CABOMETYX launch and advanced RCC, the achievement of additional cabozantinib development and regulatory milestones and the initiation of the third new Phase 3 pivotal trial for cobimetinib. Going into Q4, we have three, key near term milestones with the potential to reshape our trajectory in 2018 and beyond. They include first regulatory progress for cabozantinib in the first line RCC submission. Second, progress towards the Q1 2018 filing and subsequent regulatory review of cabozantinib for second line HCC based on the success of the celestial pivotal trial. And third, the outcome of the IMblaze370 study for the combination of cobimetinib and atezolizumab and microsatellite stable colorectal cancer for which [ph] has guided to have top line data in the first half of 2018. Recent clinical and regulatory progress provides a strong foundation for the next wave of trials with cabozantinib and important new indications and strengthens our position as we explore opportunities to rebuild our pipeline to internal R&D efforts and in licensing of external assets. As we outlined in our recent relaunch of the Exelixis brand, we are on a mission to help patients with cancer recover stronger and live longer. I'm proud to be part of our team at Exelixis as we work with focus and urgency to deliver on this mission. While we had a good quarter in Q3, we remain vigilant in making our mission as impactful as possible for patients with cancer. As we said previously, we have the team, the culture and the mandate to advance both our science and business as we embrace the opportunities that we will face in the future. We look forward to updating you on our progress. Thank you for your continued support and interest in Exelixis and we’re now happy to open the call for questions.

Thank you, sir. [Operator Instructions] And our first question will come from the line of Eric Schmidt with Cowen & Company. Please proceed.

Good afternoon and congrats on a really terrific last couple months of progress. Maybe for Mike when you talk about the CELESTIAL HCC overall survival data, it sounds like you always reference the data are both statistically significant as well as clinically meaningful. Is that an important distinction that you're making?

You know it's, I think it's a very accurate and important statement to make relative to not presenting any sort of data in the press release which we think is important to maintain the viability of having that data presented at a later date. So, we've done that, we've used that same terminology for other pivotal trials that were all positive in the past if I'm remembering correctly. So, you can read into that what you want but I think that is how we view the data and I think how it'll be viewed once it comes out and people can take a look at themselves.

I mean is there an overall survival advantage in this unmet need population which you reference that wouldn't be clinically significant?

Eric again, I wouldn't want to speculate on hypotheticals here. I think the opportunity for new compounds, new agents for HCC is large. As P.J. went through some of his prepared remarks some of the numbers there both in the US and globally. It's very important and underserved indication. When you look at as we do and I'm sure you do, the current numbers for drugs that are currently approved in that setting it really underscores the, I would say the disconnect between the epi that is widely known and widely available and the obvious uptake of some of those early agents. So, we're excited about the opportunity. We're very pleased with the progress that BMS is making on the additional cohorts with 040 study where obviously there are some analogies if you will between RCC and HCC and the idea of combining cabo with nivo or cabo with nivo and ipi in an earlier line for HCC as one that we find very interesting and hopefully one that we will pursue once we have more data from the Phase II study.

Okay. Appreciate all your thoughts there. Could you just also remind us with Ipsen and Takeda whether they need to opt in to the CELESTIAL data and what if any economics or so say within those options?

Yes, so both parties opted into HCC with those deals. There are I must say significant economic milestones for clinical regulatory and commercial with that indication. I don't think we’ve with those worry yet and I’d rather wait to have those achieved before we do that.

Okay. Thanks again.

Thank you. Our next question will come from the line of Andy Hsieh with William Blair. Please proceed.

Thanks for taking my questions. But before I do that, I just wanted to congratulate the Exelixis team on the CELESTIAL early stop. If a tough tough space where even non-inferiority is considered a major advance. So, I have two questions the first one is about the CheckMate 040 study in HCC. Is that a front-line study and is it potentially pivotal especially given the recent accelerated approval of Opdivo there? And second question is about your SG&A spend going forward. Have you thought about the sales force needed to detail the second line HCC space? And also in the 10-Q I believe you mentioned that Exelixis and Genentech are scaling back promotional efforts of kutalic [ph] and melanoma. So, is it possible to reposition the sales for HCC? Thank you.

Okay. Yes, thanks for all those questions. There is I think three, so why don’t we start with Gisela on the 040 study and then we’ll pivot over to P.J. for the other two. Go ahead.

Thank you for the question. Checkmate 040 the study is really a safety of the combinations of cabozantinib and nivolumab or cabozantinib, nivolumab and ipilimumab and not designed as a potential pivotal study. We very much look forward to the data given the positive CELESTIAL outcome and the activity of nivolumab in the space. So, we are certainly thinking forward in that direction.

Gisela, can you - patients for this question.

Thank you for the reminder. Its first and second line patients.

Well, thanks Andy. I will take the two questions regarding the salesforce here. With regards to salesforce for the HCC space. We’ve always talked about we’ll invest commencer with the opportunity. But as you mentioned in the Q we disclosed we’ve scaling back the personal promotion of the cobimetinib or COTELLIC sales force where we partner with Genentech and we’re actually really excited there because it gives us the opportunity to redeploy those 12 sales representatives to CABOMETYX currently and right now as you know we're promoting second line RCC and we’re preparing for the first line launch which is significant opportunity with about 14,000 patients. So, we’re looking forward to deploying those experience reps in the RCC market. In the near term in no way does that take away from our excitement with regards to the future of cobimetinib. As Gisela described there are three ongoing Phase III studies, -- BRAF mutant-positive melanoma and wild-type, and certainly in the near term the third line combination study in colorectal cancer. So, we’re excited about those and look forward to more developments there.

Great. Thank you.

Thank you. Our next question will come from the line of Ted Tenthoff with Piper Jaffray. Please proceed.

Great. Thank you. My congratulations as well. As we start to see some additional data rollout and approvals and regulatory filings next year. I actually have a little bit of a housekeeping question if I may. Just sort of looking at tax rate now that you've crossed over congratulations as a profitable company. Where should we expect this to be trending? Obviously, we have a couple years here maybe two decades of NOL’s to work through. But how should we be thinking about that as I think people are going to start to look more and more towards the bottom line?

Yes, Ted this is Chris. So the way I look at it, so first of all as we reported in the last 10-K we had approximately $1.4 billion of NOL. That go out from basically expires during 2018 that go all the out to 2036 and you can model that out from a Federal point of view based on your income, your assumptions on income and figure out when we’re going to - when we extinguish those. Now the taxes that we did pay or we are liable for now are state taxes in certain states where we haven’t had operations. Where we didn’t develop, where we didn’t incur NOL and so we’re paying 3% 4% tax on average effective rate for those states that we didn’t have operations previously.

That makes lot of sense. Thank you.

Thank you.

Thank you. Our next question will come from the line of Peter Lawson with SunTrust Robinson. Please proceed.

Hi Mike, just kind of thinking forward for the next couple of years. Where do you see the sales force focusing in say RCC if its first line or second line after Opdivo and I guess the same question for liver as well?

Yes, thanks for the question Peter. I’m somewhat hesitant to opine upon something that's going to be couple of years ahead. I worry about next week to a certain degree operationally speaking. Look we have, I think what we've done effectively is to ourselves and people that track this closely on the investment side that we’ve got a very strong commercial effort with a great team of experienced professionals both at the home office and as well as in the field that can help us really educate HCP’s and help them understand the value that we bring with cabozantinib across the approved indications whether it be MTC or second line RCC. We’ve talked about cabo from really almost day one as being a potential franchise molecule meaning that it had the opportunity or the ability to have broad activity and multiple indication either as a single agent or in combination and that's still the vision. And I think what you're seeing play out now is really years of deep work around the science, the preclinical work, the clinical work and now pivotal trials paying off where we’re seeing broad activity and as P.J. said four different indications over three different tumor types with the opportunity to do a lot more. And that's our focus. So, if I fast forward a couple of years, if we continue to be successful in delivering good data in terms of well controlled well executed pivotal trials, we hope to have a sales force that is broadly covering a gambit of opportunities that cabo can bring relative to the benefit we like to be able to show in those trials. So, how that will play out in renal or liver time will tell there are lots of moving pieces there and again it's hard to predict the future relative to what may or may not happen. But again, as we talked about we want to make sure that we're getting the drug to every eligible patient every single day that’s our focus, that's our passion and that will certainly continue with time.

Do you think the near-term benefits are really around that kind of second line possibility after I/O as opposed to going head to head or frontline?

I think every, again every eligible patient that might be able to benefit from cabo we will address and again how that plays relative to I/O first line in RCC versus I/O second line will be we will be ready to roll across all those different gambits based upon our label and based upon our ability to again detail in a very compliant fashion. So, without looking ahead too much farther how the 214 data, how that plays out from a regulatory point of view? How the CABOSUN data plays out both in terms of its approval eventually hopefully as well as then how that plays in the field and then how that combination works as well. We'll see, again I’d like to have data in front of me to be able to feel better about making any kinds of projections alright.

Got you. Just finally around acquisitions, how you are thinking about that or is it front and center as cabo in building that?

Well yes, we’ve talked about this I think pretty extensively previously. So, what I’ll say is shouldn't be anything new. I mean cabo is our number one priority and that’s I think pretty simple based upon the activity and the knowledge that we have now and probably over 5,000 or so patients being treated clinically to-date and certainly many more commercially. Again, we believe and I think we have a strong foundation around its ability to be a franchise molecule. So cabozantinib will get fed first when it comes to resources and when it comes to making sure that the next wave of trials and the next wave of pivotal trials gets started based upon strong data and strong I would say analysis of the competitive commercial and regulatory landscape which we do well and I'm very confident we can navigate either as a single agent or in various I/O combination formats. But again, I don't want to put all the, put everything on that and certainly there's value in diversifying the portfolio and starting to risk around. And again, we've been very clear about our interest in going out and doing internal discovery to bring up new aspects and that’s ongoing currently as well as looking outside for external assets that will allow us to jump start that portfolio rebuilding process right. Now we are going to be and I think we have a good scientific foundation and we're going to be very sophisticated buyers and we're going to have a very high bar for what we bring in house and weather we partner or buy. And we've got several opportunities now undergoing late stage diligence that we’re excited about. But again, we’ve got to finish the work and we have to go through all the details and get those done. So, but again that’s, I think that’s an important part of our strategy in the context of how we're going to operate going forward with the idea that we want to be able to grow the expense line supporting cabo and new assets while we grow the revenue line. And I think we’ve talked about that now consistently for the last couple of years and that’s still the overwriting focus on how we’re proceeding as we go forward.

Great. Thanks so much.

Thank you. Our next question will come from the line of Kennen MacKay with RBC Capital Markets. Please proceed.

Hi, thank you for taking my questions and congratulations to the whole team on reaching profitability. It’s been a long road and Mike I think it’s indicative of really disciplined expense management. Congrats there. Really quickly I was hoping for sort of a housekeeping question here. Wanted to see if you could comment on whether there was some inventory build in the quarter. I just wanted to get a perspective on whether there is some stockpiling ahead of the price pick on cabo that that you have in early October?

Yes, Ken thanks its Chris Senner. As P.J. said in his prepared remarks, we did - inventory did increase by approximately one week during the quarter. We’re still within our three to four-week target range that we hope to be within or are closer to it.

Got you. Okay. Thanks. And then one more on sort of the dynamics of the frontline RCC market. Just probably it is approved here, once its approved here. Is this setting more in the academic clinics or much more in the sort of community clinics versus second line and third line plus RCC. Just wanted to get a perspective on sort of how that shapes out versus how you are currently marketing cabo?

Hi Kenne, this is P.J. happy to answer that. With regards to the first line setting as I mention it’s a larger opportunity then the second and third, approximately the same as the second and third line setting taken together. So really excited about moving forward into that. With regards to the academic and community split, it's roughly similar I’d say there is maybe a little bit more in the community. But that’s why I think it’s really important and we’re happy that we’ve expanded the prescriber base significantly over the last few quarters and the majority of all these RCC prescribers now including the community prescribers have experience with CABOMETYX and our sales force quite frankly is leading the market in share of voice or tied for that so to speak on most surveys. So that's really important, we've established those relationships in the community and look forward to really building on that in the event that we’re approved in first line in the near term here and feel that we’re really well suited to do that with the expertise we have in house.

Got you. Thank you for taking my question. Operator Thank you. Our next question will come from the line of Stephen Willey with Stifel. Please proceed.

Yes, good afternoon and thanks for taking the questions and congratulations on another great quarter here. I think P.J. you talked about second line in patient market share being I think now at 38%. Do you happen to know what the number is for nivolumab at this point? I guess I'm just trying to think about what proportion of that new patient second line plus market opens up in the context of that you are moving the front line?

Yes, so Stephen thanks for the question it’s P.J. As I mentioned, our second line plus market share is 38% and that’s second line and beyond as you sort of refer to. Not going to comment on the competition there other than say that we feel that we’re competing very well with the oral and the IV agents and prescribers are having a good experience with CABOMETYX which we are very pleased with as we expand that prescriber base. But probably there until we kind of see how the market evolves moving forward.

Okay. So, I’m guessing in the front line setting you'll most likely be competing with ipi, nivo for these intermediate and poor risk RCC patients and you’re talking about growth within the community prescriber setting. Do you think that you have kind of an inherent advantage amongst that prescribing base just given that there's still some trepidation around the utilization of ipi among some of these community prescribers?

Yes. Thanks for the follow-up. Well, I think what I'd say is I’ll just kind of in the community the vast majority of the market share now is really with sutent and (indiscernible) so that’s where the market is. I think we’ll certainly do have the opportunity to compete effectively in the first line as we are in oral agent there is certainly convenience which plays well in the community setting. But that said again, I really kind of hold off on making any comments until we see how things play out, but we really are confident that we have the relationships. Our share of voice is strong throughout the community and we feel already to compete effectively.

And then maybe just lastly. I guess you’ve had Compendia Listing in place now for I guess about two, two and a half months. Just kind of curious if there is anything that you can say just with respect to uptake thus far in the front-line setting as a result of the reimbursement? Thanks.

Yes. Well, you know we don’t comment with regards to. Well first of all obviously we only promote to the approved indications and we don't comment on utilization and settings are indications that are off label currently. So, I’ll just leave it there for now.

Alright. Thanks for taking the questions.

Thank you. Our next question will come from the line of Michael Schmidt with Leerink Partners. Please proceed.

Hi guys, thanks for taking my question and congrats as well on another great quarter with terrific execution. I may have missed regarding the commercial team and I was wondering if you do feel the need to expand the commercial team next year to support the HCC and first line RCC launches? A –Mike Morrissey: Thanks for your question Michael. What I’ll say there is we feel we’re very well suited and ready to compete certainly in the near term with regards to the first line potential indication for CABOSUN and RCC. As we’ve always talked about we will scale the organization commensurate with the opportunity and as I mentioned earlier we just had the opportunity to redeploy they're in the process of redeploying 12 very experienced oncology representatives that have been with us for a couple of years now from cobimetinib, (indiscernible) to sort of beef up the efforts on RCC and CABOMETYX. So, we’re excited about that. So, we feel really good about our opportunity to compete, should we get a label here in the near term.

Okay. Great. And then just regarding the collaboration with breast cancer and liver cancer. Can you just remind me regarding the CheckMate 040 study is that looking at several doses of CABOMETYX or is it just looking at the 40 miligrams per day done? And then when do you think you might be in a position to move this into a pivotal study potentially in HCC?

Yes sure. This is Gisela, thanks for the question. Regarding the CheckMate 040 study, this isn’t a variation of the 40 miligram combination with nivolumab alone or nivolumab and ipipimumab. So later doses that have been evaluated in the ongoing Phase Ib study at the MCI that has been presented previously by Andrea [ph] probably still there was a (indiscernible). And regarding future plans, obviously we are very delighted about the outcome of CELESTIAL and looking forward to seeing the data from the 040 study and are certainly thinking forward, but it’s a little premature to say when first line was drawn with combination.

Okay, great. Thanks, and congrats on all the progress.

Thank you, Michael.

Thank you. And our next question will come from the line of Andrew Peters with Deutsche Bank. Please proceed.

Yes. Hi, this is Maryana Breitman for Andrew. Thanks for taking my questions and congratulations on all the progress. I had a few, one of them is basically kind of following-up on previous questions about commercial opportunity in RCC. We’re just wondering like how you’re thinking about the first line this as a first line opportunity for cabo and how do you think it’s going to change once nivo, ipi data are available as well? And then I mean I had a couple of questions on how do you think profitability is going to shape longer term over the current run rate is sustainable or we should expect an uptick in OpEx as the initial studies begin to ramp up and I also was wondering about the quarter-to-quarter dynamics? You have commented on the inventory, slight inventory kind of buildup. But I was just wondering like how do you see demand changing quarter to quarter.

Okay. There is lot’s there. So, why don’t we start with the RCC question with P.J. first and then we’ll go to Chris on the OpEx stuff.

Yes, thanks for the question Maryana. With regards to the first line RCC should, I won’t a lot about expectations for performance there. But I guess what I will say is the vast majority and that’s in the ballpark of 75% to 80% of patients in the first line, which is a large market about 14,000 patients are getting eyes now. So that’s now kind of the current habit and practice of oncologists in the US. So certainly, a good opportunity there and these are as I mentioned prescribers that will likely will be experience utilizing problematic and where we have a significant share of voice and expertise. So, we feel we are very well suited to compete there and look forward to the potential to continue to grow the brand in that large market.

Okay. Thanks P.J. So, this is Chris. So, on the profitability sustainability question we're not going to guide the future profitability but what I will say is that and what we have been saying is that we're going to continue to invest in the business along the lines of our revenues growth and that investment in the business will be primarily around continued cabozantinib development. Organic investments such as the restart of our discovery which we did at the end of last year. And also in the business development and our business development opportunities that we have in front of us. So those will be the things that we’ll be investing in and that will be along the lines of our revenue growth. So that’s kind of the guidance we have from the profitability point of view.

Okay. And her final piece is just the Q-over-Q impact of.

Yes, I can take that. So, I think we’re very pleased with the quarter we had in Q3. I am not going to comment on Q4, as we’re only few weeks into the quarter here. It’s probably not reasonable to expect that we’ll continue to grow at 30% quarter-over-quarter sequentially. But I think the 9% share growth we had in Q3 over Q2 is certainly strong. We’re pleased with the near 40% market share we’ve achieved in the second line plus setting. Happy with how we're competing there. As I mentioned a couple times, we’re pleased that we’ve really broadened the prescriber base in the adoption of CABOMETYX which I think in combination with the sort of deep experience and knowledge we have in the marketplace sets us up really well for future indications and growth particularly potential in the near term with a CABOSUN approval with the PDUFA date just a couple months away here February 15. So, looking forward to that opportunity.

Got it. Thank you, so very much for taking my questions. And again congrats. Thanks.

Thank you, Maryana.

Thank you. At this time, there are no further questions, and so I would turn the call back over to today’s host Susan Hubbard. Miss Hubbard?

Thank you, Brian and thank you all for joining us today. We certainly welcome your follow-up calls with any additional questions you may have that we didn’t get a chance to address on the call today. Thanks so much.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program and we may all disconnect. Everybody have a wonderful day.