Casdatifan

Arcus and Gilead announced an additional equity investment of $320 million into Arcus and modifications to their domvanalimab + zimberelimab clinical program to focus on the highest unmet medical needs and largest market opportunities Pharmacokinetic (PK), pharmacodynamic (PD), safety and early efficacy data, including initial observations from the expansion cohort, from ARC-20, support potential for casdatifan (AB521) to result in greater HIF-2a inhibition than the marketed competitor; expansion cohort data expected to be presented in the second half of 2024 Multiple datasets expected to be presented in the first half of 2024 including EDGE-Gastric for domvanalimab + zimberelimab + chemotherapy at ASCO and two randomized datasets for etrumadenant $1.2 billion in pro forma cash, cash equivalents and marketable securities and funding into 2027 to support Phase 3 trials for 3 different molecules and launch preparations Conference call today at 2:00 PM PT / 5:00 PM ET HAYWARD, Calif.--(BUSINESS WIRE)-- Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer, today reported financial results for the fourth quarter and full year ended December 31, 2023, and provided a pipeline update on its clinical-stage investigational molecules – targeting TIGIT, the adenosine axis (CD73 and A2a/A2b receptors), HIF-2a, AXL and PD-1 – across multiple common cancers. “By the beginning of next year, we expect to have six ongoing Phase 3 trials for three distinct programs: domvanalimab plus zimberelimab, our Fc-silent anti-TIGIT antibody and anti-PD-1 antibody combination; casdatifan (AB521), our HIF-2a inhibitor; and quemliclustat, our CD73 inhibitor. Two of our Phase 3 trials (STAR-121 and STAR-221) for domvanalimab plus zimberelimab are expected to complete enrollment this year, and we are beginning preparations for regulatory filings,” said Terry Rosen, Ph.D., chief executive officer of Arcus. “We now have cash runway into 2027, enabling us to accelerate our multiple late-clinical stage studies and support our highly productive discovery engine.” Corporate Update: In January 2024, Gilead and Arcus announced an amendment to their collaboration agreement and a separate equity investment, raising Gilead’s ownership stake to 33%. In connection with the announcement, Gilead’s Chief Commercial Officer, Johanna Mercier, joined Arcus’s board. In December 2023, Arcus and Exelixis announced a clinical trial collaboration for STELLAR-009, a Phase 1b/2 trial evaluating casdatifan in combination with zanzalintinib in patients with advanced solid tumors, including clear cell renal cell carcinoma (ccRCC). The trial is currently enrolling. Pipeline Highlights: Domvanalimab (Fc-silent anti-TIGIT monoclonal antibody) plus Zimberelimab (anti-PD-1 antibody) Domvanalimab-zimberelimab Updates: Arcus and Gilead announced strategic changes and enrollment updates to their domvanalimab + zimberelimab clinical program to focus on settings with the highest unmet medical need and where the Fc-silent design of domvanalimab has the potential for differentiation in both efficacy and safety. Enrollment was discontinued for the Phase 3 study ARC-10 evaluating domvanalimab plus zimberelimab compared to pembrolizumab in first-line PD-L1-high NSCLC. This enables a potential acceleration of the Phase 3 study STAR-121 in the all-comer first-line NSCLC setting. Arcus and Gilead plan to initiate STAR-131, a registrational Phase 3 study in perioperative NSCLC. The companies also plan to initiate a Phase 2 trial to evaluate domvanalimab plus zimberelimab in a new disease setting. Upcoming Domvanalimab-Zimberelimab Milestones: Updated PFS and ORR data from the Phase 2 EDGE-Gastric trial evaluating domvanalimab + zimberelimab + chemotherapy in first-line upper GI cancers are expected to be presented at the ASCO Annual Meeting in June 2024. This study is evaluating a similar regimen and patient population as our STAR-221 phase 3 study. Data and insights from previously enrolled patients in the ARC-10 study (Part 1) are expected to be shared at future scientific conferences. The Phase 3 studies STAR-221 and STAR-121 are expected to complete enrollment by year-end. Casdatifan, also known as AB521 (HIF-2a inhibitor) Casdatifan (AB521) Updates: Arcus shared PK, PD, safety, and early efficacy data from the dose-escalation phase of ARC-20, a Phase 1/1b study of casdatifan in cancer patients. PK, PD, and Safety Data: PD data demonstrated that a 20 mg daily dose of casdatifan (one-fifth the selected Phase 3 dose of 100 mg) achieved a similar level of HIF-2a-mediated EPO suppression as the 120 mg approved dose of the marketed competitor, belzutifan. Dose-proportional PK were observed through the selected Phase 3 dose of 100 mg of casdatifan. By contrast, plasma levels of belzutifan do not meaningfully increase above the approved dose of 120 mg. Together, the PK and PD pro suggests that the selected dose of 100mg of casdatifan has the potential to achieve substantially greater HIF-2a inhibition than the approved dose of belzutifan. No dose-limiting toxicities have been observed to date in ARC-20. To date, rates of adverse events, including anemia and hypoxia, appear consistent with observations from historical trials of belzutifan. Early efficacy data from the dose-escalation and 100 mg dose-expansion cohorts will be discussed on today’s conference call. Arcus intends to initiate a Phase 3 combination study in ccRCC in early 2025. Upcoming Casdatifan (AB521) Milestones: Efficacy data from the dose-expansion stage of the ARC-20 study are expected to be presented at a medical conference in the second half of 2024. The data will focus on the cohort of 30 patients treated with a 100 mg daily dose of casdatifan. In addition, a 50 mg daily expansion cohort is currently enrolling and a to-be-determined higher dose expansion cohort is planned; data from these cohorts will be shared at a later date. Quemliclustat (small-molecule CD73 inhibitor) Arcus presented overall survival data at the 2024 ASCO GI conference from the ongoing Phase 1/1b ARC-8 trial evaluating quemliclustat plus chemotherapy with or without zimberelimab in patients with previously untreated metastatic pancreatic ductal adenocarcinoma (mPDAC). Median Overall Survival (mOS) was 15.7 months for all patients treated with 100 mg quemliclustat-based regimens (pooled analysis) in the ARC-8 study, which exceeds the historical benchmark data for chemotherapy alone. A 37% reduction in risk of death and a 5.9-month improvement in mOS was observed for patients treated with quemliclustat-based regimens when compared to a Synthetic Control Arm of 1:1 matched patients who were treated with gemcitabine/nab-paclitaxel in Phase 2 and 3 clinical studies in a post hoc analysis. Initiation of a Phase 3 trial in pancreatic cancer is expected to begin by early 2025. Etrumadenant (A2a/A2b adenosine receptor antagonist) Data from ARC-9, a randomized Phase 1b/2 study evaluating etrumadenant plus zimberelimab plus chemotherapy versus regorafenib in third-line metastatic colorectal cancer (mCRC) are expected to be presented in the first half of 2024. Data from MORPHEUS-PDAC, a randomized Phase 2 platform study operationalized by Roche evaluating etrumadenant plus atezolizumab plus chemotherapy versus chemotherapy in first-line metastatic pancreatic ductal adenocarcinoma, are expected to be presented in the first half of 2024. Early Clinical and Preclinical Programs Arcus initiated ARC-27, a Phase 1 study of AB801, Arcus’s potent and highly selective AXL inhibitor, in advanced cancer patients and expects to initiate the first expansion cohort in NSCLC in 2025. Arcus is conducting preclinical toxicity studies on multiple development candidates against KIT, a target involved in multiple allergic and immune-mediated diseases. Financial Results for Fourth Quarter and Full Year 2023: Cash, Cash Equivalents and Marketable Securities were $866 million as of December 31, 2023, compared to $1.1 billion as of December 31, 2022. The decrease during the year is primarily due to the use of cash in research and development activities, partially offset by receipts totaling $49 million in upfront and milestone payments from Gilead and Taiho, and $33 million in proceeds from the issuance of 2.6 million shares of our common stock including shares pursuant to an equity award plan. Together with the $320 million we received from Gilead for their equity investment in January 2024, our cash, cash equivalents and marketable securities were $1.2 billion, which we believe will be sufficient to fund our planned operations into 2027. Cash, cash equivalents and marketable securities are expected to be between $870 and $920 million at the end of 2024. Revenues were $31 million for the fourth quarter 2023, compared to $34 million for the same period in 2022. In the fourth quarter 2023, Arcus recognized $22 million in License and development service revenues related to the advancement of programs, primarily the Gilead collaboration, as well as $9 million in Other collaboration revenue primarily related to Gilead’s ongoing rights to access Arcus’s research and development pipeline in accordance with the Gilead collaboration agreement. Revenues were $117 million for the full year 2023, compared to $112 million for the same period in 2022. Research and Development (R&D) Expenses were $93 million for the fourth quarter 2023, compared to $80 million for the same period in 2022. The net increase of $13 million was primarily driven by higher costs to support our late-stage development program activities. Non-cash stock-based compensation expense was $9 million for each of the fourth quarter 2023 and 2022. R&D expenses were $340 million for the full year 2023, compared to $288 million for the same period in 2022. For fourth quarter 2023 and 2022, Arcus recognized gross reimbursements of $42 million and $49 million, respectively, for shared expenses from its collaborations, primarily the Gilead collaboration. Gross reimbursements were $162 million for the full year 2023, compared to $161 million for 2022. R&D expense by quarter may fluctuate due to the timing of clinical manufacturing and standard-of-care therapeutic purchases with a corresponding impact on reimbursements. General and Administrative (G&A) Expenses were $29 million for the fourth quarter 2023, compared to $28 million for the same period in 2022. Non-cash stock-based compensation expense was $9 million for the fourth quarter 2023, compared to $8 million for the same period in 2022. G&A expenses were $117 million for the full year 2023, compared to $104 million for 2022. Net Loss was $81 million for the fourth quarter 2023, compared to $67 million for the same period in 2022. The increase in net loss included an increase of $1 million in income tax expense primarily due to an increase in taxable income compared to the prior year. Net loss was $307 million for the full year 2023, compared to $267 million for 2022. Conference Call Information: Arcus will host a conference call and webcast today, February 21, at 2:00 PM PT / 5:00 PM ET to discuss its fourth-quarter and full-year 2023 financial results and pipeline updates. To access the call, please dial (404) 975-4839 (local) or (833) 470-1428 (toll-free), using Access Code: 235272. To access the live webcast and accompanying slide presentation, please visit the “Investors & Media” section of the Arcus Biosciences website at . A replay of the webcast will be available following the live event. Arcus Ongoing and Announced Clinical Studies: Trial Name Arms Setting Status NCT No. Lung Cancer PACIFIC-8 dom + durva vs. durva Unresectable Stage 3 NSCLC Ongoing Registrational Phase 3 NCT05211895 STAR-121 dom + zim + chemo vs. pembro + chemo 1L NSCLC (PD-L1 all-comers) Ongoing Registrational Phase 3 NCT05502237 STAR-131 dom + zim + chemo; dom + zim Perioperative NSCLC Planned Registrational Phase 3 TBD EDGE-Lung dom +/- zim +/- quemli +/- chemo 1L/2L NSCLC (lung cancer platform study) Ongoing Randomized Phase 2 NCT05676931 VELOCITY-Lung dom +/- zim +/- etruma +/- sacituzumab govitecan-hziy or other combos 1L/2L NSCLC (lung cancer platform study) Ongoing Randomized Phase 2 NCT05633667 Gastrointestinal Cancers ARC-9 etruma + zim + mFOLFOX vs. SOC 2L/3L/3L+ CRC Ongoing Randomized Phase 2 NCT04660812 EDGE-Gastric (ARC-21) dom +/- zim +/- quemli +/- chemo 1L/2L Upper GI Malignancies Ongoing Randomized Phase 2 NCT05329766 STAR-221 dom + zim + chemo vs. nivo + chemo 1L Gastric, Gastroesophageal Junction (GEJ) and Esophageal Adenocarcinoma (EAC) Ongoing Registrational Phase 3 NCT05568095 Pancreatic Cancer ARC-8 quemli + zim + gem/nab-pac vs. quemli + gem/nab-pac 1L, 2L PDAC Ongoing Randomized Phase 1/1b NCT04104672 Prostate Cancer ARC-6 etruma + zim + SOC vs. SOC 2L/3L CRPC Ongoing Randomized Phase 2 NCT04381832 Kidney Cancer ARC-20 cas Cancer Patients / ccRCC Ongoing Phase 1/1b NCT05536141 STELLAR-009 cas + zanza ccRCC Ongoing Phase 1b/2 NCT06191796 Other ARC-25 AB598 Advanced Malignancies Ongoing NCT05891171 ARC-26 AB801 Healthy Volunteers Ongoing NCT06004921 ARC-27 AB801 Advanced Malignancies Ongoing NCT06120075 cas: casdatifan; dom: domvanalimab; durva: durvalumab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; nivo: nivolumab; pembro: pembrolizumab; quemli: quemliclustat; SOC: standard of care; zanza: zanzalintinib; zim: zimberelimab; ccRCC: clear-cell renal cell carcinoma; CRC: colorectal cancer; CRPC: castrate-resistant prostate cancer; GI: gastrointestinal; NSCLC: non-small cell lung cancer; PDAC: pancreatic ductal adenocarcinoma About the Gilead Collaboration In May 2020, Arcus established a 10-year collaboration with Gilead to strategically advance our portfolio. Under this collaboration, Gilead obtained time-limited exclusive option rights to all of our clinical programs arising during the collaboration term. Arcus and Gilead are co-developing four investigational products, including zimberelimab (Arcus’s anti-PD-1 molecule), domvanalimab (Arcus’s anti-TIGIT antibody), etrumadenant (Arcus’s adenosine receptor antagonist) and quemliclustat (Arcus’s CD73 inhibitor). The collaboration was expanded in November 2021 to include research directed to two targets for oncology, which research collaboration was further expanded in May 2023 to add up to four targets for inflammatory diseases. About Arcus Biosciences Arcus Biosciences is a clinical-stage, global biopharmaceutical company developing differentiated molecules and combination medicines for people with cancer. In partnership with industry partners, patients and physicians around the world, Arcus is expediting the development of first- or best-in-class medicines against well-characterized biological targets and pathways and studying novel, biology-driven combinations that have the potential to help people with cancer live longer. Founded in 2015, the company has expedited the development of multiple investigational medicines into clinical studies, including new combination approaches that target TIGIT, PD-1, the adenosine axis (CD73, dual A2a/A2b receptor and CD39), AXL and HIF-2a. For more information about Arcus Biosciences’ clinical and pre-clinical programs, please visit or follow us on Twitter. Domvanalimab, etrumadenant, quemliclustat, and zimberelimab are investigational molecules, and neither Gilead nor Arcus has received approval from any regulatory authority for any use globally, and their safety and efficacy have not been established. Casdatifan, AB598 and AB801 are also investigational molecules, and Arcus has not received approval from any regulatory authority for any use globally, and their safety and efficacy have not been established. Forward-Looking Statements This press release contains forward-looking statements. All statements regarding events or results to occur in the future contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the statements in Dr. Rosen’s quote and statements regarding: Arcus’s expectation that its cash, cash equivalents and marketable securities on-hand are sufficient to fund operations into 2027 and support Phase 3 trials for 3 different molecules and launch preparations; the timing and scope of analyses, data disclosures and presentations; whether data and results from current studies support further development of a program; expected timing of clinical milestones, including the completion of enrollment; our ability to accelerate the development of our clinical pipeline; the potential of casdatifan to achieve substantially greater HIF-2a inhibition than the approved dose of the marketed competitor; the potency, efficacy or safety of Arcus’s investigational products; and the initiation of and associated timing for future studies, including STAR-131 and the Phase 3 studies in ccRCC and pancreatic cancer. All forward-looking statements involve known and unknown risks and uncertainties and other important factors that may cause Arcus’s actual results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: risks associated with preliminary and interim data not being guarantees that future data will be similar; the unexpected emergence of adverse events or other undesirable side effects; difficulties or delays in initiating or conducting clinical trials due to difficulties or delays in the regulatory process, enrolling subjects or manufacturing or supplying product for such clinical trials; Arcus’s dependence on the collaboration with Gilead for the successful development and commercialization of its optioned molecules; difficulties associated with the management of the collaboration activities or expanded clinical programs; changes in the competitive landscape for Arcus’s programs; and the inherent uncertainty associated with pharmaceutical product development and clinical trials. Risks and uncertainties facing Arcus are described more fully in the “Risk Factors” section of Arcus’s most recent periodic report filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this press release. Arcus disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this press release except to the extent required by law. The Arcus name and logo are trademarks of Arcus Biosciences, Inc. All other trademarks belong to their respective owners. ARCUS BIOSCIENCES, INC. Consolidated Statements of Operations (unaudited) (In millions, except per share amounts) Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Revenues: License and development service revenue $ 22 $ 26 $ 80 $ 74 Other collaboration revenue 9 8 37 38 Total revenues 31 34 117 112 Operating expenses: Research and development 93 80 340 288 General and administrative 29 28 117 104 Total operating expenses 122 108 457 392 Loss from operations (91 ) (74 ) (340 ) (280 ) Non-operating income (expense): Interest and other income, net 11 8 41 16 Effective interest on liability for sale of future royalties — (1 ) (2 ) (2 ) Total non-operating income, net 11 7 39 14 Net loss before income taxes (80 ) (67 ) (301 ) (266 ) Income tax expense (1 ) — (6 ) (1 ) Net loss $ (81 ) $ (67 ) $ (307 ) $ (267 ) Net loss per share: Basic and diluted $ (1.08 ) $ (0.93 ) $ (4.15 ) $ (3.71 ) Shares used to compute net loss per share: Basic and diluted 75.0 72.6 74.0 72.0 Selected Consolidated Balance Sheet Data (unaudited) (In millions) December 31, 2023 December 31, 2022 Cash, cash equivalents and marketable securities $ 866 $ 1,138 Total assets 1,095 1,345 Total liabilities 633 688 Total stockholders’ equity 462 657 Derived from the audited financial statements included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2024.

- Total Revenues of $480 million for the Fourth Quarter of 2023, $1,830 million for the Fiscal Year 2023 - - Cabozantinib Franchise Achieved $1,629 million in U.S. Net Product Revenues for the Fiscal Year 2023, including $429 million for the Fourth Quarter of 2023 - - GAAP Diluted EPS of $0.27 for the Fourth Quarter of 2023, $0.65 for the Fiscal Year 2023 - - Non-GAAP Diluted EPS of $0.33 for the Fourth Quarter of 2023, $0.90 for the Fiscal Year 2023 - - Conference Call and Webcast Today at 5:00 PM Eastern Time - ALAMEDA, Calif.--(BUSINESS WIRE)-- Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the fourth quarter and fiscal year of 2023, provided an update on progress toward achieving key corporate objectives, and outlined its commercial, clinical and pipeline development milestones. “Exelixis entered 2024 with significant momentum on the research, development, commercial and financial fronts,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer, Exelixis. “This year, we plan to advance our regulatory strategies for cabozantinib label expansions in neuroendocrine tumors and metastatic castration-resistant prostate cancer, both indications with high unmet medical need and the potential to drive revenue growth for the franchise for years to come. Positive data from the CABINET and CONTACT-02 studies give us confidence that cabozantinib has the potential to become an important option for clinicians treating patients with these forms of cancer. As we pursue these additional growth opportunities, we remain steadfast in our defense of cabozantinib’s intellectual property and anticipate a ruling on the second bench trial for our ongoing litigation with MSN Pharmaceuticals this spring.” Dr. Morrissey continued: “Our deep, differentiated and maturing pipeline is essential to our efforts to position Exelixis as a global biotech leader in oncology. Drawing on the cabozantinib experience and the integrated research, development and commercial capabilities highlighted at our recent R&D Day, we are working to build multiple franchises across the Exelixis portfolio. As we concentrate our R&D resources on our product development activities, we remain focused on accelerating zanzalintinib, XB002 and XL309 through clinical development, and filing Investigational New Drug applications for up to three development candidates in 2024. We believe the associated restructuring of our business, announced in January, will enable us to rapidly execute on our goals, maintain positive cash flow and deliver an innovative pipeline of biotherapeutics and small molecules for patients with cancer.” Fourth Quarter and Fiscal Year 2023 Financial Results Total revenues for the quarter and year ended December 31, 2023 were $479.7 million and $1,830.2 million, respectively, as compared to $423.9 million and $1,611.1 million for the comparable periods in 2022. Total revenues for the quarter and year ended December 31, 2023 included net product revenues of $429.3 million and $1,628.9 million, respectively, as compared to $377.4 million and $1,401.2 million for the comparable periods in 2022. The increases in net product revenues were primarily due to an increase in sales volume and an increase in average net selling price. Collaboration revenues, composed of license revenues and collaboration services revenues, were $50.3 million for the quarter ended December 31, 2023, as compared to $46.5 million for the comparable period in 2022. The increase was primarily due to higher royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners, Ipsen Pharma SAS and Takeda Pharmaceutical Company Limited. Collaboration revenues were $201.3 million for the year ended December 31, 2023, as compared to $209.8 million for the comparable period in 2022. The decrease was primarily related to decreases in the recognition of milestone-related revenues and development cost reimbursements earned, partially offset by higher royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners. Research and development expenses for the quarter ended December 31, 2023 were $244.7 million, as compared to $336.8 million for the comparable period in 2022. The decrease in research and development expenses for the quarter was primarily related to a decrease in license and other collaboration costs, partially offset by increases in clinical trial costs, manufacturing costs to support Exelixis’ development candidates and personnel expenses. Research and development expenses for the year ended December 31, 2023 were $1,044.1 million, as compared to $891.8 million for the comparable period in 2022. The increase in research and development expenses for the year was primarily related to increases in manufacturing costs to support Exelixis’ development candidates, personnel expenses and clinical trial costs, partially offset by lower license and other collaboration costs and lower stock-based compensation expense. Selling, general and administrative expenses for the quarter and year ended December 31, 2023 were $131.4 million and $542.7 million, respectively, as compared to $119.3 million and $459.9 million for the comparable periods in 2022. The increases in selling, general and administrative expenses were primarily related to increases in personnel expenses, technology costs, facility expenses and legal and advisory fees. Provision for (benefit from) income taxes for the quarter and year ended December 31, 2023 was $17.5 million and $49.8 million, respectively, as compared to $(1.3) million and $52.1 million for the comparable periods in 2022, primarily due to an increase in pre-tax income. GAAP net income (loss) for the quarter ended December 31, 2023 was $85.5 million, or $0.28 per share, basic and $0.27 per share, diluted, as compared to GAAP net loss of $(30.2) million, or $(0.09) per share, basic and diluted, for the comparable period in 2022. GAAP net income for the year ended December 31, 2023 was $207.8 million, or $0.65 per share, basic and diluted, as compared to GAAP net income of $182.3 million, or $0.57 per share, basic and $0.56 per share, diluted, for the comparable period in 2022. Non-GAAP net income (loss) for the quarter ended December 31, 2023 was $104.2 million, or $0.34 per share, basic and $0.33 per share, diluted, as compared to non-GAAP net loss of $(10.2) million, or $(0.03) per share, basic and diluted, for the comparable period in 2022. Non-GAAP net income for the year ended December 31, 2023 was $289.4 million, or $0.91 per share, basic and $0.90 per share, diluted, as compared to non-GAAP net income of $265.4 million, or $0.83 per share, basic and $0.82 per share, diluted, for the comparable period 2022. Non-GAAP Financial Measures To supplement Exelixis’ financial results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Exelixis presents non-GAAP net income (and the related per share measures), which excludes from GAAP net income (and the related per share measures) stock-based compensation expense, adjusted for the related income tax effect for all periods presented. Exelixis believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Exelixis believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Exelixis’ results from period to period, and to identify operating trends in Exelixis’ business. Exelixis has excluded stock-based compensation expense, adjusted for the related income tax effect, because it is a non-cash item that may vary significantly from period to period as a result of changes not directly or immediately related to the operational performance for the periods presented. Exelixis also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Exelixis encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations, to more fully understand Exelixis’ business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release. 2024 Financial Guidance Exelixis is maintaining the previously provided financial guidance for fiscal year 2024(1): Total revenues $1.825 billion - $1.925 billion Net product revenues (2) $1.650 billion - $1.750 billion Cost of goods sold 4% - 5% of net product revenues Research and development expenses (3) $925 million - $975 million Selling, general and administrative expenses (4) $425 million - $475 million Effective tax rate 20% - 22% ____________________ (1) 2024 financial guidance excludes expenses related to the restructuring plan announced in January 2024. (2) Exelixis’ 2024 net product revenues guidance range includes the impact of a U.S. wholesale acquisition cost increase of 2.2% for both CABOMETYX and COMETRIQ effective on January 1, 2024. (3) Includes $40 million of non-cash stock-based compensation expense. (4) Includes $60 million of non-cash stock-based compensation expense. Cabozantinib Highlights Cabozantinib Franchise Net Product Revenues and Royalties. Net product revenues generated by the cabozantinib franchise in the U.S. were $429.3 million during the fourth quarter of 2023, with net product revenues of $427.7 million from CABOMETYX® (cabozantinib) and $1.6 million from COMETRIQ® (cabozantinib). For the year ended December 31, 2023, net product revenues generated by the cabozantinib franchise in the U.S. were $1,628.9 million, with net product revenues of $1,614.9 million from CABOMETYX and $13.9 million from COMETRIQ. In 2023, global cabozantinib franchise net product revenues generated by Exelixis and its partners exceeded $2.2 billion. Based upon cabozantinib-related net product revenues generated by Exelixis’ collaboration partners during the quarter and year ended December 31, 2023, Exelixis earned $40.7 million and $148.5 million, respectively, in royalty revenues. Detailed Results from Phase 3 CABINET Pivotal Trial Evaluating Cabozantinib in Advanced Pancreatic and Extra-Pancreatic Neuroendocrine Tumors (NET) Presented at the 2023 European Society for Medical Oncology (ESMO) Congress. In October 2023, detailed results were presented from the phase 3 CABINET pivotal trial at the 2023 ESMO Congress. The CABINET trial evaluated cabozantinib versus placebo in two different cohorts of patients, those with pancreatic NET and those with extra-pancreatic NET. A statistically significant and clinically meaningful improvement in progression-free survival (PFS) was observed in those patients treated with cabozantinib in both cohorts. Adverse events were consistent with the known safety pro cabozantinib. CABINET is sponsored by the National Cancer Institute and is led by The Alliance for Clinical Trials in Oncology (The Alliance). Previously, in August, Exelixis announced The Alliance’s independent Data and Safety Monitoring Board unanimously recommended to stop the trial early, unblind all patients and allow those on placebo to cross over to cabozantinib due to a dramatic improvement in efficacy. Exelixis is discussing these results with the U.S. Food and Drug Administration (FDA) to support a potential regulatory submission in 2024 and will provide an update when appropriate. Detailed Results from Phase 3 CONTACT-02 Pivotal Trial Evaluating Cabozantinib in Combination with Atezolizumab in Metastatic Castration-Resistant Prostate Cancer (mCRPC) Presented at the American Society of Clinical Oncology 2024 Genitourinary Cancers Symposium (ASCO GU). In January 2024, positive results from the primary PFS analysis in the global phase 3 CONTACT-02 pivotal trial were presented during an oral abstract session at ASCO GU. The results demonstrated a statistically significant improvement in PFS, as assessed by a blinded independent radiology committee (BIRC), for cabozantinib in combination with atezolizumab in the first 400 randomized patients in the intent-to-treat (PFS ITT) population and per protocol. A PFS benefit was observed across all subgroups of high-risk populations who have a poor prognosis and a high unmet need for additional treatment options, notably in patients with liver metastases or those who had received prior docetaxel chemotherapy. A statistically significant improvement in PFS was also observed by BIRC both in the ITT population (n=507) and according to Prostate Cancer Clinical Trials Working Group 3 (PCWG3) criteria. An interim analysis for overall survival (OS), conducted at the time of the primary PFS analysis, demonstrated a trend favoring the combination of cabozantinib and atezolizumab. The study continues toward the next analysis of OS, which is anticipated in 2024. CONTACT-02 is evaluating cabozantinib in combination with atezolizumab compared with a second novel hormonal therapy (NHT) in patients with mCRPC and measurable extra-pelvic soft-tissue disease who have progressed on one prior NHT. The safety pro the combination regimen was consistent with the known profiles of each single agent, and no new safety findings were identified. Exelixis will continue its discussions with the FDA on a potential regulatory path forward for the combination of cabozantinib and atezolizumab in mCRPC. Four-Year Follow-up Results from Phase 3 CheckMate -9ER Trial Evaluating CABOMETYX in Combination with Nivolumab (OPDIVO®) in Previously Untreated Renal Cell Carcinoma (RCC) Presented at ASCO GU. In January 2024, four-year follow-up results from the CheckMate -9ER trial were featured in an oral presentation at ASCO GU. Results continued to show superior PFS and objective response rates (ORR) in patients treated with the combination of CABOMETYX and nivolumab over sunitinib, the comparator studied in the trial, regardless of risk classification. Superior OS was also observed in patients treated with the combination. The presentation included data showing health-related quality-of-life benefits with the combination as compared to sunitinib. No new safety concerns were identified in the follow-up analysis. Pipeline Highlights Presentation of Encouraging Results from Expansion Cohort of Phase 1b/2 STELLAR-001 Trial Evaluating Zanzalintinib in Patients with Advanced Kidney Cancer at the International Kidney Cancer Symposium (IKCS) 2023. In November 2023, Exelixis presented initial results from an expansion cohort of STELLAR-001 evaluating single-agent zanzalintinib in patients with previously treated clear cell renal cell carcinoma (ccRCC) at IKCS 2023. STELLAR-001 is a phase 1b/2 trial evaluating zanzalintinib alone and in combination with atezolizumab in patients with locally advanced or metastatic solid tumors. In the ccRCC cohort of 32 patients, the findings demonstrated strong response rates and anti-tumor activity across the entire cohort, including in patients who had previously been treated with cabozantinib. Exelixis and Arcus Biosciences, Inc. Enter Clinical Trial Collaboration to Evaluate Zanzalintinib in Combination with AB521 in Patients with Advanced RCC. In December 2023, Exelixis and Arcus Biosciences announced that the companies entered into a clinical trial collaboration for STELLAR-009, a phase 1b/2 trial evaluating zanzalintinib in combination with AB521, an inhibitor of the transcription factor HIF-2⍺, in patients with advanced solid tumors, including ccRCC. The trial is divided into dose-escalation and expansion phases, and patient enrollment into dose-escalation cohorts is ongoing. Exelixis is sponsoring STELLAR-009, and Arcus is co-funding the study and providing AB521 for use in the trial. Initiation of STELLAR-305 Phase 2/3 Pivotal Trial Evaluating Zanzalintinib in Combination with Pembrolizumab in Patients with Previously Untreated Recurrent or Metastatic Head and Neck Cancer. In December 2023, Exelixis announced the initiation of STELLAR-305, a global, multicenter, randomized, double-blinded phase 2/3 trial evaluating zanzalintinib in combination with pembrolizumab versus pembrolizumab alone in patients with previously untreated PD-L1-positive recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN). The primary endpoints of the study are BIRC-assessed PFS and OS. Secondary endpoints include investigator-assessed PFS and ORR and duration of response as assessed by both BIRC and the investigator. Exelixis Provides Strategic Review of Biotherapeutics and Small Molecule Pipeline at its 2023 R&D Day: Science & Strategy. In December 2023, Exelixis held its 2023 R&D Day: Science & Strategy event in New York City. During the event, Exelixis speakers reviewed the strategy and progress of the company’s growing research and development pipeline, highlighted recent clinical updates, provided a comprehensive overview of its preclinical biotherapeutics and small molecule development candidates and elaborated on the company’s continued efforts to serve more patients with cancer and generate sustainable, long-term value for shareholders. The webcast replay of the event can be accessed via EXELRDDay.com and is also available at on the Event Calendar page under the Investors & News heading. Corporate Highlights Appointments of Two New Board Members with Extensive Drug Development and Corporate Governance Expertise. In January 2024, Exelixis announced the appointments of Mary C. Beckerle, Ph.D., and Gail Eckhardt, M.D., to the Exelixis Board of Directors, effective January 5, 2024. Dr. Beckerle is Chief Executive Officer of the Huntsman Cancer Institute and Distinguished Professor of Biological and Oncological Sciences at the University of Utah. Since 2006, she has had responsibility for the vision, strategic direction, and management of the University’s oncology programs, including research, care, education, and community outreach. She is also a noted cell biologist and cancer researcher. Dr. Eckhardt is Associate Dean of Experimental Therapeutics at Baylor College of Medicine and Associate Director of Translational Research at the College’s Dan L. Duncan Comprehensive Cancer Center. A recognized leader in translational medicine relative to oncology, she has focused her career on the preclinical and early clinical development of molecularly targeted therapies and combination regimens to treat colorectal and other gastrointestinal cancers. Share Repurchase Program. In January 2024, the Exelixis Board of Directors authorized the repurchase of up to an additional $450 million of the company’s common stock before the end of 2024. As of December 31, 2023, Exelixis completed the repurchase of 26.2 million shares of the company’s common stock for a total of $550 million, fulfilling its commitments under the prior share repurchase program announced in March 2023. Share repurchases under the 2024 program may be made from time to time through a variety of methods, which may include open market purchases, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination of such methods. The timing and amount of any share repurchases under the share repurchase program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of Exelixis’ common stock and general market conditions. Announcement of Key Priorities and Anticipated Milestones for 2024. In January 2024, Exelixis announced its key priorities and anticipated milestones for 2024, including: implementation of a corporate restructuring to prioritize the advancement of the company’s deep pipeline of clinical and near-clinical programs; potential U.S. regulatory filings for cabozantinib in advanced NET and mCRPC indications; the anticipated outcome of the cabozantinib Abbreviated New Drug Application litigation with MSN Pharmaceuticals in the first half of 2024; expansion of zanzalintinib’s pivotal development program with priorities defined by emerging phase 1b/2 data and potential clinical co-funding opportunities; advancing JEWEL-101, the phase 1 study of XB002, a next-generation tissue factor-targeting antibody-drug conjugate (ADC), alone and in combination with immunotherapy in a variety of solid tumor settings with the goal of prioritizing sensitive tumor types for full development; accelerating the phase 1 development of XL309, a potentially best-in-class small molecule inhibitor of USP1, as a potential therapy for tumors that have become refractory to PARP inhibitor (PARPi) therapy, including forms of ovarian, breast and prostate cancers, and pursuing potential PARPi combinations; potentially filing three Investigational New Drug Applications for XB010 (5T4-MMAE ADC), XB628 (PD-L1-NKG2A bispecific antibody), and XL495 (small molecule PKMYT1 inhibitor) if preclinical data continue to be supportive; and advancing two new programs to development candidate status, including a small molecule PLK4 inhibitor and an additional ADC. Exelixis presented the details of its key priorities and anticipated milestones at the 42nd Annual J.P. Morgan Healthcare Conference. Basis of Presentation Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31st. For convenience, references in this press release as of and for the fiscal periods ended December 29, 2023 and December 30, 2022 are indicated as being as of and for the periods ended December 31, 2023 and 2022, respectively. Conference Call and Webcast Exelixis management will discuss the company’s financial results for the fourth quarter and fiscal year of 2023 and provide a general business update during a conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today, Tuesday, February 6, 2024. To access the conference call, please register using this link. Upon registration, a dial-in number and unique PIN will be provided to join the call. To access the live webcast link, log onto and proceed to the Event Calendar page under the Investors & News heading. A webcast replay of the conference call will also be archived on for one year. About Exelixis Exelixis is a globally ambitious oncology company innovating next-generation medicines and regimens at the forefront of cancer care. Powered by drug discovery and development excellence, we are rapidly evolving our product portfolio to target an expanding range of tumor types and indications with our clinically differentiated pipeline of small molecules, antibody-drug conjugates and other biotherapeutics. This comprehensive approach harnesses decades of robust investment in our science and partnerships to advance our investigational programs and extend the impact of our flagship commercial product, CABOMETYX® (cabozantinib). Exelixis is driven by a bold scientific pursuit to create transformational treatments that give more patients hope for the future. For information about the company and its mission to help cancer patients recover stronger and live longer, visit , follow @ExelixisInc on X (Twitter), like Exelixis, Inc. on Facebook and follow Exelixis on LinkedIn. Forward-Looking Statements This press release contains forward-looking statements, including, without limitation, statements related to: Exelixis’ 2024 plans to advance its regulatory strategies for cabozantinib label expansions into NET and mCRPC indications, both with the potential to drive revenue growth for the franchise for years to come, and Exelixis’ confidence that cabozantinib has the potential to become an important treatment option for clinicians treating patients with these forms of cancer; Exelixis’ anticipation of a ruling in the second bench trial for its ongoing litigation with MSN Pharmaceuticals in the first half of 2024; Exelixis’ plans to accelerate zanzalintinib, XB002 and XL309 through clinical development and to New Drug applications for up to three development candidates in 2024 as part of its efforts to become a global biotech leader in oncology, as well as Exelixis’ belief that its associated restructuring will enable the company to rapidly execute on its goals, maintain positive cash flow and deliver an innovative pipeline of biotherapeutics and small molecules for patients with cancer; Exelixis’ 2024 financial guidance; Exelixis’ plans with respect to potential regulatory submissions for cabozantinib in advanced NET and mCRPC indications, including ongoing and future discussions with the FDA and related future updates; Exelixis’ anticipated timing of 2024 for the next analysis of OS from CONTACT-02; Exelixis’ plans to repurchase up to an additional $450 million of its common stock before the end of 2024; Exelixis’ key priorities and anticipated milestones for 2024; and Exelixis’ scientific pursuit to create transformational treatments that give more patients hope for the future. Any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and are based upon Exelixis’ current plans, assumptions, beliefs, expectations, estimates and projections. Forward-looking statements involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, which include, without limitation: the degree of market acceptance of CABOMETYX and other Exelixis products in the indications for which they are approved and in the territories where they are approved, and Exelixis’ and its partners’ ability to obtain or maintain coverage and reimbursement for these products; the effectiveness of CABOMETYX and other Exelixis products in comparison to competing products; the level of costs associated with Exelixis’ commercialization, research and development, in-licensing or acquisition of product candidates, and other activities; Exelixis’ ability to maintain and scale adequate sales, marketing, market access and product distribution capabilities for its products or to enter into and maintain agreements with third parties to do so; the availability of data at the referenced times; the potential failure of cabozantinib, zanzalintinib and other Exelixis product candidates, both alone and in combination with other therapies, to demonstrate safety and/or efficacy in clinical testing; uncertainties inherent in the drug discovery and product development process; Exelixis’ dependence on its relationships with its collaboration partners, including their pursuit of regulatory approvals for partnered compounds in new indications, their adherence to their obligations under relevant collaboration agreements and the level of their investment in the resources necessary to complete clinical trials or successfully commercialize partnered compounds in the territories where they are approved; complexities and the unpredictability of the regulatory review and approval processes in the U.S. and elsewhere; Exelixis’ continuing compliance with applicable legal and regulatory requirements; unexpected concerns that may arise as a result of the occurrence of adverse safety events or additional data analyses of clinical trials evaluating cabozantinib and other Exelixis product candidates; Exelixis’ dependence on third-party vendors for the development, manufacture and supply of its products and product candidates; Exelixis’ ability to protect its intellectual property rights; market competition, including the potential for competitors to obtain approval for generic versions of Exelixis’ marketed products; changes in economic and business conditions; and other factors detailed from time to time under the caption “Risk Factors” in Exelixis’ most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and in Exelixis’ other future filings with the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Exelixis as of the date of this press release, and Exelixis undertakes no obligation to update or revise any forward-looking statements contained herein, except as required by law. Exelixis, the Exelixis logo, CABOMETYX and COMETRIQ are registered trademarks of Exelixis, Inc. OPDIVO® is a registered trademark of Bristol-Myers Squibb Company. EXELIXIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenues: Net product revenues $ 429,336 $ 377,419 $ 1,628,879 $ 1,401,243 License revenues 45,229 38,079 178,635 162,056 Collaboration services revenues 5,087 8,419 22,694 47,763 Total revenues 479,652 423,917 1,830,208 1,611,062 Operating expenses: Cost of goods sold 21,753 15,920 72,547 57,909 Research and development 244,670 336,824 1,044,071 891,813 Selling, general and administrative 131,441 119,251 542,705 459,856 Total operating expenses 397,864 471,995 1,659,323 1,409,578 Income (loss) from operations 81,788 (48,078 ) 170,885 201,484 Interest income 21,388 16,988 86,543 33,065 Other income (expense), net (137 ) (337 ) 93 (197 ) Income (loss) before income taxes 103,039 (31,427 ) 257,521 234,352 Provision for (benefit from) income taxes 17,521 (1,254 ) 49,756 52,070 Net income (loss) $ 85,518 $ (30,173 ) $ 207,765 $ 182,282 Net income (loss) per share: Basic $ 0.28 $ (0.09 ) $ 0.65 $ 0.57 Diluted $ 0.27 $ (0.09 ) $ 0.65 $ 0.56 Weighted-average common shares outstanding: Basic 308,482 323,256 318,151 321,526 Diluted (1) 313,023 323,256 321,464 324,556 ____________________ (1) The dilutive effect of shares related to employee stock plans are not included in the calculation of GAAP diluted loss per share in the fourth quarter of 2022 as the effect would be anti-dilutive. EXELIXIS, INC. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (in thousands, except per share amounts) (unaudited) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP net income (loss) $ 85,518 $ (30,173 ) $ 207,765 $ 182,282 Adjustments: Stock-based compensation - research and development expenses (1) 9,041 10,464 34,320 45,350 Stock-based compensation - selling, general and administrative expenses (1) 15,265 15,392 72,025 62,224 Income tax effect of the above adjustments (5,629 ) (5,897 ) (24,691 ) (24,411 ) Non-GAAP net income (loss) $ 104,195 $ (10,214 ) $ 289,419 $ 265,445 GAAP net income (loss) per share: Basic $ 0.28 $ (0.09 ) $ 0.65 $ 0.57 Diluted (2) $ 0.27 $ (0.09 ) $ 0.65 $ 0.56 Non-GAAP net income (loss) per share: Basic $ 0.34 $ (0.03 ) $ 0.91 $ 0.83 Diluted $ 0.33 $ (0.03 ) $ 0.90 $ 0.82 Weighted-average common shares outstanding: Basic 308,482 323,256 318,151 321,526 Diluted (2) 313,023 323,256 321,464 324,556 ____________________ (1) Non-cash stock-based compensation expense used for GAAP reporting in accordance with Accounting Standards Codification Topic 718, Compensation—Stock Compensation. (2) The dilutive effect of shares related to employee stock plans are not included in the calculation of GAAP and Non-GAAP diluted loss per share in the fourth quarter of 2022 as the effect would be anti-dilutive.