Buying more Exelixis following positive renal cancer data

The past six months have been quite frustrating for Exelixis (EXEL) investors (myself included). The company had a string of positive announcements for cabozantinib (cabo) and Roche-partnered cobimetinib (Cotellic) including positive overall survival readouts for both drugs. Since the July announcement on the METEOR study in renal cancer, the stock is up only 16% despite having a wholly owned drug with a blockbuster potential, imminent approval and significant label expansion potential.

Market skepticism was best examplified by the mute reaction to last week’s announcement about cabo leading to an overall survival benefit in the METEOR study, probably the most meaningful announcement in the company’s history. Overall sentiment around biotech certainly isn’t helping Exelixis but it seems that market is more skeptical than ever about cabo’s commercial potential in renal cancer.

The bear case for cabo

The bear case for cabo in renal cancer (RCC) assumes Opdivo will take the majority of 2nd/3rd line renal cancer market based on its proven survival benefit (Exelixis still hasn’t provided actual survival numbers) which will be hard to beat and a better safety profile.

Exelixis’ press release stated there was a “highly statistically significant and clinically meaningful increase in OS”. Cross-trial comparison of the interim OS curve in METEOR with Opdivo’s survival curve demonstrates a similar pattern up to 1 year (data were too immature to conclude anything beyond that time point). Based on this, the language in the PR and the strong updated PFS data last month, cabo has a reasonable chance of demonstrating a strong survival benefit, perhaps even similar to that of Opdivo (5.4 months, HR=0.73). Full results will be presented at ASCO 2016 (June) but if cabo gets approved before that, the label might include actual survival numbers.

 nivo P3

Source: N Engl J Med. 2015 Nov 5;373(19):1803-13.

cabo P3

Source: N Engl J Med. 2015 Nov 5;373(19):1814-23.

Not a zero-sum game

While I also expect Opdivo to become the cornerstone of RCC treatment, I still think cabo is going to be a dominant drug with good market penetration in Opdivo-failures who will need additional treatment options (Opdivo is not curative and eventually all patients progress).  Investors understandably want to know how cabo’s survival benefit stack up against that of Opdivo but in my opinion this question has little relevance in the real world where RCC patients are treated sequentially with multiple agents. The introduction of two highly effective drugs will only augment this trend, as patients now have better options.

Historically, an RCC patient was treated with a 1st line kinase inhibitor (Sutent or Votrient) that kept the disease under control for a median of ~10 months. After that, physicians had very little to offer patients with multiple agents that provide a ~4 month PFS without proven OS benefit (20 months life expectancy). Today for the first time, patients have two drugs that prolong survival including one drug that keeps the disease from progressing for 7.4 months (an almost doubling compared to available drugs). Even if we assume Opdivo takes 100% of the 2nd line market, I find it hard to believe that physicians will not use cabo extensively as a third line option based on its compelling clinical profile (today they are using other less effective agents for third line patients)

Significant market opportunity

Third line renal cancer represents a significant opportunity. Of the estimated ~40k metastatic RCC patients in developed countries who are treated in the first line setting, ~23k are expected to receive second line treatment. This figure will probably grow as now there are 2 drugs with a clear survival benefit for pre-treated RCC (so far drugs were mildly active and no OS benefit).

Assuming Opdivo or other PD-(L)1 antibodies take the lion share of second line RCC and cabo is restricted to third line patients, cabo could be given  to 10k patients using conservative assumptions. An average cost of $70,000 per patient translates to $700M in RCC sales. Adding $150M in combined global revenues for cabo in MTC  and cobimetinib, (Roche’s MEK inhibitor for which Exelixis has co-promotion rights in the US) in melanoma, Exelixis is looking at a de-risked revenue stream of $850M per year. This figure excludes label expansion potential for both drugs in significant indications like liver cancer for cabo (P3 readout next year) and KRAS+ lung cancer in combination with Roche’s PD-L1 antibody for cobimetinib.

Portfolio updates

I am adding a second position in Exelixis ahead of an eventful 1H:16 which should include FDA/EMA approval, positive survival data in renal cancer and a lucrative deal (licensing or acquisition). Assuming conversion of all convertible debt (worst case scenario because a portion may be repaid in cash), the company has ~347M shares on a fully diluted basis which translates to a market cap of ~$1.6B. Using a 3x multiple on peak sales, adding ~$500M in cash (assuming debt conversion) and $250M for pipeline results in a valuation of $3.3B, representing a 100% upside.

Going forward, I still prefer to have limited exposure to biotech as I expect negative sentiment to continue in 2016. My biggest holdings right now are cash (~30% of portfolio) and  ProShares UltraShort Nasdaq Biotech (BIS) (~25% of portfolio), which is unfortunately and unsurprisingly my most profitable position so far in 2016.

Portfolio holdings – February 7, 2016

portfolio holdings - 7-2-2016 - after changes

biotech etfs - 7-2-2016

84 thoughts on “Buying more Exelixis following positive renal cancer data

  1. What would a licensing deal look like? If so, what is eventual goal for the company without a pipeline?

  2. Steven (EXEL) – For a standard ex-US deal (similar to INCY/NVS, SGEN/Takeda), at minimum I would expect a $~150M upfront, $600M in milestones and ~15% royalties on ex-US sales.


  3. Hi Ohad,

    Thanks for the EXEL analysis, the market hasn’t caught up to the potential.

    Any thoughts on the FDA breakthrough status for the ADC IMMU-132 in TNBC? This is an Irinotecan conjugated mab with promising data in a number of indications including NSCLC and SCLC (includes confirmed responses here):

    The company currently has modest revenues from an imaging agent and a solid pipeline. It currently trades with a market cap of ~$200mm, $76mm in cash, $100mm in convertible debt due 2020. The FDA validated promise in TNBC and the cheap valuation has my interest piqued. The agent doesn’t seem to have an accompanying biomarker test, nor do they have the funds to take it to the finish line. Any thoughts?

  4. Thanks for the interesting write up. Where did you see that they are presenting the OS numbers at ASCO in June, or is this a guess based on the fact it’s the obvious choice?

  5. Hi Ohad,

    Thanks for your post.

    What’s your opinion on XLRN at these levels?

    Thanks as always,


  7. Wildbiftek (IMMU) – I don’t have a strong opinion there. On the one hand there is clearly activity but don’t know if significant enough as monotherapy with a confirmed response rate of 20%. On the other hand durability looks good (more follow up is needed). I wonder if they can further enrich the population like IMGN are trying to do, could be meaningful here. Based on the archival samples, it looks like around half of TNBC cases are +3.

    commonwealthinc (EXEL) – My assumption plus I think the investigator at ASCO GU said they plan to present OS data at ASCO.

    Chris (XLRN) – I like the science and approach very much, valuation is still an issue imo.

    Bouschka (FOLD) – Still familiarizing myself there, still like it and it’s high on my watchlist.


  8. Hi Ohad,

    ARRY has been getting crushed a lot more than the overall biotech-sector in the past months. Do you believe that this happens because of questioning MEK/BRAF next to IO?

    As far as you think is ARRY fairly valued at these levels?


  9. Hi Ohad,

    Thanks for the excellent update.
    You say: “Assuming conversion of all convertible debt (worst case scenario because a portion may be repaid in cash)”.
    What percentage can EXEL repay in cash? Is it definitively at its discretion?
    You also say: “Adding $150M in combined global revenues for cabo in MTC and cobimetinib”.
    I find this estimate to be very low: MTC alone can easily bring (peak) sales of $70M. Cobi will surely have peak (EXEL) sales well above $80M…



  10. Hi Ohad,

    AUPH – What’s your take on the 8-week AURION results? Why release now for only 7 out of a planned 10 patients? I don’t see a press release that they completed enrollment but the language “first seven” suggests that they may have done. Nevertheless, the results seem encouraging but received a luke-warm response from the market. With the usual caveats that go with interpreting results from an open label, single arm trial, do you see the AURA trial (which is fully enrolled) as now being somewhat de-risked? Thanks as always for your input.


  11. Marc (ARRY) – Yes, I think people are concerned about IO making MEK/BRAF inhibitors irrelevant, at least in melanoma. I still think MEK inhibitors may have a lot of value beyond melanoma including in combination with PD-1 antibodies. ARRY is definitely on my watch list for 2016 after things stabilize.

    Peter (EXEL) – Regarding conversion, don’t know all the details but from what I understand EXEL has can choose to pay in cash or convert to stock under certain conditions. Agree about potential in MTC and cobi but I preferred using conservative assumptions.

    lgonber (ESPR/ARRY) – I am still bullish on them, more on ESPR at this valuation.

    Deaglan (AUPH) – As I wrote before, very hard to interpret results from a small single arm study. To me, this provides limited readacross to the full blown P2b.

    druz (INCY) – Jakafit failed in solid tumors.

    Alex (SAGE/MRNS) – I think they are attractive at these levels but I prefer to wait until the situation stabilizes.

    Chris (ARQL) – I don’t ascribe a lot of value to 761.

    Kevin (MESO) – Not a big fan of mesenchymal stem cells…


  12. Hi Ohad first time poster. Like your portfolio especially TRVN, AUPH,ESPR,MRNS which I hold as well. Was wanting to get your thoughts on the Anemia field which has a possible 10 billion dollar market up for grabs. I hold Pieris (PIRS) and Akebia (AKBA) and like both of their prospects. PIRS is early being in phase 1 but I am very excited about their Anticalin proteins and Akebia is further along enrolling in phase 3 with huge potential with AKB-6548. Thanks in advance.

  13. glenn (PIRS/AKBA) – Welcome. Not an expert there. PIRS has a low market cap and rationale for hepcidin is clearly there but the storywill take time to mature. Re AKBA, my sense is that FGEN has a superior drug (as well as a higher market cap).


  14. Hi Ohad,

    I’m a big fan of the blog. Any thoughts on Oncomed?
    They’re trading close to cash now. I am not a big fan of the cancer stem cell approach but they have 7 partnered programs in the clinic. Also I’m curious about their early IO programs, with one partnered with Celgene, and the potential there for a deal.
    Thanks in advance.

  15. Emmanuel (OMED) – Thanks. Agree about their IO programs potentially being more important than the CSC pipeline but I prefer to wait given the risk associated with the latter and the fact CSC still consumes more resources.

    Richard Baker (CYTR) – Not a big fan of next-gen chemotherapies.


  16. Hi Ohad

    Do you have an opinion on Seres Therapeutics (MCRB)?
    Additionally, when you have a minute would be great if you could quickly elaborate on the background of why you are a “fan” of the biology of aTyr (LIFE).

    Many thanks!

  17. Richard Baker (BLCM) – I like their technology very much and valuation is attractive. I definitely plan to get in later in the year.

    Kevin –
    Re: MCRB – I like the microbiome field and the company in particular, still waiting for valuation to move towards 500-600M before getting in.

    Re: LIFE – What is exciting in their technology is the emergence of completely novel functions of various tRNA synthetase with immunological activity. This provides a new “grip” on many immunologic processes that are implicated in a myriad of diseases. Burden of proof is obviously on LIFE and risk is very high but with a such a low enterprise value, I think risk/reward is attractive.


  18. Ohad
    good news for TRVN – BTD for IV oliceridine. It should help with the approval process. Also AUPH had some nice 8wk data. Looking forward for the 24 and 48 wk data, but so far looks good.
    Do you have an opinion about DBVT?

  19. andre – Yes, very nice surprise for TRVN. It certainly helps to clear a lot of the doubts some people had about the differentiated clinical profile due dosing and trial design issues. AUPH’s data is hard to interpret because sample size is very small, need to wait for full P2b data later this year.
    Sorry, don’t have a strong opinion on DBVT.

    Alex – INCY is still a little bit expensive for me, a lot depends on IDO and I am not excited as others about clinical activity with PD-1 mAbs (hope I am wrong…). IMGN, I plan to wait to the ASCO data before making any decisions.

    PaulB (TRVN) – Looks like this is the case. Well done TRVN, I guess CARA should also get one in uremic pruritis.


  20. Hey Ohad
    yes, very nice on TRVN. First positive thing in a while to happen with one of my holdings.

    I wonder what you make of the price action with EXEL – in spite of all the good news it has been languishing. I know the overall sentiment with bios is negative, but I am still puzzled by how stagnant things have been (while funds are adding). Do you have any explanation for this? can the market be so wrong? How do ou expect approvals in US and EU to affect stock price, if at all?


  21. Dan (EXEL) – Don’t have a good answer there. To me it seems likely that cabo will be used in a significant portion of PD-1 failures based on the PFS/OS benefit but the market thinks otherwise.While a quick FDA approval is already widely expected, the magnitude of OS benefit could have a major impact (good or bad) on the stock. A hazard ratio higher than 0.8 and median benefit lower than 3 months should be viewed as disappointing. Anything better is good news imo.


  22. Hi Ohad,

    Are you at all concerned with EXEL’s balance sheet going forward in terms of cash burn relative to cash on balance sheet? Mainly I’m asking do you see the potential for dilution to occur by the end of this year?

  23. Hi Ohad;

    Do you think SGEN could gain BTDs base on CD-33a and CD-19A early results. because IMMU gains a BTD base on its immu-132 (ADC) early result.

    Thank you.

  24. Al (EXEL) – I think they have enough cash to protect them from getting into liquidity crisis but I will be happy to see at least some of the debt (due 2018-19) going away. A lot depends on how much upfront $$ they can get as part of an ex-US deal. If they manage to get more than 100M it may enable them not to raise money actively but not sure what happens with the convertible debt in 2016.

    steve (SGEN) – I don’t think results to date justify BTD.


  25. Hello Ohad,

    Do you happen to have any opinion ACHN and their HCV/bacterial therapies? Bios on sale now so just looking into more names to see if I like anything. Wanted to see if you had an opinion regarding ACHN.


  26. Hello Ohad,

    Could you comment on what (if anything) you’re looking for in the earnings release of EXEL on Monday?

    Found your blog recently, thanks all for the detailed analyses.

  27. Chang (ACHN) – Don’t know them well but the HCV market looks very competitive and I don’t envision anybody successfully challenging GILD’s position.

    Matt (EXEL) – I don’t expect anything material in the earnings release per se. What matters now is what type of deal EXEL can get after taking cabo almost all the way to the finish line with FDA/EMA. This and actual OS benefit in METEOR are the two most important catalysts imo and I don’t think we’ll have any update on them tomorrow.


  28. Hi Ohad:
    I had my largest gain by shorting PTCT though I missed BMRN and SRPT.
    any thoughts on NBIX/MDVN?
    MDVN would be worth 8b if mgmt haulted all R&D and sold the company. I think NBIX is significantly undervalued.

  29. Hi Ohad,
    What do you think about ARQL’s capital raise of ~$15M? Does it change anything in your thesis?

  30. Hi Ohad,

    Any thoughts on the Ipsen deal for Cabo?

    “Under the agreement, Exelixis will receive a $200 million upfront payment. Exelixis is eligible to receive regulatory milestones, including $60 million upon the approval of cabozantinib in Europe for advanced renal cell carcinoma (RCC) and $50 million upon the filing and approval of cabozantinib in Europe for advanced hepatocellular carcinoma (HCC), as well as additional regulatory milestones for potential further indications. The agreement also includes up to $545 million of potential commercial milestones and provides for Exelixis to receive tiered royalties up to 26% on Ipsen’s net sales of cabozantinib in its territories.”

  31. Hey Ohad
    your expectations on the minimum terms of deal for EXEL are very very close, well done. What do you think of Ipsen, though? can they cell cabo in europe? or as Array with the french biotech, they are not an “elite” pharma company ,and this may be a disappointment?

  32. Hey Ohad.
    Regarding the deal with Ipsen there where given additional information on the CC.
    Royaties in the initial time after launch will be reduced to 2 and 12% on first 50 and next 100 mio.
    Royalties afterwords will be higher – tiered between 22 and 26% on all sales!
    Ohad, do you have an opinion on the PIII in HCC which has quite a high milestone of 50 mio included in that deal?

    Thanks Ike

  33. Ohad,

    What are the chances a U.S. non-Pharma company buys EXEL? Seems like EXEL has done the majority of the work to get a great JV deal, $855m in total payments, 26% EMA royalties, Japan JV still open and 65-35% future development cost sharing.

  34. owen – I don’t know NBIX well. MDVN is still a little bit expensive imo given potential threats from Aragon’s drug and generic Zytiga.

    Aviv (ARQL) – It’s a positive because it enables them to push next gen Btk inhibitor to IND but it doesn’t change the overall story. They still need to generate a clinical signal that could pave the way for a registration trial for either 092 or 087 in 2016 in order to push the stock higher.

    Wildbiftek (EXEL) – Economics are very good (excluding Japan) but I was somewhat disappointed by the fact they couldn’t attract a top biopharma.

    Dan (EXEL) – The deal is actually richer than what I expected and it they even kept Japan. Don’t know Ipsen well but they certainly don’t have a large pharma marketing muscle so on that front I don’t think cabo gets an ideal partner but if survival results are strong enough the drug will sell itself.

    ike (EXEL) – Royalties are very good imo, we just need to hope Ipsen can do a good enough job selling it. As I mentioned above, strong survival data will be very important. The HCC trial is a high risk opportunity imo even though cabo’s success in RCC bodes well (Nexavar is the only FDA approved targeted agent for HCC).

    Steven (EXEL) – If someone had wanted to buy EXEL at a decent premium I assume they would have done it prior to the Ipsen deal. Therefore, I no longer expect EXEL to be acquired, instead we should expect a deal for Japan soon.


  35. Hi Ohad,

    I guess since most of the larger pharma (AZN, MRK, RHHBY) had PD-1 PD-L1 they will have a conflict of interest when it comes to marketing Cabo in RCC. Maybe EXEL should have waited until the Nivo combo data was released.

    Any concerns about the CARA news? Timeline gets pushed back but other than that seems like a bargain trading close to cash.


  36. rick –

    EXEL – Perhaps, even though positioning cabo as treatment of choice for PD-1 failures makes a lot of sense for these companies.
    CARA – I tend to agree, stock is cheap and has multiple irons in the fire including uremic pruritis. I still prefer TRVN’s drug but could be a good way to diversify exposure to pain and some indications may be non-overlapping.


  37. The financials do look good compared to the MDVN/Astellas deal:

    “Under the terms of the agreement, Medivation will receive an up-front cash payment of $110 million. Medivation is also eligible to receive payments of up to $335 million upon the attainment of development and regulatory milestones plus up to an additional $320 million in commercial milestone payments. The companies will collaborate on a comprehensive development program that will include additional studies to develop MDV3100 for both late- and early-stage prostate cancer. Subject to receipt of regulatory approval, the companies will jointly commercialize MDV3100 in the U.S. The companies will share equally all U.S. development costs, commercialization costs, and profits. Astellas will have responsibility for developing and commercializing MDV3100 outside the U.S. and will pay Medivation tiered double-digit royalties on ex-U.S. sales.”

    This is a much lower upfront payment and it takes half of US profits as well. It seems like Ipsen’s current drugs bring in around 200-500mm Euros per year and they’re appropriately sized to be able to handle Cabo RCC revs. Unlike a larger pharma for whom Cabo wouldn’t move the needle, this might increase Ipsen revs by 25-30% in a few years. It can’t bring to bear the sheer number of reps as a Roche or a Novartis but the relative importance to its future growth will mean that Ipsen will afford it the appropriate amount of attention.

  38. Hey Ohad
    thanks for your answer. So what is you idea right now? holding and hoping management will execute? It seems the market was hoping for a buyout and now this deal removes the possibility of that, as you pointed out… I am just wondering what is your thinking, considering how large a position you have in EXEL and considering how low the share price is.

  39. Hi Ohad

    Do you follow FATE and have an opinion on them?

    Besides that, what do you think in general about the CRISPR/Cas9 space? Do you see value there in the future and would already consider investing at this stage? If I see it correctly so far only EDIT is listed (current market cap USD 1bn), others like Crispr Therapeutics Ltd., Intellia Therapeutics Inc. and Poseida Therapeutics Inc. might consider IPOs as well. Some patent issues seem to be pending, however this field in general seems to be the next “big thing”.

    Lastly, how do you see QURE/ONCE at current levels especially with regards to pricing discussions of their therapies? And could there be potential synergies in the future with gene editing like the companies I mentioned here above?

    Many thanks for your time and feedback!


  40. Ohad,

    Could you tell us what you think the probability is that Daiichi/ARQL will be successful in the Phase III Tivantinib trial in 2nd-line HCC? I know that you ascribe no value to this asset, but could you explain exactly why, especially in light of the fact that both Daiichi and Haiko Kirin have decided to take Tivantinib into Phase III trials?

  41. Wildbiftek,

    Good take, I was thinking the same thing
    Be careful what u wish for and with the deal Ipsen is offering it is obvious that they r taking this very seriously and Cabo will be a priority for them.
    Big pharma probably would not have been so generous and less focused towards Cabo.

  42. Wildbiftek (EXEL/MDVN) – Agree about the deal being very lucrative comparing to other deals. There are obviously good things in having a partner that is very dependent on your drug for future growth but it’s still a more risky bet imo.

    dan (EXEL) – I intend to hold the stock and if shares go lower I may want to add. Catalysts going forward are FDA approval (potentially this month) and OS data. Beyond that we will have to wait to Q4 to have an idea about the launch in RCC. A deal for Japan is also possible but less important imo.

    Kevin –

    FATE – Sorry, don’t know them well.
    EDIT -I don’t have plans to get in anytime soon. Gene editing has huge potential but too early for me as an investor, especially with $1B market cap.

    QURE/ONCE – I have multiple gene therapy companies on my watchlist including these two. I think it’s definitely a field to have exposure to, hard to select specific stocks so prefer to have a basket (BLUE, ONCE,QURE, VYGR, AGTC, AAVL etc.). Gene editing is a competitive approach to gene therapy in many cases but it’s too early to draw any definitive conclusions.

    Richard Baker (ARQL) – I think the HCC trial has a low likelihood of success (will be happy to be proven wrong) because the P2 MET+ subset analysis included a small sample size and the drug has been shown to have other activities beyond MET which casts a doubt on whether the activity is MET driven.


  43. Hi Ohad

    MGNX has also come down considerably, though just broke the recent sharp downtrend (like quite a few others) – does the current valuation look attractive to you?

    Many thanks

  44. Ohad, if possible, could you comment on what you like about BLCM? I see that BPX-501 so far shows low infection-related mortality and also that the safety switch works, but I see some people believe physicians will not choose haplo transplant over autologous (BLUE) as even a minimal chance of infection/GVHD is unacceptable for b-thal or sickle cell. I am interested in both companies, but still struggle to decide. Thank you, Hiroshi

  45. Alex (EXEL) – Agree, stock is weak and investor confidence appears tarnished. Perhaps people are worried about the OS numbers. The large pile of convertible debt certainly isn’t helping, if I were them I would start paying back some of it with the $260M from Ipsen.

    Richard Baker (DNAI) – Yes I am tracking it but don’t plan to get in soon. Their preliminary clinical data were definitely provocative in the signal they saw in DLBCL (both depth and duration of responses). I am worried by the lack of additional data beyond the 4 original DLBCL patients plus I am not sure how they can differentiate their drug from venetoclax.

    Kevin (MGNX) – Still to expensive imo. I have high hopes for the CD33 DART but results will probably come only at ASH s no rush there.

    Hiroshi (BLCM) – What I like in BLCM is that they have a clinical proof of concept for the their safety switch, which also bodes well for the activation switch in CARs.
    The issue of BLUE vs. allo transplant will never be a clear cit decision imo as in many cases (MDS, oncology) gene therapy is irrelevant. In addition, i remains to be seen if BLUE’s approach will have sufficiently effective in SCD.


  46. Ohad

    Do you have a opinion on TGTX and there compound in combination with imbruivica in CLL?

  47. Hey Ohad
    Cldx down 50%, time to look at it again?/or wait until next results?

  48. Did you get a chance to read the updates from XENE and MRNS? Any thoughts?

    Thanks, Dan S.

  49. Ohad

    Can you give me a sense of your feelings toward biotech in general.sector has corrected 35% on the Ibb and the Xbi even you look out further this year do you see a reversal or more sideways action.

  50. Dave (TGTX ) – I am still skeptic about their ability to compete in a very crowded market, especially their CD20 antibody. They have 100M but are burning a lot of cash on their aggressive development program, probably will have to raise $$$ soon.

    Dan (CLDX) – Very depressing… I intend to wait for now.

    Dan S. (XENE, MRNS) – Overall both companies look on track to generating important data in 2016. High risk but I plan on owning both going into data readouts.

    Alex (MCRB) – Unfortunately most microbiome companies are still private. MCRB is a great company but valuation too high imo.

    Dave (IBB/XBI) – Very hard to say…. I still feel a lot of companies are overvalued and that the pricing environment in the US is only becoming tougher.


  51. Hey Ohad
    VCEL has positive results on pII congestive heart failure, what CLDN could not achieve… any opinions on the company or the results implications? valuation is still low. Thanks

  52. Hi Ohad,

    Any thoughts on Cabo’s prospects in NSCLC? Do you think it’s better to spend a little here and there to lock up various sub-indications like RET fusion+, post Crizotinib ROS1, and various MET mutation NSCLC (~$40-50mm each indication for a P2 in the style of the recent Crizotinib ROS1 approval) or is it better to go all out and risk a larger trial (~$150mm w/ Ipsen dealing $50mm) in wild-type?

    I think the only reasonable wt indication will be a combo with a PD-(L)1 inhibitor vs Nivolumab, now that the NCCN has rejected Cabo’s P2 results in combination w/ Erlotinib (See NSCL‐19 in the following document):

    The feasibility of latter is awaiting the safety profile Andrea Apolo’s results of Cabo w/ Nivolumab despite its target being GU tumors. Do you know of any other more promising wt-NSCLC treatments that could throw such a plan off course?

  53. P.S. A similar document under the “Kidney/Testicular Cancers Panel” shows that both Nivolumab and Cabozantinib were given category 1 designation in 2nd line RCC whereas Lenvatinib/Everolimus was voted down for insufficient evidence. L/E doesn’t look like it will be relevant until at least its Phase 3 is completed.

    I think this gives some clarity to the commercial situation in this indication.

  54. hey Ohad
    GWPH up big on positive pivotal in epileptic seizures… their drug is marijuana based… they have several other programs, many overlapping with MRNS and SAGE? what are the implications?

  55. Ohad

    Do you feel the political climate regarding drug prices works to favor a ESPR if there compound is effective in phase 111 trials in that the pricing would be advantageous to the alternative treatments?

  56. Hello Ohad ! Do you have an opinion on ROCHE? I have always been interested in them since they absorbed GENENTECH. They seem to be very well positioned in the cancer Diagnostic business with FMI etc. Now they seem to be moving on ALL fronts with the recent collaborations with BPMC and KITE.I would appreciate any insight you might have!

  57. Dan/Richard (VCEL/EGLT) – Sorry, not familiar with these two.

    Wildbiftek (EXEL) – Cabo clearly has activity in RET+ NSCLC but it might be inferior to more selective agents such alectinib or newcomers from LOXO, BPMC. Clinical data to date is encouraging but not exceptional so not sure about potential in this indication. Same goes for ROS1.
    Most activity in NSCLC today (especially with kinase inhibitors) is in molecularly defined subsets (KRAS,ALK,ROS,RET,AXL,MET, BRAF etc.). For WT NSCLC there are a lot of immunotherapy trials but so far I haven’t seen anything groundbreaking.
    I don’t think any drug can be approved for RCC without a P3 study, especially not in combination with an approved agent.

    Dan (GWPH/SAGE/MRNS) – Good to have some good news for a change… In general I don’t think there will necessarily be direct competition across every epileptic indication. Given the different MOAs, it is easy to envision all drugs being used in some patients/subsets.

    Dave (ESPR) – I don’t see a major impact because ETC-1002 will probably be used in different patients (those who require milder LDL reductions).

    Bouschka – Sorry, not tracking big pharmas. Agree about deals with FMI and BPMC as highly valuable.

    Alex – Sorry, don’t know them.


  58. Hi Ohad,
    Any thoughts on INFI, particularly in light of its recent plunge?
    Thanks a lot,


  59. $ARQL Did the interim analysis include futility analysis or they just continued ? Given that it is a placebo controlled trial they should have succeeded by now so it might actually be not so good news that the trial did not get stopped.

    What do you think ?

  60. Peter (INFI) – The news from GILD’s Zydelig are disconcerting because it might be a class effect + INFI’s drug does not seem to be differentiated.

    curiousgeorge (ARQL) – From what I understand there was no futility analysis so there is not a lot of impact on likelihood of success imo. The fact the study was not stopped due to a negative effect (higher mortality on the active arm) is a slight positive though.

    Richard Baker (CYNA) – Sorry don’t know them well.


  61. Alex (INFI) – I am somewhat skeptical regarding PI3K-gamma Inhibition for immuno-oncology.

    andre (SAGE) – While I agree with their comment about data generated in single arm trials, I think the efficacy signals in SRSE and PPD are too strong to be a coincidence (especially given the described disease severity).


  62. Hi Ohad,

    Re TRVN, Are you optimistic about TRV 027 Phase II B data for heart failure due in Q2?
    Thanks as always,

  63. What is your opinion on CLDX at this point? Yes, Rintega is dead, but the rest of the pipeline should not totally be ignored, IMO. $290 in cash should carry them through the next two years.


  64. Chris (TRVN) – I don’t have high expectations from this program, I own the stock solely based on the pain franchise.

    Richard Baker (CLDX) – Good question… The CD27 and GPNMB ADC clearly have some value but I prefer to wait on th sidelines for now.


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