Susan Hubbard - IR Mike Morrissey - President, CEO Chris Senner - EVP, CFO Gisela Schwab - President, Product Development, Medical Affairs & CMO P.J. Haley - Vice President-Commercial.

Cristina Ghenoiu - Cowen Prakhar Verma - Stifel Stefan Quenneville - Morningstar.

Good day ladies and gentlemen, and welcome to the Exelixis' Fourth Quarter and Full Year 2015 Financial Results Conference Call. My name is Sabrina, and I will be your operator for today. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host for today Ms. Susan Hubbard, Investor Relations.

Please proceed..

Thank you, Sabrina, and thank you all for joining us for the Exelixis' fourth quarter 2015 financial results conference call.

Joining me on today's call are Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; and Gisela Schwab, our Chief Medical Officer, who together will review our corporate, financial and development progress for the quarter ended December 31, 2015, as well as recent key development and corporate events including this afternoon's announcement of our collaboration with Ipsen.

P.J. Haley, our VP of Commercial and Peter Lamb, our Chief Scientific Officer are also here with us and will participate in the question-and-answer session of this call.

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 Web site at exelixis.com. During the course of this presentation, we'll 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 Exelixis' files from time-to-time with the Securities and Exchange Commission, which under the heading Risk Factors identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today, including without limitation, uncertainties related to the availability of data at the reference time, risk and uncertainties related to the regulatory review and approval processes, risk associated with conducting clinical trials and compliance with applicable regulatory requirements, risk and uncertainties associated with the Exelixis dependent on its collaboration partner and ability to maintain its rights under existing collaborations and uncertainties related to Exelixis' ability to enter into new collaborations, risk regarding Exelixis' financial outlook and sufficiency of the Exelixis' capital and other resources over time.

And the risk and uncertainties related to commercial planning, product commercialization success and market competition. With that, I will turn it over to Mike..

All right. Thank you, Susan and thanks everyone for joining us on the call today. The fourth quarter of 2015 and the first few months of 2016 have been marked by a continuing series of significant events for Exelixis from a clinical, regulatory and corporate point of view.

We believe our recent progress puts us in a position for an exciting and potentially transformative year. At the end of Q4, we completed our NDA submission to the FDA for cabozantinib in advanced RCC and in February, the FDA accepted the NDA and granted a PDUFA date of June 22.

In early January, we completed our MMA submission to the EMA who accepted the application on January 28. The EMA has previously granted accelerated assessment to the filing. Our preparations for a potential launch continued to advance as planned and we have now completed the staffing necessary to be launch ready in the U.S. pending approval.

Of particular note, we also announced on February 1, that we have obtained positive overall survival results from METEOR, our Phase 3 pivotal trial of cabozantinib advanced in RCC. These data have been shared with both the FDA and the EMA for potential inclusion in the label, if approval is granted.

Importantly, the achievement of a highly statistically significant and clinically meaningful improvement in overall survival makes cabozantinib, the first and only drug in this setting to deliver improvements in all three measures of clinical benefit, mainly, overall survival, progression free survival and objective response rate.

We plan to present the OS data at a METEOR medical meeting later this year. We are excited about this traditional lead-off for METEOR, which we believe will be well received by the medical community and will put us in a strong position to compete in this rapidly evolving market.

As a remainder, the current market for second and later line RCC includes about 17,000 patients in the U.S. and approximately 37,000 patients worldwide, the global revenues for current second line RCC agents of approximately $1 billion in 2014.

Our early market research suggest that this market opportunity could grow significantly over time as more patients access new and potentially improved agents with longer duration of therapy. We believe this market is currently under served and they will be able to support multiple new and potentially improved therapies.

As I mentioned earlier, we filed our MMA for advanced RCC in the EU in early 2016 and could have approval before the end of the year. It's in that context, that I'm pleased to announce today the deal with Ipsen as our partner to commercialize cabozantinib in markets outside of the U.S., Canada and Japan.

We believe the deal economics reflect both the strength of the METEOR data set as well as Ipsen's commitment to cabozantinib in RCC and importantly to the development of a broader cabozantinib franchise. At a high level, Exelixis will receive first and upfront payment of $200 million.

Second, an EU approval milestone of $60 million that we expect to receive in 2016. Third, regulatory milestones for second line HCC at $50 million as well as other clinical and regulatory milestones for additional future indications.

Fourth, potential commercial milestones of $545 million including $20 million in potential initial commercial launch milestones. Fifth, tier royalties up to 26% on net sales in Ipsen territories. And finally, the companies have agreed to collaborate on the development of cabozantinib for current and potential future indications.

In summary, we expect to receive up to a combined $260 million in 2016 with the upfront payment in EU approval milestone. I will also remind you that with today's announcement, Exelixis retained all commercial rights for cabozantinib and all indications in the U.S., Canada and Japan.

Chris will review the details of the agreement in a moment along with this impact on our 2016 financial guidance. Ipsen has a significant presence in GU oncology outside of the U.S. with commercial operations in 115 countries and approximately 150 sales reps covering urologists and GU oncologists in Europe.

They currently market products including Decapeptyl, GnRH analogues in prostate cancer and Hexvix, an imaging agent used to detect bladed cancer.

Additionally Ipsen markets arrange a products for the detection and treatment of neuro-endocrine tumors and associated symptoms which provides another area potential overlap given the ongoing evaluation of cabozantinib and a Phase 2 trial in neuro-endocrine tumors.

The GU oncology business represent a significant component of Ipsen's annual revenues and both GU and GI oncology have been highlighted as areas of strategic focus for them going forward. It is noteworthy that this partnership represents a sizable investment for Ipsen and will play a prominent role in the evolution of their business.

This fact together with our shared vision and alignment around the future cabozantinib franchise makes them an ideal partner with both the ability to successfully execute commercially in their territories and share our commitment to the success of the overall franchise.

Exelixis will continue to pursue an additional partnership for the Japanese rights to cabozantinib. As Chris will discuss in a moment, we ended 2015 with over $250 million in cash with Q4 being our proudest quarter-to-date with respect to COMETRIQ revenues. We also received our first revenues from the sale of COTELLIC.

With the additional cash infusion from the upfront and expected EU milestone through the partnership with Ipsen in 2016, we are in a solid cash position and keeping with our financial strategy outlined last year. We will maintain a high degree of financial discipline as we move forward and continue to focus our spending to support the potential U.S.

launch in RCC and to advance the development of cabozantinib in HCC and other potential indications as warranted by data from our ongoing clinical trials. With a strong start behind us, 2016 promises to be a very exciting year for Exelixis potential for regulatory approvals in both the U.S. and EU in a commercially significant setting.

As I mentioned earlier, we have made excellent progress in building out all areas of our commercial organization with staff now in place to make us launch-ready pending approval in the U.S.

Although for competitive reasons, we won't be providing the details and the sizing of our commercial infrastructure, we believe that the team we put in place is appropriately resourced and will be highly effective.

We now have the critical mass of people, talent and experience in our sales, marketing, commercial operations and market access teams to enable a strong launch. This foundation is further supported by the [Trifecta] [ph] of clinical benefit now demonstrated for cabozantinib then the improvements in overall survival, PFS and objective response rate.

The high quality of the staff that have joined our growing sales marketing and medical affairs teams makes us confident, it will be ready to execute effectively in a competitive environment.

Alternately, once we have approval in hand, our goal is to use the free cash generated from an effective launching RCC to enhance our ability to broaden the development of cabozantinib beyond RCC and HCC to fully explore its potential to positively impact the lives of patients with cancer.

It could also provide an opportunity to expand that the Exelixis pipeline beyond cabozantinib allowing us to build on the scientific development and commercial expertise that we have gained over the last several years during which time two Exelixis' discovered drugs have advanced to the market.

So with that intro, I will turn the call over to Chris to review our financial performance for the fourth quarter full year 2015.

Chris?.

Thank you, Mike. I will begin with a review of our fourth quarter and full year 2015 financial results provide a detailed financial background on our collaboration with Ipsen, and then, provide our 2016 financial guidance.

My comments will be focused on the highlights of our financial performance and I will refer you to our press release and Form 10-K filed earlier today for additional details. Net revenues for the quarter ended December 31, 2015 were $9.9 million and consisted almost entirely of net product revenue from the sale of COMETRIQ.

This is compared to $7.4 million for the comparable period in 2014. Net revenue in the fourth quarter 2015 were impacted by an approximate 160 carton increase in U.S. wholesale inventory, when compared to the level of their inventories at the end of the third quarter 2015.

For the year ended December 31, 2015, net revenues were $37.2 million compared to $25.1 million for the comparable period in 2014.

Full year 2015, net revenues included $3 million of contract revenues for milestone payment received from Merck in the third quarter of 2015 related to their worldwide license of our PI3K-Delta program as well as net product revenue related to sale of COMETRIQ.

Research and development expenses for the quarter ended December 31, 2015 were $23.5 million compared to $39.7 million for the comparable period in 2014. And for the year ended December 31, 2015 were $96.4 million compared to $189.1 million for the comparable period in 2014.

The decreases for both the quarter and the year ended December 31, 2015 were primarily related to net decrease in clinical drug, cost related to COMET, the company's Phase 3 trial in metastatic castration resistant prostate cancer and METEOR, the company's phase 3 trial in advanced RCC and to a lesser degree decreases in personnel related expenses resulting from an overall reduction in headcount.

Those decreases were partially offset by an increase in stock-based compensation expense for performance based stock options tied to the positive top line data received from the METEOR trial and the anticipation of acceptance of NDA filing with the FDA.

Selling, general and administration expenses for the quarter ended December 31, 2015 were $17.1 million compared to $9.8 million for the comparable period in 2014. And for the year ended December 31, 2015 were $57.3 million compared to $50.8 million for the comparable period in 2014.

The increases for both the quarter and year ended December 31, 2015 were primary related to higher marketing expenses as well as stock-based compensation expense due to divesting in performance-based stock option as a result of the positive top line data received from the METEOR trial and the anticipated acceptance for our NDA filing with the FDA.

Also, our 2015 SG&A expense includes approximately $16.6 million of loss from our COTELLIC commercialization collaboration with Genentech.

As noted in our 10-K, we have recruited our COTELLIC collaboration expenses but we are currently in discussions with Genentech over the level and type of expenses that Genentech has allocated the collaboration P&L. The overall SG&A increases were partially offset by a decrease in facilities cost and consulting outside services.

For the period ended -- for the year ended December 31, 2015, there were also decreases in personnel related expenses resulting from an overall reduction of headcount and patent cost is compared to the comparable period in 2014.

Other income and expense net for the quarter ended December 31, 2015 was an net expense of $12 million compared to $11.9 million for the comparable period in 2014. Other income and expense net for the year ended December 31, 2015, was a expense of $48.3 million compared to $44.3 million for the comparable period in 2014.

The net expense is comprised primarily of interest expense which includes $7.1 million and $28.9 million respectively of non-cash expense related to the accretion of the discounts on the both four and a quarter percent convertible senior subordinated notes to 2019 and the company's indebtedness under the Deerfield notes for the quarter and year ended December 31, 2015 as compared to $7.7 million and $29.5 million for the comparable period in 2014.

Net loss for the quarter ended December 31, 2015 was $43.6 million or $0.19 per share compared to $58 million or $0.30 per share for the comparable period in 2014. Net loss for the year ended December 31, 2015, was $169.7 million or $0.81 per share compared to $268.5 million or $1.38 per share for the comparable period in 2014.

The decrease is a net loss for both the quarter and the year were primarily due to decreases in research and development expenses an increase in net revenues partially offset by selling, general and administration expenses.

Cash and cash equivalent, short and long-term investments and short and long-term restricted cash and investments totaled $253.3 million at December 31, 2015, which included $145.6 million in cash we raised through an equity offering in the third quarter of 2015. Compared to $242.8 million at December 31, 2014.

Now turning to our agreement with Ipsen for the commercialization and development of cabozantinib. I wanted to provide a little additional color on the economics for the collaboration. Under the terms of the agreement Exelixis will receive $200 million up front payment.

Exelixis eligible to receive $60 million upon the approval of cabozantinib in Europe for advanced RCC and $50 million upon the filing and approval of cabozantinib in Europe for advanced HCC as well as an additional regulatory milestone for potential further indications.

The agreement also includes up to $545 million for commercial milestones based on escalating sales levels including $20 million on commercial sales of the product in the first two EU big five countries. The upfront payment and these potential milestones total $855 million. Exelixis will also receive royalties on net sales of the product.

We receive a 2% royalty on the initial $50 million in net sales and 12% royalty on the next $100 million of net sales. After this initial period Exelixis will receive a tier royalty of 22% to 26% on annual net sales. These tiers will reset each calendar year.

Exelixis remains committed to the continued development of cabozantinib and ongoing trials and will solely upon them to completion Exelixis and Ipsen will collaborate a new clinical trials for the product and will share the cost of development with Exelixis paying 65% of the cost and Ipsen paying 35% of the cost.

We continue our efforts to identify a collaboration partner for Japan who may also share in the cost associated with the continued development of the product.

Turning to our financial guidance for 2016 with the June 22, 2016 PDUFA action date for advanced RCC on the horizon, we will continue to make the investments necessary to build the incremental infrastructure necessary to prepare for the potential U.S. launch of cabozantinib in advanced RCC.

As Mike highlighted, we are essentially launch ready now, having hired the majority of our commercial organization including, as you heard from Mike, the complete RCC sales infrastructure.

As a result of this investment, the company is providing guidance to total costs and operating expenses for the full year will be between $240 million and $270 million. This guidance includes approximately $30 million in non-cash cost and expenses related primarily to stock-based compensation expense.

And with regard to our cash in 2016, the upfront payment and the anticipated milestones for Ipsen will put us in a very strong position. We will not be providing cash guidance for this year because revenue variables make extremely different to predict our final cash position.

We are on the cusp of an anticipated dynamic launch of revenue contribution from cabozantinib in advanced RCC here in the U.S. and receiving meaningful royalty revenue from COTELLIC. With the cash we had to start the year discipline expense management including the cost associated with launching cabozantinib in the U.S.

for advanced RCC and the anticipated milestones for Ipsen, we are projecting that we will be in a very healthy cash position at year end. I'm very pleased with where the company is sitting currently from a financial perspective. We now have a clear path to become a cash flow positive.

We look forward to updating you with our revenue and overall financial performance over the course of this year. And with that, I will turn the call over to Gisela to provide the development update..

Thank you, Chris. The last several months have been very busy and productive following the positive results from METEOR of Phase 3 trial comparing cabozantinib and everolimus in advanced RCC patients who have experienced disease progression following treatment with at least one prior VEGF TKI.

We are very excited to have seen in early February 2016 that the trial also succeeded in meeting its secondary endpoint of improving overall survival [Technical Difficulty] as compared to everolimus update had met the primary PFF endpoint last July.

With this important result in hand cabozantinib now has demonstrated significant improvement over an active standard of care treatment everolimus in all three key end points; overall, survival, progression free survival and objective response rate. We conducted the second overall survival interim analysis following consultation with FDA and EMA.

Both agencies indicated that they would like to see the results while reviewing our filings. We submitted the results to both agencies in early February. I will now provide a summary of the presentation of the PFS subgroup results at the ASCO conference for genitary urinary cancers or ASCO GU in early January.

I will then discuss our recent progress on the regulatory side. And I will close with a brief update on other ongoing trials for cabozantinib in HCC, RCC and other indication and an update on cobimetinib. METEOR's primary endpoint was progression free survival, the results represented at ECC in September 2015 by Dr.

Toni Choueiri from the Dana Farber Cancer Institute and concurrently published in the New England Journal of Medicine.

The analysis of progression free survival among the first 375 enrolled patients per the independent radiology committee showed a highly statistically significant benefit for cabozantinib with an HR of 0.5h and a P value of less than 0.0001. Cabozantinib nearly doubled. The median PFS was 7.4 months as compared to 3.8 months with everolimus.

Cabozantinib treatment reduced the risk of disease progression or death by 42%. More recently at ASCO GU in early January 2016, Dr. Bernard Escudier presented the detailed results of predefined subgroup analyses for PFS. The ASCO GU presentation was the first time to present PFS data from the METEOR trials entire 658 patients study population.

The results were highly consistent with the primary PFS analysis.

As assisted by an independent radiology [Technical Difficulty] the median PFS across all enrolled patients was 7.4 months for the cabozantinib arm versus 3.9 months for the everolimus corresponding to a 48% reduction in the rate of disease progression or death for cabozantinib was compared to everolimus with an HR of 0.52 and a P value of less than 0.0001.

Updated objective response rate results from the full 658 patient study were also presented ASCO GU for the first time. As assisted by the independent radiology committee, the objective response rate across all 658 patients was 17% for cabozantinib and 3% for everolimus.

As previously reported at the ECC in September 2015, the objective response rate for the first 375 patients enrolled was 21% for cabozantinib and 5% for everolimus.

Cabozantinib's effect on PSF and objective response rate were favorable across all patient subgroups including equal performance status, commonly applied RCC risk criteria developed by Motzer et al; organ involvement including bone and overall tumor burden; extent and type of prior VEGF TKI therapy; and prior PDI or PD01 therapy.

For patients without prior PDI or PD01 therapy, medium PFS was 7.4 months for cabozantinib and 3.9 months for everolimus with an HR of 0.54. For patients who had received prior PD1 or PD01 therapy, the median PFS for cabozantinib was not reached and the median PFS for everolimus was 4.1 months with an HR of 0.22.

The rates of series adverse events were consistent with those presented at the primary analysis. Event rates were similar between treatment arms and discontinuations for adverse events were low at about 10% in both treatment arms and consistent with those previously reported for everolimus.

As you will recall data pertaining to overall survival in the entire study population of 658 patients, a secondary endpoint of the trial were immature at the data cut-off for the primary PFS analysis in mid-2015 was a minimum follow-up of only six months.

But an interim analysis triggered to occur at the time of the primary analysis for PFS showed a strong trend favoring cabozantinib with an HR of 6.7 and a P value of 0.005. At the time of the interim analysis the pre-specified P value of 0.0019 to achieve statistical significance was not reached.

Following consultation with FDA and EMA, we have now performed a second interim analysis for overall survival and we have announced the top line results in early February 2016. The trial met its key secondary endpoint and cabozantinib improved overall survival with high statistical significance as compared to everolimus.

With this result, cabozantinib is the first and only drug that has demonstrated robust and statistically significant improvement for all three efficacy endpoints of overall survival, progression free survival and objective response rate in a large pivotal trial in patients with advanced renal cell cancer.

We look forward to presenting the data at a scientific conference this year. Further, on the regulatory side, we have completed our rolling NDA filing in the U.S. in December of 2015. And FDA has recently granted priority review status and set a PDUFA date for June 22, 2016.

FDA has previously granted breakthrough therapy designation for cabozantinib in the treatment of advanced RCC patients in August of 2015. In the EU, we have completed the MMA filing with EMA in early January 2016 in the filing was validated on January 28.

CHMP has previously granted accelerated assessment status, which could shorten the review time by approximately 2 months compared to a regular review. Thus, at the outcome of the review -- of the reviews is successful cabozantinib could achieve regulatory approval both in the United States and in Europe in 2016.

Now turning to our second ongoing Phase 3 study in advanced hepatocellular cancer, CELESTIAL. The study continues to enroll patients globally. In this study patients with advanced HCC, who have received prior treatment with sorafenib are randomized to receive either cabozantinib at 60 mg per day or matching placebo.

The primary endpoint for this trial is overall survival and we are expecting results in the 2017 timeframe. There is currently no standard of care available in the second later line population that has received a prior sorafenib highlighting the unmet medical need in this indication.

It is worth noting that there are a number of parallels between the tumor biology of RCC and HCC. As an RCC, the VEGF and met pathways are importantly implicated in hepatocellular cancer.

The receptor tyrosine kinases met and its cognate ligand hepatocyte growth factor play an important role in diverse aspects of tumor path biology including tumor growth survival neurogenesis invasion and dissemination.

That has been found to be over expressed in HCC compared with normal level tissue with higher med expression linked to poor prognosis and resistance to sorafenib. The VEGFRs and ligands are central mediators of too many neurogenesis and lymphangiogenesis.

High tumor micro level density appears predictive of poor disease free survival HCC resection and tumor vascular invasion is a well-established negative prognostic factor. Therefore, there is strong biological rationale for evaluation of cabozantinib a potent inhibitor of receptor tyrosine kinases including met VEGF receptors and AXL and RET in HCC.

The strong biological rationale and previously presented Phase 2 clinical data showing clinical activity for cabozantinib in HCC more than encouraging disease control rate of 66% a median PFS of 4.4 months and a median overall survival of 11.5 months provided the foundation for our CELESTIAL trial and second line treatment of HCC following sorafenib, a disease setting where there is no available standard of care.

Additionally, as this the case with RCC, physicians are taking care of patients with HCC are very familiar with future lives and growth reductions to maximize the safety profile associated VEGFR TKIs due to the years of experience with sorafenib in the first-line setting.

Beyond our focus and effort related to our late stage development in RCC and HCC and regulatory findings for RCC based on METEOR, additional clinical development in RCC continues in the form of trials sponsored by our collaborators at the National Cancer Institute Cancer therapy evaluation program as well as through our investigative sponsor trial program.

Most notably an important study in first-line advanced RCC is currently ongoing in the cooperative group known as the alliance under the CTEP IND. This CABOSUN trial is a randomized Phase 2 study comparing cabozantinib versus sunitinib in first-line therapy of intermediate or poor risk patients per the standard risk classification.

The primary endpoint is PFS and the study achieved its target enrollment of 150 patients in March of 2015, given the historical PFS duration in patients with intermediate or poor risk RCC in the first-line setting, we are expecting data in the first half of 2016.

While this trial is not designed to be labeled enabling, it will provide important insight into the potential of cabozantinib in the first-line setting. We look forward to providing you with results when available.

In addition, our CTEP collaborators have initiated a Phase 1 study evaluating the combination of cabozantinib plus nivolumab with or without ipilimumab.

In patients with genitary urinary cancers including RCC, there is a strong rationale for combining cabozantinib with these types of immuno-oncology agent including evidence of the compounds ability to create a more immune premises environment as well as preclinical data suggesting that cabozantinib and penetration T-cell infiltration into tumors.

This study was open for enrollment in July 2015 and continues to actively accrue patients.

Data on the tolerability and anti-tumor activity of the accommodation studies in this early phase trial could set the stage for later phase evaluation not only in the genitary urinary setting but in other areas as well like non-small cell lung cancer and histologies that appear sensitive to both agents.

For example based on positive Phase 2 results in non-small cell lung cancer presented at ASCO 2015, Exelixis is working on potential next steps for cabozantinib in this indication with its collaborators at the NCI and at the ECO ACRIN further development of cabozantinib in lung cancer may exclude the evaluation of combination approaches with an immunotherapy.

Additionally, regarding the CTEP studies, we also expect data from a Phase 2 study evaluating single agent cabozantinib in recurrent endometrial cancer and it is also part of Exelixis collaboration with the NCIC. Lastly, on cabozantinib, I want to add my excitement about today's announcement of our collaboration with Ipsen.

We have had very positive interactions with the development colleagues Ipsen leading up to the closing of the collaboration agreement and are very much looking forward to working together with the Ipsen team.

We will continue to lead the clinical development program for our ongoing work and jointly work on future development programs where each partner will be responsible for study supporting requirements and their perspective territories and Exelixis will lead potential future global development work.

Before turning the call back to Mike, I would like to provide an update on cobimetinib, our MEK inhibitor that is being developed in partnership with Genentech Roche, BRAF V600 mutations, our absorption about 50% of patients with malignant melanoma, BRAF V600 mutations lead to uncontrolled signaling and cell proliferation.

Targeting of mutated BRAF and MEK With a combination of vemurafenib and cobimetinib has been evaluated in patients with advanced BRAF mutant melanoma in Genentech's coBRIM Phase 3 study that form the basis for regulatory filings in 2014.

On the basis of the results of the coBRIM study, cobimetinib in combination with vemurafenib was approved by the U.S. FDA, the European Commission and Swiss Medica in 2015 and very recently also by the Canadian Health Authority for the treatment of patients with advanced BRAF V600 mutant melanoma.

The treatment -- trade name for cobimetinib is COTELLIC. Additionally, the final analysis of overall survival, the secondary endpoint of the pivotal coBRIM study was presented at the Society for Melanoma Research in San Francisco in November.

The combination of COTELLIC and vemurafenib helped patients with advanced BRAF mutant melanoma lives significantly longer when compared to vemurafenib alone.

The median overall survival was 22.3 months for the combination of COTELLIC and vemurafenib versus 17.4 months for vemurafenib alone; corresponding to a 30% reduction in the rate of death for the combination as compared to vemurafenib alone was an HR of 0.7 and a P value of 0.005.

Additionally, a broad development plan is in place to further advance the development of cobimetinib spanning multiple trials evaluating cobimetinib in various different indications and in combination with a number of other targeted agents including [indiscernible] Genentech's PD01 targeting antibody.

We look forward to data from these exciting trials when available. And with that, I will hand the call back to Mike..

All right. Thanks Gisela. The fourth quarter of 2015 and the first two months of this year had been extremely productive and have provided us with the event and considerable momentum that will dramatically shape our future.

With these significant milestones in place, we will keep our focus on executing on the next key drivers of our business including first potential regulatory approval and launch of cabozantinib in advanced RCC in the U.S. Second the seamless transition of the MMA to our new partner Ipsen.

And finally our continued support of our partner Genentech with the U.S. launch of our second commercial product COTELLIC in combination with vemurafenib and patients with mutant BRAF positive melanoma.

Before I close, I want to take a moment to thank the entire team here who work so hard and tirelessly over the last few months to secure the right partner in Ipsen for cabozantinib.

I also wanted to take a moment to welcome all of the new employees in commercial and medical affairs and thank them for bringing their energy, expertise and experience to our rapidly evolving organization and culture. We are excited to have them on board and look forward to them helping us take Exelixis to the next level as a commercial organization.

We are making very significant strides in our efforts to bring new therapies to people with cancer; we individually and collectively aim to serve. And I'm personally very excited about what this shirt can look like going forward from today. So thank you all for your time this afternoon and your interest in Exelixis.

And we are now happy to open the call for questions..

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

Hey, Michael.

Are you there?.

Mr. Schmidt, please check your mute button..

Sabrina, let's take the next question. See, if he is back up..

Sounds good. Our next question comes from the line of Cristina Ghenoiu of Cowen. Your line is now open..

Hi, congratulations on the deal. And thank your taking my question. The first one is on the European opportunity. And I was wondering you said that in the U.S. about 85% to 90% of RCC subscribers are the community oncologists and they're not particularly married to the IO treatment.

I was wondering if in Europe -- do you expect the same kind of dynamic to play out with nivo? Thank you..

Yes. Hi. This is PJ. Thanks for the question. We've been obviously very focused on the U.S. market where we think we have an exciting opportunity for Cabo and RCC and European market depending on the country and who is treating the dynamics can vary. But, I would think of them is roughly similar to those in the United States..

Thank you. If I can ask one on, it's kind of a housekeeping question, do you happen to know how the OPEC for 2016 is divided between R&D and SG&A, and also you mentioned something about Ipsen supporting 35% of clinical cost can you clarify that a bit more? Thank you.

Is this ongoing clinical trials or future once?.

Yes. Cristina, this is Chris Senner. So the answer to that question is, we're not giving specific guidance. But generally, I would say our R&D expense staying flat year-over-year generally flat with clinical development going down and our build-out of our MSL organization taking up the difference.

And then from a -- the rest of the growth in SG&A expense..

And for spend the 35%?.

So, Cristina are you asking about the allocation of the spend of 65:35, what do you -- I'm sorry..

Yes. I was just trying to better understand what is that referring to.

Is that referring to ongoing trials or future trials?.

Sure. Yes. Chris will handle that. Thank you..

So, right now we're going to pay for the current ongoing trials, and then, when we agree on new trials that's when the 65:35 split will kick in..

Thank you..

Thank you. [Operator Instructions] Our next question comes from the line of Stephen Willey of Stifel. Your line is now open..

Hi. This is Prakhar Verma for Steve today. Thank you for taking my question.

So, first question on the combination studies with Cabo, so would you intend to wait to see the data from the Cabo plus nivo study before you initiate other combination studies and other tumor types like lung or breast or what's the timeline on those studies?.

This is Gisela. Thank you for the question. We are looking forward to seeing foremost safety in dosing data from the ongoing Phase 1b study combining cabocantinib and nivolumab. And this is a study being done in genitary urinary cancers a dose emerging from that Phase 1b study could be applicable to other tumor types as well.

So we hope to see such data on dosing throughout the year of 2016. That could drop into other indications..

Okay.

And just trying to get clarification on the future trials but for Cabo, I wasn't sure if there is -- who decides what indication [indiscernible] in the future, is that a joint committee or you guys take the lead or is that Ipsen as a territory specific, can you clarify on who decides what indications to pursue?.

Sure. Yes. There will be a joint development committee that is governing the clinical development plan. We are at the current time obviously very focused on our existing studies and driving these forward.

The joint committee that will determine which indications go forward and each partner has the ability to conduct study, services their respective territories in support of development. In regards to future global development Exelixis will take the lead in those global development studies..

Okay. Thank you for taking my questions..

You bet..

Thank you. And our next question comes from the line of Stefan Quenneville of Morningstar. Your line is now open..

Hi. Thanks for taking the question. Sorry, I just wanted to do a little housekeeping, could you repeat the tiers for the royalties in the Ipsen deal. You said them quickly and I miss them.

And then, my second question is, because you sort of talk to us a bit about how the launch is going with Roche for COTELLIC and just sort of any directional information you want to give about how it's starting and how it's looking from your perspective after its approval?.

Yes. This is Chris. I'll answer the first question. So the royalty tiers that I identified were 22% to 26% we also have them on the slides out on the web in my section. So you can look there we are not giving the actual dollar tiers where they kick in..

Okay. I thought you did mention and I missed them..

Yes. The other royalties are 2% on the first $50 million and then 12% on the next $100 million. And then, after that the royalties will kick in at 22% to 26%. .

Great. I just want to make sure I had those right. Thanks..

Okay..

Hi. And this is Mike. In terms of the COTELLIC launch. Look, it's still early days right now. We're going to play that one and kind of follow Roche's guidance with what they say. So, we will wait until they provide more updates to give you more updates ourselves. .

Okay. Thanks..

Thank you..

Thank you. And we do have a follow up question from the line of Cristina Ghenoiu of Cowen. Your line is now open..

Hi. Thank you for taking my follow-up.

The first one is on the OS data, do you have any more clarity whether this OS data will make it into the initial label?.

We have announced in early February that this study met is key secondary endpoint of overall's survival with high statistical significance. And was also provided the results to both of the FDA and the EMA. We had conducted the study following consultation with both agencies and they wanted to see the results while they are reviewing the filing.

So ultimately we cannot speculate what will be in the label. That's up to the agency, but we certainly provided the data in time for them to see all the data in context..

That's very helpful. Thank you. And lastly, I wanted to ask about Cabo and HCC, the ongoing Phase 2 trial, are you able to comment on what kind of events will trigger the interim analysis for that study? Thank you..

Yes. The HCC study is designed as a Phase 3 placebo-controlled study to 760 patients. The final analysis will be conducted when 620 events have occurred with integrated interim analysis at 50% and 75% of events..

Thank you. .

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

Hubbard?.

Thank you, Sabrina. And thank you all very much for joining us today. We welcome your follow-up questions with any -- follow-up calls with any additional questions. Thanks so much..