On November 1, 2022 Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500 science and technology leader, reported financial results for the third quarter of fiscal year 2022.

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Roger Krone, Leidos Chairman and Chief Executive Officer, commented, "Our third quarter results demonstrate the momentum in our business as we continue to report revenue growth at the upper end of our guidance across our diversified portfolio. In addition, our dedicated team delivered earnings in excess of our forecast and generated the highest quarterly cash flow from operations in our history. These results position us well to deliver on our full-year financial targets as we make the world safer, healthier and more efficient."

Revenues for the quarter were $3.61 billion, up 4% compared to the third quarter of 2021; the largest contributors were continued growth of the Navy Next Generation Enterprise Network Recompete (NGEN-R) Service Management, Integration and Transport (SMIT) contract; ramp-up of the National Aeronautics and Space Administration (NASA) Advanced Enterprise Global Information Technology Solutions (AEGIS) contract; and increased deployments on the Defense Healthcare Management System Modernization (DHMSM) program.

Net income was $164 million and diluted EPS was $1.17. Net income and diluted EPS were down 21% and 18% year-over-year, respectively. Net income and diluted EPS include a $16 million unrealized loss associated with the foreign currency forward contract entered into in order to hedge the preliminary purchase price for Cobham Aviation Services Australia ("Cobham") in Australian dollars. In addition, net interest expense increased to $50 million from $47 million in the third quarter of 2021. Weighted average diluted shares for the quarter were 138 million compared to 143 million in the prior year quarter, which benefited from the Accelerated Share Repurchase (ASR) agreement implemented in the first quarter of 2022.

Adjusted EBITDA was $372 million for the third quarter, down 8% year-over-year, and adjusted EBITDA margin decreased from 11.6% to 10.3% over the same period. Profitability in the year-ago quarter was elevated due to temporarily increased workload and decreased indirect expenses as a result of the COVID-19 pandemic as well as an elevated level of write-ups on certain contracts. Adjusted EBITDA and adjusted EBITDA margin increased $6 million and 10 basis points, respectively, compared to the second quarter of 2022. Non-GAAP net income was $221 million for the third quarter, down 15% year-over-year, and non-GAAP diluted EPS for the quarter was $1.59, down 12% year-over-year.

Cash Flow Summary

In the third quarter net cash provided by operating activities was $748 million, or 462% of net income attributable to Leidos shareholders. After adjusting for payments for property, equipment and software, free cash flow was $721 million, resulting in a free cash flow conversion ratio of 329%. In addition, Leidos used $26 million for investing activities and $217 million for financing activities.

Leidos returned $49 million to shareholders in the third quarter as part of its regular quarterly cash dividend program. As of September 30, 2022, Leidos had $807 million in cash and cash equivalents and $5.0 billion of debt.

On October 30, 2022, Leidos completed the acquisition of Cobham Special Mission, which provides airborne border surveillance and search and rescue services to the Australian Federal Government. Purchase consideration was $305 million Australian dollars, subject to working capital adjustments. At the signing of the definitive agreement, Leidos entered into a forward contract for $215 million to offset foreign currency fluctuations of the full purchase consideration. Based on the exchange rate at the close, the translated purchase price was $196 million. We realized a loss of $18 million associated with the foreign exchange forward contract.

On October 28, 2022, the Leidos Board of Directors declared a cash dividend of $0.36 per share to be paid on December 30, 2022, to stockholders of record at the close of business on December 15, 2022.

New Business Awards

Net bookings totaled $4.1 billion in the quarter, representing a book-to-bill ratio of 1.1. As a result, backlog at the end of the quarter was $35.0 billion, of which $7.4 billion was funded. Notable awards in the quarter include:

Sentinel. Leidos was awarded a prime task order by the Department of Defense to enhance technological innovation with a focus on rapid insertion of technologies across the mission spectrum for multiple services, and integrating new technology with existing and legacy systems for increased effectiveness. Leidos will support the government with rapid technology insertion to enhance Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) missions at a global scale. This award enables Leidos to expand its extensive C5ISR portfolio as well as deliver a critical capability towards improved warfighter support. The contract has a total value of $1.5 billion dollars and includes a one-year base period of performance with four one-year options.

U.S. Naval Sea Systems Command (NAVSEA) Medium Unmanned Undersea Vehicle (MUUV). Leidos was selected by the NAVSEA to design and build a MUUV to support intelligence preparation of the operational environment by providing submarine-based autonomous oceanographic sensing and data collection for the Navy. The MUUV will also provide surface-launched and recovered mine countermeasures. The single award, cost-plus-fixed-fee contract holds an approximate value of $358 million if all options are exercised.

Defense Information Systems Agency (DISA) Defense Enclave Services (DES) Task Order. DISA awarded Leidos a task order contract with a total estimated value of $138 million dollars with a five year period of performance. Through the DES contract, Leidos will consolidate enterprise IT services and provide standardized, responsive and cost-effective solutions for more than 370,000 users spanning 22 Department of Defense (DoD) agencies and field activities with over 500 sites both in the U.S. and abroad. This first task order will lay the framework and begin to consolidate, integrate and optimize five agencies on a common network architecture through digital modernization and transformation. The work will focus on mission value and user experience, while improving cybersecurity, network availability and reliability for Fourth Estate agencies.
Forward Guidance

For information regarding adjusted EBITDA margin and non-GAAP diluted EPS, see the related explanations and reconciliations to GAAP measures included elsewhere in this release.

Leidos does not provide a reconciliation of forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, Leidos is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income at this time. The amounts of these deductions may be material and, therefore, could result in projected net income and diluted EPS being materially less than what may be implied by projected adjusted EBITDA margins and non-GAAP diluted EPS.

Conference Call Information

Leidos management will discuss operations and financial results in an earnings conference call beginning at 8:00 A.M. eastern time on November 1, 2022. Analysts and institutional investors may participate by dialing +1 (877) 869-3847 (toll-free U.S.) or +1 (201) 689-8261 (international callers).

A live audio broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Leidos Investor Relations website (View Source).

After the call concludes, an audio replay can be accessed on the Leidos Investor Relations website or by dialing +1 (877) 660-6853 (toll-free U.S.) or +1 (201) 612-7415 (international callers) and entering conference ID 13733461. (Press release, Leidos, NOV 1, 2022, View Source [SID1234622702])

On November 1, 2022 Hubro Therapeutics reported that our abstract has been accepted for poster presentation (display) at the ESMO (Free ESMO Whitepaper) Immuno-Oncology Congress 2022, Geneva, Switzerland 7-9 December 2022 (Press release, Hubro Therapeutics, NOV 1, 2022, View Source [SID1234622701]). The presentation is supported by the presence of Company employees and the Principal Investigator for the trial.

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Abstract # 514; A Phase I Study of the cancer-specific vaccine FMPV-1 in Healthy Male Subjects to Assess Safety and Immune Response

On November 1, 2022 Veracyte, Inc. (Nasdaq: VCYT) reported that three abstracts highlighting the company’s unique, multi-omics immuno-oncology capabilities and offerings will be presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s 37th Annual Meeting & Pre-Conference Programs (SITC 2022), taking place November 8-12, 2022, in Boston (Press release, Veracyte, NOV 1, 2022, View Source [SID1234622700]).

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"Our comprehensive multi-omics expertise and tools have demonstrated potential to address critical questions related to the newest areas of cancer therapy, including which patients are most likely to benefit from immunotherapies," said Corinne Danan, general manager for Veracyte’s Biopharma business unit. "The abstracts being presented at SITC (Free SITC Whitepaper) 2022 will provide additional insight into how our Veracyte Biopharma Atlas and Brightplex offerings can enhance understanding of the tumor microenvironment to help our biopharma partners confidently advance every step of their oncology drug development programs."

Following are details of the Veracyte abstracts that will be shared during poster sessions at the SITC (Free SITC Whitepaper) 2022 Annual Meeting. Poster sessions will be held in the Boston Convention and Exhibition Center, Hall C.

Veracyte will also host a symposium at SITC (Free SITC Whitepaper) 2022 to provide additional detail regarding the development of the DLBCL Biopharma Atlas featured in poster 1454. The company’s Biopharma Atlas, generated through unsupervised multi-omics and multimodal assessment of thousands of parameters, may be used to generate customized maps and clusters for patient group identification and clinical outcome interpretation.

About Veracyte’s Biopharma Offerings

Veracyte collaborates with biopharma partners to provide novel insights, expertise and capabilities that empower partners to confidently advance every step of their oncology drug development programs. With an array of offerings that include the Veracyte Biopharma Atlas, Brightplex and Decipher GRID Real World Data (RWD), Veracyte helps address each partner’s unique oncology drug development needs, including therapeutics and diagnostic development, clinical development insights and decisions, clinical trial patient selection, and clinical trial management. For more information, please visit View Source

On November 1, 2022 Peptomyc reported that Researchers have found that a drug that targets the key, cancer-causing gene, MYC, has for the first time been able to inhibit the function of the gene in a phase I clinical trial (Press release, Peptomyc, NOV 1, 2022, View Source [SID1234622699]). Until now, no other drug has been able to do this safely and effectively.

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Presenting preliminary results from the trial at the 34th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) [1] Symposium on Molecular Targets and Cancer Therapeutics in Barcelona, Spain, Dr Elena Garralda, Director of the Early Drug Development Unit at Vall d’Hebron Institute of Oncology (VHIO) in Barcelona, and a member of the scientific committee for the meeting, said: "MYC is one of the ‘most wanted’ targets in cancer because it plays a key role in driving and maintaining many common human cancers, such as breast, prostate, lung and ovarian cancer. To date, no drug that inhibits MYC has been approved for clinical use."

Scientists from VHIO developed a mini-protein called OMO-103 that can enter cells and reach the nucleus. In experiments in the lab and in mice, they had shown that it successfully inhibited the ability of MYC to promote tumour growth by blocking MYC’s function of controlling the flow of information from many common genetic mutations found in cancer.

Starting in April 2021 Dr Garralda, in collaboration with two other Spanish sites, enrolled 22 patients to a phase I clinical trial to assess the safety of OMO-103 and to see if there were any early signs of it controlling cancer. The patients had a range of solid tumours, including pancreatic, bowel, and non-small cell lung cancers. They had all been heavily pre-treated, having received between three and 13 other treatments previously.

OMO-103 was given intravenously once a week at six dose levels ranging from 0.48 to 9.72 mg per kg of patient weight. The researchers took biopsies from the tumours at the start of the study and after three weeks of treatment to assess levels of MYC gene activity and other biological indicators for cancer.

By 10 October 2022 [2], eight out of 12 patients who had CT scans after nine weeks had stable disease, with the treatment having stopped the cancer growing. Of these, two had pancreatic cancer, three had colon cancer, one had non-small lung cancer, one had a sarcoma and one had a salivary gland cancer.

Dr Garralda said: "It’s still very early days to assess activity of the drug, but we are seeing stabilisation of disease in some patients. Remarkably, one patient with pancreatic cancer stayed on the study for over six months, his tumour shrank by eight per cent and there was a reduction in tumour-derived DNA circulating in the blood stream. The patient with a salivary gland tumour has stable disease and is still in the study after 15 months.

"The most exciting thing is that biological markers show that we are targeting MYC successfully. In addition, the adverse side effects are mostly mild, which is important when we start to think about next steps and combining OMO-103 with chemotherapy or other therapies."

The most common treatment-related adverse side effects were mild reactions to the intravenous infusion, such as chills, fever, nausea, rash and low blood pressure. Higher dose levels were associated with more reactions to the infusion but were easily treated. Inflammation of the pancreas was the only dose-limiting reaction, which occurred in one patient.

Analysis of how OMO-103 was absorbed and processed in the body indicated that it remained for at least 50 hours in blood serum.

"We have experimental evidence that this could be a significant underestimate of how long the drug remains in the tumour. Evidence from our work in mice suggest drug concentrations in the tumour that are at least four-fold higher than in the blood," said Dr Garralda. "In addition, even after long-term treatment, we could not detect any anti-drug antibodies, which can decrease the amount of drug available and therefore make it less effective."

She concluded: "OMO-103 is the first MYC inhibitor to successfully complete a phase I clinical trial and to be ready to proceed to a phase II trial. We have determined the recommended dose for phase II to be 6.48mg/kg."

Dr James L. Gulley is co-chair of the 34th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) Symposium for the NCI and Director of the Medical Oncology Service, Center for Cancer Research, NCI, USA, and was not involved in the research. He said: "MYC plays an important role in many cell-signaling pathways that promote a range of different cancers but has long been perceived as an ‘undruggable’ target. Researchers have spent much time and energy on the search for drugs that target MYC successfully but it has proved hard to develop therapies that are effective but don’t have side effects that are too severe for patients to tolerate. These results showing that patients typically experienced mild adverse side effects to OMO-103 are important when considering next steps and how it might be combined with chemotherapy. We look forward to the results from the phase II trial with interest."

Abstract no: 7, "Dose escalation study of OMO-103, a first in class Pan-MYC-Inhibitor in patients (pts) with advanced solid tumors", Elena Garralda, presented in the ‘New drugs on the horizon’ session, 11.30-13.00 hrs CEST, Friday 28 October.

[1] EORTC [European Organisation for Research and Treatment of Cancer, NCI [National Cancer Institute], AACR (Free AACR Whitepaper) [American Association for Cancer Research]. The Symposium takes place in Barcelona from 26-28 October 2022.[2] These are the latest, updated results.

The study was funded by Peptomy-SL and by funding from the SME Instrument phase II within the EU’s Horizon 2020 programme.

On November 1, 2022 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the third quarter of 2022 and provided an update on progress toward achieving key corporate objectives, as well as commercial, clinical and pipeline development milestones (Press release, Exelixis, NOV 1, 2022, View Source [SID1234622698]).

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"Exelixis focused its efforts toward the progress and expansion of our clinical and early-stage pipeline during the third quarter of 2022, fueled by the growing revenues from our cabozantinib franchise," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer, Exelixis. "The team continued to drive strong commercial performance for cabozantinib, resulting in 39 percent year-over-year net product revenue growth for our flagship franchise. The team was also highly active on the business development front evaluating various opportunities and executing on multiple deals, including new option deals with Cybrexa and Sairopa announced today, which highlight our strategic efforts to access clinical- or near-clinical- stage assets that have the potential to be first- or best-in-class medicines and may provide differentiated benefits to patients with cancer."

Dr. Morrissey continued: "In addition, we achieved key clinical milestones, including presenting detailed results from our pivotal COSMIC-313 clinical trial and dose-escalation data from the phase 1b STELLAR-001 trial of XL092 at the ESMO (Free ESMO Whitepaper) 2022 Congress, as well as sharing the first clinical update from our phase 1 XB002 tissue factor ADC program at the 34th ENA Symposium in October. I’d like to thank the entire Exelixis team for their continued hard work and dedication in the third quarter as we made significant progress in commitment of the patients we serve."

Third Quarter 2022 Financial Results

Total revenues for the quarter ended September 30, 2022 were $411.7 million, as compared to $328.4 million for the comparable period in 2021.

Total revenues for the quarter ended September 30, 2022 included net product revenues of $366.5 million, as compared to $263.1 million for the comparable period in 2021. The increase in net product revenues was

primarily due to an increase in sales volume, which was partially offset by increases in discounts and allowances, primarily from an increase in chargebacks related to the 340B Drug Pricing Program.

Collaboration revenues, composed of license revenues and collaboration services revenues, were $45.3 million for the quarter ended September 30, 2022, as compared to $65.3 million for the comparable period in 2021. The decrease in collaboration revenues was primarily related to decreases in the recognition of milestone-related revenues and development cost reimbursements earned, which was partially offset by higher royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners, Ipsen Pharma SAS (Ipsen) and Takeda Pharmaceutical Company Limited (Takeda).

Research and development expenses for the quarter ended September 30, 2022 were $198.8 million, as compared to $163.4 million for the comparable period in 2021. The increase in research and development expenses were primarily related to increases in clinical trial costs, personnel expenses, consulting and outside services expenses, and stock-based compensation expense, which were partially offset by a decrease in other development costs.

Selling, general and administrative expenses for the quarter ended September 30, 2022 were $115.0 million, as compared to $101.6 million for the comparable period in 2021. The increase in selling, general and administrative expenses were primarily related to increases in personnel expenses, business technology initiatives, and rent and utilities expenses.

Provision for income taxes for the quarter ended September 30, 2022 was $18.8 million, as compared to $15.1 million for the comparable period in 2021, primarily due to an increase in pre-tax income.

GAAP net income for the quarter ended September 30, 2022 was $73.2 million, or $0.23 per share, basic and diluted, as compared to GAAP net income of $38.2 million, or $0.12 per share, basic and diluted, for the comparable period in 2021.

Non-GAAP net income for the quarter ended September 30, 2022 was $102.0 million, or $0.32 per share, basic and $0.31 per share, diluted, as compared to non-GAAP net income of $64.5 million, or $0.20 per share, basic and diluted, for the comparable period in 2021.

Cash, cash equivalents, restricted cash equivalents and investments were $2.1 billion at September 30, 2022, as compared to $1.9 billion at December 31, 2021.

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.

2022 Financial Guidance

Exelixis is providing the following updated financial guidance for fiscal year 2022:

____________________
(1) Includes $45 million of non-cash stock-based compensation expense.
(2) 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 $366.5 million during the third quarter of 2022, up 6% over the prior quarter, comprised of net product revenues of $361.4 million from CABOMETYX (cabozantinib) and $5.1 million from COMETRIQ (cabozantinib). In the third quarter of 2022, global cabozantinib franchise net product revenues generated by Exelixis and its partners were almost $500 million. Exelixis earned $30.3 million in royalty revenues during the quarter ended September 30, 2022, pursuant to collaboration agreements with its partners, Ipsen and Takeda.

Detailed Results from Phase 3 COSMIC-313 Pivotal Trial in Patients with Previously Untreated Advanced Renal Cell Carcinoma (RCC) Presented at the 2022 European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress. In September, Exelixis presented detailed results from the pivotal phase 3 COSMIC-313 trial evaluating the triplet combination of cabozantinib, nivolumab and ipilimumab versus the combination of nivolumab and ipilimumab in patients with previously untreated advanced intermediate- or poor-risk RCC, at the 2022 ESMO (Free ESMO Whitepaper) Congress. The data included detailed results of the primary endpoint of progression-free survival (PFS) demonstrating a positive PFS benefit for the triplet combination of cabozantinib, nivolumab and ipilimumab compared to the combination of nivolumab and ipilimumab, as well as encouraging objective response rates in the PFS intent-to-treat population. The safety profile observed in the trial was reflective of the known safety profiles for each single agent as well as the combination regimens used in this study. Previously, in July, Exelixis announced that COSMIC-313 met its primary endpoint, demonstrating significant improvement in PFS at the primary analysis. At a prespecified interim analysis for the secondary endpoint of overall survival (OS), the combination of cabozantinib, nivolumab and ipilimumab did not demonstrate a significant benefit over the combination of nivolumab and ipilimumab. Therefore, the trial will continue to the next analysis of OS.

Pipeline Highlights

Presentation of Dose-Escalation Results from Phase 1b STELLAR-001 Trial Evaluating XL092 Monotherapy and in Combination with Atezolizumab in Patients with Advanced Solid Tumors at the 2022 ESMO (Free ESMO Whitepaper) Congress. In September, Exelixis presented results from the dose-escalation stage of STELLAR-001, an ongoing phase 1b trial evaluating XL092 as a single agent and in combination with atezolizumab in patients with locally advanced or metastatic solid tumors. The data showed that XL092 demonstrated preliminary clinical activity similar to that observed with cabozantinib in phase 1 across a range of solid tumors and dose levels, with a manageable safety profile. Of note, both single-agent XL092 and XL092 in combination with atezolizumab demonstrated encouraging efficacy and safety in a heavily pretreated patient population, including clear cell RCC patients previously treated with cabozantinib. Tumor reduction was seen in a majority of patients along with a high disease control rate. The maximum tolerated dose was determined to be 120 mg, and the recommended dose for the expansion stage is 100 mg for both single-agent XL092 and XL092 in combination with atezolizumab. The cohort-expansion stage of the study is currently ongoing and enrolling patients across multiple solid tumor types.

Expanded Clinical Trial Collaboration and Supply Agreement with Bristol Myers Squibb (BMS) to Include Fixed-Dose Combination of Nivolumab and Relatlimab in Combination with XL092 in Phase 1b STELLAR-002 Trial. In October, Exelixis announced the expansion of its June 2021 Clinical Trial Collaboration and Supply Agreement with BMS to include the use of the fixed-dose combination of nivolumab and relatlimab in the ongoing phase 1b STELLAR-002 clinical trial, which is evaluating XL092 in combination with multiple immune checkpoint inhibitors in advanced solid tumors. Relatlimab is a lymphocyte activation gene-3 (LAG-3)-blocking antibody. LAG-3 is an inhibitory immune checkpoint expressed on the surface of T-cells. The STELLAR-002 trial is divided into two parts: a dose-escalation stage and a cohort-expansion stage. Enrollment and dosing in the dose-escalation portion of STELLAR-002 is ongoing. The dose-escalation stage will determine the recommended dose in patients with advanced solid tumors for each of the combination therapy regimens, including: XL092 and nivolumab; XL092, nivolumab and ipilimumab; and XL092 and the fixed-dose combination of nivolumab and relatlimab. The novel triplet combination of XL092 and the fixed-dose combination of nivolumab and relatlimab has the potential to be used in multiple expansion cohorts.

Presentation of Initial Dose-Escalation Results from the First-in-Human Phase 1 JEWEL-101 Trial Evaluating XB002 in Patients with Advanced Solid Tumors at the 34th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) (ENA) Symposium. In October, Exelixis presented promising initial results from the ongoing dose-escalation stage of JEWEL-101, a phase 1 study evaluating Exelixis’ XB002 next-generation tissue factor-targeting antibody-drug conjugate (ADC), at the 34th ENA Symposium. The data demonstrated that XB002 was well-tolerated across multiple dose levels, with no dose-limiting toxicities observed as of the data cutoff. A pharmacokinetic analysis demonstrated that XB002 exposure increased more than or proportionately to dose increases. XB002 total antibody and intact ADC pharmacokinetics were similar, suggesting XB002 is stable after infusion. Consistent with this, levels of free circulating payload remained low at all dose levels. JEWEL-101 is enrolling patients with advanced solid tumors for which therapies are unavailable, ineffective or intolerable. The dose-escalation stage of the study is currently ongoing and will progress to the cohort-expansion stage once the recommended dose and/or maximum tolerated dose for XB002 have been determined. In the upcoming cohort-expansion stage, the efficacy of XB002 will be further evaluated as a single agent and in combination with nivolumab.

Corporate Updates

Exclusive License Agreement with Ryvu Therapeutics S.A. (Ryvu) to Develop Novel STING Agonist-Based Targeted Cancer Therapies. In July, Exelixis and Ryvu announced an exclusive license agreement focused on the development of novel targeted therapies utilizing Ryvu’s STING (STimulator of INterferon Genes) technology. The collaboration is intended to expand Exelixis’ portfolio of biotherapeutics by combining its tumor-specific

targeting approaches with Ryvu’s proprietary small molecule STING agonists and STING biology know-how. Under the terms of the agreement, Exelixis paid Ryvu an upfront fee of $3.0 million in exchange for certain rights to Ryvu’s STING agonist small molecules, which Exelixis will seek to incorporate into targeted therapies such as ADCs. Exelixis will lead all research activities and, upon selection of each development candidate, will be responsible for all development and commercialization activities. Ryvu will provide expert guidance and know-how during the early research phase of the partnership.

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 period ended October 1, 2021, is indicated as being as of and for the period ended September 30, 2021.

Conference Call and Webcast

Exelixis management will discuss the company’s financial results for the third quarter of 2022 and provide a general business update during a conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today, Tuesday, November 1, 2022.

To access the webcast link, log onto www.exelixis.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the
webcast. Alternatively, please call 888-338-9509 (domestic) or 412-902-4281 (international) and ask to be joined into the Exelixis conference call to participate by phone.

A telephone replay will be available until 8:00 p.m. ET on Thursday, November 3, 2022. Access numbers for the telephone replay are: 877-344-7529 (domestic) and 412-317-0088 (international); the passcode is 6992264. A webcast replay will also be archived on www.exelixis.com for one year.