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Exelixis Inc  (NASDAQ:EXEL)
Q3 2018 Earnings Conference Call
Nov. 01, 2018, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Exelixis' Quarter 2018 Financial Results Conference Call. My name is Justin, and I'll be your operator for today. As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to your host for today's conference Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Ma'am, please proceed.

Susan Hubbard -- Executive Vice President of Public Affairs and Investor Relations

Thank you, justin, and thank you all for joining us for the Exelixis third quarter 2018 financial results conference call. Joining me on today's call are, Mike Morrissey, our President and CEO; Chris Senner, our Chief Financial Officer; P.J. Haley, our Senior Vice President of Commercial; and Gisela Schwab, our Chief Medical Officer, who together will review our corporate, financial, commercial and development progress for the third quarter ended September 30, 2018. As well as recent key developments and corporate events.

Peter Lamb, our Chief Scientific Officer, is also here with us and will join us for the Q&A session following our prepared remarks. As a reminder, we are reporting our financial results on a GAAP basis only. And as usual, the complete press release with our results can be accessed through our website at exelixis.com.

During the course of this presentation, we will be making forward-looking statements regarding future events and the future performance of the company. This includes statements about possible developments regarding clinical, regulatory, commercial, financial, and strategic matters. Actual events or results could of course differ materially. We refer you to the documents we file from time to time with the SEC, which under the heading Risk Factors identify important factors that could cause actual results to differ materially from those expressed by the company verbally and in writing today. Including and without limitation, risks and uncertainties related to product commercial success, market competition, regulatory review, and approval processes. Conducting clinical trials, compliance with applicable regulatory requirements, our dependence on collaboration partners and the level of costs associated with commercialization research and development, business development, and other activities.

Now with that, I will turn the call over to Mike.

Michael Morrissey -- President and Chief Executive Officer

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. Exelixis had a strong third quarter and maintains a high level of clinical, commercial, and financial execution as we move into Q4. As you'll hear from the team today revenues, earnings and cash continued to grow in Q3. We advanced our plans to expand indications for CABOMETYX, launched the next wave of potential label enabling studies with cabozantinib and rebuild our pipeline. Importantly, we see tangible growth in Q3 for the CABOMETYX RCC business, while increased competition has negatively impacted the market share in Q3 revenues of the other TKIs in this indication. Simply put, our company and our business has never been stronger.

We are optimistic that cabozantinib's best in class TKI profile can continue to drive a strong growth in the face of the emerging competition from an immune checkpoint inhibitor based therapies. We're determined to stay focused and deliver on our goals every single day for both patients and shareholders. I'll begin today by providing a brief summary of our key Q3 milestones, and then turn the call over to Chris, PJ, and Gisela for additional details on our Q3 financials. The commercial performance for CABOMETYX and our cabozantinib development activities.

Key highlights for Q3, 2018 includes, first, the significant growth in revenue, earnings, and cash based on the strong commercial performance for CABOMETYX and advanced renal cell carcinoma. Third quarter net cabozantinib franchise revenue were approximately $163 million, achievement of key regulatory milestones for cabozantinib in the EU and Canada provided additional milestone revenue and led to total revenues for the quarter of $225 million. Q3, net income was approximately $127 million with diluted earnings of $0.41 per share. The continued strong performance of the RCC business, were CABOMETYX is now. Secondly, the continued strong performance of the RCC business where CABOMETYX is now recognized as the best in class TKI.

The recent NCCN update highlights the role of CABOMETYX as the preferred TKI in the treatment of the vast majority of both previously untreated and refractory RCC patients. The totality of the METEOR and CABOSUN data continues to differentiate CABOMETYX from the other TKIs approved in this indication. As Gisela will describe shortly, recent updates at ESMO, highlight cabo's potential utility in PD-L1 negative RCC patients, as well as those patients refractory to previous ICI monotherapy or combination treatment. Third; we are aggressively advancing the cabozantinib regulatory and development program. Our second line, HCC, sNDA filing based on the positive survival data from the Celestial trail is under review with the FDA and EMA and PDUFA in the US of January 14, 2019.

With encouraging data for both single agent cabozantinib and ICI combinations, we're on the start-up phase for the second wave of cabozantinib late stage clinical trials in indications across a wide range of histologies and potential lines of therapy. The continued progress with CheckMate 9ER trial of the cabo/atezo combinationin first-line RCC and the initiation of the COSMIC-311 Phase 3 trial of single agent cabozantinib in second line differentiated thyroid cancer or DTC highlights our recent progress in this area. And sets the stage for additional late stage trials to start over the next several months. Our progress throughout 2018 reflects, the team's strong performance across all components of our business.

For the sector of small mid cap bio-tech companies, which includes Exelixis, CABOMETYX has been the leading commercial launch across both oncology and other therapeutic areas with the highest quarterly and cumulative US sales of any drug launched since 2014 and is firmly on its way to becoming $1 billion global brand. We plan to build on this momentum and remain focused on growing revenues from product sales, collaboration milestones and royalties. While managing our expenses in a rigorous fashion to generate free cash to reinvest in our business in order to return to long-term sustainable growth.

So with that, I'll turn the call over to Chris, who will provide more details on our third quarter financials.

Christopher Senner -- Chief Financial Officer

Thanks, Mike. I'm very pleased to share with you our strong financial results for the third quarter, 2018. Total revenues for the third quarter 2018 were $225.4 million with $126.6 million of net income and diluted GAAP earnings per share of $0.41, compared to total revenues of $152.5 million, net income of 81.4 million and diluted GAAP earnings per share of $0.26 for the same period last year. Total revenues, include net product revenues of $162.9 million for the quarter ended September 30, 2018, compared to $96.4 million for the comparable period in 2017, which is a 69% increase. The increase in net product revenues reflects the continued growth of CABOMETYX in the treatment of advanced renal cell carcinoma, On a quarter-over-quarter sequential basis, our net product revenues increased by approximately $17.1 million or 12%.

This was the result of an approximate $8 million increase in CABOMETYX patient demand, a change in inventory of approximately $6 million, and finally, approximately $3 million, which reflects the positive impact of the price increase we took on CABOMETYX at the end of the second quarter. Our deductions from gross sales in the third quarter of 2018, increased slightly to 15.7% when compared to the second quarter of 2018, which was 15.5%. This increase in gross to net was primarily due to an increase in discounts related to government programs. Total revenues also include collaboration revenues of $62.5 million for the quarter ended September 30, 2018, compared to $56.1 million for the comparable period in 2017.

Collaboration revenues in the third quarter of 2018 was primarily related to the recognition of $36.9 and $5 million milestone revenue from our collaboration with Ipsen for the anticipated approval of the second-line treatment of HTC in the EU following positive CHMP recommendation, and the the approval by Health Canada of CABOMETYX for second line RCC. Collaboration revenues also include approximately $10.3 million in royalties earned Ipsen, as the royalty rate had reached the 20% tier on net sales in their territories. As well as 6.9 million in development cost reimbursements under our collaboration agreement with Ipsen and Takeda, and $3.3 million of profit share and royalties from our collaboration with Genentech.

As is evidenced this quarter, collaboration revenues continue to be an increasing component or of our total revenue growth as CABOMETYX gains traction on a global scale.

It's important to note that the majority of these revenues flowed directly through to our bottom line and significantly enhance our cash position, allowing us increasing flexibility as we look to the next wave of cabo trials, research and business development opportunities. Our total cost and expenses for the third quarter of 2018 were $100.2 million, compared to $100.3 million in the second quarter of 2018.

With in total and expenses, our SG&A costs declined by approximately $4 million, which was offset by increases in R&D in cost of goods sold. The largest increase was in R&D expenses and is primarily the result of increases in our clinical trial spend, which was partially offset by lower licensing expenses. As a reminder, in Q2 of 2018, we paid $4 million of licensing expenses in the form of upfront and initiation fees to our collaboration partner Invenra. Cash and cash equivalents, short- and long-term investments, short- and long-term restricted cash and investments totaled d $750.3 million at September 30th, 2018, as compared to $457.2 million at December 31, 2017.

And finally, the company has updated its guidance for total cost and operating expenses for the full year. We are now lowering and tightening the range to $410 million and $420 million, given the timing of clinical trial expenses primarily related to our plant and ongoing combination trials. As previously stated, this guidance includes approximately $50 million of non-cash costs and expenses related primarily to stock-based compensation expense.

I will now turn the call over to P.J.

Patrick Haley -- Senior Vice President, Commercial

Thank you, Chris. We are pleased with the strong performance of CABOMETYX in the third quarter. We made significant progress toward our goal of establishing CABOMETYX as the TKI of choice in RCC as demonstrated by the strength of the Q3 business fundamentals, updated NCCN guidelines positioning Cabo more favorably and continued gains in market share in the TKI market.

CABOMETYX net product revenue grew by 12% over Q2 to approximately $158 million and can demand grew by more than 5%. The prescriber base of CABOMETYX continue to expand and grew by approximately 11% in the third quarter. Also, we saw broad utilization across academic and community settings, lines of therapy and clinical risk groups. We are pleased that CABOMETYX continued to grow in Q3, despite the increased competition. In order to get a better sense for the evolving competitive dynamics, we analyze the IMS prescription data for the RCC oral tyrosine kinase inhibitor or TKI market comprised of sunitinib pazopanib, axitinib and CABOMETYX over the last two years.

Notably, both the NRx and TRx volume for this basket of compounds have been relatively stable since the first quarter of 2017. These trends confirm that the approval of the nivo/ipi combination has had a limited impact on the TKI prescription volumes since US approval in April of this year. On the other hand, based on the publicly available IMS prescription data, CABOMETYX has continued to grow in both market share and volume. CABOMETYX NRx volume increased by 3% in Q3 relative to Q2 and CABOMETYX market share increased to 32% in Q3 even in the face of increased competition. Furthermore, these trends were strongest in the month of September, where we saw 4% NRx volume growth over August and CABOMETYX an NRx market share increased to 34%.

In terms of new prescriptions, CABOMETYX was the most prescribed TKI and RCC in September. We are pleased with the overall prescription dynamics, as well as the kinetics of those trends exiting the quarter. Also in September, the NCCN published updated guidelines for kidney cancer. Cabo is now the only TKI that as a preferred regimen for poor and intermediate risk first-line patients, a population that makes up approximately 80% of the first-line market. Importantly, Cabo is also the only preferred TKI regimen for subsequent therapy, thus making Cabo the primary recommendation for patients who have already received an immunotherapy combination.

This strong positioning in the guidelines once added credence to the broad label and robust totality of data from METEOR and CABOSUN, and ultimately further strengthens the differentiation for CABOMETYX relative to other RCC TKIs. The RCC market will continue to be driven largely by the sequencing of therapeutic options. Most patients will have the opportunity to receive either CABOMETYX followed by ICI therapy or an ICI combination followed by Cabo in sequence. We expect the number of second-line patients who have been treated with an ICI combination in the first line to increase in the coming quarters. CABOMETYX is well positioned to be the treatment of choice for these patients.

Since the approval of nivo/ipi in April, the majority of the patients who have progressed on ICI, combination therapy have received CABOMETYX as their second line agent. This is consistent with recent market research in which over 90% of 50 key opinion leaders indicated that CABOMETYX would be their therapeutic choice after first-line combination immunotherapy. These findings are consistent with the recently updated NCCN guidelines. In addition to the continued growth of CABOMETYX through the expanded RCC indication we, look forward to the opportunity to drive growth through a potential label expansion in HCC which should represent a third tumor type and fourth indication for the cabozantinib franchise.

Liver cancer is a significant unmet medical need, accounting for over 600,000 deaths globally on an annual basis. In the US, over 40,000 patients are diagnosed with liver cancer and there are approximately 29,000 deaths each year. Hepatocellular carcinoma is the most common form of primary liver cancer and the number of deaths in the US attributed to HCC has doubled since 1999. This market has long been underserved as until recently, there was only one approved systemic therapy. The HCC market will have the potential to grow significantly in coming years, as new therapies are introduced and Exelixis intends to play a key role in the advancement of therapeutic options for these patients with potentially both single agent Cabo and Cabo ICI combination approaches.

HCC key opinion leaders indicate there is more systemic therapies become available, more of their patients will receive systemic therapy and an increasing number of patients will receive multiple lines of treatment. The market research firm, Decision Resources predicts an increase in the US of first-line drug treated patients of approximately 37% by 2025 and the increase in second line drug treated patients is even greater at 69%. The difference is attributed not only to be increasing incidence of the disease, but even more so to the increase in drug treatment rates that are expected to occur as more options are available to patients.

We are pleased with the progress and preparation that our experienced team has made over the last year. Exelixis is now launch ready and we very much look forward to the opportunity to bring CABOMETYX to HCC patients pending FDA approval. Our launch and prep analysis indicates that there is a significant overlap between the prescribing physicians who treat RCC and HCC. This is largely driven by community oncology. In fact, our current sales footprint covers approximately 95% of the combined RCC and HCC market potential. We will begin calling on the remaining HCC specific prescribers following approval.

Furthermore, the new indication will be leveraged by our team, generally to increase access to accounts, where they will have the opportunity to share new data from the approval. We've made significant progress toward our goal of becoming the TKI of choice in RCC. CABOMETYX is now the number one TKI in RCC for NRx and we believe the favorable update to the NCCN guidelines will provide continued momentum for the brand. We are pleased with the results of Q3, but believe that many more RCC patients can benefit from CABOMETYX. Our team is focused and motivated to compete every day to bring the benefit of CABOMETYX to every eligible patient, as we continue to build on the positive momentum of the franchise.

With that I will turn the call over to, Gisela.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Thank you, P.J. I'm pleased to provide an update on the progress of the cabozantinib development program in the quarter. I will start with a brief regulatory update on second line HCC and RCC as the first quarter was marked by important milestones. First in September 2018, the CHMP granted the positive opinion for cabozantinib as monotherapy for the treatment of HCC in adults, who have previously been treated with sorafenib. If confirmed by the European Commission, who have the ultimate authority for approval decisions, this will further expand the labeled indication of CABOMETYX in the European Union.

FDA's review of our submission for second line HCC is ongoing, and the PDUFA date has been set for mid-January 2019. Also in September, Health Canada approved CABOMETYX for the treatment of adult patients with RCC, who have received prior VEGFR-targeted therapy. The Health Canada approval brings the international approvals for CABOMETYX to 10th including recent approvals in Brazil and Taiwan for this indication besides the United States and Europe.

With these important milestones achieved, we are fully focused on the broader development and lifecycle management plan for cabozantinib. Including single-agent evaluations and combinations with immune checkpoint inhibitors through our collaborations with BMS and Genentech Roche. As we have mentioned on prior calls, we are planning to start multiple pivotal trials with cabozantinib in various tumor types in 2018 and in 2019 are are making progress in our work for such trials as planned. One such study has advanced to initiation recently, and I'm pleased to provide a little more color on this Phase III trial today.

A couple of weeks ago, we announced the initiation of a placebo-controlled Phase III trial of cabozantinib for the treatment of advanced radioiodine refractory differentiated thyroid cancer patients, who have received prior VEGFR targeting therapy. This trial COSMIC-311 will enroll a total of 300 patients globally. The co-primary endpoints of the trial are objective response rate and progression-free survival. The objective response rate endpoint will be analyzed among the first 100 patients involved with appropriate followup, while PFS will be an event driven analysis among all 300 patients enrolled. There is a planned interim analysis for PFS that will be conducted at the time of the objective response rate analysis.

This study has been designed based on cabozantinib's encouraging activity in previously treated differentiated thyroid cancer patients with durable response rates of 40% to 54% reported in two separate Phase 1 and 2 evaluations. Regarding combinations with checkpoint inhibitors, we're very pleased with the progress of our clinical collaboration with BMS combining cabozantinib with nivolumab alone or both nivolumab and ipilimumab. The the Phase III CheckMate 9ER 3 study in treatment-naive RCC patients evaluating cabozantinib in combination with nivolumab versus the sunitinib is making good progress in enrolling patients globally. This trial is co-funded by ourselves and our collaboration partners Ipsen and Takeda. Together with BMS, who is conducting the study.

The triplet combination of cabozantinib, nivolumab and ipilimumab continues to be evaluated in ongoing Phase 1 b trial in patients with advanced genitourinary malignancies that has established the preliminary safety and tolerability and recommended dose for this combination. And start-up activities for a separate Phase 3 trial investigating the triplet combination versus nivolumab and ipilimumab and first-line RCC are advancing as planned. This study is expected to begin enrolling patients early in the New Year. We also continue to make progress in our collaboration with Genentech evaluating the combination of cabozantinib and atezolizumab in an initial dose-ranging study with planned cohort expansions in various different tumor settings,

We have identified an active dose of cabozantinib in combination with atezolizumab with good tolerability for the combination in the dose ranging part of the trial. Initial data for this combination were presented at the recent ESMO conference in Munich by Dr. Neeraj Agarwal. The combination of cabozantinib and atezolizumab was generally well tolerated with few grade 3 adverse events and no grade 4 or 5 events observed. There were no dose limiting toxicities seen and the combination showed encouraging clinical activity with 8 of January 80%, previously untreated clear cell RCC patients, achieving a durable confirmed response including 7 partial responses and one complete response. Anti-tumor activity was observed regardless of PD L1 expression.

The initially planned 8 expansion cohorts, including various bladder cancer, first line RCC and various non-small lung cancer settings are now actively enrolling patients. And an additional 10 histologies are being added to the ongoing expansion cohorts, investigating a variety of tumor types, including GI malignancies and GYN malignancies in this important trial. Further late stage checkpoint inhibitor combination studies and indications, including HCC, bladder cancer and non-small cell lung cancer are under discussion with a first-line HCC study in advanced data preparation and expected study initiations in the short term.

And to close, I'll provide a quick summary of the cabozantinib related presentations at the recent ESMO conference in October in Munich. As already mentioned, the first data presentation of the Cosmic-021 combination trial of cabozantinib and atezolizumab dose escalation experience. Expansion core data from this study will be presented when sufficient follow-up is available and the data are mature. Also an important biomarker analysis in late-breaking abstract was presented by Dr. Choueiri and others from the Dana-Farber Cancer Institute, who have evaluated the efficacy of cabozantinib in both the, METEOR and CABOSUN trials by baseline PD L1 expression status. PD L1 expression in greater than or equal to 1% of tumor cells was a negative predictive for both overall survival and progression-free survival was short survival and PFS times compared to patients with no PD L1 expression.

However, in both the METEOR and CABOSUN data sets, Cabozantinib treatment resulted in improved outcomes compared to the respective active comparator arms ever line with sunitinib irrespective of PD-L1 expression. Also a retrospective analysis of real world data among 86 RCC patients presented by Dr.Bradley MacGregor from Dana-Farber Cancer Institute of the activity of cabozantinib following prior checkpoint inhibitor therapy, either alone or in combination with VEGF targeting or other therapies showed encouraging activity with cabozantinib with an objective response rate of 36% across all risk categories, and 41% among patients with intermediate or favorable risk factors. These two data sets indicate that cabozantinib's activities independent of PD L1 expression and that cabozantinib is active after prior checkpoint inhibitor therapy, as well as prior VEGF targeted therapy.

So in summary, I'm very pleased with the progress made in our cabozantinib development program and with the important regulatory milestones reached during the quarter, and look forward to updating you in the future.

And with that, I'll hand the call back to Mike.

Michael Morrissey -- President and Chief Executive Officer

All right. Thank you, Gisela. Exelixis had a strong third quarter and continues to see solid growth in all aspects of our business, as we put up the year and move into 2019. Our notable commercial and financial performance in Q3 provides a strong platform for building our product portfolio with future cabozantinib trails in important new indications in adding new product opportunities through internal and external R&D efforts.

I'll close by saying that we fully recognize the recent the market volitility, and specifically the decline across the small and mid cap commercial oncology sector that has been ongoing since the beginning of the year. I'll restate what I said in my introduction. Exelixis has never been stronger from a clinical, commercial and financial perspective. Our recent success differentiates us from others in the mall midcap oncology space and provides substantial momentum as we move into 2019.

I'd like to reiterate several key issues that are important to keep in mind as we move forward. FIrst, Exelixis will continue to build on the strength of the CABOMETYX launch and its position as the TKI of choice for RCC. Based on the totality of the clinical data from METEOR and CABOSUN, our commercial efforts target the entire RCC populations, independent of line of therapy, IMDC risk category and PD L1 status. While targeting the broad RCC opportunity, we are working toward the future where nearly every eligible RCC patient receives CABOMETYX at some point in their journey from first to third line treatment. We are not surprised by the success of ICI combination strategies in RCC and expect that the vast majority of these patients will need subsequent therapies as they stop responding to front line ICI modalities.

Based on market research and KOL feedback, CABOMETYX appears to be the TKI of choice for these ICI refractory patients and recent real world data presented at ESMO highlights Cabo's potential utility in patients post single agent ICI or ICI combinations.

Second, we seek to expand cabozantinib indications with the HCC submission under review and with new Phase III trials that we anticipate initiating in Q4 and early 2019. Cabo has demonstrated broad clinical activity in multiple tumor types as a single agent and was encouraging activity, tolerability and safety when combined with ICI's. The second wave of potential label enabling trials has now begun with the initiation of the DTC study, and you'll see additional trials get under way shortly. The broad basket study, COSMIC-201 was designed to help us prioritize the potential third wave of trials for the cabo/atezo combination and we're excited about the initial data presented recently at ESMO that highlights the potential of this combination.

Third, we will aggressively pursue Cabo's broad development, new internal drug discovery and business development activities as we build on our strong financial position from generating significant free cash for the last eight quarters. Our growing cash position and profitability are rare in the small mid cap biotech sector, and has obvious implications from both tactical and strategic perspective. We will continue to invest in the business and to drive growth in a sustainable fashion, and always be on the hunt for a compelling assets that are valued appropriately.

I want to thank the entire Exelixis team for their dedication and commitment, as we work to write our next chapter of the Exelixis story. The constant and negative narrative that we all here on a daily basis, could be a major distraction, but it's not for us. The the Exelixis team continues to be energized and inspired by the opportunities ahead and we remain focused, vigilant and dedicated to make every day count as we develop the next generation of our medicines for cancer patients in need of better and more effective therapies. We look forward to updating you on our progress.

Thank you for your continued support and interest in Exelixis, and we are now happy to open the call for questions.

Questions and Answers:

Operator

(Operator Instructions) Our first question comes from Andy Hsieh, William Blair. You may proceed.

Andy Hsieh -- William Blair -- Analyst

Thanks for taking my question, and congratulations on the progress. I got a couple of questions if I may. First is for Gisela. How do you think about the data flow as we head into 2018. It seems like you kind of talked about several opportunities for early look for the Cosmic-311 study in DTC. But specifically for cosmic-021, I think some of the cohorts you're targeting IO relapse or IO experienced patients, do you think any of them could be eligible for the accelerated approval pathway?

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Yeah, thank you for the question. Certainly COSMIC-O21 is a large basket study with the opportunity to generate a lot of interesting data for the combination of cabozantinib and atezolizumab. And we certainly look forward to two of the results from the various different cohorts. Just to reiterate what I said a little bit earlier, we are going to wait for full enrollment of the individual cohorts and maturing of the data, so that we have reliable data to be presented in. It's right now a little bit early to say, when that will be the case. But as we go forward, we will keep you updated. And regarding your last bit of the question. We have the opportunity to expand individual cohorts depending on activity and the overall profile of tariffs and the initial expansion cohort. So, we certainly look forward to updating you on that as well, when it occurs.

Andy Hsieh -- William Blair -- Analyst

Okay, thanks for that. So at ESMO, I think or near ESMO, there's been two Phase III studies with IO, TKI combinations, specifically pembro/axitinib, avelumab/axitinib. When you compare these two trials, so pembro/axitinib study stopped early early, its being both PFS and OS benefit across the whole population. On the other hand, the JAVELIN Renal 101. I think the OS is still matured, despite the fact that they enrolled about 60 plus percent of PDL1 positive patients. I think the consensus view on the street is the IO TKI various combinations might perform similarly. So this questions perhaps for Mike or Gisela. Do you think this is perhaps a data to suggest potential differentiation across various IO TKI combinations out there?

Michael Morrissey -- President and Chief Executive Officer

Hey, Andy, it's Mike. It's little early to speculate on comparing trials, especially when one trial hasn't been presented, right? So we've seen in the press release and certainly saw the JAVELIN data at ESMO. We're not surprised by that data. All the Phase 1 B data that's been, I think being presented and talks about over the last 18 months has looked encouraging, high response rates, long PFS, high DCR. So our expectation is that those would readout positive in some shape, manner or form. How they compare, side-by-side at steady state when all the data is out, we will see. Again, it depends upon a number of different factors and certainly, where they enroll, when they enroll and everything else. So, it's early there. We're excited about 90 R. Certainly both cabo and nivo have been leading the charge here as kind of next-generation agents for RCC over the last few years. Both have a strong survival advantage based upon their various trials.

So we're excited about that combination and certainly that collaboration with BMS. And as Gisela out, there's a lot more there that we're thinking about doing and looking at, whether it would be cabo/nivo, cabo/nivo/ipi or cabo/atezo combinations. So we are going to push this hard. And again, use the data that we've got as momentum to really move the whole company forward potentially based upon data that will come out in the future.

Andy Hsieh -- William Blair -- Analyst

Great. Just a follow-up on that, if I may. Obviously, these two combinations are using sunitinib. So maybe for PJ. What is the kind of utility for sunitinib in the second line setting. Obviously, if those become the standard of care. Maybe a sunitinib might not be used as frequently as right now?

Yeah. Thanks for the question, Andy, I guess a couple of things there. I think since our initial launch of CABOMETYX and METEOR, we've really seen axitinib utilization declined in the second and third lines. And really, as I kind of mentioned in my remarks, we've seen CABOMETYX really become the best in class TKI with regards to now leading a new prescriptions as well certainly the revenue growth and the demand we've seen in the last few quarters. That said, I think as we talked to KOLs and conduct our market research, generally, we think there'll always be a place for Cabo across lines of therapy. Certainly in the first-line setting for certain patients with potentially rapidly progressive disease, symptomatic disease.

And certainly as ICI combinations go into first line, that's going to create more and more patients in the second line, who've been exposed to immunotherapy or as you point out potentially another TKI already. And I think that really just increases the opportunity for Cabo in the second line. So we continue to be focused on differentiating Cabo from the other TKIs which with the NCCN guidelines, certainly the data from our clinical trials gives us really strong platform to do that and continue to really compete for every patient across lines of therapy.

Great. Well, thanks so much for answering all my questions.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

You bet, Andy.

Operator

Thank you. Our next question comes from Michael Schmidt from Guggenheim. Your line is now active.

Michael Schmidt -- Guggenheim -- Analyst

Hey, guys. Thanks for taking my questions. I had a couple, maybe a follow-up on sort of the commercial performance of CABOMETYX in the third quarter. Can you teach and help us understand a little bit more, how much of the volume growth that was seen was driven by frontline use versus recurrent RCC.

Michael Morrissey -- President and Chief Executive Officer

Yeah, well. I think, with regards to that Michael, what we are seeing is growth across lines of therapy. We're certainly seeing a lot of the growth driven by refills, as well as new patients starts in Q3 and that's encouraging. I think we're well positioned now that we've sort of taken the lead so to speak in overall NRx prescriptions and are the TKI of choice. And I think really the NCCN guidelines continues to provide us with the opportunity to have continued momentum there. And I think that's really in the first-line setting, because we do see still opportunity remaining with with Sutent and Votrient there that we can go after in the TKI market. And certainly as I just sort of mentioned in the second-line plus setting opportunity for growth there as the landscape changes in ICI's are used in the first line in combination.

Michael Schmidt -- Guggenheim -- Analyst

Okay, great. And then, I realize, Mike you didn't want to speculate around Checkpoint TKI combinations and potentially differentiation. But just looking at the Checkmate 9ER study design. It looks like it's a relatively small trial compared to the Merck study for example. I think it's about two-thirds of the number of patients. And I was just wondering, if you would be able to provide at some point updates on the enrollment pace and potentially narrow sort of a guidance on potential data either from Checkmate 9ER trial?

Michael Morrissey -- President and Chief Executive Officer

I'm not sure about the question, but at some point we will certainly tell you when the trial is fully enrolled as we normally do. And once we have a sense on data, I mean, again, it's in primary endpoints are all event driven. So that's kind of on a timeframe that is defined by the actual numbers and how those trials work. So, but again we'll be as transparent as we can in the context of how we do this stuff and how we've done in the past. And obviously, we have a partner with BMS that we have to coordinate with too. So --

Michael Schmidt -- Guggenheim -- Analyst

All right, great. Understand. And then last question, a bigger picture strategy type question. I know that you in the past have said that your business development strategy has been focused sort of on earlier stage licensing of sort of R&D type assets in terms of business development. And I was just wondering at this point in context of the strong financial health of the company, to what degree do you feel that there is an opportunity or maybe a sort of an urgency to take advantage of obviously, your capital in order to do a bigger transaction, maybe a more transformative transaction to bring another bring other products into the basket.

Michael Morrissey -- President and Chief Executive Officer

Yeah, it's a fair question. And as we've talked about and previously before, we have certainly had a very focused efforts looking at literally all oncology assets going from pre-clinical to marketed products for the last couple of years now, had a strong effort that's been collaborative between BD and R&D and commercial and finance kind of a full team effort to understand, take our knowledge of the landscape, our knowledge of the biology, understanding of potential combination approaches and move that forward. So, I don't see anything changing, and this is all, if you will, been somewhat pre-start-up from the standpoint of going back to as early as the middle of 2015, around the idea that we wanted to right-size the company, fix the balance sheet, get on a much more strong financial foundation and then look to add assets in a way that can help us help us build growth.

Again, the cabo only focus wasn't a strategy, it was tactic to do all the baseline work that we had to do and then move the company forward in a sustainable fashion. And we've done that now and we're certainly cranking in terms of clinical, commercial, financial and feel good about where that's going. We have to do the right deal at the right time at the right price that mindset hasn't changed. We don't want to do a sub optimal deals just to do a deal, but it has to really fit our criteria. And we have a pretty high bar when it comes to the science and the numbers relative to commercial and the financial side . So, we're going to continue to be aggressive in looking at opportunities and we've got a pretty broad net out there across the continuum of assets. And when we find something that we like, that makes sense to us, both scientifically, commercially and financially, then we will move forward.

Michael Schmidt -- Guggenheim -- Analyst

Okay, great. Thanks for taking my questions.

Operator

Thank you. Our next question comes from Kennen MacKay from RBC Capital Markets. Your line is now open.

Kennen MacKay -- Analyst

Hi. Thanks so much for taking my question, and congrats on the commercial progress there. Just looking at your 5% increase in demand. It seems like this is really being driven by the increase in the prescriber base that have 11% increase. And I wanted to see, is that 11% quarter-over-quarter. And really was hoping to understand a little bit more sort of where that incremental new prescribers is coming from? Is that commercial or community docs that having been treating some of the higher risk later line patients were Cabo was previously approved. And beyond that, was wondering what's happening on the commercial sales of FTE front. Doesn't looks like SG&A has actually been coming down quite a bit? And then just had one quick follow-up on some seasonality questions.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Great. Kennen, we'll take those one at a time.

Christopher Senner -- Chief Financial Officer

Ultimately. Thanks for the. So with regards to your observation on the demand increase in the prescriber base. I think that's right. So, we did have, as you mentioned over 5% demand growth in Q3 relative to Q2, and approximately 11% increase on the prescriber base, and that's really over cumulative prescribers. So people who -- prescribers who now prescribe CABOMETYX. So that's really important to us. Strategically too, as we prepare for new indications in HCC. For example, our market research indicates, and advisory Boards in HCC, that physicians who have previously written Cabo and there's a lot of them in the community as a mentioned in the prepared remarks. In RCC are more likely to prescribe than in HCC and do that more quickly. So, it's great to expand the prescriber base.

And I think your comment about really that happening in the community is what we see happening. So we see -- really in the last few quarters, going back to the cabo that launch in December treating sort of earlier healthier patients in the first line has given us the opportunity to educate more broadly the prescribers in the community and then in those prescribers who may not see as many RCC patients a year, are now having the opportunity to gain experience with cabo which is great, out just particularly before the HCC launch.

I'll touch on also your question about the sales force. We've really -- we always evaluate and take a look at the size of our organization. And really our team, we've gotten right sized and prepared for the business in terms of our CABOSUN launch in HCC, going back over a year now. So, the team is ready and focus and we have, as I said, a high degree of overlap between RCC and HCC prescribers. So, we're prepared and ready to go with regards to the infrastructure commercially. And I think having these new opportunities or new indications provide us the opportunity to have operating leverage and synergy which is fantastic. as we kind of leverage the experience and the capabilities we have in place.

Kennen MacKay -- Analyst

Got you. And maybe one for the final commercial question here. I was wondering that the new patients add the new demand that you saw in Q3. Last quarter you talked a little bit about some patients coming on to cabo post IO. I was wondering if these new patients were largely post IO TKI naive patients since we're starting to see some patients progressing beyond IO combo front line or if these are sort of true front line RCC patients that haven't seen prior therapies? And then the follow-up question I had was on just inventory. I was wondering if there is sort of a seasonality effect there or what the quarter-over-quarter change in inventory was relating to? Thank you.

Patrick Haley -- Senior Vice President, Commercial

Okay. Kennen. This is P.J. I'll maybe start off with kind of what new patients we saw in the quarter and then I'll pass it to Chris to discuss inventory. So, what we're seeing, really in terms of new patient starts. We did say last quarter, we're starting to see patients progress on ICI combination therapy and we're certainly continuing to see that. I'd say we're really in the sort of early days of that. We're not seeing a significant amount yet progress. What's certainly encouraging across all the market research that we conducted and see, is that the majority of those patients who are progressing on immune checkpoint inhibitors combo therapy are going on to CABOMETYX. So, it's consistent with that we heard which is good. And we are also seeing new patients coming in the first line. So I'd say it's a mix. The market is very dynamic right now. But as I mentioned, I think we have opportunity for growth across lines of therapy and particularly, as that second line immune checkpoint inhibitor combination sort of previously treated population will increase in the coming quarters.

Christopher Senner -- Chief Financial Officer

And Kennen, this is Chris. I will talk about the inventory. So, we did see an increase in inventory in the quarter. I wouldn't call it seasonality, but we did see an increase in inventory related to the demand increase that we saw, and we also saw a slight increase in our weeks on hand. We're still at the lower end or range around 2.5 weeks. But we're very comfortable in that range. And so -- again, there's no real seasonality to it.

Kennen MacKay -- Analyst

Got you. Thanks so much for your question and congrats.

Thank you. Our next question comes from Peter Lawson from SunTrust Robinson Humphrey. Your line is now open.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Thanks for taking my question. Just on the gross this quarter, is that mostly driven by kind of front-line patients or the post IO. Is there any way you can kind of break that out for mostly the biased one way or particular?

Patrick Haley -- Senior Vice President, Commercial

Yeah, Peter. This is P'J. Thanks for the question. I think what we're seeing a kind of -- from across lines of therapy. Like I said, its sort of early days in terms of seeing the patients go on to Cabo or any therapy for that matter from ICI combinations. We are seeing the majority of those patients who get treated with ICI combinations in the first line are going onto Cabo. But we think that population is going to continue to grow in the coming quarters. And we are still seeing new patient starts so to speak in first line, we're pleased that we're competing effectively there across risk groups broadly. And I think particularly with the favorable updates to the NCCN guidelines in September that really makes us now worthy preferred TKI in intermediate and poor risk front line patients, which is 80% of the population. So, I think we have the opportunity to continue to grow in the first line at the expense of the other TKIs.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

P.J. where you do you think you're taking share mostly in the TKI space?

Patrick Haley -- Senior Vice President, Commercial

Peter, we're seeing it taking it from really both Sutent and Votrient. Certainly years ago, we saw the decline come from axitinib, but since our CABOSUN launch in December, we've seen both Sutent and Votrient decline. Frankly, those TKIs, if you look at their revenue quarter-over-quarter, all had significant double-digit sequential declines in revenue, while we had a increase of 12% quarter-over-quarter. So, we think we're impacting all of them.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

And then just finally on the liver opportunity. It sounds like you're not going to be adding to the salesforce. You feel, they've got enough bandwidth kind of liver and kidney indication, and should we kind of think SG&A kind of being flat into next year.

Christopher Senner -- Chief Financial Officer

Well, I think on -- with regards to the commercial infrastructure. We really at the end of 2017 put in place the team in the structure that will need to compete effectively in both these indications. And that included adding sales representatives as well as marketing personnel that we need to do that. And the teams, really are in good shape and ready to launch in HCC. So, we do expect to start to get some operating leverage with regards to the commercial organization. And there's a a large overlap in community oncology with regards to the treatment of RCC and HCC. As I mentioned in the prepared remarks, we currently cover 95% of the potential of the RCC and HCC market opportunity, and it will be very simple just a few accounts per representative to start calling on those HCC only treaters upon a potential approval.

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Great. Thanks for taking the questions.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Thank you, Peter.

Operator

Thank you. Our next question comes from Stephen Willey with Stifel. Your line is now open.

Stephen Willey -- Stifel -- Analyst

Yeah. Good afternoon. Thanks for taking the questions. I guess as you guys consider the plethora of I-O TKI trials that are starting to unblind now. Just what's your thought is around, what is the need for these combos to be able to move the needle in terms of depth of response in order to gain traction as a frontline regimen. And I guess, as you think about Cabo relative to some of the other TKIs. Is there anything about the mechanism or the kinase profile that you think would somehow move the needle on CRA, its more so than perhaps axitinib and lenvatinib?

Michael Morrissey -- President and Chief Executive Officer

Yes, Steve, it's Mike. Let me start with that, and I'll pass it off to P.J. and or Gisela provide some additional commentary. Again, it's really early for us to speculate on what is going to move the needle here. I would much rather have data then just kind of top line press releases to be able to really answer that question in detail. Obviously, the duration and depth of response is very important, DCR rates that go for a long time and also very important, obviously to move the needle with both PFS and OS is going to be an important part of the equation. Certainly, Cabo, Cabo is different right? It was designed to be different. It certainly -- we tested that hypothesis clinically. And I think across the Board at least in studies that have read out right now. And renal and in liver looks to be different than kind of VEGFR-targeting TKI.

Is that because of the MET AXL inhibition? Probably, certainly, we impact other cell types as well that appear to play an important role outside of that kind of simple anti-tumor, anti-vascular activity, which we think is important. But, you look at the totality of the data. Single agent Cabo versus a single agent other VEGFR targeting molecules. With all the caveats that go with doing those comparisons, those cross trial comparisons. Cabo has very real differences in terms of it's activity in METEOR where we double PFS. We showed survival for the first time with the TKIs second line. Certainly winning with the survival benefit in liver was again a relatively rare event to my knowledge. No other molecules have done that, besides those based upon sorafenib backbone. So lots of failed attempts.

So, with lots of field attempts. So, we have some ideas, those ideas obviously were put into play when we made that molecule a long time ago. And it took us a while to, if you will prove that clinically, but we feel like we've got that now. And the momentum that we've got with these ICI combinations is, I think pretty, pretty strong. So,now our challenge is to do that on a broad scale, It's renal, it's liver and beyond some of the histologies that were mentioned in Gisela's remarks. It's just really the first kind of tip of the iceberg there. And certainly looking at the 021 study, we've got lots of, lots of other options and opportunities at play there as well.

So, it's early days for us. We certainly like what we've got, and we're excited to push that forward as quickly and as deeply as we can.

Stephen Willey -- Stifel -- Analyst

Okay. And then I guess when you think about the work that you're doing both with Bristol and with Roche. There is some redundancy, obviously, between tumor types. You have bladder cancer data with Bristol, you've the renal data with Bristol and liver data with Bristol. And it looks like you're kind of replicating that with Roche as well. So, just trying to hear how you guys are thinking about the redundancy there that exists between tumor types? And do you eventually choose one partner to kind of concentrate development efforts on or should we think about these as occurring in parallel tracks?

Michael Morrissey -- President and Chief Executive Officer

Yeah, I would think more of the latter, knowing that we'll make investment decisions on a case-by-case basis based upon data, based upon where we stand in terms of the competition and other factors. So stay tuned on that, I don't want to get ahead of where we're taking those. But I would say the idea that we have a second wave and a third wave of label -- potential label enabling trials with Cabo combinations is a vision that we hope to make a reality. And the question is just now, kind of filling in all the details. The histology, the combination partner, the line of therapy, the comparator. And that is certainly, important and how we factor the priorities here relative to what is obviously a very fast-moving field with lots of other players and other combinations that certainly have some activity. And then just lastly on the COSMIC-311 trial in DTC. Is lenvatinib the frontline TKI of choice there? And I guess, if so, how much data do you have in the post-lenvatinib setting?

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

I think both have obviously sorafenib and lenvatinib as an indication in the setting and both are being used in maybe regional differences, but both are certainly being used in this setting. We have our older data largely in sorafenib filling patients, but the little bit of data in lenvatinib feeling patient the mechanism of action is obviously VEGFR-targeting and DTC and/or for another indication that cabozantinib is active and the post VEGFR-targeted is getting.

Stephen Willey -- Stifel -- Analyst

Great. Thanks for taking my questions and congrats for the quarter.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Thank you, Steve.

Operator

Thank you. Our next question comes from Paul Choi with Goldman Sachs. Your line is now open.

Paul Choi -- Goldman Sachs -- Analyst

Hi. Thanks for taking my question and congrats on the quarter as well. I guess, my first is question is with regard to the commercial side. As you prepare for the second line launch in HCC. And as you think about the demand curve out the gate, what is your view that -- is there a buildup in terms of demand or will be more of a steady build. And if you could characterize your expectations there, that would be helpful.

Patrick Haley -- Senior Vice President, Commercial

Yeah. Thanks for the the questions. Paul, this is PJ. We certainly don't want to provide any guidance, so to speak in terms of our revenues. We're not doing that. I think what we can say is that, it's been a very dynamic marketplace. As I mentioned, heavy unmet medical need there for those patients. So, I think with the newer therapies recently available, physicians are really trying to figure out how to put all that together right now. You see that the medical meeting. So, it's really an ideal time and opportunity for us to be able to launch into that dynamic marketplace and help educate physicians on the CABOMETYX data there. So, I think we will build on and leverage the experience we have in RCC and the positive momentum there.

As I mentioned, we have market research that indicates prescribers are more likely to write for CABOMETYX in HCC, If they've written in RCC. And over 50% of the community targets have at this point. So really good momentum there. And with that the 11% increase in prescribers this quarter, certainly it's helpful there and a good sign. So, we'll look forward to bringing that to patients if and when approved by the FDA.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Thanks for that. And then, in the wake of the various IO plus TKA data sets or headlines at least that we've seen so far, and post ESMO. Can you give us your updated thoughts or any color you're hearing on how renal docs are thinking about sequencing, and what you think in a post IO TKI patient population. What duration could possibly look like relative to where it is right now?

Michael Morrissey -- President and Chief Executive Officer

Yeah. I think as I mentioned, renal RCC has really been a sequencing market for over a decade now. And I think certainly for everybody in the field and the KOLs, exciting to have new options for their patients. I think the sequencing will continue to play out. And as I mentioned, that we're really well positioned to continue to compete in the first line as well as post any sort of ICI combination in the second line in RCC. And think beyond that, it's probably a little bit early to speculate till we see more data and kind of see how things play out in the coming quarters and years frankly in that marketplace. But I think being the TKI of choice currently and really having a great team and experience we have in the marketplace really gives us a lot of momentum to continue to be successful there.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Thanks for taking our questions.

Operator

Thank you. Our next question comes from Jeff Hung from Morgan Stanley, your line is now open.

Jeff Hung -- Morgan Stanley -- Analyst

Yeah. Thanks for taking the questions. A follow-up on the earlier BD question. So, you said that you want to do the right deal at the right price. So, has the recent market pullback changed your views on external assets that might now be more attractively priced? Or do you feel, things are still priced a little bit too high?

Michael Morrissey -- President and Chief Executive Officer

Yeah, Jeff. I think the issue really is more around the science and the data and the fit. Price is certainly important, but again, we're focused on doing the right deals, early stage, pre clinical early stage, mid-stage, late-stage, whatever, that makes sense from the standpoint of existing data either as those assets exist. The potential for those assets to be franchise molecules in own right. In their ability to combine with compounds that we have in our portfolio, as well as those that could be useful in other with other compounds, say on the ICI front as well. So we have a very -- we're certainly very agnostic in looking at, how we view the assets, the classes, the modalities, the targets, but the overall framework has to make sense to, as it has to really fit our expectations around the science.

The pullback recently is certainly something that we've noticed as well, kind of hard to miss that. But it certainly doesn't --it's not the driver for us from the standpoint of of pulling the trigger or not based upon where we see the real priority is at finding the best assets, possible that we'll have the longest term potential to drive growth going forward.

Jeff Hung -- Morgan Stanley -- Analyst

Great, thanks. And then you've highlighted overlaps between RCC and HCC such as the prescribers. As you prepare for the potential launch, what differences do you see in HCC from RCC, and how are you preparing for those?

Michael Morrissey -- President and Chief Executive Officer

That will certainly -- it's a different indications. So there is differences clinically. Shares just lot commonality though in community oncology generally. So clearly, there'll be some academics and KOLs in HCC that will engage vigorously upon launch. The marketplace is so, as I mentioned, very common customer base among community oncologists and similar in the fact that both are really TKI immuno-oncology space is too. So, I think our experience over the last few years, competing with those type of agents will really serve us well. So, I think we're certainly very excited to get out there and hopefully have the opportunity to sell it is as soon as possible.

Jeff Hung -- Morgan Stanley -- Analyst

Great, thanks.

Operator

Thank you. Our next question comes from Asthika Goonewardene. Your line is now open.

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

H, guys. Thanks for squeezing me in. Clearly KEYNOTE-426 has gotten everyone excited. So, I'm going to try to ask one more question about Checkmate 9ER. Is there an interim coming up? And if, so when?

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Yeah. We haven't really spoken about details of the trial design and remember the study is being run by BMS. And it's really for them to address any questions on interim analysis in the like, it but this is what we can say at this point.

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

Okay, I had to ask. Interesting in discussions with our with I-O KOLs. They have highlighted that AXL and MET and some of the other kinases that cabozantinib hit. It could be causing -- could lead to some synergy with PD-1 and PDL-1. Looking at that slide that you put with the expansion cohorts with the T cell for example, I'm wondering does this AXL and MET synergy would be the one. Is that more particularly relevant in certain tumor types than others?

Patrick Haley -- Senior Vice President, Commercial

Yeah, this is P.J. I'll take that one. The role of AXL and MET with respect to PD-1 is probably largely driven through AXL and MET on the immune cell subset. So it's kind of host site thing rather than tumor type thing. So, if you look at the totality of the cabozantinib target profile, we've got VEGFR, MET and AXL. There is a role of TKI that play a role in modulating immune cell subsets. And in general when they're activated, they help enhancing the immune suppressive environment. And what we've been seeing in preclinical models and also increasingly in some kind of clinical PD in patients treated with cabozantinib is that you get increase in the activated T cells, you get decreases in immune suppressive cells, just Tregs and MDSCs. And I see that's a very interesting poster at ESMO recently. Looking at RCC patients on cabozantinib pre and post that -- one confirm those findings and actually also showed an increase in the activated natural killer cells.

So we're impacting both of the adaptive and innate immune systems with cabozantinib. And I think it's that we feel provides the kind of scientific underpinnings for the ongoing I-O combo trials with cabozantinib.

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

Okay, thanks. That's exciting. On HCC, I understand we discussed on the call extensively today that you have HCC, RCC overlap in the community setting. But I'm just wondering is this going to be anything you could expect even in the larger prescribing centers? Just wondering what advantages unique to you -- you'll have when you square up against Merck in HCC?

Michael Morrissey -- President and Chief Executive Officer

Well, I think, as I mentioned, what's I think exciting for us in the HCC centers, we have the synergy and the community for that great experience and we're in all of these centers already though we're not hauling on those specific positions toward HCC docs. But I think it's really the same type of story that led to our success in early days of RCC. We've got a very experienced team. We've got a great data. We've got -- we're going to have tremendous focus on educating them and moving the business. And frankly, I think one advantage that we've had and will continue to have at Exelixis. This is where we're hungry, we're small and we're nimble with a great drug to sell.

And there is not that many incremental HCC customers that we're going to have to call on. So I think that's very doable. And frankly, we have the opportunity to focus on just a couple of things and really make that count.

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

Okay. And then last one, when you think about pipeline, could you tell us if any -- if either small molecule or biologics are interesting to you either or just seeing that there's quite a bit of data coming out from ADCs and by specifics these days. I'm just wondering if you have a particular preference?

Michael Morrissey -- President and Chief Executive Officer

Yes, Mike, yeah, we're completely agnostic to the modalities that we're interested in. Obviously, it's all about the -- it's all about the tumor biology and the data that's existing that helps guide us. The two deals that we've done this year, to date one is with small molecules, one is with biologics and we're certainly looking and talking to people on both fronts as well. So, again, it's all about data and potential to be able to build a franchise either by itself or in combination with other drugs that we have in our existing portfolio.

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

Great, thank you very much for taking my questions guys.

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Of course.

Operator

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

Susan Hubbard -- Executive Vice President of Public Affairs and Investor Relations

Great, thank you, Justin, and thank you all for joining us today. We certainly welcome your follow-up calls and any additional questions that we were unable to get to you in today's call.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great.

Duration: 74 minutes

Call participants:

Susan Hubbard -- Executive Vice President of Public Affairs and Investor Relations

Michael Morrissey -- President and Chief Executive Officer

Christopher Senner -- Chief Financial Officer

Patrick Haley -- Senior Vice President, Commercial

Gisela Schwab -- President of Product Development & Medical Affairs and Chief Medical Officer

Andy Hsieh -- William Blair -- Analyst

Michael Schmidt -- Guggenheim -- Analyst

Kennen MacKay -- Analyst

Peter Lawson -- SunTrust Robinson Humphrey -- Analyst

Stephen Willey -- Stifel -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Asthika Goonewardene -- Bloomberg Intelligence -- Analyst

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