Exelixis, inc (EXEL) Q3 2021 Earnings Call Transcript

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Exelixis, inc (EXEL -0.76%)
Q3 2021 Earnings Call
Nov 2, 2021, 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' Third Quarter 2021 Financial Results Conference Call. My name is Jeff, 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, Ms. Susan Hubbard, Executive Vice President of Public Affairs and Investor Relations. Please proceed.

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

Thank you, Jeff, and thank you all for joining us for the Exelixis Third Quarter 2021 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 Executive Vice President of Commercial; and Peter Lamb, our Chief Scientific Officer, who will together review our progress for the third quarter 2021 ended September 30, 2021. During the call, we will refer to financial measures not calculated according to generally accepted accounting principles. Please do refer to today's press release, which is posted on our website, for an explanation of our reasons for using such non-GAAP measures, as well as tables deriving these measures from our GAAP results.

During the course of this presentation, we will be making forward-looking statements regarding the future events and future performance of the company. This includes statements about possible developments regarding discovery, product development, 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, without limitations, 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 cost associated with discovery, product development, business development and commercialization activities. Now with that, I will turn the call over to Mike.

Michael M. Morrissey -- Chief Executive Officer, President and Director

All right. Thank you, Susan, and thanks to everyone for joining us on the call today. Exelixis had a strong third quarter across all components of our business as CABOMETYX demand and market share grew in the face of increased competition. At the same time, we advanced our pipeline of promising early stage programs with a new IND and an additional collaboration for an exciting target in the RNA sensing pathway. On the commercial front, CABOMETYX maintained its status as the leading TKI for RCC in Q3.

We saw strong demand for the CABOMETYX/nivolumab combination across all segments of the first-line RCC market, including continued NRx and TRx growth. Despite some quarter-to-quarter choppiness, we are pleased to see CABOMETYX net product revenue in the third quarter of 2021 maintained significant momentum with 63% year-over-year growth compared to the same period in 2020. To expand on this further, three factors converged to impact the second quarter 2021 CABOMETYX revenues: first, a significant growth in demand following the success of the nine-year launch; second, an increase in inventory, reflecting the growing demand seen throughout the first half of 2021; and third, clinical trial comparator sales.

While third quarter CABOMETYX demand continued to grow in the face of increased competition, the latter two factors did not occur to a significant extent in Q3. Looking ahead, we expect cabo to achieve well in excess of $1 billion in U.S. revenue in full year 2021, and our goal remains to exit 2022 with a $1.5 billion annualized run rate for RCC in the U.S. We view our progress in 2021 as putting us in a good position to achieve this goal. Exelixis also advanced key 2021 regulatory development and discovery activities in Q3. We were thrilled with the early approval of CABOMETYX in second-line DTC and excited to bring this new treatment option to prescribing physicians and patients to treat this indication for which no standard of care previously existed.

The abstract for the cabo/atezo doublet in first-line HCC from COSMIC-312 was accepted for presentation at the ESMO Asia Virtual Oncology Week Congress during the virtual plenary session on Saturday, November 20. Based on recent feedback from the FDA, we plan to file the COSMIC-312 sNDA in early 2022 once the final OS data are available. In regard to late-stage development, the full portfolio of COSMIC and CONTACT trials with cabozantinib ICI combinations continues to advance. In particular, the CONTACT-01 and CONTACT-03 studies in forms of non-small cell lung cancer and renal cell carcinoma, respectively, are nearing full enrollment.

Top line results for COSMIC-313, which is evaluating the cabo/nivo/ipi triplet in previously untreated intermediate or poor risk RCC are now expected in the first half of 2022 based on current event rates. Our early clinical pipeline is advancing as well with significant progress for XL092, XL102, and XB002, and we expect to share initial clinical updates for each program over the course of 2022. Since reinitiating the build-out of our early stage pipeline in 2017, the Exelixis discovery, business development and nonclinical teams have seamlessly integrated their work streams to pursue compelling opportunities across small molecules and biologics, with the aim of growing our clinical pipeline, most recently exemplified by our new IND filing for XL114 and the collaboration with STORM Therapeutics.

So with that, please see our press release issued an hour ago for our full Q3 financial results and an extensive list of our corporate milestones achieved in the quarter. I'll now turn the call over to Chris, who will review our third quarter 2021 financial results. Chris?

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Thanks, Mike. For the third quarter of 2021, the company reported total revenues of $328.4 million. Total revenues for the quarter included cabozantinib franchise net product revenue of $263.1 million. Total revenues also included $65.3 million in collaboration revenues from Ipsen, Takeda and Genentech. Our total operating expenses for the third quarter 2021 were $276.8 million compared to $262.2 million in the second quarter of 2021. R&D expense was the primary driver of the increase in total operating expenses, which was primarily related to higher licensing and clinical trial expenses.

Provision for income taxes for the third quarter of 2021 was $15.1 million compared to $28.8 million for the second quarter 2021. The company reported GAAP net income of $38.2 million or $0.12 per share on a fully diluted basis for the third quarter of 2021. The company also reported non-GAAP net income of $64.5 million or $0.20 per share on a fully diluted basis. Non-GAAP net income excludes the impact of approximately $26.3 million of stock-based compensation expense, net of the related income tax effect. Cash and investments for the quarter ended September 30, 2021, was approximately $1.8 billion. And finally, turning to our financial guidance for the full year 2021.

Given where we are in the year, we are tightening the financial guidance for total revenues, net product revenues, R&D and SG&A expenses provided earlier this year. Total revenues are expected to be in the range of $1.3 billion and $1.35 billion. Net product revenues are expected to be in the range of $1.05 billion and $1.1 billion. Research and development expenses are expected to be in the range of $650 million and $675 million, which includes noncash expenses related to stock-based compensation of approximately $50 million. Selling, general and administrative expenses are expected to be in the range of $400 million and $425 million, which includes noncash expenses related to stock-based compensation of approximately $70 million.

And finally, we are projecting cash investments to be approximately $1.8 billion at year-end. This guidance does not include the impact of any potential new business development activities, which remains a key priority for the company. With that, I'll turn the call over to P.J.

Patrick J. Haley -- Executive Vice President of Commercial

Thank you, Chris. Today, I will discuss the CABOMETYX business with regards to Q3 2021, particularly in the context of the continued prescription growth driven by the approval of CABOMETYX in combination with an immune checkpoint inhibitor. As you know, on January 22, CABOMETYX received FDA approval for use in first-line RCC in combination with nivolumab. We are pleased that we continue to see broad adoption as CABOMETYX built on its position as the number one TKI in RCC. Q3 saw continued growth of CABOMETYX prescriptions, both in terms of new prescriptions, NRx, and total prescription, TRx. NRx grew 8% in Q3 relative to Q2 and TRx grew 7% in Q3 relative to Q2.

This growth is being driven by CABOMETYX in combination with nivolumab in first-line RCC. As the launch progresses, the success of CABOMETYX in combination with nivolumab is changing the mix of patients on CABOMETYX and RCC. First-line combination usage has increased the proportion of the new cabo prescriptions in this patient population. Given the clinical data from the CheckMate 9ER study, we anticipate these first-line combination patients to receive therapy for approximately one and a half years or more driving a longer treatment duration for CABOMETYX.

We are encouraged by the fact that in our data, we see more than a doubling of the amount of new patient starts at the 40-milligram dose year-to-date relative to the same period last year. This is further indication that the combination uptake in the first-line setting is robust. The launch of the combination has led to an inflection in the prescription growth of CABOMETYX in 2021. TRx growth in 2021 year-to-date relative to 2020 year-to-date is 35%. For the same year-to-date comparison of NRx growth in 2020 relative -- in 2021 relative to 2020, the growth rate is 37%.

Now looking at the same IQVIA prescription data, but for the broader market, including competitors, a couple of salient points stand out. The 7% Q3 over Q2 TRx growth affirms CABOMETYX is the only TKI in this market to have positive TRx sequential volume growth in Q3 relative to Q2. Furthermore, CABOMETYX is the only agent in this market basket to have positive market share growth as CABOMETYX TRx share went from 38% in Q2 to 41% in Q3. As I mentioned previously, the growth is being driven by first-line combination utilization, while the second line RCC business for CABOMETYX remains stable. Turning to the next slide.

We looked at the same market basket and prescription data with the addition of lenvatinib for the graph, given the recent first-line combination approval in RCC. The key takeaways from the previous analysis and discussion remain the same. CABOMETYX was the only product in the market basket to grow TRx volume in this competitive marketplace and the only agent to increase market share going from 32% to 34%, driven by the first-line combination indication. In addition to the strong momentum in the RCC business, we are pleased that CABOMETYX was approved for previously treated differentiated thyroid cancer in September, several months ahead of the PDUFA date.

There were previously no therapies approved for this patient population with significant unmet medical need. We are proud that this fifth indication for CABOMETYX adds to the body of data in the label and enables Exelixis to help more patients with severe cancer. The strong Q3 performance in CABOMETYX' trajectory position the cabozantinib franchise to continue significant revenue growth in 2021 and beyond. We're thrilled with the opportunity that 9ER provides Exelixis looking forward, as we continue to build upon the foundation in RCC, where CABOMETYX is the number prescribed TKI. Our team remains highly focused and motivated to compete every day to bring the benefit of CABOMETYX to all eligible patients as we continue to build the franchise and maximize potential. And with that, I'll turn the call over to Peter.

Peter Lamb -- Executive Vice President of Scientific Strategy and Chief Scientific Officer

Thanks, P.J. I am pleased to provide an update on our preclinical development and pipeline expansion efforts. Over the last six months, we've enhanced our capacity and ability to prosecute a wide variety of targets and programs, both from a small molecule and biologics point of view, while continuing to advance our preclinical pipeline. We significantly expanded our internal discovery footprint with the opening of new laboratories on our Alameda campus that will allow us to add capacity and new capabilities to our small molecule discovery efforts. Work with our partners has also advanced. In particular, we're pleased to have exercised our option for a second compound, XL114, from our collaboration with Aurigene. XL114 has a novel mechanism of action that results in inhibition of MALT1 activation.

MALT1 is a paracaspase that is a key part of the signaling pathway downstream of B cell receptors, and is constitutively activated in a variety of B-cell lymphomas. XL114 is a potent inhibitor of B-cell lymphoma cell growth and is active in a variety of lymphoma models in vivo. Notably, since XL114 acts downstream of BTK, it has activity in BTK-resistant lymphoma models and in certain subsets of B cell lymphoma where BTK inhibitors are not active. The IND of XL114 is now active, and we anticipate initiating the Phase I trial in patients with non-Hodgkin's lymphoma in the next few months. Work on additional programs at Aurigene is proceeding well, and we may have the opportunity to move additional compounds from the collaboration into preclinical development in the first half of next year.

With respect to our biologics programs, we have greatly expanded our collaboration with Invenra to encompass an additional 20 targets over the next three years. We've been impressed by Invenra's ability to produce high-quality antibodies against a range of targets, including some very challenging ones. Antibodies and binders generated by Invenra will be used to generate bispecifics, using Invenra's B-Body platform and also flow into our ADC collaborations. We have already provided Invenra-generated antibodies to our partners Catalent and NBE, who have successfully moved them into their site-specific conjugation platforms and coupled them with their proprietary payloads.

This has led to the identification of multiple ADCs with excellent activity in vitro and in vivo. These are being further characterized to understand their therapeutic index before potentially advancing into preclinical development. Invenra-generated antibodies have also advanced into our collaboration with Adagene, aimed at using their SAFEbody technology to generate masked antibodies that will preferentially bind in the tumor microenvironment, thereby improving the therapeutic index versus a conventional antibody. Several masked versions of these antibodies have been identified and are being further characterized.

We're excited to have recently announced a new partnership with STORM Therapeutics based on their RNA-modifying enzyme platform. Modifications to bases in RNA, termed RNA epigenetics, has emerged as a novel way to control gene expression and the activity of RNA sensing pathways, processes that are often deregulated in tumors. The collaboration includes two targets: ADAR1 or adenosine deaminase and a second target to be named later. ADAR1 is an enzyme that converts adenosine to inosine in double-stranded RNA, thereby destabilizing the double-stranded structure.

Cytoplasmic double-stranded RNA is recognized by two centers, MDA5 and RIG-I, which then activate a gene expression program that includes upregulation of interferon production. Tumor cells which express interferon receptors then activate an interferon stimulated gene expression program that includes up-regulation of inflammatory cytokines and often results in cell death. Tumor cells can have elevated levels of double-stranded RNA, probably as a result of deregulated transcription, and this results in some chronic stimulation of MDA5 RIG-I and consequent activation of an interferon gene signature, which is seen in about 30% of tumors. These cells are reliant on ADAR1 activity to maintain tolerable levels of double-stranded RNA and in these tumors, a reduction in ADAR1 levels can result in tumor cell death.

Consistent with this, ADAR1 emerged as an interesting target in large unbiased CRISPR or shRNA screens for gene dependency in tumor cell lines. In addition, reduction in ADAR1 sensitizes tumors to checkpoint inhibition, even in genetic backgrounds that are refractory to single-agent checkpoint inhibitors such as loss of beta two microglobulin. STORM has established a leading platform for discovery of ADAR1 inhibitors and has a suite of biochemical and cellular assays to guide lead optimization. We look forward to working with them to develop inhibitors against this novel class of targets.

We continue to assess a broad range of opportunities for additional business development, including partnerships that may further complement our ongoing small molecule, bispecific and ADC programs, as well as individual assets, particularly those that are in late preclinical or early clinical development. We look forward to providing further updates as these discussions mature. And with that, I'll turn the call back to Mike.

Michael M. Morrissey -- Chief Executive Officer, President and Director

All right. Thanks, Peter. As you heard on the call today, our team continued to execute across all facets of our business in Q3 with significant progress across our pipeline, clinical development and commercial activities. As we close out the remainder of this year and look to 2022, we're excited about the potential of the multiple growth drivers ahead of us to move the business forward, and most importantly, put Exelixis in a position to help many more cancer patients. I'm pleased to share that the Exelixis team is now greater than 99% vaccinated against COVID-19, and we are back in the office working together again side-by-side.

I want to thank everyone on the team for their individual and collective efforts to navigate the many significant challenges introduced by the pandemic, and then ultimately see us through to a very productive third quarter. Before I close, I want to touch on the recent passing of two of our colleagues, Dr. Gisela Schwab, the company's President of Product Development and Medical Affairs and Chief Medical Officer; and John Berndt, our Senior Vice President of Sales. Losing Gisela and John in the same week, both of whom were life science industry veterans, incredible colleagues and dear friends, is a reminder of our fragility and that cancer knows no bounds.

It's also a driving reminder of why we do what we do every single day at Exelixis. It has only served to deepen our commitment to our mission to help cancer patients recover stronger and live longer. So with that, we look forward to updating you on our progress in the future. Thank you for your continued support and interest in Exelixis, and we're happy to now open the call for questions.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Asthika Goonewardene from Truist Securities.

Asthika Sarith Goonewardene -- Truist Securities, Inc. -- Analyst

Hi guys, thanks for taking my question. I have to echo like you said of his death we do miss Gisela's voice on this call. Maybe I'll start us off on maybe a question to P.J. Has the excess inventory worked itself out? And are we more back at more normal levels? And I guess when we think about going into Q4, should we expect your reported sales numbers to sync up a little bit more with the volume growth that we see on the Symphony or IQVIA data? And then I have a follow-up.

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Asthika, it's Chris. So the inventory that was built during the second quarter was all demand-related. So it wasn't excess inventory, as you said. I would say that our weeks on hand inventory between Q2 and Q3 was relatively stable. And even if you go back to Q1, it's been relatively stable throughout the year. So it's not excess inventory. It was just inventory built in association with the demand increase during Q2.

Asthika Sarith Goonewardene -- Truist Securities, Inc. -- Analyst

Got it. So Chris, would you expect then going to Q4 that maybe the prescription data that we all look at, like Symphony and IQVIA, that might more better reflect what you might could report on your net sales?

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Asthika, yes, it's Chris again. So thanks for the question. It's hard to say. I mean both Symphony and IMS are forecasted numbers. So it's hard to say how they collate their data and project it, but it's historically in line with reported numbers.

Asthika Sarith Goonewardene -- Truist Securities, Inc. -- Analyst

Got it. Okay. And then it was very encouraging that the FDA gave you guys feedback to file the sNDA for frontline HCC. Just want to make sure I haven't missed anything. This actually indicates that the FDA is open to the possibility of granting approval for cabo-atezo for first-line HCC just based on PFS as the co-primary endpoint. And then are there maybe some specific scenarios where this is more relevant, such as, for example, where patients on the control arm are crossing over and causing complications?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Asthika, it's Mike again. I don't want to get into the details of the discussions with the FDA. I think the information we shared today was, I think, pretty clear. We plan to file the sNDA in early 2022 once we have the final OS data available. As we talked about previously, as other, I think, sell-side research analysts have opined upon, there's a pretty sizable population of patients with either gastric or esophageal varices that can have complications in terms of bleeding with long-lasting agents like antibodies to VEGF, for example. So we want to be able to help with that population, if that's feasible. But I don't want to get ahead of ourselves. We will file as we plan to based upon the guidance we just gave in early 2022 based upon once we have the final survival data. So for all the rest, stay tuned.

Asthika Sarith Goonewardene -- Truist Securities, Inc. -- Analyst

Thanks again for taking my question.

Operator

Your next question comes from the line of Mike King from H.C. Wainwright.

Michael George King -- H.C. Wainwright & Co -- Analyst

Hi guys. Can you hear me?

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

Yes, loud and clear, Mike.

Michael George King -- H.C. Wainwright & Co -- Analyst

Okay. Thanks for taking my question. Great. I had to jump on late. And if you guys don't want to go through the numbers again, that's fine. I can always take it offline. But just on a sequential quarter basis, do you have a handle on what the underlying demand increase was quarter-on-quarter?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. So again, I don't want to repeat the whole call. Sorry, you missed the early part. P.J., you want to just give the high level demand numbers and then maybe we can cover the rest offline.

Patrick J. Haley -- Executive Vice President of Commercial

Yes. Thanks for the question. We're really pleased with the quarter where we continued demand growth. Q-over-Q, we had 7% TRx volume growth and 8% NRx volume growth. So continuing to see strong uptake across all segments, driven by combination first-line use. So we're very pleased with that.

Michael George King -- H.C. Wainwright & Co -- Analyst

Okay. Great. That's super helpful. And then related to that, can you talk about whether you saw any inroads or any competitive pressure from LENVIMA combinations with KEYTRUDA at all in RCC? And would that have had any impact on the numbers in the quarter?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Mike, it's Mike. As we said numerous times in the prepared remarks, the demand growth that we saw was in the context of increased competition.

Michael George King -- H.C. Wainwright & Co -- Analyst

Great, thanks.

Operator

Your next question comes from the line of Jason Gerberry from Bank of America.

Jason Matthew Gerberry -- BofA Securities -- Analyst

Hi guys, thanks for taking my questions. I guess two for me. Just on the patent litigation front peers, are there any important milestone events between now and the scheduled May 2022 trial date, be it either any more patents that you guys might be adding to the Orange book? I know you guys have been active on that front, any important pretrial proceedings that are worth mentioning? And then secondly, just on XL092. Is the plan to still move that into some pivotal trials before year-end 2021? Just wondering if we might start to hear about some pivotal trials getting underway before the end of the year?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Jason, it's Mike. In terms of the patent litigation topic, nothing that I'd like to point out here between now and the beginning of the trial date. Obviously, I wouldn't want to front run any news in that regard before it happens. So just stay tuned. As things evolve, we will keep you up to date on that. In terms of 092, the first pivotal trial for that compound in combination with an ICI will shift to 2022, and we will alert you when we have the first site activated. So stay tuned there as well.

Jason Matthew Gerberry -- BofA Securities -- Analyst

Okay, thank you.

Operator

Your next question comes from the line of Michael Schmidt from Guggenheim.

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Hi guys, thanks for taking my question. I just had another one for Chris or P.J. Just trying to understand the sequential decline in product sales are a little bit better given the 7% growth in volume. And I know you mentioned a few factors, but could you perhaps quantify how much each of those contributed to the decline?

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Yes, Michael, thanks. It's Chris. As Mike mentioned, we did see an inventory -- a demand-related inventory build in Q2, which didn't take place in Q3. And we also saw some comparator sales in Q2 that, to a large degree, didn't take place in Q3. So those are the two drivers of the difference between the demand numbers that P.J. referenced and the reported numbers that we're talking about today.

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Got it. And the gross to net, was that stable in the third?

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Gross to net was slightly down. Well, it's slightly up between Q3 and Q2, but down from where it was in Q1. And it's still, as I said earlier in the year, we were thinking 25% to 26% gross to net. We're still thinking in that 26% range.

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Got it. Okay. Interesting. And then Peter mentioned some more details on the new product that's going into Phase I, XL114. Just if you had some additional color how this drug could potentially fit into the treatment landscape within non-Hodgkin lymphoma?

Peter Lamb -- Executive Vice President of Scientific Strategy and Chief Scientific Officer

Yes. Thanks for the question. We think it's a very interesting and differentiated profile in that setting, I think particularly as I commented, because its point of intervention is downstream from BTK. It is active in BTK-resistant lymphoma models. So that's certainly one place where it could go. There are also subtypes of B cell lymphoma, which activate the MALT1 on that pathway without activating BTK. So those, again, are insensitive to BTK inhibitors. These are lymphomas that have mutations in things like CARD11, for example, they're often called MALT lymphomas. So that's another point of differentiation. So that's another place that this compound could go as well. So those are the two things I'd highlight initially.

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Very interesting. And then I know you mentioned initial data disclosures on the earlier-stage pipeline drugs in 2022. I'm just wondering if you were thinking more first half AACR or ASCO perhaps? Or are we thinking more in the second half of the year at one of the conferences?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Michael, it's Mike. Yes, probably too early to opine upon them now, but stay tuned. As those plans evolve, we'll be sure to keep you up to speed on what's happening.

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Right, thanks again.

Operator

Your next question comes from the line of Andy Hsieh from William Blair.

Tsan-Yu Hsieh -- William Blair & Company -- Analyst

Thanks for taking my question. First and foremost, I'd like to express my deepest condolences to the Exelixis team. Gisela's and John's energy and enthusiasms are missed. So in terms of questions, P.J., I have a question maybe on the broader RCC TKI market, maybe your perspective on where it is versus prior to the COVID-19 pandemic. It seems like there is some fluctuations between kind of growth and shrinking toward the middle part of last year and also some fluctuations in the first half of this year. Just curious about your take on that.

Patrick J. Haley -- Executive Vice President of Commercial

Yes. Andy, thanks for the question. It's P.J. I think you're right. I mean, over the course of the pandemic, I think the broader RCC marketing beyond TKIs saw certainly a little bit of choppiness as we've discussed, given the difficulties with treating patients in hospitals in that pandemic. But I think over time, what we've seen is the market expand. And I think part of it is recovery from COVID. But I think as you've seen IO-TKI combinations become more and more standard of care in first-line treatment, and I think we talked about that somewhat last quarter, certainly with cabo/nivo driving more of that utilization in the frontline setting.

We're seeing the TKI market expand and could potentially see that continue as we see more and more duration from the utilization of drugs like cabo over time for these first-line patients who would stay on therapy longer, and that could continue to potentially drive expansion of the TKI market within RCC.

Tsan-Yu Hsieh -- William Blair & Company -- Analyst

Got it. Okay. And in terms of the upcoming 303 study, I have a question about the protocol. So for CheckMate-214, they have a very strict discontinuation protocol. I'm just curious if that is also baked in to the 313 study? Or maybe there's like improvement just because people know how to use IO combinations better over time.

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Andy, it's Mike. Yes, I think we've done a really good job of working with a variety of KOLs to optimize the protocol around managing through a variety of AEs that are seen with either one or all three of those molecules combined relative to what we've learned over the last four or five years since the 214 data read out. But that's why you run trials, is to look at the data in a blinded fashion and let the data speak for itself. So we're excited about that opportunity. We're really pleased to be on the leading edge of driving potential advancement of standard of care with the first triplet in RCC, and we're excited to have the data come out sometime hopefully in the first half of 2022. So stay tuned.

Tsan-Yu Hsieh -- William Blair & Company -- Analyst

Great. And maybe last question for Peter. Just curious on your take about the MALT1 pathway, just at least in the DLBCL space, especially with Polivy, the CD79B antibody drug conjugate, potentially replacing the standard of care. Would that drive higher dependency on the MALT1 pathway as kind of patients go through the frontline therapy?

Peter Lamb -- Executive Vice President of Scientific Strategy and Chief Scientific Officer

Yes, I think there's a lot of activity in the cell lymphoma space generally, as you are aware, as I was commenting earlier, of course, there's still a lot of activity around new BTK inhibitors, novel BTK inhibitors, be they covalent. People are starting to advance degraders now as well against BTK. So I would say one in all of those cases should resistance arise, which it almost certainly will, then there's certainly a strong opportunity for a compound like 114 to be active as well.

Interesting you raised the CD79 side of things. CD79 activation, obviously, is something that can drive B cell lymphomas as well that, that does not go through BTK. But again, those lymphomas look active or sensitive to 114 as well. So yes, it will certainly be interesting to see whether downstream of agents directed at CD79, whether we have an opportunity to pick up those resistant patients as well. Time will tell.

Tsan-Yu Hsieh -- William Blair & Company -- Analyst

Okay, thanks so much for taking all my questions.

Operator

Your next question comes from the line of Jay Olson from Oppenheimer.

Cheng Li -- Oppenheimer & Co. Inc. -- Analyst

Hi. This is Cheng Li for Jay. Can you comment on the launch of cabo in DTC, given that it's almost like three months ahead of the PDUFA date? And also, if you're counting sales in DTC into your full year revenue guidance?

Patrick J. Haley -- Executive Vice President of Commercial

Yes. This is P.J. Happy to talk about the approval. We're certainly very pleased to have DTC approved, I think, about 79 days ahead of PDUFA date. That's certainly great news for patients, as I mentioned, in the setting of high unmet medical need, so patients who really needed a therapy. So very happy with that. The data are very strong. And I think what we heard and we continue to hear from physicians is that progression-free survival data is very compelling.

So we think as we promote and raise awareness, we will likely get very good utilization with that. Very happy that the team was ready to go immediately in launch day one, even with the rapidly accelerated time lines of approval. So very good news there. Thyroid cancer is a space we've been in since 2013. So we know it extremely well. We know where those physicians are and who they are and are really excited to be working with them.

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Yes. Cheng, this is Chris. So on the guidance question, on the revenue guidance question, yes, I mean, it's in the revenue guidance generally. So yes, for the year.

Operator

Your next question comes from the line of Peter Lawson from Barclays.

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Hi, thanks for taking my questions. Just on the HCC filing, are you waiting for further data for that filing? And also could XL092 also have a place in HCC?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Peter, it's Mike. I missed the first part of that question. Could you say it again?

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Oh, just on the HCC filing, are you waiting for other data before...

Michael M. Morrissey -- Chief Executive Officer, President and Director

Oh, I see. Yes. As we talked about in the prepared remarks, we've agreed with the agency to submit the sNDA once we have the final overall survival data in hand. So that's what's driving it from basically a Q4 2021 event to a 2022 event.

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

And do you need to see more than a trend in the OS?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. As I addressed in one of the earlier questions, I don't want to speculate on that whole topic. We've agreed to file once we have the final survival data in hand. So stay tuned.

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Got you. And then XL092, could that find a place in HCC? Or is that kind of white space not available for it?

Michael M. Morrissey -- Chief Executive Officer, President and Director

No, it's certainly available and we're talking a lot about various indications and combinations for 092 right now. Certainly, some of the learnings that we've seen from 312, if you look at the broader context of HCC, say even with some of the emerging data from other IO combinations, 092 could play I think, a very interesting role in potential doublets or triplets for HCC. We have to sit down and think about priorities and think about how we want to do that.

But I would say, in general, we view development in a broad sense like we're doing with RCC. It's not just one shot. It's multiple shots on goal, multiple trials covering a variety of lines of therapies, combinations, etc., to give us the opportunity. And that's the goal we have for all of our compounds, all of our trials is to move the bar up in terms of standard of care for patients. So certainly 092 could play an important role in a number of different indications, and liver could be one of them going forward, for sure.

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Got you. And just a final question. On generics, how did that affect revenues in the quarter? And then how do you think it kind of changes the way you're thinking about positioning yourself around generic suit?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Again, as I said numerous times in the prepared remarks, demand grew in the face of increased competition, and that includes that issue as well. So we're pleased with demand growth. Obviously, better data drives demand. And we think we have that with 9ER and METEOR and CABOSUN, etc. So end of the day, better data wins, right, and that's what we're seeing here.

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Got you. Okay. Thanks so much.

Operator

Your next question comes from the line of Kennen MacKay from RBC Capital Markets.

Kennen B. MacKay -- RBC Capital Markets -- Analyst

Hi, thanks for taking my question. Maybe for Mike or P.J., can you help us understand the magnitude of the commercial frontline RCC market that could be addressed by the triplet of cabo/ipi/nivo from your conversations with both KOLs and community physicians in your service? Thank you.

Michael M. Morrissey -- Chief Executive Officer, President and Director

P.J., you want to give that a shot, and I'll provide color commentary as we go?

Patrick J. Haley -- Executive Vice President of Commercial

Yes. Obviously, it will be important to see the data, and thanks for the question, Kennen. The trial is being run in the intermediate and poor risk setting where the control arm 214 is approved. I think just generally what I'd say about it is, it's certainly, as Mike mentioned earlier, it's exciting to really be on the cutting edge here in terms of having the first triplet.

Moving forward, in a study in RCC, and when you think about, I guess, just to contextualize the poor intermediate risk patient population is about 75%, 80% roughly of that first-line patient population, which is about 14,000 patients in the U.S. So excited to see the data when available.

Operator

Your next question comes from the line of Jeff Hung from Morgan Stanley.

Melina Joy Santoro -- Morgan Stanley -- Analyst

Hi. This is Melina Santoro on for Jeff. Regarding cabo/nivo in first-line RCC, with the continued growth in new patient share in the community setting, what do you see as the remaining opportunity for growth in that segment? And maybe are there certain patient populations that would be easier to reach?

Patrick J. Haley -- Executive Vice President of Commercial

Yes. Melina, thanks for the question. This is P.J. I'd say we're very excited about the data and the feedback we're hearing from physicians, sort of profile of overall survival and improved tolerability and safety profile with the combination 40-milligram dose of cabo. We're hearing great feedback on that as well as the quality of life. So I think broadly, we're seeing inroads and opportunity, and it's still kind of early days in our launch. So we can continue to execute against that. And I think patients will have the opportunity to benefit from it regardless of the setting.

We continue to have more data in terms of pat met and non-clear cell and other data being presented that continue to really round out the clinical profile of cabozantinib and RCC, and we're really pleased with that. If you look at the NCCN guidelines, I think is a good exercise to do, you really see we're well positioned as a preferred agent across risk groups as well as lines of therapy. And really community physicians, in particular, reference that, and we're really pleased with our positioning there. So I think we have many more patients who can benefit from CABOMETYX.

Melina Joy Santoro -- Morgan Stanley -- Analyst

That's helpful. Thank you. And then I have one more. So you continue to establish these collaborations with other technologies recently with STORM Therapeutics, can you kind of talk about your strategy going forward? Is it to be more opportunistic with the new platforms and technologies? Or are there certain capabilities and technologies that you want to remain more focused on? Thanks.

Peter Lamb -- Executive Vice President of Scientific Strategy and Chief Scientific Officer

Thanks for the question. I mean I think going forward, we're going to kind of stay consistent with what we've been doing. Obviously, as I commented, we have our own internal small molecule discovery capability, which is going through a pretty significant expansion right now. But we've always wanted to take the opportunity to complement what we can do internally with expertise that other folks have, maybe have a different approach but maybe they have specific expertise in various areas that we don't have as a way of kind of managing to kind of increase our overall bandwidth and throughput.

And that's what the STORM Therapeutics collaboration represents. It's a hot new target, relatively new target in the oncology space. It's the deaminase. It's a little bit of a newer target from that sense, and they've built, I think, a very compelling platform around how to prosecute that target as well as a broader batch of RNA modifying enzymes. So it kind of made sense to us to do that as a collaboration with them rather than try and reinvent everything in-house. So going forward, again, we'll continue to look at opportunities like that, be that on the platform side or with folks that have interesting assets that might get us into the clinic sooner.

Melina Joy Santoro -- Morgan Stanley -- Analyst

Right, thanks for taking my question.

Operator

Your next question comes from the line of Chris Shibutani from Goldman Sachs.

Chris Shibutani -- Goldman Sachs Group, Inc. -- Analyst

Thank you. Could I just ask about some of the contact programs. These are Phase III trials going across a number of very sizable indications. I know these trials have been ongoing for a while. I believe you mentioned that we are potentially reaching a point where we're going to get some progress updates. Can you be more specific about perhaps whether we'll see any data in 2022? I know you've been enrolling globally, and when you get that data, sort of how you're thinking about what kind of decision tree point you could be with those opportunities that those trials are designed to answer?

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Chris, it's Mike. Thanks for the question. Contacts are, again, all important trials in non-small cell lung cancer, prostate cancer and second-line RCC, all being done in collaboration with Roche, Genentech. I think they are exciting opportunities for cabo and certainly ones that we, as part of that collaboration, are very much focused on in terms of execution right now. So do we see results in 2022? Well, those are all event-based trials. So we'll have to see how those go from the standpoint of the actual event rates as they read out, but they're certainly very important parts of the cabo story and one that we hope will be successful. But that's why we do the experiment, to be able to get the data and move forward as appropriate. But they're certainly a very high priority for the team right now and ones that we're very focused on in terms of execution.

Chris Shibutani -- Goldman Sachs Group, Inc. -- Analyst

And then from a pipeline standpoint, 092 remains the most advanced of the programs. Can you update us with any updated thinking that you have about particular indications that you think directing further clinical development for 092 might head? Thank you.

Michael M. Morrissey -- Chief Executive Officer, President and Director

Yes. Again, we'll speak to that, as I mentioned in our previous question, we'll speak to that in more detail as we launch the first pivotal trial and activate the first sites. Again, I think we're very pleased and encouraged by what we're seeing right now clinically relative to cabo across a range of different components of activity and its overall profile, and looking forward to getting that moving in pivotal trials as quickly as possible. As we advance XB002, the tissue factor targeting ADC as well as XL102 and now 114 that Peter talked about today. So pleased with the overall progress. The goal is to get really exciting compounds for both small molecules and biologics moving into the clinic as quickly as possible with a focus on quality and novelty and high probability of success in helping patients with cancer.

Operator

Your next question comes from the line of Mike King from H.C. Wainright.

Michael George King -- H.C. Wainwright & Co -- Analyst

Oh, thanks guys. My follow-up was answered.

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

Okay. Operator, do we have any more questions?

Operator

At this time, there are no further questions. And so I will turn the call over to today's host, Susan Hubbard. Ms. Hubbard?

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

Okay. Okay. Jeff, thank you very much, and thank you all for joining us today. We certainly welcome your follow-up calls with any additional questions you may have that we didn't get to during today's call. Thanks so much.

Operator

[Operator Closing Remarks]

Duration: 50 minutes

Call participants:

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

Michael M. Morrissey -- Chief Executive Officer, President and Director

Christopher J. Senner -- Executive Vice President and Chief Financial Officer

Patrick J. Haley -- Executive Vice President of Commercial

Peter Lamb -- Executive Vice President of Scientific Strategy and Chief Scientific Officer

Asthika Sarith Goonewardene -- Truist Securities, Inc. -- Analyst

Michael George King -- H.C. Wainwright & Co -- Analyst

Jason Matthew Gerberry -- BofA Securities -- Analyst

Michael Werner Schmidt -- Guggenheim Securities -- Analyst

Tsan-Yu Hsieh -- William Blair & Company -- Analyst

Cheng Li -- Oppenheimer & Co. Inc. -- Analyst

Peter Richard Lawson -- Barclays Bank PLC -- Analyst

Kennen B. MacKay -- RBC Capital Markets -- Analyst

Melina Joy Santoro -- Morgan Stanley -- Analyst

Chris Shibutani -- Goldman Sachs Group, Inc. -- Analyst

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