Oct 30, 2013
Executives
Charles Butler - Vice President, Investor Relations and Corporate Communications Michael M. Morrissey - President and Chief Executive Officer Frank L.
Karbe - Executive Vice President and Chief Financial Officer J. Scott Garland - Executive Vice President and Chief Commercial Officer Gisela M.
Schwab - Executive Vice President and Chief Medical Officer
Analysts
Eric Schmidt - Cowen & Company Lee Kalowski - Credit Suisse Ted Tenthoff – Piper Jaffray Biren Amin – Jefferies & Company Joel Sendek – Stifel Nicolaus & Co.
Operator
Good day, ladies and gentlemen. And welcome to the Third Quarter 2013 Exelixis Financial Results Conference Call.
My name is Celine and I will be your operator for today. At this time all participants are in a listen-only mode.
Later we will conduct a question-and-answer session. (Operator Instructions).
As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr.
Charles Butler, Vice-President of Investor Relations. Please proceed, sir.
Charles Butler
Thank you for joining us for the Exelixis’ third quarter 2013 financial results call. Joining me on today’s call are Mike Morrissey, our President and CEO; Frank Karbe, our CFO; Scott Garland, our Chief Commercial Officer; and Gisela Schwab, our CMO, who will together review our corporate, financial and development progress for the quarter-ended September 30, 2013.
They also will discuss priority activities for the remainder of the year and provide an update on the COMETRIQ launch and ongoing clinical development activities for cabozantinib. As a reminder we’re 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’ll be making forward-looking statements regarding future events or the future performance of the company, including statements about possible future developments regarding clinical, regulatory, commercial, financial and strategic matters.
Actual events or results of course, could differ materially. We refer you to the documents that Exelixis' files from time to time with the Securities and Exchange Commission, and in particular the company’s quarterly report on Form 10-Q filed today, October 30, 2013.
These documents contain and identify, under the heading Risk Factors, important factors that could cause actual results to differ materially from those contained in any forward-looking statements, including the risk that unanticipated developments could adversely impact the launch, commercialization, distribution, and availability of COMETRIQ, the degree of market acceptance of and reimbursements for COMETRIQ, risks and uncertainties related to compliance with applicable regulatory requirements, market competition, the availability of data at the reference times, and risks and uncertainties related to the initiation, conduct, and results of clinical trials. With that I’ll turn it over to Mike.
Michael M. Morrissey
Okay, thank you Charles and thanks to everyone for joining us on the call today. We met important milestones in the third quarter and we continue to focus on our key priorities from a clinical, commercial and financial perspective.
Our progress in 2013 and specifically in Q3 continues to point to 2014 as a critical year for Exelixis as we expect multiple clinical and corporate milestones. Our overall goal for the company remains the same, to capitalize on the potential of cabozantinib, to become an oncology franchise across a range of important cancer indications.
We are working very hard across the entire organization to achieve this overarching goal as quickly as possible and with the highest quality possible. Before handing the call over to Frank, Gisela and Scott for a review of our financial development and commercial efforts I will take a few moments to outline our status at a high level.
First, we have two late stage assets, specifically MET, VEGFR inhibitor cabozantinib and the selective MEK inhibitor cobimetinib under investigation in six global randomized pivotal trials. Cabozantinib is being evaluated in five pivotal trials for patients with MTC, prostate cancer, renal cancer and liver cancer.
Cobimetinib, our MEK inhibitor partnered with Roche-Genentech is in an additional pivotal trial named coBRIM in combination with Zelboraf in first line patients with BRAF mutation positive metastatic melanoma. Second, we expect top line data from four of these pivotal trials in 2014.
For cabozantinib we expect having overall survival or OS data from the COMET-1 trial and pain palliation data from COMET-2 in 2014 as well as OS data from the MTC exam trial. In addition, Roche-Genentech confirmed guidance on their recent Q3 earnings call that they expect to have top line data and pursue regulatory filings for cobimetinib from the coBRIM study in 2014 as well.
Third, we continue to advance our appropriately sized commercial effort for COMETRIQ in progressive metastatic MTC. This activity is critically important to get this drug to MTC patients in need of additional therapeutic options and help us mature as a commercial organization so that are ready to rapidly and affectively launch cabozantinib in potentially larger commercial indications once we have met the obligatory clinical and regulatory milestones.
Fourth and last, we continue to maintain a position of significant financial strength by focusing the company’s activities and operating expenses on cabozantinib. We’ve had a productive year in 2013 and expect and certainly have a lot more important work to do as we close out the year and move into 2014.
I want to take a moment upfront to thank our key stakeholders, including patients, investigators, employees, shareholders and our broad network of contract manufacturing, development and sales organizations for their unwavering efforts, support and encouragement. So with that I will turn the call over to Frank for a review of our third quarter financials.
Frank?
Frank L. Karbe
Thanks, Mike. As usual I will focus my comments on the highlights of our financial performance in the quarter and refer you to our press release and today’s 10-Q filing for additional details.
Net revenue for the quarter was $5.5 million of which $4.8 million related to the sale of COMETRIQ with a gross to net discount of approximately 4.3%. As indicated in prior calls our license and contract revenues continue to decrease amounting to $0.7 million this quarter which now fully depleted the remaining deferred revenues for this line item.
R&D expenses for the quarter were $47.4 million. The increase of $16.7 million as compared to Q3 last year was predominantly due to a $13.9 million increase in clinical trial expenses which was primarily related to activities for the COMET-1 pivotal trial as well as costs incurred in connection with the startup of phase III trials for metastatic RCC and advanced HCC.
As you may imagine the rapid involvement of COMET-1 was the main driver behind the year-over-year increase in R&D expense. The increase in clinical trial expenses was partially offset by decreased expenses for our randomized discontinuation trial as well as the EXAM and other studies that are winding down.
SG&A expenses were $13.6 million for the quarter compared to $7.3 million for the comparable period in 2012. Approximately half of the increase was a result of an increase in expenses related to consulting and outside services provided by our U.S.
sales force and our European distribution partner for the sale of COMETRIQ. The remaining increase was related to legal and accounting fees, wages and benefits, employee stock-based compensation expense and patent costs.
These increases were partially offset by decreases in facilities cost. Total cost and expenses for the third quarter were $61.4 million.
The increase of $22.6 million as compared to the third quarter last year on one hand reflects the ramp up in our clinical trial activity and on the other hand the fact that we have matured from a pre-commercial biotech company to one that has an approved product in the market. As previously mentioned the completion of enrollment on Comet-1 is worth pointing out as the single most important driver of the increase in the expenses in addition to the fact that we are now running five active pivotal trials on top of the large number of earlier stage clinical studies.
Our 2013 full year financial guidance for the total cost and expenses remains unchanged in the range of $200 million to $230 million. That said we expect to come out at the high end of this range and depending on how enrollment progresses on our newly initiated Phase III studies in RCC and HCC possibly even a little bit above.
For other income expense we incurred a net expense of $11.2 million for the quarter. The increase of $3.8 million as compared to Q3, 2012 predominantly relates to the interest expenses associated with our 4.25% convertible senior subordinated notes due 2019 issued in August of last year.
$6.7 million of the interest expense incurred in the third quarter reflects non-cash charges. Let me wrap up by commenting on our cash position.
We ended the quarter with $465 million in cash and investments. Our guidance for yearend cash also remains unchanged with an expected yearend cash balance of approximately $400 million.
With that I will pass the call on to Gisela.
Gisela M. Schwab
Thank you Frank. In the next few minutes I will provide an update on the progress of the development program for cabozantinib.
Specifically I will cover the status of the COMET trials, the status of the RCC and HCC Phase III studies, activities in RET fusion gene positive non-small cell lung cancer patients and I will close with a brief update on our activities in MTC or medullary thyroid cancer on the regulatory front. Our clinical and regulatory effort is intensely focus on expanding the cabozantinib opportunity across multiple indications.
As we’ve discussed previously we have a broad strategy in place for evaluating the compound in a variety of indications using internal resources to support Phase III trials and working in partnership with a wider array of individual physician as well as cooperative groups through our collaboration with the National Cancer Institute’s Cancer Therapy Evaluation Program or CTEP and an investigator sponsor trial program. I will start the update with the ongoing Comet trials, which are our two Phase III pivotal trials in metastatic castration-resistant prostate cancer.
As you know COMET-1, a randomized study of cabozantinib versus prednisone is focused on assessment of overall survival as the primary end point. And COMET-2, a randomized study of cabozantinib versus mitoxantrone and prednisone is focused on pain response.
I am happy to report that we have recently completed enrollment for COMET-1, the study assessing overall survival. This study enrolled more than 960 patients globally and approximately 14 months.
As always with larger global Phase III studies enrollment was commensurate with a site activation and started out slowly initially. But once the majority of sites were activated in early 2013 the enrollment proceeded very quickly with about 900 patients having been enrolled in this study between January and September 2013.
This has only been possible due to the enthusiasm of our global investigators for cabozantinib in this patient population for whom there is a high unmet medical need despite the fact that multiple compounds have become available for the treatment of CRPC in recent years. COMET investigators have also highlighted the fact that an agent addressing a different mechanism of action compared to chemotherapy or hormonal agents is important as there are emerging data suggesting the development of cross resistance when using agents targeting the androgen receptor axis sequentially.
I also want to highlight the remarkable and dedicated efforts of our internal team and the CROs who all ensured a timely site activation and monitoring of patients eligibility to ensure that the appropriate patients were enrolled in this study. With this big milestone under our belt, our focus remains on enrolling patients in COMET 2.
This is a smaller study aiming to enroll 246 patients and it is being conducted exclusively in English speaking countries. As the primary endpoint these patients reported pain response and we wanted to avoid any language validation issues with the [PRO tool].
In fact, US, UK and Australian COMET-1 investigators are now rolling on to COMET-2 to contribute to the study and to continue to make a cabozantinib trial available to their CRPC patients. We continue to expect the top line data from both COMET trials will be available in 2014.
If both trials are successful, the combined data package would demonstrate a survival benefit and improvement of pain associated with born metastases. We believe this would differentiate Cabozantinib from other agents used in the treatment of CRPC and support the product activity in this indication.
In addition to the COMET studies which evaluate cabozantinib in late line of treatment of CRPC patients post-docetaxel and abiraterone or enzalutamide we are also actively working on advancing cabozantinib in the earlier line of treatment of CRPC patients prior to chemotherapy. We are on track with our plan to initiate two earlier line Phase 1 or 2 studies in the near future.
The first will evaluate the combination of cabozantinib with abiraterone. We project that this randomized Phase II study will start in the fourth quarter of 2013.
Data from an investigator Phase I study conducted at the Dana Farber Cancer Institute was published at AACR earlier in the year and has shown that cabozantinib can be given safely in combination with full dose abiraterone. In our planned randomized Phase II study, we will now compare full dose of abiraterone with Cabozantinib given its three different doses of 40 milligram daily, 20 milligram daily or 20 milligrams every other day combined with four doses of abiraterone.
The patient population is a pre-chemo therapy population of CRPC patients with metastases and the primary end point is radiographic disease progression. A second trial will evaluate the combination of Cabozantinib with enzalutamide and is expected to start in the first half of 2014.
As enzalutamide is a strong CYP3A4 inducer and Cabozantinib is CYP3A4 substrate the objective for the first Phase I combination study is to evaluate drug-drug interaction and resulting impact on pharmacokinetics as well as safety for different doses of Cabozantinib given in combination with full dose enzalutamide. Regarding the status of cabozantinib in other indications we are working very actively working on the execution of two new Phase 3 pivotal trials in metastatic renal cell cancer and advanced hepatocellular cancer.
Just as a reminder the Phase III trial in RCC was initiated in May 2013 and is now actively enrolling patients. It is a 650 patient randomized open-label study that is comparing cabozantinib with everolimus in patients who have received and progressed on or following at least one prior VEGFR tyrosine kinase inhibitor.
That is [secondary] therapy. The primary endpoint is progression free survival or PFS, and the secondary end point overall survival.
No crossover between treatment arms is allowed. Patient reported outcomes, biomarkers, safety and pharmacokinetics will be evaluated as exploratory endpoints.
We have selected the study sites and are planning the global execution of this study with site accrual weighted towards Western Europe, North America and Australia. The HCC trial has also been initiated recently.
It is a 760 patient study in patients who have received prior sorafenib and will compare overall survival between patients treated with cabozantinib and those receiving placebo. Overall survival is the accepted endpoint in this indication and was the endpoint used to support approval of sorafenib as first-line therapy for HCC.
There is a tremendous amount of enthusiasm for these trials in the community based on the early stage data and the design of these Phase III trials. Both studies are off to a good start and we hope to see top line data on RCC in 2015 and HCC in the late 2016 or early 2017 timeframe.
These studies together with CRPC if positive could support the next wave of indications for cabozantinib after MTC. We are also working on the initiation of a single agent phase II study and about 100 non-small cell lung cancer patients lung cancer patients carrying the RET fusion genes.
This genetic alteration is seen in about 1% to 2% of non-squamous cell non-small cell lung cancer patients and is seen in patients whose tumors are negative for EGFR, KRAS or ALK mutations. Cabozantinib has been shown in preclinical studies to potently inhibit RET nanomolar IC50 values.
And initial clinical data showing activity of cabozantinib in a small group of non-small cell lung cancer patients with RET fusion genes has recently been published. This data has also recently resulted in an NCCN category 2a company listing for cabozantinib for this patient population.
Also on the basis of the data the phase II study in RET fusion gene expressing patients is designed as a single arm trial with the primary endpoint of objective response rate. Based on recently completed regulatory meeting we believe a robust response rate in such a selected patient population could potentially lead to regulatory approval in the U.S..
So we are now moving forward to start-up activities for the execution of this trial. Before closing I would like to provide a brief update on the review process of our EU filing for MTC.
The filing was accepted for review in November 2012. We are addressing the EMA’s questions and are now in the last phase leading up to the opinion from CHNP.
We will keep you updated as we are reaching this fast now. So to summarize we have made very good progress on the clinical and regulatory fronts.
COMET-1 has reached its target recently. Multiple phase III trials are actively enrolling be we are working actively on startup of the combination studies in the earlier line of CRPC and the study in non-small cell lung cancer patients with RET fusion genes.
And the IST and CTEP programs are also advancing well. So with that I will turn the call over to Scott.
J. Scott Garland
Thanks, Gisela. We continue to make solid progress on the commercial launch of COMETRIQ in progressive metastatic medullary thyroid cancer.
As Frank mentioned net product revenues in Q3 were $4.8 million representing a 20% quarter-on-quarter increase. As with previous calls we will not be providing any further breakdown of product sales and I will strict all my comments to the MTC market.
Our penetration and our labeled indication of progressive metastatic MTC continues to grow. Our brand awareness amongst oncologists is now over 80% and exceeds that of our competitor which is noteworthy given the size of our sales team.
In recent market research incentive healthcare practitioner survey rated their impressions of COMETRIQ as either favorable or highly favorable and close to 90% said the drug exceeded their expectations. In addition anecdotal feedback from prescribers particularly those with experience using VEGF TKIs indicate that they are comfortable managing the side effects associated with COMETRIQ.
Today, 20% of patients have dose reduced with the majority of reductions occurring in the first three months. About 50% of thyroid patients are being treated at 140 milligram dose with the remaining half split evenly between 100 milligram and the 60 milligram doses.
Recall that in Q3 we increased the size of our sales team to 15 reps and two managers. This larger sales force has allowed us to dramatically shrink the size of the individual territories thereby increasing the reach and frequency of our sales call on customers.
The new expanded sales team started calling our customers at the end of July. In Q3 the sales team made over 3,000 calls on targets with an average frequency of 2.6 visits per target in the quarter.
Our marketing and sales efforts continues to focus on three key areas, finding the appropriate MTC patient for treatment, differentiating COMETRIQ from the competition and keeping patients on therapy once treated. We have instituted a number of tactics to accomplish these goals, including designing novel targeting strategies and initiating high touch compliance and persistence programs with our specially pharmacy partner Diplomat.
I want to emphasize that all promotional tactics focus exclusively on label patients and comply with all applicable rules and regulations. The recent publication of the EXAM manuscript in JCO has had another important promotional tool for our sales reps.
Physicians tell us that the patient population studied in EXAM is more representative of patients they treat in their practice and serves as yet another source of differentiation from our competition. We also continue to hear that lack of a REMs protocol for COMETRIQ is viewed favorably.
Moving to reimbursement, our payer field team continues to call on our payer targets which represent approximately 99% of all covered lives. Coverage policies are now largely in place and over 31 payers have paid claims for COMETRIQ.
As I said on previous calls payer reaction to COMETRIQ has been positive and coverage is consistent with our labeled indication in category 1 NCCN rating. Today payers have covered essentially all MTC scripts submitted for reimbursement.
Average co-pay to date has been approximately $36 with close to 90% of patients paying less than $100 out of pocket for COMETRIQ. Recall that we offer comprehensive reimbursement support services through Exelixis access services including co-pay assistance, benefits investigation, appeal support and referral independent co-pay assistance charities.
Finally as Gisela mentioned we are now in the last phase leading up to an MTC opinion from CHNP in Europe. We have been working closely with Sobi, our distribution partner to get ready for a potential approval there.
Progress has been made on several front including preparing the Sobi country affiliates for launch, assembling the necessary documentation to support reimbursement with national payers and setting up our distribution network. Now with that I will turn the call back over to Mike.
Michael M. Morrissey
Alright, thanks Scott. I will keep my closing remarks brief so we can get to your questions.
As you heard from the team today progress continues on all fronts and we are vectoring toward an important set of milestones in 2014. We have a singular focus to advance the near term cabozantinib opportunity in metastatic CRPC and expand into other important oncology indications in the short term with our initial set up pivotal trials.
Our overall goal is unchanged to bring new therapies to patients with cancer and book value for investors. So with that we’ll stop here and be happy to take your questions.
Operator?
Operator
Thank you. (Operator Instructions).
The first question comes from the line of Eric Schmidt, Cowen and Company. Please proceed.
Eric Schmidt - Cowen & Company
Scott, just hoping you could comment a little bit on the quarter-over-quarter growth that you saw with COMETRIQ. You mentioned it was up 20% but given the very substantial increased rate of adoption between Q1 and Q2 seems like if you just kind of kept patients on the drug during Q3, we might have had a even higher sales number to talk about.
So was there a persistency issue in the quarter?
J. Scott Garland
No, Eric, no persistency issues in the quarter. I mean I would say generally, [inaudible] top line comments, one is MTC is a small market and we have been saying that all along.
In terms of what we are seeing on a quarterly basis I would say that things are pretty much in line with our expectations. I will say our penetration is actually ahead of what I would have expected at this point and as you get into the upper range of expectations for penetration the growth from penetration perspective quarter on quarter obviously starts to slow.
That’s true for any drug at this point of launch and I think that’s what you are seeing reflected in the differences in the quarter. So all-in-all I am not really concerned and there is no underlying issue from sort of I forgot what words you used, but persistency.
Eric Schmidt - Cowen & Company
And then for Gisela, it sounds like you are getting near the end of the EMA process on MTC. Can you comment on whether you will be at the CHNP meeting in November, whether the drug will be reviewed then?
Gisela M. Schwab
We can’t really comment on that. We are moving through the process and are responding to questions as appropriate and so we will have to just wait for the final outcome.
Eric Schmidt - Cowen & Company
Okay. And then with the RET meeting that you had with the FDA concerning a potentially pivotal single-arm trial could you talk about the size of that potential pivotal study and when that might begin?
Gisela M. Schwab
Yes, we are planning about a 100 patients study and it’s a single-arm trial as you mentioned. We are working though the start-up activities right now.
So we are thinking in the first half of 2014 this study will start.
Eric Schmidt - Cowen & Company
And last question with COMET-1 now fully enrolled, have you seen a pick-up in COMET 2 activity as some of the same centers shift patients to other trial of cabo?
Gisela M. Schwab
Yeah. So COMET-1 investigators have been interested in continuing to participate in Cabozantinib studies to make the drug available to their patients.
So, they are starting now to participate in COMET 2 and accrual is ongoing. So, that’s quite gratifying.
Eric Schmidt - Cowen & Company
Okay, thanks a lot.
Operator
Next question comes from the line of Lee Kalowski, Credit Suisse. Please proceed.
Lee Kalowski - Credit Suisse
Thanks. As far as the timing of COMET, so you are saying it's 2014, I know in the past you have been pretty clear about there being interim.
So just to be clear, are you confirming that the interim is not expected in the remainder of 2013?
Gisela M. Schwab
We are expecting a data for COMET-1 in 2014.
Lee Kalowski - Credit Suisse
Whether on the interim or final analysis?
Gisela M. Schwab
We haven’t really spoken to that.
Lee Kalowski - Credit Suisse
Okay. And as far as the timing of both COMET 1 and 2, are they going to be really – what - is it your expectations that they will be released as data comes out, so could be potentially at different times?
Gisela M. Schwab
Yes, that is a correct assumption.
Lee Kalowski - Credit Suisse
Okay. And then as far as the EXAM trial is concerned, so you said that the OS will be next year, maybe a commercial question related to that.
Do you think the release of the EXAM trial might have any impact on the uptake in the launch and MTC indication, maybe put slightly different way, do you think what we are seeing so far would be impacted one way or another by OS results?
J. Scott Garland
Obviously, having overall survival would be nice to have. I’ll say it’s not been an issue for us in the market place.
Physicians actually viewed the data that was presented and published in the EXAM manuscript very favorably and it compares well to our competition. I think the biggest issue in MTC is it’s just a very small market.
I’d certainly be happy if we get it, but it's not going to be an issue for us if we don't.
Lee Kalowski - Credit Suisse
Okay. Maybe one last question.
As far as the earlier trials in prostate cancer, so it sounds like you are thinking about pre-chemo use, obviously the duration will be a lot longer than the post chemo and post Xtandi and Zytiga. Have you had any experience with keeping patients on drug for that sort of length of duration?
Gisela M. Schwab
Yeah, we have actually quite a bit of information on that and remember the MTC study has been ongoing for quite a long time since 2008 and there are still patients on treatment, so we have had patients on Cabozantinib for three, four to five years at this point.
Lee Kalowski - Credit Suisse
Okay, thanks.
Operator
The next question comes from the line of Cory Kasimov, JPMorgan. Please proceed
Unidentified Analyst
Hi, this is actually [Whitney] [ph] on for Cory today. Question on the RET fusion study, you mentioned that a robust response rate could be sufficient for registration.
I’m just wondering how we should be thinking about robust, if you could maybe just maybe give us a range or kind of how you guys are thinking about that? And then also in the last call, I think you mentioned for MTC that it was shifting more towards community and I think it was greater than 50% of prescriptions were coming from the community.
Can you provide any updated metrics on that?
Gisela M. Schwab
To your first question what is viewed as a robust response rate, I think [that is certainly the experience has set an example there so] [ph] in the order 50% plus, minus.
Michael M. Morrissey
And in terms of relative concentration of MTC prescriptions the trend remains pretty stable. We are seeing a fair amount of adoption in the community for COMETRIQ in MTC.
Unidentified Analyst
Great, thanks.
Operator
The next question comes from the line of Ted Tenthoff, Piper Jaffray. Please proceed.
Ted Tenthoff – Piper Jaffray
Great, can you hear me okay?
Michael M. Morrissey
Yes.
Ted Tenthoff – Piper Jaffray
Excellent. Thanks for the update and all the progress; really exciting to see the COMETRIQ launch off to such a good strong start.
I guess my question really has to do with the opportunity with the timing on the COMET data. Can you remind us what your expectations are for placebo control and what's powering it around COMET-1?
Gisela M. Schwab
Sure so just to describe a little bit the statistics and the assumptions underlying the trial design the study’s design is a 960 patient study and 578 events provide a 90% power for an HR of 0.75. The underlying assumption regarding the prednizone arm was that the median overall survival for that arm would be seven months and that was derived from the COUGAR 301 experience where the timeframe from end of treatment to death was seven months for the abiraterone arm.
So those are the assumptions. We obviously vetted at the time very thoroughly our assumptions with key opinion leaders, the leaders of the trial really and I think there was a general feeling that this was a generous assumption.
Ted Tenthoff – Piper Jaffray
Excellent, and then just additionally to, if I recall correctly I think COMET-1 does have an SPA and are there any changes with background therapy that you think may put in jeopardy [inaudible] control?
Gisela M. Schwab
Just to clarify we don't have any SPA for COMET-1. Obviously we had extensive regulatory discussions before starting the study but no SPA.
In terms of the background therapy or competing therapy there are no issues at all and if there had been one would have noted that was slowdown in the core.
Ted Tenthoff – Piper Jaffray
Okay, thank you.
Operator
The next question comes from the line of Biren Amin, Jefferies. Please proceed.
Biren Amin – Jefferies & Company
Yes, thanks for taking my questions. On the COMETRIQ launch and I noticed in the Q that the company took a 5% price increase recently.
Just wanted to get your thoughts around that given the recent launch of the drug and whether we can expect I guess frequent price increases with the franchise. Thanks.
Michael M. Morrissey
Hey, yeah that’s correct. We took a 5% price increase.
The new price for COMETRIQ is $10,395 for 28 days supply. We obviously look very closely at price increases relatively common, actually I would say very common for all oncology drugs to take at least one price increase and in many cases taken two price increases per year.
The 5% price increase we took was very consistent with what we see for other oral oncology drugs and we believe this reflects both the relative value that COMETRIQ brings to the market and also is very much in line what we see for our competition.
Biren Amin – Jefferies & Company
Okay, that’s helpful and I guess I just have a couple more follow-ups. So on COMET-1 I guess with data expected in 2014 and with the trial fully enrolled can the company share with us any patient base line characteristics from the trial and whether they were in line with the company’s estimates for the trial?
Gisela M. Schwab
Obviously we want to preserve the integrity of the study and so we don't look at that and cannot share it at this point.
Biren Amin – Jefferies & Company
Okay, that’s helpful. And I guess with the HCC trial which has recently started.
I was noticing it's a quite sizeable study compared to the BRISK PS trial and in particular I think you are looking at a healthier patient population than BRISK PS, as far as Child-Pugh Class core of A in your current trial versus A or B with BRISK PS arm so why pursue a healthier patient population in the second line HCC study?
Gisela M. Schwab
So we are focusing on the Child-Pugh A population. Obviously as patients develop worsening of their liver disease and move into Child-Pugh B or even further there are other confounding factors and we wanted to avoid such factors to come to play.
That’s why we are focusing on this population and we have I think appropriately sized, learning from the BRISK study that the background rate on placebo in terms of overall survival was 8.3 months and I think in previous studies for other compounds there has been a tendency to underestimate the placebo rate.
Biren Amin – Jefferies & Company
Great, thank you.
Operator
(Operator Instructions). We have a question from the line of Joel Sendek, Stifel.
Please proceed.
Joel Sendek – Stifel Nicolaus & Co.
Thanks. I am going to try one more time on the interim.
I mean I guess my question is if you miss the interim or even know about it or will you just go to the final analysis on the COMET study? Thanks.
Michael M. Morrissey
So Joel it's Mike, our plan is to certainly communicate when the interim is done. Obviously if it works we will communicate that.
If we need to keep going we will communicate that as well. So we think it’s a material event in terms of running the interim analysis and our expectation is to communicate around that topic.
We are not talking about when and we are communicating I think in a very consistent conservative style. We’ll certainly talk about things when they happen but we’re not giving, I would say higher resolution guesses around when it could be.
Joel Sendek – Stifel Nicolaus & Co.
Okay and even throughout 2014 you are not going to narrow it down. You are just going to say at some point we’ll get that released.
Michael M. Morrissey
That’s correct. When we have the data and we have the event if you will then we will share that information with investors.
Joel Sendek – Stifel Nicolaus & Co.
Okay and then on the spend side I am just wondering if the 4Q is a good run rate for 2014. I know it kind of be little bit tough given the fact you don't know when you are going to get the data, well that makes it a little bit difficult for us to make our projections if you can give us an insight on that.
Thanks.
Frank L. Karbe
Yeah, Joe it’s Frank. As you know we only provide financial guidance for the current fiscal year so I have to defer that discussion until the next earnings call when we will provide our financial guidance for 2014.
Joel Sendek – Stifel Nicolaus & Co.
Okay, thank you.
Operator
At this time there are no further questions in the queue.
Michael M. Morrissey
All right then we’ll end it here. Thank you everybody for your time and interest and we look forward to seeing you on the road.
Thank you.
Operator
Ladies and gentlemen that concludes today’s conference. Thank you for your participation.
You may now disconnect. Have a great day.