Exelixis (EXEL) strong setup with shares starting to work out of a multi-week bull wedge and key data upcoming in Q2 with a Phase 3 interim update for their study in liver cancer (1L HCC). The study – COSMIC-312 – is being done with Ipsen and evaluating the combination of atezolizumab and cabometyx against sorafenib, a treatment developed by Bayer and Onyx. The trial was expected to have data in late 2021 but COVID slowed down enrollment and then later the FDA asked EXEL to add more patients and more data in the single-dose cabometryx part of the trial to get a better understanding of its efficacy and impact on the doublet. EXEL believes that based off of data from 2018 in the CELESTIAL trials of cabometyx, their treatment will beat on both PFS and OS. The trial is part of EXEL’s longer-term plans to expand cabometyx’s label and opportunity:

Liver cancer is the second leading cause of cancer-related death globally and one of the fastest growing new diagnoses with 800,000 cases per annum. This is up around 3X since the early 1980s. The relatively poor prognosis makes new treatment options a major priority, so new data with a better OS than some of the existing treatments is maybe one of the better growth opportunities in oncology. Without treatment, advanced HCC has a less than 6-month survival rate. The HCC market is significant. The key elements to watch for COSMIC-312 focus on overall survival and compared data versus peers like the Merck/Eisai combo therapy and others. In February, the company was at the Guggenheim Healthcare conference and talked about how big of a growth driver it is for them vis-à-vis the market opportunity:

“It’s a big indication globally. It’s as I’ve said before publicly, it’s probably one of the largest growth indications in all of oncology in terms of the size, the incidence that really I would say, until recently the lack of great agents that really improve outcomes for patients. So you’ve got a lot of patients that need better therapies, large unmet medical need. And the question is can you go to this combination approach with I-O/TKIs and be able to move the needle for those patients? And certainly, the IMbrave data of looking at the combination of atezolizumab plus bevacizumab looked really encouraging, first study in the first-line setting to actually beat sorafenib head to head. Great data. The question is how does 312 look? Very similar to the discussion we had in 2019 with 9ER around the PFS OS response rate tolerability metrics. So we’re excited about that. We really — we’re running a very similar study to what they ran with IMbrave, only we’re looking at basically swapping out cabo for Avastin. So we like that swap, and we certainly are very excited about the data we have in this setting. In terms of market opportunity, we had some numbers last year at — in 2020 at JPMorgan with, I would say, modest market share growth in the first-line setting. So again, reasonable numbers in terms of market share, duration and those kinds of things. This could be a $700 million, $800 million a year opportunity for us in the U.S. alone. And obviously ex U.S., it’s even much bigger.”

BAML out positive last week seeing positive data “given mechanistic validation by atezo/bev (IO/anti-angiogenesis) and encouraging median OS from nivo/cabo in a small single-arm study (CM040) in 1L HCC.” On the market opportunity, they also noted that, “based on likely longer duration of 1L treatment, we estimate cabo being a dominant 1L treatment is worth $500m more in US sales than cabo remaining the default 2L HCC standard of care.”