Bristol Myers Squibb Q1 2022 Earnings Call Transcript

Quartr
Provided by Quartr
April 29, 2022

Key Takeaways

  • Strong Q1 performance with 7% revenue growth to $11.6 billion and double-digit non-GAAP EPS growth, driven by both in-line and new products.
  • FDA approvals of mavacamten (Camzyos) for symptomatic obstructive HCM and Opdualag (relatlimab + nivolumab) for unresectable/metastatic melanoma, plus EU approval of Ryansy.
  • First generic Revlimid entries occurred later in the U.S. with modest erosion, while ex-U.S. erosion was faster, prompting full-year Revlimid guidance of $9.0–9.5 billion.
  • Key upcoming pipeline catalysts include mid-year Phase 2 data for Milvexian in secondary stroke prevention and a September PDUFA date for ducravacitinib in psoriasis with positive lupus proof-of-concept.
  • Maintained strong financial flexibility with approximately $15 billion in cash, execution of a $5 billion accelerated share repurchase, and ongoing focus on debt reduction and business development.
AI Generated. May Contain Errors.
Earnings Conference Call
Bristol Myers Squibb Q1 2022
00:00 / 00:00

There are 13 speakers on the call.

Operator

Good day, and welcome to the Bristol Myers Squibb 20 22 First Quarter Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Tim Power, Vice President, Investor Relations. Please go ahead, sir.

Speaker 1

Thank you, Sergey, and good morning, everyone. Thanks for joining us this morning for our Q1 2022 earnings call. Joining me this morning with prepared remarks are Giovanni Cafforia, Our Board, Chair and Chief Executive Officer and David Elkins, our Chief Financial Officer. Also participating in today's call are Chris Berner, our Chief And Saman Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can follow along For Giovanni and David's remarks.

Speaker 1

But before we get started, I will read our forward looking statements. During this call, we will make statements about the company's future plans and that constitute forward looking statements. Actual results may differ materially from those indicated by these forward looking statements as a result of various factors, including those discussed in the company's SEC filings. These forward looking statements represent our estimates as of today and should not be relied upon as representing our As of any future date, we specifically disclaim any obligation to update forward looking statements even if our estimates change. We'll also focus our comments on our non GAAP financial measures, which are adjusted to exclude certain specified items.

Speaker 1

Reconciliations of certain non GAAP financial measures to the most Comparable GAAP measures are available on vms.com.

Speaker 2

And so I'll hand over now to Giovanni. Thank you, Tim, and good morning, everyone. Let's start with our Q1 performance on Slide 4. This is an important year for Bristol Myers Squibb, And I'm pleased to share that we've had a strong start to 2022. In fact, just yesterday, the FDA approved mavacamten Or CAMZYOS.

Speaker 2

This is a first in class medicine for patients living with symptomatic obstructive HCM. It's an important milestone for patients who up until now had no options to treat the underlying cause of this disease. I'm proud that we're giving hope to patients and improving their quality of life. It's also an important milestone for BMS. With U.

Speaker 2

S. Approvals of Obdolag and Kamsayas, so far this year, we have significantly strengthened our new product portfolio. And we are on track to potentially launch 3 important new first in class medicines this year. Additionally, strong commercial execution in the quarter resulted in solid year over year growth from our in line products and new product portfolio. During the quarter, we saw the first entries of Revlimid Genetics in the U.

Speaker 2

S. And Europe. David will comment on our Q1 dynamics. But for the full year, U. S.

Speaker 2

Entry expectations remain the same, While ex U. S. Erosion is expected to be faster than previously anticipated. Overall, we grew revenue by 5% And delivered double digit non GAAP EPS growth compared to the same quarter last year. There is good momentum in our business, and our performance in Q1 validates that we are well prepared for the renewal of our portfolio With multiple catalysts across in line products and new product portfolio to more than offset coming Eloese and drive growth through the decade.

Speaker 2

Our very strong financial position gives us significant flexibility as we continue Prioritize business development while paying down debt and expanding shareholder distributions. Now let me turn to our scorecard on Slide 5 and provide some context around the important achievements of the quarter. We are making good progress against our milestones, which are central to delivering on our long term strategy and growth Starting with the milestones we saw during the quarter. Opdivo was approved in the U. S.

Speaker 2

In March as the first IO agent To treat early stage non small cell lung cancer patients before surgery. This indication strengthens It's profile in lung and provides additional tailwind for growth. While disappointed with the results of the Banpack program, We are very pleased with the significant progress of our new product portfolio overall. Ryansy is now approved in Europe, Our second CAR T cell therapy approved in the EU. As you know, we've been planning to bring 3 important new products to market this year.

Speaker 2

So far, 2 of those new products, Ogdolag and KAMZYOS, received FDA approval. Many of our new products have significant expansion opportunities. For OPDUALAG, we recently initiated A pivotal study in colorectal cancer. And for ducravasitanib, we delivered a successful Phase II proof of concept result in lupus. Looking to the future, the breadth of milestones ahead is exciting.

Speaker 2

One that we're looking forward to is The Milvexion Phase 2 data in secondary stroke prevention. We have decades of expertise in cardiovascular disease, And we believe this could be a medicine that treats an even broader population of patients than current oral anticoagulants. We expect to get Phase 2 data in house around the middle of the year. And depending on the results, we plan to start Phase 3 trials later this year. Turning to our 3 new products on Slide 6.

Speaker 2

As I mentioned, in March, we received approval For OPDUALAG for the treatment of patients with unreceptible or metastatic melanoma. OPDUALAG is our 1st in class The combination of rilatinib and evolumab demonstrated a clinically meaningful PFS NOS benefit. ODDOAG marks the 2nd approved IO combination that we delivered and demonstrates our continued scientific leadership in IO. While we are still in the early days, I can say that the OPDLAC launch is going very well. We believe this medicine has the opportunity to become A new standard of care for melanoma patients.

Speaker 2

In addition to melanoma, OPDUALAG has the potential for new indications, And we are exploring important opportunities in lung, liver and colorectal cancers. Turning now to our just The benefit of Kamsayos for patients with symptomatic obstructive HCM We're further reinforced with the exciting VALOR data presented at ACC this month. We're launching KANZYOS in the U. S. And look forward to receiving EU approval and launching internationally with future indications to come.

Speaker 2

Finally, we continue to be excited about the opportunity for ducravasitinib. As you know, we have an FDA PDUFA date in September for We believe that psoriasis patients need better oral options, and these assets has demonstrated Superior efficacy compared to the oral standard of care with a favorable safety and tolerability profile. During the Q1, we also delivered a successful Phase 2 proof of concept result in lupus, Positioning us to start Phase III studies later this year in a disease with a very high unmet need. Importantly, the lupus data continues to show the consistent and differentiated safety profile of a selective tick 2 inhibitor. We plan to share comprehensive data with the scientific community at an upcoming Congress this year.

Speaker 2

With our upcoming FDA PDUFA date in the Q3, Phase C trials already underway in psoriatic arthritis and a proof of concept achieved in lupus and additional Phase II trials ongoing, including in IBD, our confidence in the potential of this program continues Now turning to Slide 7. Thanks to the hard work, dedication and strong execution by our employees, I am confident in our ability to deliver on our strategy and more than offset key LOEs By continuing the growth of our in line products, with $8,000,000,000 to $10,000,000,000 in incremental sales and delivering $10,000,000,000 to $13,000,000,000 of revenue expected from our new product portfolio by 2025. Our strong clinical performance further derisks our launch portfolio. And as a result, we have confidence in our ability to deliver The $25,000,000,000 plus in non risk adjusted revenue in 2029. We have a strong foundation in And as the renewal of our portfolio gains further traction this year, I am confident in the potential of our company.

Speaker 2

Now, I'll turn it over to David.

Speaker 3

Thank you, Giovanni, and welcome again to our Q1 earnings call. I'm pleased to turn to Slide 9 to discuss That's our top line performance. Unless otherwise stated, I will discuss sales performance on an underlying basis, which excludes the impact of foreign exchange translation. Total company revenues in the quarter exceeded $11,600,000,000 growing 7% year over year. This was driven by Strong double digit sales of our in line and new product portfolio, partially offset by our recent LOEs.

Speaker 3

Let's take a closer look at our new product portfolio performance on Slide 10. In the Q1, the new product portfolio contributed 3 $50,000,000 in revenue, more than doubling revenue versus prior year. With a combination of factors, including the usual year end buying patterns Impacting sequential performance, remain confident in the growth potential of the new product portfolio. The first in class Approvals of Opdivide and yesterday's FDA approval of Kymzios further strengthen our confidence in the new product portfolio. We also look forward to our upcoming PDUFA Thank you, Cabozitinib in September, which will deliver another first in class medicine for patients with the opportunity to deliver more than $4,000,000,000 And non risk adjusted revenue in 2029.

Speaker 3

These initial approvals are just the beginning as many of these new medicines have Significant expansion opportunities into additional indications. Now let's look at our expanded, more diversified business by therapeutic area, Turning to our solid tumor performance on Slide 11. Opdivo and Yervoy continue their growth trajectory, growing double digits versus prior year. This is driven by continued demand for our newly launched indications and our core indications. In the U.

Speaker 3

S, Opdivo grew double digit versus prior year, Driven by demand in first line lung, renal and gastric cancer as well as adjuvant esophageal and bladder cancers. Outside the U. S, Q1 year over year revenues increased double digit. This strong growth was primarily driven by expanded access in emerging markets As well as demand for new indications in developed markets as we continue to secure reimbursement. Looking forward, we expect continued growth of Opdivo from our new and expanding indications.

Speaker 3

With the launch of OptilAg in mid March, we are pleased to be the only company with 3 approved IO agents. While early days in the launch, we generated approximately $6,000,000 in sales, half of which was demand and the other half stocking. We are encouraged by the initial feedback suggesting the potential for OptoLag to be a new standard of care for patients with metastatic melanoma. I look forward to providing more updates as the year progresses. Now let's move to our growing cardiovascular portfolio on Slide 12.

Speaker 3

I'll start with Eliquis, which continues to grow globally with revenues up 14% year over year. In the U. S, sales increased 12% versus prior year, driven Primarily by total prescription growth of 10%. Internationally, sales were strong, up 17% versus a year ago. This strong double digit growth was primarily driven by increased share across key markets and the brand continues to be the number one OAC in multiple countries.

Speaker 3

Turning to our expanded portfolio, I'm really excited about the approval of mavacamten, now known as Kymzios, for patients with symptomatic Obstructive hypertrophic cardiomyopathy or OHCM. We plan to leverage BMS' existing CV leadership, building our Strong expertise and relationship focused initially at top HCM Centers. Our field teams are excited to bring this product to patients in the U. S. And Chris can provide more details on our go to market strategy in the Q and A session.

Speaker 3

Now let's turn our attention over to a few of our hematology products on Slide 13, Starting with REVLIMID. Sales in the quarter were nearly $2,800,000,000 Revenues were primarily impacted by generic entry. During Q1, we saw generics enter the U. S. Later than expected entry and so far at a modest pace.

Speaker 3

As mentioned last quarter, we expect variability quarter to Due to the uncertainty of how generic players will enter the market, though there is no change to our outlook for the U. S. Revlimid this year and beyond, we expect Favorability we saw in Q1 to reverse in Q2. And internationally, generics launched broadly across Europe in mid February and erosion has been faster than expected. As a result, we now expect full year global sales to be approximately $9,000,000,000 to $9,500,000,000 Based upon U.

Speaker 3

S. And ex U. S. Dynamics, we expect Q2 global revenues to be approximately $2,000,000,000 Pomalyst Global revenues grew 9% versus prior year. Global revenues continue to be driven by volume and market share gains as patients move to earlier lines of treatment And extending duration of treatment.

Speaker 3

Now moving to Revozel, which generated revenues of $156,000,000 in the quarter, Sales were up 41% versus prior year, primarily driven by continued demand in ESA refractory MDS In the U. S. To date, we have robust on label share in RS positive patients. We are seeing encouraging trends in the reduction of time and the switch from ESA failures, which is also supported by NCCN guidelines. We have also made progress in physicians upgrading A patient's dose to ensure sustained duration and benefit.

Speaker 3

Our focus remains on patient identification and dose titration for optimal outcomes. And outside the U. S, rublizel continues to grow with increased share in both MDS and beta thalassemia associated anemia. We have now launched in 6 countries outside the U. S.

Speaker 3

And expect to launch in more markets in 2022. Moving to cell therapy launches of Beqma and Briansy. Vecna generated revenues of $67,000,000 in the Q1. As expected, sales were largely similar to the Q4 of 20 21 as demand continues to be robust and we work hard to expand capacity. We're on track to expand capacity in the middle of this year to be able to help more patients with With highly refractory multiple myeloma.

Speaker 3

As it relates to Briansy, sales in the quarter were $44,000,000 Sales are driven primarily by demand in the U. S. While physicians continue to recognize Briansy's best in class profile. We are very pleased with the recent EU approval for Brianca and 3rd line plus large B cell lymphoma and look forward to launching in select markets in 2022. Additionally, we are preparing for the U.

Speaker 3

S. Launch of Brianca and second line large B cell lymphoma in June and are ramping up capacity in order to treat more patients. Moving to our immunology product summary on Slide 14. Orencia sales grew 6% versus prior year due to expanded U. S.

Speaker 3

Sales driven by increased market As it relates to Cipozia, global sales in the quarter were $36,000,000 doubling sales compared to prior year. Sequentially in the U. S, we saw encouraging demand growth that was offset primarily by buying patterns from prior quarter and higher gross to net impacts related We are pleased with the awareness and perception of ZYPOZIA and UC and are encouraged by the strong increase in new patient starts. We continue to work further expanding volume while strengthening access and reimbursement and expect to have increased contribution from UC In the second half of this year and expanding in 2023. Internationally, Saposi has continued to secure reimbursement in other markets for MS As well as obtain additional reimbursement for the newly approved UC indication last quarter.

Speaker 3

Lastly, as we continue to broaden our immunology portfolio, Launch plans are already underway to prepare for dupravacitinib's upcoming PDUFA date in September. Now let's turn to our Q1 P and L on Slide 15. As noted recently, we changed the presentation of our non GAAP results. Along with other pharmaceutical companies, we no longer Excludes significant research and development charges or other income resulting from upfront or contingent milestone payments in connection with asset Acquisitions are licensing of 3rd party intellectual property rights. These charges have been included in our GAAP results and there is no impact to the economics of our business.

Speaker 3

Going forward, we will now include these previously specified charges in both GAAP and non GAAP results as a new line item called acquired in process Research and development as well as capture the previously specified income in our OI and E line item. In the quarter, Operating expenses, including acquired in process research and development, increased versus prior year, primarily due to increased MS and A, driven by differences in timing of spend in the prior year as well investments in our new product portfolio. Net charges of $280,000,000 consisting of acquired in process R and D charges The first quarter effective tax rate was impacted by earnings mix. Even with this new financial presentation And the $0.10 impact from the inclusion of acquired in process R and D and previously specified income, our strong performance in the quarter allowed to grow non GAAP EPS 13% versus last year. Excluding this, the new presentation chain of non GAAP EPS would have grown 18%.

Speaker 3

Now moving to the balance sheet and capital allocation on Slide 16, cash flow generation for the company remains strong. Cash flow from operations in the quarter was approximately 3 We ended the quarter in a strong liquidity position with approximately $15,000,000,000 in cash and marketable securities. Our capital allocation priorities remain unchanged. BD continues to be a top priority and we remain committed to continued debt reduction and returning capital to shareholders. And in the quarter, we executed a $5,000,000,000 accelerated share repurchase program.

Speaker 3

Approximately 65,000,000 shares or 85 percent of $5,000,000,000 aggregate repurchase price was delivered to the company in the quarter. The ASR will settle over the next couple of quarters and we remain opportunistic about future share repurchases. Now turning to our 2022 non GAAP guidance on Slide 17. As you know, we guide based upon prevailing exchange rates at the time we report our results. We're updating our top line guidance the in line to prior year primarily due to movements in foreign exchange reflecting the spot rate of the dollar today and faster erosion of Revlimid Recent LOE product guidance is also being changed to reflect the updated Revimed outlook In the range of $9,000,000,000 to $9,500,000,000 Though FX headwinds impact our entire The outlook for in line products and the new product portfolio remains unchanged.

Speaker 3

This reflects a strong performance and confidence in our future growth drivers. We now expect total operating expenses excluding in process R and D to decline in the low single digits versus prior year driven primarily by cost discipline And the impact of foreign exchange. Excluding the change in financial presentation that we've adopted for non GAAP earnings, There is no change to our outlook for non GAAP EPS for the year. With the impact of certain acquired in process R and D and licensing income that are now included in non GAAP Our new range is $7.44 to $7.74 This change is driven by the previously announced $0.10 impact from the Actuals in the Q1, an additional $0.11 related to the buyout of future royalty obligations from mavacamten that occurred in April. Before we move on to Q and A, I want to thank our colleagues around the world for continuing to deliver strong commercial, clinical and financial results.

Speaker 3

And I'm really excited for what lies I'll now turn it back over to Tim and Giovanni for Q and A.

Speaker 1

Thanks, David. Sergey, can we go to our first question, please?

Operator

Sure. Our first question comes from Chris Schott from JPMorgan. Please go ahead.

Speaker 4

Great. Thanks so much for the questions. Just two for me. First, if you may talk about Chemsyos, if I'm pronouncing that right, and the echo monitoring requirements There, it seems like it's a fairly kind of long program. I'm just wondering how you see that impacting any uptake the drug could have?

Speaker 4

And the second question for me was on Melvexion and just the read across from the Bayer Factor XIa data we saw last month. I guess specific Question would be, can you just talk about the attractiveness of AFIB as a category for the Factor 11As? And Is that a focus for Bristol? Or is your focus more in markets where there currently isn't, I guess, Factor Xa usage? So just any color there would be appreciated.

Speaker 4

Thank you.

Speaker 2

Thank you, Gaurav. Good morning. I'll ask Chris to answer your question on Kamsaios and then Samit will comment on Miltaxin. Hi, Chris. Thanks for the question.

Speaker 5

Since this is the first question on KAMZYOS, let me just say at the outset that we're incredibly excited to be launching KAMZYOS. This is an important new medicine for Obstructive HCM patients. And for those of you who are at ACC, there's palpable excitement and anticipation of this So this is a great opportunity for patients. Let me say a couple of things on just the REMS in general, and then I'll get to your question on the echo monitoring. We've been working with Simon's team and the FDA on the design of this REMS and with customers on how we would execute against it for a number of months.

Speaker 5

We view obviously the REMS as important because it ensures that patients are able to be treated safely, that they get on the right dose and that they're able to ultimately get the Full benefit for Kamsiose. There are 2 key components as you think about this REMS. There's a titration period, which is all about monitoring patients to ensure they get the Hey, Joe. This is largely akin conceptually to how cardiologists manage hypertension. And then the 2nd component is ensuring eligibility of drug given background medications.

Speaker 5

As we look across both of these two key components Together, we see the requirements for the RIMs as manageable, generally fitting as I referenced earlier to the treatment approach for cardiac patients and we don't see them as a barrier to adoption. Now with respect to the echo monitoring period specifically, we obviously consulted Customers as we were working through the design of the RINs and they don't see it as a concern for a couple of reasons. First, the Requirements of this monitoring period are relatively minimal. You have to get an LVEF and an LVOT reading. That can be done with your local physician.

Speaker 5

So for those patients who are being treated in centers of excellence. They can go back to their cardiologist, local cardiologist office to fulfill those requirements. 2nd, You have to remember, patients would be coming back a couple of times a year anyway for echos and a number of patients would be coming back Much more frequently for symptom management. So physician visits every 3 months is not seen as particularly burdensome. And the last thing I would highlight is A very important point, which is that patients are going to be highly motivated to work their way through this period.

Speaker 5

As we saw with these four study, patients are highly motivated to Stay on drug, they feel better on CAMZYOS. And so we think there's going to be strong motivation on their part to work through these requirements. So net net, This is something we'll be obviously educating customers on, but we don't see this as a barrier to use.

Speaker 6

And Chris, thanks for that. And Chris from GPM for your question on valynxian. I think, first of all, we are truly excited about that medicine as well As we look forward to getting the data in house in the middle of the year, the read through from the buyer presentation, I would say, is that it further strengthens our confidence in the mechanism of action as well as provides a further proof of concept that inhibiting Factor XI A is a safe way to provide Further anticoagulation or antithrombotic therapies for patients who really need it. As it comes to what indications we'll be pursuing, we'll continue to work with our partners To really define those once the data are in house and we can look at the data, the dose, the ways of administering the drug And all in all, we'll be able to share that with you once we're ready with the data and the read throughs. Thank you.

Speaker 1

Thanks, Salat. Sergey, can we go to the next question, please?

Operator

Sure. Chris Shibutani, Goldman Sachs. Please go ahead.

Speaker 7

Great. Thank you very much. Good morning. Congratulations on the approval on Canxayo as well. Perhaps can you talk about 2 issues, one relating to Access and the other in terms of timelines for which you feel that the physicians are going to get more comfortable with dosing.

Speaker 7

Perhaps can you update us on your expectations for access timing relative to this approval and with the early phases of the rollout? And again, on timing on when we're going to be educating physicians and expecting them to get more comfortable with the breakeven and the REMS.

Speaker 1

Thank you. Thank you, Chris. Chris?

Speaker 5

Sure. So, 2 very good questions. So let me start with access. In general, We anticipate the majority of these Zios patients are going to have very good access for this therapy. Remember, about half of the patients who are obstructive HCM are covered by commercial and Medicare.

Speaker 5

And we think access in this patient population is going to be particularly good. And we expect Initially, a disproportionate share of our use is going to come from this patient population. Now remember, like virtually all specialty medicines, KANZYOS is not Going to be on formulary day 1. We will plan to cover these patients on bridge programs for the roughly 4 to 6 weeks that are going to be required to work through the exceptions process. But we've built strong patient support programs to assist these patients during this time and we expect minimal barriers for these patients during this initial period.

Speaker 5

And then of course once KANZYOS is on formulary, we would expect access to be much more straightforward. Now for Medicare patients, We expect that share is going to grow over time as any affordability challenges there get resolved. Initially, the opportunity will be mainly in the low income Some subsidy patients, but then the broader population use will expand as additional support becomes available to Addressing the affordability issues there. With respect to your second question on timelines for dosing education, We actually think that's going to be relatively rapid. A few things to keep in mind.

Speaker 5

Number 1 is we work through this label. I referenced that we were working with customers on how we would execute against the REMS. So many of the customers, Particularly in centers of excellence, which will be the primary focus at launch, are already roughly familiar with the dosing requirements here. And obviously, The initial focus of our commercial efforts are going to be in these centers of excellence. So we think the understanding of the dosing requirements and the REMS more generally are going to be Very good at launch there.

Speaker 5

And then we're going to be targeting a much broader audience. In fact, the majority of potential obstructive HCM patients With our launch efforts, we're staffed to do that and those education efforts are underway beginning today.

Speaker 1

Thanks, Chris. Sergey, can we go to the next one, please?

Operator

Sure. Jeff Mitchem from Bank of America. Please go ahead.

Speaker 3

Hey, guys. Good morning. Thanks for the question.

Speaker 5

I just had a couple on

Speaker 3

the new product launches. So first on Briansy. Just want to get kind of an update of where you guys what you guys think drives the real inflection? If you had any update as well on the manufacturing, that would be helpful. And then on ZAPOSIA, can you just talk a little bit about the drag on access, just timing for formulary additions, etcetera?

Speaker 3

Just kind of wondering the drivers of an inflection for that brand as well. Thank you.

Speaker 5

Thank you, Chris. Chris? Sure. So, let me talk about Briansy first, then I'll touch on ZYPOSIO. So, Briansy, we're happy with the continued performance that we saw in the quarter.

Speaker 5

We were up, Obviously, sequentially, we're seeing within our existing indication continued Strong interest from physicians in using the product. Patient enrollments from activated accounts were up nicely in the quarter. We saw A nice increase in A. For these patients and that translated into growth in Briyonzi's overall class share, Which is now roughly 20% to 25%. Particularly important from my perspective is that Brienzi continues to be seen as the best in class And so that gives us confidence not only in our existing indication, but obviously we're very much looking forward to a label expansion into the second line setting for this asset, which continues to be on track and Samba can speak to that in the second half of the year.

Speaker 5

With respect to manufacturing, As we've said previously, obviously, that's a big focus for us. We have consistently said that we're Our focus is on expanding that capacity by the middle of the year to be ready for that second line launch, and those efforts continue to be on track. As for ZYPOSEA, again, I think we are happy with the continued progress that we've made with ZYPOSEA. As David referenced, we had a Few dynamics in the quarter with respect to gross to net and inventory. That said, as we look at That product, particularly in UC, which is obviously important for the long term growth of the product, There are 2 things that are going to be critically important for the success of the product.

Speaker 5

First, we've got to, as you referenced, improve access and second, And we've got to drive volumes. Since both of those things co travel, maybe I'll just give you a quick update on both. With respect to access, We have very broad formulary access today. And in fact, we've seen the quality of that access improve this year relative to But as we expected, the majority of patients for ZYPOSI and UC still have multiple step edits. And so we've got to continue to improve access for these patients.

Speaker 5

And the way we will do that is by driving volume. And on that front, we made good progress in the quarter. Patient starts were up about 30 in Q1 relative to Q4. We continue to expand our user base nicely. And importantly, we continue to DRIVE intent to prescribe, all of which we think set us up for continued volume growth.

Speaker 5

Now the majority of those patients when they come on therapy I'm going to initially be triaged to our BRIDGE program. So what we've got to do this year is first we've got to convert those patients to commercial drug where possible. For patients who have better access, we need to convert them over from our bridge program on to commercial drug and there's a big focus this year to do that. And the second, obviously, we've got to continue to drive new patient starts. So as I look at the quarter, I think we've made good headway.

Speaker 5

We've got more work to do. But as we begin to achieve success, particularly in moving those patients from bridge to commercial, you'll see greater volume of sales coming from UC and that will set us up for Continued success later this year and into 2023.

Speaker 1

Yes. Sergey, can we go to the next one, please?

Operator

Seamus Fernandez, Guggenheim. Please go ahead.

Speaker 1

Great. Thanks so

Speaker 8

much for the question. So the first one really is on Ian, wanted to drill into your comments earlier on the call with regard to the opportunity in SSP And your knowledge there, feedback that we have gotten from thought leaders and experts in the space View this as a bit of a riskier indication, more in the context of the patients that get recruited and the interactions that can occur between clopidogrel and aspirin that perhaps could confuse a little bit of the data as it relates So, wanted to just get a better understanding of how you guys are controlling for that. There are genetic factors that impact clopidogrel bleeding risk, things like that, As well as the efficacy of clopidogrel. So just wanted to get a sense of how you are managing for that, whether you're stratifying for it or perhaps Looking at that on an after the fact. And then the second question on mavacamten.

Speaker 8

Obviously, I think the price may be surprised to the upside a little bit at 90 dollars annually. That's quite a widespread between that result and the EISR evaluation of less $15,000 a year. Obviously, can you just comment on that differential and How you hope to get beyond that with additional clinical studies? Thanks, guys.

Speaker 2

Thank you. Thank you, Seamus. So let me just make a comment at the beginning. We've been very clear with respect to the ICER Assessment of Malacamten with the fact we didn't think it was scientifically accurate and not based on Solid data and methodology. So Chris will give you his perspective about the mavacamten value and price.

Speaker 2

Before that though, Samit will answer your question on Milvexin SSP. Thank

Speaker 6

you, Giovanni, and thanks, Seamus, for your question. On Mill vaccine, as you know, that SSP trial is ongoing. It's more than 2,000 patients that have been enrolled in the study And we'll have a readout in the middle of the year, as I said earlier. We have the background therapy of COPITROL as well as aspirin COPITROL, which is given in the This month and ASA continues for the next up to 3 months. With that data, we will be getting all of the PK data as well as all of the safety data And we'll be able to then analyze if there are any interactions.

Speaker 6

Having said that, we've done quite a number of DDI studies and we do not see drug drug interactions as issues. And of course, the overall safety that we will And of course, the overall safety that we will get from this study combined with the data from the TKR study that we've already Done. We'll then define how we proceed further. So since the data are almost around the corner, let's wait for that and not speculate on how the application will be in the SSP study. And certainly, when the data are available and then presented at medical conferences in the future, We can have a further dialogue on that.

Speaker 6

Thank you. And Chris?

Speaker 5

Thanks, Seamus. I think Giovanni addressed the question on ICER. So As it relates to the specific price for Kamsiose, we price this product very much consistently with how we price products generally, which is looking at Variety of factors and notably the value that the drug brings to patients in the healthcare system with a strong focus on ensuring that we are So there really aren't any clinically comparable therapies here. You've got largely ineffective non specific products like beta and calcium Calcium channel blockers that are relatively old and inexpensive and then you've got more effective, but Highly invasive procedures like myectoB and septal ablation, these Procedures alone can be upwards of $100,000 to $150,000 and then you've got ancillary costs associated with those. And remember, they don't cure the So you've got ongoing multiyear costs associated with these products as well.

Speaker 5

So it's a fairly broad range of Prices, where we netted out here, we think is a price that, as I mentioned before, reflects the value of the product. We don't see any incremental concerns with respect to access. And as I referenced in the previous question, we have a robust suite of programs and resources that are in the market to help address any patients or caregivers to support access for this product.

Speaker 1

Let's go to the next question, Sergey.

Operator

Sure. Evan Sigerman from BMO. Please go ahead.

Speaker 9

Hi, guys. Thank you so much for taking my questions and congrats on the approval last night. So I just wanted to touch on Revlimid. I know you David, you had mentioned some color on the call in your prepared remarks. But aside from FX, can you characterize any other potential downside risk to the guidance over the remainder

Speaker 8

of the year? Just trying to get a

Speaker 9

sense of kind of the erosion curve OUS and what we should be thinking about. And now that we're into the quarter,

Speaker 8

Can you really characterize what you're seeing in OUS and kind of maybe give us

Speaker 9

some more color there? And just on one housekeeping item, on that royalty obligation you Waka or Mavacamten, any impact we should be thinking about in our models? Thanks so much.

Speaker 3

Yes. Thanks Evan for the question. And on Revlimid, you really need to think about it in the context of the 2 markets, the U. S. And OUS.

Speaker 3

And as I said in my prepared remarks, For the U. S, the generic entry was later than we'd anticipated and the erosion has been modest. So, and as a result of that, we think that will come out in the second And that's why I provided guidance on the Q2 for Revlimid overall of $2,000,000,000 in Q2. As you think about The full year, outside the U. S, we have multiple generics enter in Europe in mid February, and that erosion has been faster than we anticipated.

Speaker 3

And based upon that erosion that we're seeing, that's why we changed the full year guidance on Revlimid between $9,000,000,000 $9,500,000,000 As you think about longer term Revlimid going forward, you may recall that we provided a guidance of about $2,000,000,000 to $2,500,000,000 Per year over the next couple of years. And as we head into next year, since the erosion a little faster this year, we'll probably be at the lower end of that range of around $2,000,000,000 for So that's on REVLIMET. And mavacamten, there was a minor royalty that we were able Retired that obligation and it will be a slight improvement to our gross margins, but we don't guide gross margins for our products overall. All right. It's a low single digit royalty obligation that we're able to expire.

Speaker 3

Thanks. Can

Operator

Andrew Baum, Citi. Please go ahead.

Speaker 1

Thank you. A couple

Speaker 10

of questions, please. Assuming axiomatic SSP reads out positive, I'm curious as to which clinical settings you'd actively avoid With Nalvexion, given it only inhibits one of the pathways, the intrinsic pathways, Diox has failed and EsoF has failed in the chemical heart valves. I'm just looking for some guidance not where you want to go, but where you would be disinclined to go. And then second, given the accumulating long term follow-up on ducravasitinib as the indications expand. I wonder whether you'd care to comment on any imbalances For Zoster or thrombosis in that collected data that I'm sure you shared with the agency.

Speaker 10

Thank you.

Speaker 2

Thank you, Andrew. Let me ask Samik to answer both of your questions.

Speaker 6

Thank you, Andrew. And I like the new flavor of the question on the indications for meloxicillin Asking the same question in a different way, but I think the answer will remain the same for you, that we are not disclosing at this time what indications we are going to pursue or We will have to make those decisions once we have the dose as well as our conversations with our partners and of course in conversations with the regulatory agencies in In terms of how we will conduct the studies, what control arms will be used, etcetera. So certainly, we'd be happy to have that dialogue once we are With the data as well as the decisions. On ducarvasitinib, you're absolutely right. We are continuing to be very confident in the profile of the medicine.

Speaker 6

We have the data of course from POYTIG1, POYTIG2 with long term follow ups now. We've conducted studies in psoriasis in China and Japan as well, which Continue to support the overall profile. Additional data, of course, from psoriatic arthritis Phase 2 studies, SLE study that we've talked about as well, All continue to support the overall safety profile that we have seen in terms of the very Specific inhibition of the TYK2 pathway without an impact on the JAK pathway. So the differentiation continues and those are the data that we have provided from the psoriasis perspective to the agencies and looking forward to that launch in moderate to severe psoriasis in September of this year.

Speaker 1

Thanks Sergey, can we go to the next one?

Operator

Steve Scala, Cowen. Please go ahead.

Speaker 7

Thank you very much. I'd like to follow-up on the Revlimid Jacktery, it looks like the second half Revlimid revenue is expected to be about $4,200,000,000 to $4,700,000,000 That implies a flat To up performance versus the second quarter, can you discuss why it will be up in flat to up in H2 2, if pressure has intensified in both the U. S. And OUS.

Speaker 5

That's the first question.

Speaker 2

Yes. The

Speaker 7

second The question is, and I apologize for splitting hairs, but mosexion data was expected in the first half. Now it's mid year. That is a modest change, but has there been some sort of delay maybe because of events? This isn't necessarily meant Directed at Bristol, but it seems in this industry mid year is always the Q3 and the Q3 is always September. So any color would be appreciated.

Speaker 7

Thank you.

Speaker 2

Thank you, Steve. Let me answer the second question and then I'll ask David to answer your question on Revlimid. There is no change To the time lines for Milvexion. So the study is on track, and we look forward to updating you as soon as the data is

Speaker 3

And Steve, thanks for the question on Revlimid. The thing that's important to remember, in the U. S, We only have one generic entry in the first half of the year. And then we have multiple generics that we're entering in the second half of the year. So that's why the phasing is from quarter to quarter and it can shift as I was saying between because the generic entry will be in the September timeframe.

Speaker 3

So depending on how Hopefully that comes into the market will impact the phasing of the product quarter to quarter, but you will see more generics in the U. S. In the second half of the David, Sergey, can

Speaker 1

we go to the next question please?

Operator

Luisa Hector, Berenberg. Please go ahead.

Speaker 11

Thank you very much for taking my questions. I wanted to ask you whether we can compare and contrast There's a posier ramp with the potential ramp of ducravasitinib. Do you anticipate A similar sort of challenge, I guess, in terms of access and volume as you bring that product to market. And really, it's a question How we should moderate our ramp, our launch ramp for ducravacitanib? And on M and A, Your comments still consistent commentary.

Speaker 11

But given some of the changes to valuations of some of the targets, I just wondered whether Anyos, the dialogue is also shifting. Are you finding more companies approaching you? Is there more dialogue around Collaborations on early stage pipeline, just any shift in the dialogue? Thank you.

Speaker 2

Thank you very much. Let me I'll answer the first the second question on M and A and then Chris will answer your question on DUKORALA. So and let me just reiterate Our focus on M and A has always been there. It's the central pillar of our capital allocation strategy. It's a really important part Our innovation strategy, we've actually had a number of deals that we've executed in the last few months, which really confirms A very proactive approach to business development and more broadly.

Speaker 2

And as a result of that, that will continue to guide us in the future. With respect to your question about whether we are seeing any change, our experience is that Whenever there is some type of realignment in market values, it always takes a little bit of time for those values to really be the values that boards of biotech companies look In terms of their valuations. Having said that, of course, Values were extremely high. They're somewhat realigned. And I'll conclude by saying that every company is a bit of a different story and you have to really look at it one at a time.

Speaker 2

But we are confident And the ability to continue to bring new innovation into the company through a combination of Development strategies that go from partnership and collaboration in licensing and potential acquisitions.

Speaker 5

Krish? Yes. So thanks, Louisa, for the question. Just a couple of things. I would say at a high level, there are some Important similarities between UC and psoriasis.

Speaker 5

Volume is going to be important to gain access over time. This is a market that, while it is less competitively intense than what you see and you see particularly in the oral setting, It is a market that has been historically heavily managed. Now there are some important differences as well. While psoriasis is heavily managed, we have seen A number of national payers have moved from highly restricted access to more open formulary management over the last few years. That's good for new entrants.

Speaker 5

We also know that many patients are going to be covered on plans that have open access when we launch. Again, that's an important Opportunity for a new entrant, Mike Ducravacitinib. But for the remainder of covered lives, it's going to be important, as we've been discussing with Posia to build volume over time so that we can work with payers to gain more of a favorable access position. So there are some similarities between the two And then a couple of important differences as well.

Speaker 1

Okay. Can we go to the next one?

Operator

Tim Anderson, Wolfe Research. Please go ahead.

Speaker 9

Hi, thanks for taking our question. This is Adam on behalf of Tim. So first on TYK2, Can you talk about the commercial potential in psoriasis under 2 different scenarios? The first being, if you get a black box warning And the second is without that warning, if you do get a black box warning, would it be safe to assume that sales in psoriasis could be Something like half of what they would be if you had a clean label. And then secondly, just real quick on WAG-three, when will we get the next round of important data

Speaker 2

Thanks, Adam. This is Giovanni. So on TIK2, let me just start by saying, we are increasingly confident in the potential of that program, as I mentioned earlier, with PDUFA date in September for psoriasis, ongoing Phase 3 Starting psoriatic arthritis and then, of course, the SLE proof of concept readout earlier this year, together with ongoing Phase II studies in a number of other indications, including IBD. So The prospects for the program continue to strengthen as we go forward. We've answered that question On regulatory outcomes, specifically with respect to the label a number of times, but let me ask Chris To give you his perspective again and then Samit will comment on

Speaker 5

the LAG-three program. Sure. Thanks Adam for the question. So first, I'm not going to speculate on the black box scenario. As we've said consistently, we're going to continue to operate under the perspective of the most likely scenario and the scenario that we believe is most supported by the data, which is that dacravasitinib has a unique mechanism action consistent with all of the preclinical and clinical data that we have.

Speaker 5

And so our focus from a commercial standpoint, while we, of Core scenario plan, various versions of the label, that's going to be the operating plan that we go as the most likely case. And so we're still very much Focused on leveraging the data from the 2 Phase 3 studies that we have that clearly show clinical data that is Superior both from an efficacy standpoint and safety superiority to Otezla, which is the only branded oral in the market today. And given that efficacy, we believe we have a very strong case for establishing ducravasitinib as the branded oral of choice here. Launch preparations are well underway. We have a great team already in the field from a medical standpoint.

Speaker 5

The home office team has been Apten is up and running. We're in the process of hiring the sales force. So our going position continues to be consistent with dupravasitinib as a unique mechanism of action and we think we have the clinical profile and the team in place to deliver on establishing this product as the branded oral of choice.

Speaker 6

Thanks, Chris. And Adam, just on the Opdivo LAG, because LAG-three is obviously being developed as a fixed dose combination with nivolumab. We have several studies ongoing not only as BMS sponsored trials, but also through investigator initiated trials. And through those investigator initiated There will be continued evolution of the data that will be coming through, even including from this ASCO itself. So you will see the Data continuing to come out at various conferences through either our trials or through the ISRs that are being And of course, then the Phase 3s and will start to read out over the coming years.

Speaker 1

Sergei, can we go to the next one, please?

Operator

Terence Flynn, Morgan Stanley. Please go ahead.

Speaker 12

Hi. Thanks for squeezing me in. Maybe 2 for me. A follow-up on Opdulag. I know it's still early in the launch, but just wondering what types of patients you're seeing receive the drug.

Speaker 12

I know your initial focus was going to be on the monotherapy setting, but is that pretty consistent or are you seeing broader use? And then in terms of Abekma, What percentage of demand are you able to supply now? And can you help quantify how much additional supply will come on later this year? Thank you.

Speaker 5

Thanks, Darren. Chris? Sure. Let me start with Opdulag. So we're very pleased, as David noted, with the not only the approval, The reaction from physicians has been very positive.

Speaker 5

Based on the early read that we have and again, it's only a few weeks of data, The what we're seeing in the marketplace is entirely aligned with our expectations. So, number 1, the profile is very well received Given the 2x improvement in PFS, the strong trend toward OS, similar safety relative to PD-one monotherapy, So the excitement that we've seen around the profile is as we hoped and expected for this asset. 2nd, What physicians are playing back to us as they see using this product in the segment initially of the market that we had anticipated. Remember, First line metastatic melanoma is a market that is essentially divided into thirds. A third of patients are getting dual IO therapy, a A third of patients are getting PD-one monotherapy and a third are getting targeted therapies, notably BRAF mutants.

Speaker 5

And so Our initial focus had been on the PD-one monotherapy segment and that's where physicians have begun to use the product. Now it's possible that over time that could expand into other segments, but keep in mind that Opdivo Yervoy has a very strong presence there just given the long term survival benefit. So we anticipate and what we're hearing right now is that the initial use is going to be in the PD-one monotherapy as expected. With respect to Abekma, what I can tell you The demand continues to be very strong. We have utilized every manufacturing slot that we have for Vecna over the quarter.

Speaker 5

Our focus continues to be on building demand to the middle of the year In anticipation of continued strong demand for this asset over time, and remember this is a space in which we've had a competitive agent enter and so we've still seen very strong demand for Avegma, which is also in line with expectations. So Well, I won't give specific guidance as to exactly what that ramp will look like. What I can tell you is our focus continues to be on making sure that we make more spots available for Abegma. We're in line with our expectations on being able to be in a much better position by the middle of the year.

Speaker 1

Okay. Can we go to the next one, please?

Operator

Dan Leone, Raymond James. Please go ahead.

Speaker 9

Hi. Thank you for taking the questions. Two questions from me, please. Mavacamten, the premise for the acquisition of Cardia was obviously not just mavacamten, but was largely predicated on on the opportunity to develop not just in obstructive HCM, but potentially non obstructive and hep path as well. The questions we've been getting a lot since the approval last night and the review of the label, no real surprises in terms of the handholding needed To get a patient on drug and then monitor the patient while they're on drug given the pharmacodynamic and PK properties of mavacamten.

Speaker 9

But really the discussion comes down to how in Embark, which is your HFpAS study that I think we'll read out maybe next year, Can the dosage and treatment algorithm be modified to make the drug and its properties more accommodative to Preserved detection fraction in patient population or non obstructive patient population. And should we Expect to have maybe lower doses be viewed as potentially effective in those populations that might resolve some of the handholding needed for the drug. And then the second question is actually in fintechumab. We will have a readout, I think, of opoptumab coming up, the Phase 2 study. That should be fairly informative.

Speaker 9

Could you just give us your expectations of what you need to see there to feel confident moving forward in any topic during the backdrop? Thank you.

Speaker 2

Okay. Thank you. Thank you, Dave. Let me ask Samit to answer both of your questions.

Speaker 6

Yes. Thanks, Dave. The line was cutting off, but I think I got the gist So, when we think about mavacamten, you very correctly said that now that the drug is approved in obstructive hypertrophic cardiomyopathy, Our intent, of course, is based on the data from the MAVERICK Phase 2 study and the long term follow-up from there, we are initiating the Phase 3 program Later this year in non obstructive hypertrophic cardiomyopathy. Now of course, the HESPEP study is a small Phase 2 study, which is a proof of concept trial looking at the dose of 2.5 raise to 5 milligrams dose and that data when we have the proof of concept will then open the door for future indication expansion to fbev. And at that time, we'll be able to have the decision around what dose and how to manage the overall profile in terms of dosing these patients In that indication, so more to come as the data evolves and we understand it better, the application of this medicine in that disease.

Speaker 6

For cindacimab, we have 2 studies that are ongoing, as you know, with a Phase 3 study in eosinophilic esophagitis. And then, of course, as you said, later this year, we'll see the data from Atopic dermatitis. Now that is the field where we have understood quite well because of the competition that is out there and the data that are out there. So the data that needs to evolve The Phase 2 study needs us to be in a place where we can ultimately understand the applicability of this drug and the population where it should be used. So again, let's wait and watch.

Speaker 6

When the data evolves, we'll be able to discuss that and give more specifics if those data are significant and clinically meaningful to go into Phase 3 studies.

Speaker 1

Thank you. Sergey, can we go to the next one? Sergey, can you go to the next question please? Sergey, can you hear us? Not sure if you can hear us, Sergey.

Speaker 1

We're here if you can.

Speaker 3

Hello.

Speaker 12

Very

Speaker 11

good. Yes. Excuse me, interruption. Shall we move on to the next question?

Speaker 1

Yes, please.

Speaker 11

Yes, go ahead.

Speaker 1

I think we're out of time at this point. Maybe we should wrap up the call, Giovanni.

Speaker 2

Yes. I'm sorry for the last minute issue. Let me just thank you all again for joining our call. And obviously, our teams are available to answer any additional questions you may have. So in concluding, Let me just say, we're really pleased with the 2 approvals this quarter, the continued progress we've made with our pipeline and our strong commercial performance.

Speaker 2

That makes me really confident in our ability to continue to execute. We are very well positioned for growth. And I just want to thank our employees for their continued hard work and dedication. With that, we'll close the call. And again, Tim, Nina And the rest of the team remain available for answering any additional questions you may have.

Speaker 2

Thanks, everyone.

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