Q3 2020 Amgen Inc Earnings Call

All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speakers prepared remarks.

Operator: All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speaker's prepared remark. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourselves to asking one question during the Q&A session. To ask a question, press star then the number one on your telephone keypad.

Order to ensure that everyone has a chance to participate.

I would like to request that you limit yourself to asking one question during the Q and a session to ask a question Press Star then the number one on your telephone keypad to withdraw your question press the pound key.

Arvind Sood: Draw your question, press the pound. I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin. Okay, thank you, April. Good afternoon, everybody. I, together with several members of our leadership team that you will hear from today, would like to welcome you to our Q3 call. The format of our Q2 call was very well received, so we'll stick to keeping our prepared comments to a minimum and limit the overall duration of the call to one hour. The slides have been posted.

I'd now like to introduce Arvind Senior Vice President of Investor Relations Mr. <unk> you may now begin.

Okay. Thank you good afternoon, everybody I together with several members of our leadership team you will hear from today I would like to welcome you to our Q3 call.

Before I wrap up our Q2 call was very mild to see so we'll stick to keeping our prepared comments to a minimum and limits. The overall duration of the call to one hour.

The slides have been posted just a quick reminder to use non-GAAP financial measures in our presentation and some of the statements will be forward looking statements are 10 can't subsequent filings identify factors that could cause our actual results to differ materially.

Arvind Sood: Just a quick reminder that we use non-GAAP financial measures in our presentation, and some of the statements will be forward-looking statements. Our 10K and subsequent filings identify factors that could cause our actual results to differ materially. So with that, I would like to turn the call over to our chairman and CEO, Bob Bradway.

Now I would like to turn the call over toward Chairman and CEO, Bob Bradway, Bob Good. Thank you for joining todays call.

Bob Bradway: Okay. Thank you for joining today's call. I will take a few moments to discuss our performance in the third quarter and then share some thoughts on the overall operating environment in a COVID context. We delivered another strong quarter. You can see that in our revenue growth of 12%. And, in addition, once again this quarter, our revenue growth exceeded expense growth.

I'll take a few moments to discuss.

Our performance in the third quarter, and then share some thoughts on the overall operating environment and a coolant context.

We delivered another strong quarter she's out in our revenue growth of 12%.

And in addition, once again this quarter our revenue growth exceeded expense growth.

Unknown Executive: [inaudible] Putting the results in a broader context, our double-digit increase in revenues was driven by the continued volume-driven growth of many of our innovative products. [inaudible] which is proving resilient in the face of increased competition. We expect these three factors to be key to our long-term success. Turning to COVID-19, clearly, the pandemic remains an important factor affecting performance for Amgen and for our industry. You'll recall that Amgen grew revenues by 11% in the first quarter of the year, with the first 10 weeks of performance largely unaffected by the pandemic. In the second quarter, when conditions were at their worst, revenues grew by 6%.

They bring us to reporters for sure Ross well ahead of revenues.

What are the results in a broader context.

Or double digit increase in revenues was driven by the continued volume driven growth in many of our innovative products the strong uptake of our high quality Biosimilar.

The relative stability of our base business.

She is proving resilient in the face that increased competition.

We expect these three factors to be key for long term success.

Turning to COVID-19, clearly the pandemic remains an important factor affecting performance for Amgen and for our industry.

You'll recall that Amgen grew revenues by 11% in the first quarter of the year, but the first 10 weeks or performance partially affected by the pandemic.

In the second quarter when conditions were up their worst revenues grew by 6%.

Our performance in the third quarter reflects an encouraging recovery from the depth of the pandemic and was largely consistent with what we anticipated for you in our remarks at the time of our second quarter call.

Bob Bradway: The performance in the third quarter reflects an encouraging recovery from the depths of the pandemic and was largely consistent with what we anticipated for you in our remarks at the time of our second quarter call. As regards the fourth quarter, we see the current resurgence in cases as a potential headwind for our business. We are closely monitoring this to see what the impact may be for the rest of the year and if there might be any spillover into 2021. However, we don't expect anything like what we saw earlier in the year, as global healthcare systems know much more about how to treat COVID-19 and are better prepared to do so than they were earlier in the year. However, on the margin, we're not ruling out that there will be some impact, and we've tried to incorporate this into our planning assumptions for the fourth quarter and into the beginning of next year. Overall, I remain optimistic that innovation from the biopharma industry will break the back of this pandemic; vaccines, antibodies, and other therapeutics that are being developed with unprecedented speed and collaboration. One thing this pandemic has exposed is the importance of innovation.

As regards the fourth quarter, we see the current resurgence in cases as a potential headwind for our business.

We are closely monitoring this to see what the impact may be for the rest of the year and if there might be any spill over into 2021.

We don't expect anything like what we saw earlier in the year as global Health care systems know much more about how to treat carbonite team and are better prepared to do so than they were earlier in the year. However on the margin we're not ruling out because there will be some impact.

We tried to incorporate this into our planning assumptions for the fourth quarter.

Beginning of next year.

Overall, I remain optimistic that innovation from the bio pharma industry well break the back of this pandemic vaccines antibodies and other therapeutics that are being developed.

Yesterday that speed and collaboration.

One thing this pandemic has exposed to is the importance of innovation.

And that of course is at the core of our strategy and that's reflected in the first in class molecules that are advancing rapidly in our pipeline.

Bob Bradway: That, of course, is at the core of our strategy, and it's reflected in the first-in-class molecules that are advancing rapidly in our pipeline. We're pleased, of course, with the Phase II results of our first-in-class molecule, soduracid, and we expect to see top-line Phase III data for tezupelumab, a potential first-in-class treatment for severe asthma, by year We're also making good progress with several of our half-life extended bite molecules, particularly in solid tumors like prostate and small cell lung. All the work that we do is taking place at a time when more is expected of companies than ever before. We understand these expectations and are committed to good corporate citizenship and sustainable operations. Before I turn things over to the rest of the team, let me thank our staff members around the world for their unwavering commitment to serving patients during this challenging time. Their resilience, creativity, and ability to execute give me great confidence in our long-term future. Dave

We are pleased of course with the phase two results of our first in class molecule soon RASM and we expect to see topline phase three data for tens you probably about.

Potential first in class treatment for severe asthma by year end.

We're also making good progress with several of our half life extended bite molecules.

Securely in solid tumors like prostate and small cell lung cancer.

Hi, good work that we do is taking place at a time when more is expected of companies than ever before we understand these expectations and are committed good corporate citizenship and sustainable operations.

Before I turn things over to the rest of the team let me. Thank our staff members around the world for their unwavering commitment serving patients during this challenging time ever.

Their resilience creativity and ability to actually to give me great confidence in our long term future.

Dave.

Thanks, Bob.

David M. Reese: Thanks, Bob. I'll begin with soda acid, our first in class KRAS G12C inhibitor. Based on the data we have accumulated and the evolution of the field, we are extremely optimistic about the potential of sodoracid and will continue to aggressively advance the development program. Earlier this month, we reported positive top-line results from our Phase II monotherapy study in advanced non-small cell lung cancer, demonstrating an objective response rate consistent with our Phase I data at 960 mg and promising results on other measures of efficacy, including duration of response, with Safety and tolerability were similar to previously reported data for this population and have been remarkably consistent across the 160 patients treated with our Phase 2 dose.

Beginning with soda roster, our first in class K Ras T 12, C. inhibitor.

Based on the data we have accumulated and the evolution of the field. We are extremely optimistic about the potential of solar assets and we'll continue to aggressively advanced the development program.

Earlier this month, we reported positive top line results from our phase two monotherapy study in advanced non small cell lung cancer, demonstrating an objective response rate consistent with our phase one data at 960 milligrams and promising results on other measures of efficacy, including duration of response.

More than half of the responder still on treatment at the data cut off so.

Safety and Tolerability were similar to previously reported data for this population and have been remarkably consistent across the 160 patients treated with our phase two dose.

Our phase one and phase two data are based on protocol specified intend to treat criteria as is our practice in the scans to assess efficacy parameters in phase two had been evaluated by independent Central review.

David M. Reese: Our Phase I and Phase II data are based on protocol-specified, intent-to-treat criteria, as is our practice, and the scans to assess efficacy parameters in Phase II have been evaluated by independent central review. We look forward to presenting the Phase II results at the World Congress on Lung Cancer taking place in January. We also reviewed with interest the data presentation made a few days ago. Based on our assessment of available efficacy and safety data, including durability measures, we remain extremely confident in our molecule.

We look forward to presenting the phase two results at the World Congress on lung cancer, taking place in January.

We also reviewed with interest the data presentation made a few days ago.

Based on our assessment of available efficacy and safety data.

Moving durability measures.

We remain extremely confident in our molecule to date, we have treated over 550 patients with soda rassam.

David M. Reese: To date, we have treated over 550 patients with sodoracib, and we are looking forward to discussions with the FDA and other regulatory agencies to determine the best path forward as monotherapy in patients with advanced lung cancer. We couldn't be more enthusiastic about our position as we move towards establishing SodaRacib as a KRAS G12C foundational therapy. We also remain optimistic about our bike platform. We now have evidence of clinical activity in solid tumors, including recently presented prostate cancer data from AMG-160, which targets prostate-specific membranes. The Benefit Risk Profile of AMG-160 has continued to improve with additional dose optimization. Amg757 is our half-life extended bite targeting DLL3, which is a very attractive target due to its differential expression in small cell lung cancers, and we look forward to presenting initial data at the Society for Immunotherapy of Cancer annual meeting next month. Small cell lung cancer is a major unmet medical need globally, and yet treatment options have not advanced significantly in decades.

We are looking forward to discussions with the FDA and other regulatory agencies to determine the best path forward as monotherapy in patients with advanced lung cancer.

We couldn't be more enthusiastic about our position as we move towards establishing soda rasta as a K Ras to 12 C. foundational therapy.

We also remain optimistic about our bite platform.

We now have evidence of clinical activity in solid tumors, including recently presented in prostate cancer data from M.G., 160, which targets prostate specific membrane antigen Ben.

The benefit risk profile AG 160 has continued to improve with additional dose optimization.

M.G. 757 is our half life extended bite targeting deal, though three which is a very attractive target due to its differential expression in small cell lung cancers.

I look forward to presenting initial data at the society for immunotherapy of cancer annual meeting next month small.

Small cell lung cancer is a large unmet medical need globally, and yet treatment options have not advanced significantly in decades.

We will also investigate AMG 757 for the treatment of neuroendocrine tumors.

David M. Reese: We will also investigate AMG 757 for the treatment of neuroendocrine tumors. We expect to present data from AMG 701 targeting BCMA for multiple myeloma later in the year as well. And before leaving the BITE platform, I wanted to mention a Phase 2 publication in the New England Journal of Medicine that reported deep responses and a tolerable safety profile for dasatinib induction, followed by blinsito consolidation Bansal, Jay Olson, David Reese, Arvind Sood, Yaron Werber, Salveen Richter, Daniel Lundquist, If these results are confirmed in larger trials, this could lead to a potential paradigm shift in the treatment of this disease. Cardiovascular Disease.

We expect to present data from AMG seven to one targeting VCM eight for multiple myeloma later in the year as well.

Before leaving the bite platform I wanted to mention a phase two publication in the New England Journal of Medicine that reported deep responses into tolerable safety profile for dissatisfied of induction followed by Blincyto consolidation in adults with Philadelphia chromosome positive AOL.

A set of patients achieved a molecular response and disease free survival was 88% at 18 months highlighting the potential of a chemotherapy free regimen.

If these results are confirmed in larger trials this could lead to a potential paradigm shift in the treatment of this disease.

In cardiovascular disease, we recently released the topline results from our Omecamtiv Mecarbil phase three outcome study and the results will be presented at the American Heart Association scientific sessions in November.

David M. Reese: We recently released the top-line results from our Omicamptive-McCarville phase 3 outcome study, and the results will be presented at the American Heart Association scientific sessions in November. As a result of inflammation, along with AstraZeneca, we look forward to the top-line results of the pivotal tezapelimab phase 3 study, Navigator, in patients with severe uncontrolled asthma, which remains on track. We also expect the results from the Oral Corticosteroid Sparing Phase 3 Study Source by the end of the year, which should complement the pivotal. I'm happy to announce that we will be advancing our third inflammation program into Phase 2 development next year with AMG-592, now named afavalucan-alpha, our IL-2 mutine for systemic lupus erythematosus. The trial was selected for [inaudible] Closing, I would like to thank all of the Amgen teams for executing at such a high level during the ongoing pandemic, Murdo. Thanks, Dave.

And inflammation, along with Astrazeneca, we look forward to the topline results of the Pip pivotal TESTOPEL EMA phase three study navigator in patients with severe uncontrolled asthma, which remains on track.

We also expect the results from the oral corticosteroids bearing phase three study source by the end of the year.

It should complement the pivotal data.

I'm happy to announce that we will be advancing our third inflammation program into phase two development next year with AMG five nine too.

Now named Fabio Luke an alpha or I or two new team for systemic lupus erythematosus trial was selected for inclusion in the FDA complex innovative trial designs pilot program, which supports the development and regulatory review of novel clinical trial designs for new therapies.

In closing I would like to thank all of the Amgen teams for executing at such a high level during the ongoing pandemic murdo.

Thanks, Dave we've seen volumes continue to improve from the initial stages of the pandemic with Q3 global revenues growing 12% year over year, driven by 18% volume growth.

Murdo Gordon: We've seen volumes continue to improve from the initial stages of the pandemic, with Q3 global revenues growing 12% year over year, driven by 18% volume growth. Additionally, during Q3, physician-patient interactions increased to near pre-COVID levels. Across the industry, in the U.S., total prescriptions are still down approximately 2%, and physician visits, either in person or remote, are down approximately 10% versus the pre-COVID baseline. While trends improved during the quarter, we are seeing infection rates rise in many parts of the world, which may bring additional quarter-to-quarter variability. Let me spend a few minutes discussing our Q3 performance and outline our expectations for the remainder of 2020. In Bone Health, our efforts are focused on ensuring patient continuity. We grew prolia volume by 10% year-over-year, even though osteoporosis diagnosis rates have returned to just 70% of pre-COVID levels in the U.S. COVID has also resulted in a change in historical quarterly trends for prolia. Prior to the pandemic, the first and third quarters each year had lower sales than the second and fourth quarters.

During Q3 physician patient interactions increased to near pre cold at levels across the industry in the U.S. total prescriptions are still down approximately 2% and physician visits either in person or remote are down approximately 10% versus the pre cove at baseline.

While trends improved during the quarter, we are seeing infection rates rise in many parts of the world, which may bring additional quarter to quarter variability.

Let me spend a few minutes to discuss our Q3 performance and outline our expectations for the remainder of Twentytwenty.

In bone health, our efforts are focused on ensuring patient continuity, we grew prolia volume by 10% year over here, even though osteoporosis diagnoses rates have returned to just 70% of prequaled levels in the U.S. Cove. It has also resulted in a change in historical quarterly trends.

For Prolia prior.

Prior to the pandemic, the first and third quarters, each year had lower sales than the second and fourth quarters. However, given the impact of the pandemic in the second quarter and the six month dosing regimen of Prolia, we would expect year over year growth rate in the fourth quarter to be lower than pre.

Murdo Gordon: However, given the impact of the pandemic in the second quarter and the six-month dosing regimen of Prolia, we would expect year-over-year growth rates in the fourth quarter to be lower than pre-COVID growth. With the current rise in COVID infection rates in the U.S. and Europe, there could be additional delays in patients receiving their prolietary vaccines. The identity sales in the U.S. grew This growth was offset by lower sales in Japan, which were partially related to the timing of purchases by our partner Astellas. We believe Avenity's unique bone-building abilities will continue to drive growth in our business as physicians appreciate its benefit-risk profile in treating their post-fracture patients. Repatha Sales increased 22% year-over-year driven by 60% volume growth and is the segment leader globally.

Cobot growth trends.

With the current rise in colon infection rates in the U.S. in Europe, there could be additional delays in patients receiving their prolia treatment in Q4.

Then at these sales in the U.S. grew quarter over quarter, driven by 30% volume growth. This growth was offset by lower sales in Japan, which were partially related to timing of purchases by our partner Astellas.

We believe the Venice. These unique bone building abilities will continue to drive growth in our business as physicians appreciate its benefit risk profile in treating their post fracture patients.

Repatha sales increased 22% year over year, driven by 60% volume growth and as this segment leader globally to scare us.

We remain confident in our ability to grow repatha, given the significant unmet medical need in treating high risk cardiovascular patients our comprehensive patient payer coverage the convenient self administration and established outcomes data in the label.

Murdo Gordon: We remain confident in our ability to grow Repatha given the significant unmet medical need for treating high-risk cardiovascular patients, our comprehensive patient pair coverage, the convenient self-administration, and established outcomes data in the label. Moving on to Parsiviv, which is an attractive treatment for secondary HPT supported by the convenience of its IV administration. In January 2021, reimbursement for Parsibiv will move into the dialysis bundle payment system. We've already begun to see some negative impact on rates of utilization in the U.S., and we would expect this impact to continue in Q4. Transitioning to our inflammation portfolio, total prescriptions for Otesla in the U.S. grew 11% year-over-year, while underlying volume trends remain strong. Sales were negatively impacted by lower inventory levels compared to last year.

Moving on to parse it does which is an attractive treatment for secondary HBT supported by the convenience of its IB administration.

In January 2021 reimbursement for parts of this will move into the dialysis bundle payment system.

Already begun to see some negative impact on parts of that utilization in the U.S. and we would expect this impact to continue in Q4.

Transitioning to our inflammation portfolio total prescriptions for Otezla in the U.S. grew 11% year over year.

Underlying volume trends remain strong.

Sales were negatively impacted by lower inventory levels versus last year.

Murdo Gordon: We're confident that Otesla will continue its double-digit year-over-year volume growth based on its well-established safety and efficacy profile, convenient oral dosage, broad pair coverage, and the lack of lab monitoring requirements. Embrel remains the cornerstone of our inflammation franchise, and we continue to invest in Embrel along with our broader inflammation portfolio, including Otazla, Amjavita, and recently launched Avsola. Enbrel was impacted by slowing growth in rheumatology prescribing in Q3, related to COVID, and experienced some share loss in the quarter, while maintaining price stability year on year.

We're confident that Otezla will continue its double digit year over year volume growth based on its well established safety and efficacy profile convenient oral dosage broad payer coverage and the lack of lab monitoring requirements.

Embratel remains the cornerstone of our inflammation franchise, and we continue to invest in Edinburgh, along with our broader inflammation portfolio, including Otezla and visa and recently launched a solo.

Brazil was impacted by slowing growth in rheumatology prescribing in Q3 related to coated and experienced some share loss in the quarter, while maintaining price stability year on year.

Continued softness in rheumatology prescribing related to rising cobot infections could farther in fact and bell in the fourth quarter.

Murdo Gordon: [inaudible] Our Q3 biosimilar revenues were $480 million, supported by share growth by Invasi and Kenjin. We've achieved leading biosimilar shares for Amgevita in Europe and for Mvasi and Cangenti in the US. Our highly efficient operating model and full complement of patient services provide an important advantage as we face additional biosimilar competitors heading into 2021. In Oncology, Nelassa Onpro remains the preferred long-acting GCSF, with 55% share of volume in the quartet. New Elasta sales decreased 22% year-over-year driven by declines in volume and net selling. Competitive activity and long-acting progressives are impacting average selling price. The most recent published average selling price for Nelasta in the US declined 19% year over year and 6% quarter over quarter.

Our Q3 bio similar revenues were $480 million supported by share growth by end basi and can genting.

We've achieved a leading biosimilar share strategy Vito in Europe, and friend Basi and can gently in the U.S., our highly efficient operating model and full complement of patient services provides an important advantage as we face additional biosimilar competitors heading into 2021.

In oncology Neulasta Onpro remains the preferred long acting GCSF, Seth with 55% share of volume in the quarter.

I'll ask the sales decreased 22% year over year, driven by declines in volume and net selling price compare.

Competitive activity and long acting Filgrastim is impacting average selling price. The most recent published average selling price for neulasta in the U.S. declined 19% year over year, and 6% author over quarter.

Overall I'm very pleased with our Q3 performance, we remain vigilant as the pandemic continues to create uncertainty and potential disruptions in the health care marketplace.

Peter H. Griffith: Overall, I'm very pleased with our Q3 performance. We remain vigilant as the pandemic continues to create uncertainty and potential disruptions in the healthcare marketplace. Employees around the world are focused on ensuring continuity of care for our patients. And we'll continue investing to drive growth of our innovative products, advance our geographic expansion, and prepare for potential new product launches. And with that, I'll turn it over to Peter. Thank you, Murdo.

Amgen employees around the world are focused on ensuring continuity of care for our patients and we'll continue investing to drive growth of our innovative products advance our geographic expansion and prepare for potential new product launches and with that I'll turn it over to Peter.

Thank you Murdo.

Consistent with the first half of the year, we executed effectively during the third quarter, delivering 12% revenue and 19% non-GAAP EPS year over year growth.

Peter H. Griffith: Consistent with the first half of the year, we executed effectively during the third quarter, delivering 12% revenue and 19% non-GAAP EPS year-over-year growth. As you heard Murdo say, revenue growth was driven by volume increases, consistent with our focus on volume-driven growth. Third quarter non-GAAP operating expenses increased 10% year over year and 9% quarter over quarter as we accelerated our investments to drive growth and advance the pipeline.

As you heard Murdo se revenue growth was driven by volume increases of 18% consistent with our focus on volume driven growth.

Third quarter, non-GAAP operating expenses increased 10% year over year, and 9% quarter over quarter as we accelerated our investments to drive growth and advance the pipeline.

Although activity levels. During Q3 were still partially impacted by COVID-19, most trials continue to enroll patients.

Peter H. Griffith: Although activity levels during Q3 were still partially impacted by COVID-19, most trials continue to enroll patients. Customer facing commercial activity levels increased, and launch preparations were in process. We see activity levels increasing in the fourth quarter of the year, resulting in increased investment. We have financial flexibility with $12.4 billion in cash and investments on our balance, and continue to generate stable free cash flow with $3.2 billion in the quarter.

Customer facing commercial activity levels increase.

And launch preparations were in process.

We see activity levels, increasing in the fourth quarter of the year, resulting in increased indefinitely.

We have financial flexibility with $12.4 billion in cash and investments on our balance sheet and continue to generate stable free cash flow was 3.2 billion in the quarter.

Additionally, our third quarter dividend was $1.60 per share an increase of 10% over last year.

Peter H. Griffith: Additionally, our third-quarter dividend was $1.60 per share, an increase of 10% over. Our capital allocation principles and plans remain unchanged and uninterrupted. Let me now share some thoughts on our 2020 outlook going forward. We are narrowing our revenue guidance to $25.1 billion to $25.5 billion from $25.0 billion. This range reflects the uncertainty created by the recent resurgence of COVID-19 infections globally, which Bob discussed in his remarks. And as you just heard Murdo say, our products, including Prolea, for the most at-risk COVID patients, are most susceptible to the accelerated rate of infection. The lower end of our range takes into account a more accelerated impact from COVID-19 globally. We are raising our non-GAAP earnings per share guidance to $15.80 per share to $16.15 per share versus our prior guidance of $15.10 per share to $15.75 per share.

Our capital allocation principles and plans remain unchanged and uninterrupted.

Let me now share some thoughts on our 2020 outlook going forward.

We are narrowing our revenue guidance to 25.1 billion to 25.5 billion from 25.0 billion to 25.6 billion.

The range reflects the uncertainty created by the recent resurgence of COVID-19 infections globally, which Bob discussed in his remarks.

And as you just heard Murdo say, our products, including Prolia for the most at risk coven patients are most susceptible to the accelerated rate of infection.

The lower end of our range takes into account a more accelerated impact from cobot globally.

We are raising our non-GAAP earnings per share guidance to $15.80 per share to $16.15 per share.

Versus our prior guidance of $15.10 per share to $15.75 per share.

We continue to believe that we could experience fluctuations in our quarterly revenues and earnings over the duration of the pandemic.

As we shared during our Q2 call. We expect full year total non-GAAP operating expenses to grow in the high single digit percentage range year over year on an absolute basis.

We expect fourth quarter non-GAAP operating expenses to grow at about 20% on a quarter over quarter basis.

Peter H. Griffith: We continue to believe that we could experience fluctuations in our quarterly revenues and earnings over the duration of the pandemic. As we shared during our Q2 call, we expect full-year total non-GAAP operating expenses to grow in the high single-digit percentage range year-over-year on an absolute basis. We expect fourth quarter non-GAAP operating expenses to grow at about 20% on a quarter-over-quarter basis. Now, let me share a bit more detail on our non-GAAP expectations for the full year 2020. Cost of sales is the percent of product sales will be generally consistent with 2019.

Now, let me share a bit more detail on our non-GAAP expectations for the full year 2020.

Cost of sales as a percent of product sales will be generally consistent with 2019.

We plan to increase R&D investments in the fourth quarter of the year as clinical trial and laboratory activities continue to recover from Covance related slowdown.

SGN ate spend is projected to increase due to investments in otezla and other growth brands geographic expansion and launch preparations.

We anticipate other income and expense to be a net expense of about 1.3 billion.

Peter H. Griffith: We plan to increase R&D investments in the fourth quarter of the year as clinical trial and laboratory activities continue to recover from COVID-related slowdowns. GNA spend is projected to increase due to investments in Otesla and other growth brands. Geographic Expansion and Launch Preparation. We anticipate other income and expense to be a net expense of about $1.3 billion, which includes more than $130 million of benefit from mark-to-market gains on our equity investment portfolio in Q3.

Which includes more than $130 million of benefit from mark to market gains on our equity investment portfolio in Q3.

We are updating non-GAAP tax rate guidance to 13% to 14% versus.

Versus prior guidance of 13.5% to 14.5%.

Our expectation for share repurchases are unchanged at the lower end of our previously disclosed range of three to 5 billion.

Finally recall that Q4 of 2020 will be comparing against a partial quarter to vote Tesla sales and expenses in Q4 2019.

So as we approach the end of 2020, we are pleased with our progress and execution this year, including the successful integration of Otezla collaboration with Beijing and transition from a sell us in Japan.

Peter H. Griffith: We are updating our non-gas tax rate guidance to 13 to 14 percent, versus prior guidance of 13.5% to 14.5%. Our expectations for share repurchases are unchanged at the lower end of our previously disclosed range of three to five billion. Finally, recall that Q4 of 2020 will be comparing against a partial quarter vote on Tesla sales and expenses in Q4 2019. So as we approach the end of 2020, we are pleased with our progress and execution this year, including the successful integration of Otesla, collaboration with Beijing, and transition from Astellas in Japan. As is customary, we will provide full 2021 guidance on our January call. This concludes the financial update. I'll turn it back to Bob to get going on Q&A. Okay, April, why don't we open up the lines for questions, and perhaps you could start us by reminding our callers of the procedures. We're asking a question. As a reminder, to ask a question, you will need to press the star on your telephone, draw your question, and then press the pound.

As is customary we will provide full 2021 guidance on our January call.

This concludes the financial update I will turn it back to Bob to get going on you in it.

Okay, well why don't we open up the lines for <unk>.

Questions, perhaps you could start off by reminding our callers the procedures for asking a question.

Yes.

Minder asking question you would need to press star on your telephone to withdraw your question press the pound key.

And <unk>.

Couponing rosters.

And your first question comes from line of Michael Yee from Jeff.

Great.

Hey, guys. Thanks for the update.

I appreciate it I had a question on TESTOPEL AMAP question really important read out coming soon and that's an important drug just wanted to understand David.

Perspective on the importance of the low eosinophil group and in the context of the overall data and how important that is to hit there and how that would change the overall profile and outlook flat truck. Thanks.

Thanks, Mike.

Courseware greatly looking forward to that.

Readout as well what I can say is that.

Michael J. Yee: We have prepared a Q&A room, and your first question comes from the line of Michael Yee from, Hey guys, thanks for the update. Really appreciate it.

The trial is very well powered to look at our outcomes on the primary endpoint here is annualized.

Masturbation rates the standard endpoint all for asthma studies across the different sub groups, all including the low if NFL population. So we feel very comfortable that this will be a definitive test of TESTOPEL you map across the entire range of patients with severe asthma.

David M. Reese: I had a question on tezapilimab, of course, a really important readout coming soon, and it's an important drug. Just wanted to understand David's perspective on the importance of the low eosinophil group and in the context of the overall data and how important that is to hit there and how that would change the overall profile and outlook for that drug. Thanks. Mike.

Yeah, and if it is not.

And Proclear one.

Matthew Harrison from Morgan Stanley.

Great. Good afternoon. Thanks, Thanks for taking my question and thanks for the update.

Matthew Harrison: Yeah, and, of course, we're greatly looking forward to that readout as well. What I can say is that, you know, the trial is very well powered to look at outcomes in the primary endpoint here, annualized exacerbation rates, the standard endpoint for asthma studies across the different subgroups, including the low eosinophil population. So we feel, you know, very comfortable that this will be the definitive test of tezapelumab across the entire range of patients with severe asthma. [inaudible] A question from someone called Matthew Harrison from Morgan Stanley. Great. Good afternoon,

I guess.

I guess another question for for Dave could.

Could you maybe just comment I know you commented on your opening remarks here on.

Well see I guess the question here is as we think about moving the response rate higher in terms of the combination studies that you have ongoing what's your relative confidence around those studies either improving response rates are improving durability.

And how do you think about your ability to progress them rapidly now that you have a good sense of the monotherapy activity the compound. Thanks.

David M. Reese: Thanks for taking the question and thanks for the update. I guess. I have another question for Dave.

Thanks, Matt.

Certainly the combination studies are an important topic.

David M. Reese: Could you maybe just comment, I know you commented in your opening remarks here on G12C. I guess the question here is, as we think about moving the response rate higher in terms of the combination studies that you have ongoing, what's your relative confidence around those studies, either improving response rates or improving durability, and how do you think about your ability to progress them rapidly now that you have a good sense of monotheism? Thanks, Matt. You know that certainly combination studies are an important topic. They're moving forward quite briskly.

They are moving forward quite briskly, we up I think seven cohorts open now three or four more are coming very soon so we feel we are testing.

In a range of indications the biologically plausible and clinically relevant.

Nominations will have data next year on on a number of these and you know to your point you know the goal always in combination therapy beyond monotherapy is to enhance efficacy.

And potentially durability in terms of response rates, but also our durability. If you are cutting off avenues of tumor resistance or escape and that's certainly our goal we're very much guided by the biology here and as you look at those cohorts that are coming up I think you'll see that that's the case.

David M. Reese: We have, I think, seven cohorts open now, and three or four more are coming very soon. So we feel we are testing, you know, in a range of indications; the biologically plausible and clinically relevant combinations will have data next year on a number of these. And, you know, to your point, the goal of combination therapy beyond monotherapy is always to enhance efficacy and potentially durability, you know, in terms of response rates, but also durability if you are cutting off avenues of tumor resistance or escape. And that's certainly our goal. We're very much guided by biology here.

And next question comes from the line.

From Cowen.

Yes, great. Thanks for taking my question, David I'm, just going to maybe keep you on the spot on on the tourists that that some of the bigger the or comments that we heard this week is that a competing product was well tolerated at the high dose with an easier far inhibitor pembro, if I remember correctly at ESMO.

I think you're investigators said something along the lines and correct me if I'm wrong that it.

With your product.

With PD one there was tolerability there was but it was addressed with dose reduction something along those lines I'm. If you. If you don't mind, maybe exactly how to correct. What he said and then secondly on because the Pelham manor our understanding is that the the way the study's design, it's actually incorporating the low centerfield those into one or the other.

David M. Reese: And as you look at those cohorts that are coming up, I think you'll see that's the case. Next question comes from the line of Yaron Werber from, Yes, hi, great, thanks for taking my question. David, I'm just gonna maybe keep you on the spot on SoteroCib.

All of this and the primary endpoint is the same.

Yaron Werber: Some of the data or comments that we heard this week are that a competing product was well tolerated at high doses with an EGFR inhibitor and Pembro. If I remember correctly, at ESMO, I think your investigator said something along the lines, and correct me if I'm wrong, that with your product, with PD-1, there was tolerability, there was, but it was addressed with dose reduction, something along those lines. I don't know if you don't mind, maybe just to kind of correct what he said.

Up analysis and so if you hit that does that mean, you got a broad label. Thank you.

Yeah sure. So let me take those in order in terms of the combinations. The one thing I would caution everyone isn't what's not over read anything into cohorts of three or four.

Patients, whether that's our trials or anyone else's trials, we're moving forward we've been you know.

What we have is a foundation of Tolerability in monotherapy, all which is the critical thing to build on in combinations and I think this was.

You put into some perspective by.

And then a tornado in the new England Journal of Medicine that accompanied the publication of our phase one trial, a few weeks ago and I'd refer you to that and certainly.

David M. Reese: And then secondly, on tezapelumab, our understanding is that the way the study is designed, it's actually incorporating the low eosinophil dose into one of the analyses in the primary endpoint as a sub-analysis. And so if you hit that, does that mean you get a broad label? Thank you. Yeah, sure. So, you know, let me take those in order.

It's very common in combination therapy development in oncology to look at all sorts of dosing and scheduling regimens and are we fully intend to do that and all priore, we would intend on doing that.

With regards to the analysis and Tesla Pelley Mab, Yes, that's correct I mean, the analysis is powered.

David M. Reese: You know, in terms of the combinations, one thing I would caution everyone is not to overread anything into cohorts of three or four patients, whether that's our trials or anyone else's trials. You know, we're moving forward. We've been, you know, what we have is a foundation of tolerability and monotherapy, which is a critical thing to build on in combinations. And, you know, I think this was put into some perspective by an editorial in the New England Journal of Medicine that accompanied the publication of our Phase I trial a few weeks ago, and I'd refer you to that. And certainly, you know, it's very common in combination therapy development in oncology to look at all sorts of dosing and scheduling regimens, and we fully intend to do that. And a priori, we would intend to do that. With regard to the analysis in tezapelumab, yeah, that's correct. I mean, the analysis is powered and geared across the entire population, with also a look at the low eosinophil population. So, your suppositions there are, and your next question comes from the line of Jay Olson.

Geared across the entire population then with also a look at the low isn't a fill population. So all your suppositions there are correct.

And your next question comes from the line of Jay Olson from Oppenheimer.

Well he congrats on the quarter and thank you for taking the question.

I just wanted to follow up on the comments around Katy Rice, Chief 12 C.

The competing program that that featured data over the weekend did report Qt prolongation, including some cases its grade three four is this a class effect and have you seen any cases of Qt prolongation with cigarettes. It had been and how important is this cardiovascular.

Are you finding in this patient population. Thank you.

Yeah, well I can't speak to directly to others data of course I'll allow them to do that I will say that we have as I mentioned treated over 550 patients. There is no evidence whatsoever.

Q T signal to date.

And we remain quite pleased with the overall tolerability soder acid.

Jay Olson: Oh, hey, congrats on the quarter. And thank you for taking the question. I just wanted to follow up on the comments around KRS-G12C. The competing program that featured data over the weekend did report QT prolongation, including some cases of grade 3-4. Is this a class effect?

Your next question comes from the line of Terence Flynn.

Thanks.

Great. Thanks for taking my questions maybe.

Maybe I was just wondering if as you think about capital allocation if the omecamtiv setback, maybe changes anything on that front, particularly how you think about the cardiology opportunity for the company and then.

David M. Reese: And have you seen any cases of QT prolongation with sodium acid? And how important is this cardiovascular safety finding? Yeah, you know, while I can't speak directly to others' data, of course, I'll allow them to do that. I will say that we've, as I mentioned, treated over 550 patients, and there's no evidence whatsoever of a QT signal to date. And we remain quite pleased with the overall tolerability of sodaracin. Your next question comes from the line of Terrence Flynn from Goldman.

A question for Peter was just wondering if you could give us a preliminary view of 2021 expenses just relative to this year just wondering if you're wrapping up a number of late stage programs now.

Why spend would grow next year. Thank you.

Hey, Terence as Bob why don't I take the first part of your question.

The answer short answer is no the owned.

Captive results don't change our thinking on capital allocation we.

We continue to look for business development opportunities and continue to look for internal programs in.

Unknown Executive: Thanks for taking my questions. Maybe I was just wondering if, as you think about capital allocation, if the OMACAMPTIV setback maybe changes anything on that front, particularly how you think about the cardiology opportunity for the company. And then a question for Peter: I was just wondering if you could give us a preliminary view of 2021 expenses just relative to this year. I was wondering if you're wrapping up a number of late stage programs now, why spending would grow next year. Thank you. Hey Terence, it's Bob.

In cardiovascular disease as you know were moving rapidly with our phase two program directed against healthy for life sewer.

And to have some fast studies going for that molecule.

We'll continue to look for ways to invest in the franchise cardiovascular disease as you know.

Killer people on the plan.

We continue to think what we need in that field is more innovation not less so we'll continue looking for that.

Parents, it's Peter Thank you for your question. Good question as you know we will guide on 2021, when we get to January but I do want to just say.

No.

We always intend on continuing to be a top performing biopharma from looking at various financial metrics always operating margin right. There. So look we're going to remain flexible and adaptable as attractive opportunities arise and with the underlying objective to grow our after tax cash flow. So.

Bob Bradway: Why don't I take the first part of your question? The answer, the short answer, is no: the only captive results don't change our thinking on capital allocation. We continue to look for business development opportunities and continue to look for internal programs in cardiovascular disease. As you know, we're moving rapidly with our phase two program directed against LP little a So, I'm excited to have some advanced studies going for that molecule, and we'll continue to look for ways to invest in that franchise. Cardiovascular disease is, as you know, the leading killer of people on the planet. We continue to think what we need in that field is more innovation, not less, so we'll continue looking for that. Parents, it's Peter.

That's where we sit right now on expenses, we wanted to be clear on the fourth quarter and how that's going to sequence in which is really on a normal historical basis, just at the upper end of it on an opex basis, so with that I'll turn it over the next question.

Next question is from the line.

From credit Suisse.

Hi, guys. Thank you so much for taking the question actually one for Murdo kind of on some of the dynamics in the Biosimilar business. So you're talking about pricing headwinds as volumes increase are you seeing this more the inflammation space or this is does this in oncology and can you kind of provide some color as to how accounts generally I guess in the U.S.R.

Peter H. Griffith: Thank you for your question. It's a good question. As you know, we'll guide for 2021 when we get to January, but I do want to just say, you know, we always intend to continue to be a top-performing biopharma firm, looking at various financial metrics, always operating margin right there. So, you know, look, we're going to remain flexible and adaptable as attractive opportunities arise. Nathaniel, Daniel Lundquist, David Reese, Arvind Sood, Yaron Werber, Salveen Richter, How that's going to sequence in, which is really on a normal historical basis, just at the upper end of it on an opex basis, so.

Using bio similar is it more just totally you know for giving the brand had gone all the Biosimilar, where do you see some sort of a mix. Thank you so much.

Thanks, Evan Yes look we are really pleased with what we've been able to do with bio similars business in the quarter we were.

The team's done a really nice job this year despite covidien establishing.

Strong penetration into the U.S. oncology market with them basi are vast and biosimilar and can ginty our herceptin.

Biosimilar I would say with respect to the dynamic in the market a lot of people questioned whether or not we had a.

Peter H. Griffith: With that, I'll turn it over to the next... Next question is from the line of Evan Seigerman from Credit. Hi guys, thank you so much for taking the question. Actually, one for Murdo, kind of on some of the dynamics in the biosimilar business. So you're talking about pricing headwinds as volumes increase.

An efficient functioning biosimilar market in the U.S., because I think they were over interpreting some of the early biosimilar launches and I think what you can see now that we have an efficient market that when there are when there's a clear value on the table healthcare systems providers and payers are able to capitalize on and that's what's.

Evan Seigerman: Are you seeing this more in the inflammation space, or is this more of an oncology one? And can you kind of provide some color as to how accounts generally, I guess, in the U.S. are using biosimilars? Is it more totally, you know, for getting the brand and going all to the biosimilar, or do you see some sort of a mix? Thank you so much. Thanks, Evan.

Driving of course, the uptake of our Biosimilar I also think that you know that the experience we've had in defending against Biosimilar erosion on products like Neulasta.

His position as well to understand how accounts are looking to purchase biosimilar. So when we launched our own we were able to take some advantage of that and I would say that of the accounts that have opened up.

Murdo Gordon: Yeah, we're look, we're really pleased with what we've been able to do with biosimilars business in the quarter we were, The team's done a really nice job this year, despite COVID, in establishing strong penetration into the U.S. oncology market with Mvassi, our Vastin biosimilar, and Kanjinti, our Herceptin biosimilar. I would say, with respect to the dynamic in the market, a lot of people questioned whether or not we had an efficient, functioning biosimilar market in the U.S. because I think that we're over-interpreting some of the early biosimilar launches, and I think what you can see now is that we have an efficient market, that when there's a clear value on the table, healthcare systems, providers, and payers are able to capitalize on it, and that's what's driving, of course, the uptake of our biosimilars.

Biosimilar usage generally initially we thought they might be using biosimilar is for new patients going forward, but we've actually seen them use our biosimilar both for new patients and switching patients who are mid course of treatment to biosimilars as well, so I'd say that the penetration at an account level has been deeper than we had.

Currently anticipated and I think by no there's fairly broad adoption.

In the U.S. at the 340 b. level that non threeforty be level and of course within the clinics now that's oncology, it's a little different in inflammation, depending on the biosimilar itself, whether its a an infused biosimilar or whether it's a self injected or self administered biosimilar and I think.

Murdo Gordon: I also think that the experience we've had in defending against biosimilar erosion on products like Neulasta has positioned us well to understand how accounts are looking to purchase biosimilars, so when we launched our own, we were able to take some advantage of that, and I would say that of the accounts that have opened up biosimilar usage, generally, initially, we thought they might be using biosimilars for new patients going forward, but we've actually seen them use our biosimilars both for new patients and switching patients who are mid-course of treatment to biosimilars as well, so I'd say that the penetration at an account level has been deeper than we originally anticipated, and I think by now there's fairly broad adoption in the U.S. at the 340B level, the non-340B level, and of course within the clinics. Now that's oncology.

Need to watch that carefully because the two are not analogous so I would I would treat each business segment as it full one example, and not draw comparisons from one to the other.

Thank you so much.

Yes go ahead.

And primary there.

<unk>.

Sorry, one moment.

Mm.

Yeah, Paul what's happening.

And your next question sorry about that is from the line of Chris Raymond from Piper Sandler.

Oh, Thanks for taking the question Yeah I was wondering if I could maybe ask on us so tours of again and take the conversation back there. So I I heard David your commentary on hopes on the response rate in combo, but I think you guys are also working on a B.I.D. dose.

If memory serves I I think we were.

Maybe we were expecting to see something by year end or at least in the coming months. So I wonder if you could.

You know sort of talk about your hopes with.

With respect to that potential as a monotherapy B.I.D. and then also on I'm on the same topic can you just sort of confirmed this.

Murdo Gordon: It's a little different in inflammation, depending on the biosimilar itself, whether it's an infused biosimilar or whether it's a self-injected or self-administered biosimilar, and I think you need to watch that carefully because the two are not analogous, so I would treat each business segment as its own example and not draw comparisons from one to the other. Thank you so much. Apollo, are you there?

So tourism have CNS activity can you give us any indication on that one thanks.

Yes, thanks, Chris both important questions.

Standard in any new molecule was part of the clinical pharmacology program to.

Examine different schedules. So we continue to do that with twice daily dosing, but the one thing I'd urge everyone to do is kind of go back to basic pharmacokinetics here.

Murdo Gordon: Kapral, what's happening? All right, and your next question, sorry about that, is from the line of Chris Raymond from Piper Sandler. Thanks for taking the question. Yeah, I was wondering if I could maybe ask on Sitoris again and take the conversation back there.

As we think about this field and what are the reasons to go to split dosing. While they are really two reasons. One if you needs with dosing in order to achieve target coverage or two if you need to split the dose because of tolerability issues.

And with soda Rasta were very convinced that we are getting.

Christopher Joseph Raymond: So I heard, David, your commentary on, you know, hopes for the response rate in the combo, but I think you guys are also working on a BID dose. And if memory serves, I think we were, maybe we were expecting to see something by year end, or at least in the coming months. So I wonder if you could, you know, sort of talk about your hopes with respect to that potential as a monotherapy, you know, BID. And then also, on the same topic, can you just sort of confirm, does Sitoris have CNS activity?

Target coverage throughout the dosing interval with our once daily dosing and of course, we've got very nice tolerability.

Once daily dosing and so that's really is this is I think the basic pharmacology and pharmacokinetics and the science underlying that that has driven our clinical choices.

In terms of CNS pen.

Penetration or we did mentioned at ESMO, we have a.

A couple of patients with.

One or two patients with CNS metastasis, who clearly had a responses.

David M. Reese: Can you give us any indication on that one? Thanks. Thanks, Chris. Both are important questions.

So the question with small molecules or.

CNS responses in general is always is that due to true penetration or because there's typically a highly disruptive blood brain barrier in that setting you almost always get some.

David M. Reese: You know, it's standard in any new molecule as part of the clinical pharmacology program to examine different schedules, so we continue to do that with twice daily dosing. But one thing I'd urge everyone to do is kind of go back to basic pharmacokinetics here, as we think about this field, and what are the reasons to go to split dosing? Well, there are really two reasons. One, if you need split dosing in order to achieve target coverage, or two, if you need to split the dose because of tolerability issues. And with sodoracid, we're very convinced that we are getting target coverage throughout the dosing interval with our once daily dosing. And of course, we've got very nice tolerability at once daily dosing. And so that's really it.

Exposure ought to drug or the third potential explanation, which we continue to explore is that it's a secondary immune activation that could potentially trigger.

Activity in the central nervous system. We are exploring this question explicitly in a cohort of it we're just opening for patients with brain metastasis and so I think in through next year, we'll have a good sense of potential activity in the central nervous system. Thanks.

Thank you.

And your next question comes from the line of Geoffrey Porges from SVB.

David M. Reese: This is, I think, basic pharmacology and pharmacokinetics, and the science underlying that, that has driven our clinical choices. In terms of CNS penetration, we did mention at ESMO, we have a couple of patients with, one or two patients with CNS metastases who clearly had responses. So, you know, the question with small molecules or CNS responses in general is always, is that due to true penetration or because there's typically a highly disrupted blood-brain barrier in that setting, you almost always get some exposure to the drug.

Please go ahead.

Hi, Thank you for the question. This is Andrew on for Jeff. So I have a question regarding Pelham Meps read out. So the study is successful how might it be commercialized given the conflict that your partner has with the Senate same indication. Thank you.

[noise] yeah. Thank you I'll jump in on that one.

We've we've obviously been very transparent with our partners on how we can commercialize says Italian I'd have to say with with the many years of experience that Astrazeneca has in this therapeutic area. We continue to believe there I was standing partner, we've worked through all the details of commercialization.

David M. Reese: The third potential explanation, which we continue to explore, is that it's a secondary immune activation that could potentially trigger activity in the central nervous system. We are exploring this question explicitly in a cohort that we're just opening for patients with brain metastases, and so I think through next year, we'll have a good sense of whether there is potential activity in the central nervous system. Thank you. And your next question comes from Geoffrey Porches from SVB. You're on the line, please go ahead. Hey, thank you for the question. This is Andrew on behalf of Geoff.

Astrazeneca will indeed be putting up dedicated resources for the promotion of Tabalumab. So think about different sales reps literally in the market promoting the two different products.

We will be handling many elements of the commercial process in the U.S. for example will be lead on the market access and negotiations and relationships, while Astra Zeneca will lead on consumer marketing and professional marketing so.

So I think we've really put the best of the best together here and I continue to have a lot of confidence in the emphasis that our partner is placing on this really exciting molecule. Both for the launch and also just strategic lifecycle management ideas that they have as well.

Unknown Executive: So I have a question regarding telemaps readout. If the study is successful, how might it be commercialized, given the conflict that your partner has with the standard for the same indication? Thank you. Thank you. I'll jump in on that one.

Murdo Gordon: We've obviously been very transparent with our partners on how we can commercialize tezapelumab. I have to say, with the many years of experience that AstraZeneca has in this therapeutic area, we continue to believe they're an outstanding partner. We've worked through all the details of commercialization, and AstraZeneca will indeed be putting up dedicated resources for the promotion of tezapelumab. So think about different sales reps literally in the market promoting the two different products. We will be handling many elements of the commercial process in the U.S. For example, we'll lead on market access negotiations and relationships while AstraZeneca will lead on consumer marketing and professional marketing. So I think we've really put the best of the best together here.

Thank you everyone for them.

And your next question comes from the line.

From Bernstein.

Good afternoon, and thank you for taking my calls on you've done really well with by similar deal closing in on about $2 billion run rate up from about a billion last year.

I'm kind of wondering out of the balance for next year, you are seeing significant competition coming in on both the Avastin and herceptin by similar as you launch from to yourself and reduction of button, we talk to the mob infliximab, but.

But the dynamics MTP potentially tougher if we kind of think about the next 12 months should we can we expect the same kind of growth rate or or is this asking for too much and then separately. My deal I was wondering if you can comment on Repatha outlook.

Outlook and how do you think about the competition with an R&D based physician office based molecule.

Okay. Thank you.

Overall, I think the Biosimilar business as I said is evolve really nicely, we penetrated quite well if I look at the oncology products in the us running at 44% a share currently on our Avastin Biosimilar I do think as you see additional competitors come in the average sell.

Murdo Gordon: And I continue to have a lot of confidence in the emphasis that our partner is placing on this really exciting molecule, both for the launch and also just the strategic lifecycle management ideas that they have as well. Thank you. And your next question comes from the line of Ron Eagle from: Good afternoon and thank you for taking my calls. You've done really well with Biosimilars. You're closing in on about $2 billion in run rate, up from about a billion last year. I'm kind of wondering about the balance for next year.

Selling price will come down.

So that's a reality that competition brings and that's related to my comment earlier about this being an efficient marketplace. I do think there is an appreciation, though for what we've done at Amgen, which is to have a very effective.

Effective provider focused commercial presence. The same people that are that are talking to accounts about our innovative portfolio are talking to those same customers about our bio similars. So all of our services that we normally have on an innovative product are available and bio similars and that includes patient services for.

Unknown Attendee: You're seeing significant competition coming in for both the Avastin and Herceptin biosimilars. You're launching yourself and Rituximab and Fliximab, but the dynamics seem to be potentially tougher. If we're going to think about the next 12 months, can we expect the same kind of growth rate, or is this asking for too much? Then separately, Merdo, I was wondering if you could comment on Repatha Outlook and what you think about the competition with an RNA-based physician office-based molecule? Okay.

Things like reimbursement or co pay assistance and I think that differentiates us so I would anticipate us being able to continue to capture good volume.

Albeit at some price erosion as we go into the new year, but as I said, we're at 44% share of.

Murdo Gordon: Thank you. Overall, I think the biosimilars business, as I said, has evolved really nicely, and we've penetrated quite well. If I look at oncology products in the U.S., we currently have a 44% share currently on our Avastin biosimilar. I do think as you see additional competitors come in, the average selling price will come down.

Of the total bevacizumab market and slightly less than that of the trastuzumab market. So there's still a lot of headroom.

For growth and I think on the inflammation site the dynamics are a little bit different depending on whether it's.

On a product like our Remicade biosimilar out solo or whether we're looking at a product like our rituxan biosimilar. So I think we have to watch how we draw parallels on expectations. Overall, we made a big commitment to Biosimilars. So we'll continue to advance new products through the clinic and into the market and we can.

Murdo Gordon: So that's a reality that competition brings, and it's related to my comment earlier about this being an efficient marketplace. I do think there is an appreciation, though, for what we've done at Amgen, which is to have a very effective provider-focused commercial presence. The same people that are talking to accounts about our innovative portfolio are talking to those same customers about our biosimilars. So all of our services that we normally have on an innovative product are available on biosimilars, and that includes patient services for things like reimbursement or copay assistance. And I think that differentiates us from each other.

Effectively across Europe, and we're competing nicely so far in the U.S. just transitioning to Repatha and look we've done I think an excellent job of converting to an affordable price of Repatha, we've got about 80% ACV.

Access coverage across Medicaid and commercial.

And we're seeing really nice volume growth was 60% in the quarter and I think we're also seeing some nice evolution outside of the U.S., where repatha continues to gain share.

Murdo Gordon: So I would anticipate us being able to continue to capture good volume, albeit at some price erosion as we go into the new year. But as I said, we're at 44% of the total Bevacizumab market and slightly less than that of the Trastuzumab market. So there's still a lot of headroom for growth. And I think on the inflammation side, the dynamics are a little bit different depending on whether it's a product like our Remicade Biosimilar Afsola or whether we're looking at a product like our Rituxan Biosimilar. So I think we have to watch how we draw parallels on expectations.

On the product really with Repatha, we are just scratching the surface of those that need this there's a lot of high risk.

Coronary event patients who require more aggressive lip and learning therapy and in light of cobot I actually think that Repatha is a unique solution. It's it's a self administer product with excellent coverage well demonstrated efficacy and safety profile and we havent reduction data in the.

Label, So I think you know compared.

Compared to a product that might require patients to travel to physician office for administration in light of Cove. It that's.

Thats going to be a tougher task for another product to come in so I feel good about where we are and I feel good about our growth prospects going forward.

Murdo Gordon: Overall, we've made a big commitment to biosimilars, so we'll continue to advance new products through the clinic and into the market. And we compete effectively across Europe, and we're competing nicely so far in the U.S. Just transitioning to Repatha. We've done, I think, an excellent job of converting to an affordable price for Repatha.

Your next question comes from the line of Collin.

Yes.

Good afternoon, thanks for taking the question so.

Another one on site to assets I'm, just curious like you have we will update you on this asset now what's your current thinking around the potential to advance that I.

Murdo Gordon: We've got about 80% access coverage across Medicaid and commercial, and we're seeing really nice volume growth with 60% in the quarter. And I think we're also seeing some nice evolution outside of the U.S., where Repatha continues to gain share.

I guess first line therapy.

In light of the stone data, we've seen from Iowa agent Multitrans the pension thanks.

Yeah, no. Thanks, calling great question and of course.

As is typical in oncology development programs you start in later lines of therapy, where patients don't have.

Murdo Gordon: The product, you know, really, with Repatha, we're scratching the surface of those that need this. There are a lot of high-risk coronary event patients who require more aggressive lipid lowering therapy. And in light of COVID, I actually think that Repatha is a unique solution. It's a self-administered product with excellent coverage, a well-demonstrated efficacy and safety profile, and we have event reduction data in the label. So I think, you know, compared to a product that might require patients to travel to a physician office for administration in light of COVID, that's going to be a tougher task for another product to come in. So I feel good about where we are, and I feel good about our growth prospects going forward. Your next question comes from the line of... Good afternoon and thanks for taking the question. So another one on photoracid.

Much in the way of treatment options, but certainly moving into earlier lines of therapy will be part of the development program as we move forward I'd also point out that an important part of the program. In later lines is the head to head phase three trial against Ddos attacks or chemotherapy.

That is.

That is very important in outside of the U.S. Some in some jurisdictions for regulatory approval, but also in many jurisdictions for our reimbursement and so I wouldn't also overlook the potential of that this is a global development program.

And thats another important piece. Thank you.

Mm Hmm comes on line.

And so from Citibank [noise].

David M. Reese: I'm just curious, as you have more data on this asset now, what's your current thinking around the potential to advance this to earlier, I guess, first-line therapy in light of the strong data we've seen from IO agents in the G12c patients? Thanks. Yeah, no, thanks, Colin.

Great. Thanks for taking my question or maybe.

Maybe one question on does it really matter that's not so that's the data coming up.

How important do you think you still shows the benefit in your U.S. patients in case, if it doesn't bug.

You think your partner may not be interested in commercializing to start a given that they already have a product for high yield stations and they didnt have to competing for [laughter] area. Thank you.

David M. Reese: Great question. And, of course, as is typical in oncology development programs, you start in later lines of therapy where patients don't have much in the way of treatment options, but certainly, moving into earlier lines of therapy will be part of the development program. As we move forward, I would also point out that an important part of the program in later lines is the head-to-head phase three trial against Dositaxel chemotherapy. That is, You know, that is very important outside of the US in some jurisdictions for regulatory approval, but also in many jurisdictions for reimbursement. And so I wouldn't also overlook the potential of that. This is a global development program. And that's another important piece.

Yeah, well, let me start and then ill hand things off to Murdo.

As we discussed the primary endpoint is powered across the entire population and also on the analysis plan allows a look in the low eosinophil group.

Our phase two data, which is currently our best predictor, we showed relatively comparable efficacy regardless of eosinophil status and it certainly would be our hope that we are able to replicate that in phase three on terms of commercialization, let me ask murdo to weigh in.

Yes, as I mentioned before there is a strategic commitment here from our partners to taxi they've been very.

Unknown Executive: Thank you. And the next question comes from one of Mohit's... from Citibank. Great, thanks for taking my question. Maybe one question on teletalumab and asthma.

Very supportive constructive and helpful. As we work through the development plan and now we look beyond that to commercialization and potential lifecycle management ideas and I think that there's a strong press from Astrazeneca to continue to really think about all of the patients that we can benefit.

David M. Reese: As the data are coming up, how important do you think it is to show the benefit in low EOS patients in case it doesn't work? Do you think your partner may not be interested in commercializing this product given that they already have a product for high EOS patients and they may have two competing products in that area? Thank you. Yeah, well, let me start and then, you know, hand things off to Murdo.

Development of Teddy I would just say that there is a large market opportunity here in severe asthma.

Having alternative mechanisms in the market is a good thing and I think that there's plenty of room for us to launch effectively there and I am.

I'm pretty sure that our partners at Astrazenecas here.

Good thank you.

And your next question comes from the line of Jeff.

David M. Reese: You know, as we discussed, the primary endpoint is powered across the entire population, and also, the analysis plan allows a look at the low eosinophil group. In our phase two data, which is currently our best predictor, we showed relatively comparable efficacy, regardless of eosinophil status, and it certainly would be our hope that we're able to replicate that in phase three. In terms of commercialization, let me ask Murdo to weigh in. Yeah, as I mentioned before, there's a strategic commitment here from our partners to TESI. They've been very supportive, constructive, and helpful as we've worked through the development plan, and now we look beyond that to commercialization and potential lifecycle management ideas, and I think that there's a strong push from AstraZeneca to continue to really think about all of the patients that we can benefit from the development of TESI.

From Bank of America.

Afternoon, guys. Thanks, so much for the question.

Murder, I feel like I, suppose one a lot but on any big what do you think it'll take for this product to really break out I mean, I get it it's growing on units but.

For a new product it looks it looks range bound is there.

Is there a meaningful negotiation with renegotiation with payers like you guys did.

With with Repatha, that's going to be required or what do you think it could take thanks.

Yes, Thanks, Jeff.

Lets narrow or rephrase. The question I don't think its a payer issue I think weve negotiated very good access for aim of vague, it's covered broadly with very little in the way of utilization management criteria physician.

Requests are being filled very well our percentage of paid.

Patience is very high now.

We're in the high 80% range for paid patient. So it's not a it's not a an access restriction thats, thus, reducing the uptick in the class. There are really two things one is obvious its co but you know we.

David M. Reese: I would just say that there is, you know, a large market opportunity here in severe asthma. Having alternative mechanisms in the market is a good thing, and I think that there is plenty of room for us to launch effectively there, and I'm pretty sure that's how our partners at AstraZeneca see it. Okay, thank you. And your next question comes in the line of, from Bank of America. Afternoon, guys. Thanks so much for the question. Murdo, I feel like I have asked this one a lot.

We are down substantially in new patients per week because of Cove, it and a lot of migraine sufferers. Unfortunately are just not seeking care and.

And neurology as a as a prescribing specialty is down more than some others like cardiology recovered nicely in the quarter neurology is still down in terms of total prescribing.

And that that's the cobot impact and then there's another I.

I think opportunity, which we are focused on and that is to have both neurologists and patients moving quicker through older less effective preventative agents and to try to.

Geoff Meacham: But on Amovig, what do you think it'll take for this product to really break out? I mean, I get it, it's growing in units, but, For a new product that looks range-bound, is there meaningful negotiation and renegotiation with payers like you guys did with Repatha that's going to be required, or what do you think it could take? Thanks. Yeah, thanks, Geoff. Let's narrow or reframe the question. I don't think it's a payer issue. I think we've negotiated very good access for AIMAVIG. It's covered broadly, with very little in the way of utilization management criteria.

Biologic CRP like Amazon and that's really where our focus is for growth.

We've seen movement, there and it was going well, but we've got we've still got a lot of work to do as you point out.

But we've got we've got a large volume of patients over 4 million I think were 15% penetrated into that patient population. So there's really no doubt in my mind that it will move I also think by the way. The oral CRP is are helping here with the promotional effort communication to patients awareness building of the benefits of the category.

Murdo Gordon: Physician requests are being filled very well. Our percentage of paid patients is very high now. We're in the high 80% range for paid patients. So it's not an access restriction that's reducing the uptick of the class. There are really two things.

So their acute promotion is also helping in the preventive space, but.

Yeah. We're we're focused on that I think we've done all the right things on the on the communication front to payers now we're focused on patients and patients had providers and patients.

Murdo Gordon: One is obvious, it's COVID. We are down substantially in new patients per week because of COVID. And a lot of migraine sufferers, unfortunately, are just not seeking care.

And your next question comes from line of Kennen Mackay from RBC capital.

Murdo Gordon: And neurology as a prescribing specialty is down more than some others. For example, cardiology recovered nicely in the quarter. However, neurology is still down in terms of total prescribing.

Hi, Thanks for taking the question congrats on the quarter.

Wondering hoping rather that.

The record straight for plagiarism attempted mercury, though are there plans to pursue a regulatory filing for the itunes and if so.

Murdo Gordon: And that's the COVID impact. And then there's another, I think, opportunity, which we're focused on. And that is to have both neurologists and patients moving quicker through older, less effective preventative agents to try biologic CGRPs like AIMAVIG. And that's really where our focus is for growth. We've seen movement there, and it is going well, but we've still got a lot of work to do, as you point out. But we've got a large volume of patients, over 4 million. I think we're 15% penetrated into that patient population, so there's really no doubt in my mind that it'll work.

What is the gating factor thank you.

I think I'll take that you know with OMA captive we issued the topline results, we've got data coming out at the American Heart Association.

Just a couple of weeks saw and I think in the wake of that.

I'll be discussing next steps.

Okay apparel, let's take the next question. Please and your next question comes from the line.

From Evercore.

Hi, Thanks, so much for taking my question I had two here if I may 1st I know, there's a lot of focus on the duration of response data as it's evolving in your phase one and phase two trial with K Ras but my question is as we think about one step out in a possible first line setting, possibly as a PD one combination.

Murdo Gordon: I also think, by the way, oral CGRPs are helping here with the promotional effort, communication to patients, and awareness building of the benefits of the category. So their acute promotion is also helping in the preventive space. But yeah, we're focused on that. I think we've done all the right things on the communication front with payers.

We know what Keytruda does as a first line regimen on a duration of treatment and duration of response I'm curious, what's your expectation that keytruda paired with a targeted therapy, how much improvement can we see realistically they will be very helpful. Number one and also on that same note.

Unknown Executive: Now we're focused on providers and patients. And your next question comes from one... Kaye from RBC Capital. Hi, thanks for taking the question and congrats on the quarter. Women are hoping, rather, that you could set the record straight for claims with unaccounted mercantile. Are there plans to pursue a regulatory filing for the agent? And if so, what is the gating factor?

As we head into the colorectal data in the first half knowing that there were I think three out of 25 responses in colorectal previously what are your expectations on what we need to see to be a more constructive on colorectal. Thank you.

David M. Reese: Thank you. Thanks, and I'll take that. You know, with Omicamptive, we issued the top line results. We've got data coming out with the American Heart Association in just a couple weeks, and I think in the wake of that, you know, we'll be discussing next steps. Thank you, April.

Yes, thanks, Umer so in terms of duration of response in.

Moving in earlier lines of therapy, you know, it's very clear what the checkpoint inhibitors do I mean, typically you know you're going to look for.

25, 30% improvements on these sorts of efficacy measures.

To get into the clinically meaningful range. So as we're designing programs those sorts of targets that we would generally look at it.

Operator: Let's take the next question, and your next question, from Evercore, ISF. Hi, thanks so much for taking my question. I had two here, if I may.

Colorectal cancer.

I've mentioned before we fully enrolled the phase two trial data.

Umer Raffat: First, I know there's a lot of focus on the durational response data as it's evolving in your Phase I and Phase II trials with KRS, but my question is, as we think about One Step Out in a possible first-line setting, possibly as a PD-1 combination, we know what Keytruda does as a first-line regimen in terms of duration of treatment and durational response. I'm curious, what's your expectation that Keytruda, paired with targeted therapy, how much improvement can we see realistically? [inaudible] Thanks, Umer.

No.

Next year that will inform a potential monotherapy path forward you know I would want to see response rates perhaps.

A little better than Weve observed now for monotherapy, but that will be a discussion with.

You know folks in the field and here I would say there's also just a huge amount of emphasis on combination therapy to both enhance the response rate and then of course to generate dot duration of response as I mentioned earlier, we've got a number of combination trials are either up and running or about to.

Launch.

And some of them are directed specifically for colorectal cancer. So we're really looking forward to generating those data, but I think thats the kind of state of play right now.

David M. Reese: You know, so in terms of duration of response when I'm moving an earlier line to therapy, it's very clear what the checkpoint inhibitors do. I mean, typically, you know, you're going to look for, you know, 25, 30% improvements on these sorts of efficacy measures to get into the clinically meaningful range. So as we're designing programs, those are the sorts of targets that we would generally look at.

Thank you very much.

Your next question comes from mine.

From Cantor.

Hey, guys. Thanks for taking my question and congrats on the quarter progress can.

Can you talk a little bit about it sounds like what you've seen in light of maybe COVID-19 with it being an oral and I've noticed more kind of marketing I guess on the television just wanted to get your outlook on price and kind of volume over the next 12 months. Thanks.

David M. Reese: In colorectal cancer, as I've mentioned before, we fully enrolled the phase two trial, you know, data you know, Next year, that will inform a potential monotherapy path forward. You know, I would want to see response rates perhaps a little better than we've observed now for monotherapy. But you know, that'll be a discussion with, you know, folks in the field. And here, I would say there's also just a huge amount of emphasis on combination therapy, to both enhance the response rate and, then of course, to generate duration of response. As I mentioned earlier, we've got a number of combination trials either up and running or about to launch. And, you know, some of them are directed specifically at colorectal cancer.

Yeah. Thanks, Lisa we've we've been pleased with those Tesla, we continue to see all of our integration activities of bringing that product and being smoothes on eventful largely now under the management of Amgen employees around the world and the field Force continues to really do an outstanding job.

But making sure dermatologists understand the benefits of Otezla in the treatment of psoriasis and Psoriatic arthritis, I think what we've seen in the quarter is a return to a customer activity largely by 90% of pre cobot levels.

The majority of those customer interactions are in the virtual route.

About 60% of those I think overall, we're pleased with the growth in volume in the quarter. We did see some onetime events counting adjustments, we had a favorable accounting adjustment in 2019 in Q3, and an unfavorable accounting adjustment in Q3 this year, creating on.

David M. Reese: So, you know, we're really looking forward to generating that data. But you know, I think that's the kind of state of play right now. Thank you very much.

Bob Bradway: And your next question comes from the line. Hey guys, thanks for taking my question and congrats on the quarter in progress. Can you talk a little bit about Okesla and what you've seen in light of maybe COVID-19 with it being an oral drug, and I've noticed more kind of marketing, I guess, on the television. Just wanted to get your outlook on price and kind of volume over the next 12 months. Thanks. Yeah, thanks, Alicia.

Unfavorable compare quarter over quarter.

From prior year, and we are also seeing a bit of softness in the dermatology prescribing volume year on year on the basis of Cove, it, but I think the differentiation of having an oral versus biologics versus topicals and psoriasis is really helping us hold up well and.

We continue to feel confident about our double digit growth going forward we've.

Murdo Gordon: We've been pleased with Otezla. We continue to see all of our integration activities of bringing that product in being smooth and uneventful, largely now under the management of Amgen employees around the world. And the field force continues to really do an outstanding job of making sure dermatologists understand the benefits of Otezla and the treatment of psoriasis and psoriatic arthritis. I think what we've seen in the quarter is a return to customer activity, largely at about 90% of pre-COVID levels. The majority of those customer interactions are in the virtual realm; about 60% of those.

We've also held price nicely as we go into 2021, that's a that's a good effect of having a differentiated product and then overall I think as we look at.

Sources of growth throughout the world Our international expansion plans have been going well, we secured reimbursement in Australia, our Japanese business really is doing well and we're looking at reimbursement and market authorization in other markets. So overall, it's been a really good growth story for us and we continue to feel good about the future.

Okay, and then we'll wait patiently to see if.

We are able to secure a mild to moderate indication next year, because I think thats a patient population that could really benefit from the convenience of an oral and the safety profile that we've established.

Murdo Gordon: I think overall, we're pleased with the growth in volume in the quarter. We did see some one-time events, accounting adjustments. We had a favorable accounting adjustment in 2019 in Q3 and an unfavorable accounting adjustment in Q3 this year, creating an unfavorable comparison quarter over quarter from the prior year.

Tesla versus say more potent orals or even biologics.

And your next question comes from the line.

From JP.

<unk>.

Hey, good afternoon, guys. Thanks for taking my question I wanted to follow up on Otezla and ask about your baseline assumptions fortyk to just given the proximity of that data in psoriasis.

Murdo Gordon: And we are also seeing a bit of softness in the dermatology prescribing volume year-on-year on the basis of COVID, but I think the differentiation of having oral versus biologics versus topicals and psoriasis is really helping us hold up well. And we continue to feel confident about our double-digit growth going forward. We've also held prices nicely as we go into 2021. That's a good effect of having a differentiated product. And then, overall, I think as we look at sources of growth throughout the world, our international expansion plans have been going well. We secured reimbursement in Australia. Our Japanese business is really doing well.

Those results are roughly are consistent with the phase two data that's been published how do you think about this potentially sliding into the market and you.

The potential impact it may or may not happen in the future trajectory of Moatize. When can you remind us whether the the double digit CAGR expectation you put out there for Otezla contemplates U.S. competition. Thanks a lot.

Yes, I'll answer your second part of your question first Corey the double digit growth assumptions that we put out there did indeed assume.

Murdo Gordon: And we're looking at reimbursement and market authorization in other markets. Overall, it's been a really good growth story for us, and we continue to feel good about the future. And then we'll wait patiently to see if we're able to secure a mild to moderate indication next year because I think that's a patient population that could really benefit from the convenience of an oral and the safety profile that we've established of Otezla versus, say, more potent orals or even biologics. Operator, your next question comes from the line.

The the launch of other orals into the U.S. and relevant relatively similar timeframe as to what's been publicly disclosed.

I think overall as others as I was saying earlier, we feel really good about the position of Otezla and the market. It's it's a widely reimbursed product with really good market access and affordable product from a patient perspective, very safe product from an overall profile perspective.

And I.

I, just think that new entrants into the category.

Unknown Attendee: Hey, good afternoon, guys. Thanks for taking the time to answer the question. I wanted to follow up on Otezla and ask about your baseline assumptions for TIC-2, just given the proximity of that data to psoriasis. You know, those results are roughly consistent with the phase two data that's been published. How do you think about this potentially slotting into the market and, you know, the potential impact it may or may not have on the future trajectory of Otezla? And can you remind us whether the double-digit CAGR expectation you've put out there for Otezla contemplates U.S. competition? Thanks a lot.

We will not necessarily differentiate on on efficacy or on safety right out of the gate I think it's going to take some time before.

Dermatologists, who are quite quite frankly leery of potent biologics for other products that might have efficacy, but that might travel with some safety concerns and that's not the case with otezla. So this familiarity with otezla unique positioning now that being the first product. They go to post topical and pre biologic I think is going to.

Hold up really well and we continue to invest we continue to invest heavily somebody mentioned they noticed more television advertising, we had ramped up DTC given co with is somewhat disrupting patient behavior and also in light of cobot. There are a lot of products in this category that required lab monitoring and Otezla doesn't so.

Murdo Gordon: So I'll answer your second part of your question first, Corey. The double-digit growth assumptions that we put out there did indeed assume the launch of other orals into the U.S. in a relatively similar time frame as to what's been publicly disclosed about products on efficacy or on safety right out of the gate. I think it's going to take some time before dermatologists who are, quite frankly, leery of potent biologics or other products that might have efficacy but might travel with some safety concerns, and that's not the case with Otesla. I think this familiarity with Otesla, the unique position now that it is the first product they go to post-topical and pre-biologic, I think is going to hold up really well, and We continue to invest heavily. Somebody mentioned they had noticed more television advertising.

So a really good profile and I think one that will hold up well despite competition.

And from getting to the top of the hour. So let's take one more question after which Bob will make some closing comments.

And your last question will come from the line.

From true security.

Great. Thanks for squeezing me in I'll stay on Otezla. So.

Now that the current hospitals are not ideal, but the side effect profile. When if you could comment on the recent data for keeping her off with Apache score that look on par with a Tesla and my specific question is more you know what percentage of a tesla use its with low surface involvement he sent and you see these new topicals that are coming out potentially disruptive.

Share or pricing basis. Thanks.

Yes, Thanks, Robyn, we really see these as unique segments of the market. The topical segment doesn't necessarily compete with the oral segment and we do see.

Murdo Gordon: We have ramped up DTC given COVID is somewhat disrupting patient behavior. And, you know, also in light of COVID, there are a lot of products in this category that require lab monitoring, and Otesla doesn't. So, a really good profile and I think one that will hold up well despite COVID. April is getting to the top of the hour, so let's take one more question, after which Bob will make some closing comments. And your last question will come from one of Robyn Karnauskas from. Great, thanks for squeezing me in. I'll stay on Otesla.

Right now we do see some low surface area usage, but I think as we as we look at our mild to moderate indication in the future I think there would be more potential overlap with sales.

Say, let's say more effective topicals for little surface areas and Orals, but it's really it's not impeding our ability to grow and I don't see them as overlapping sectors I think when patient say they want the convenience of an oral its.

It's a very clear choice to go to a Tesla.

Bob would you like to make any assurances just briefly with nine or so weeks left.

Robyn Kay Shelton Karnauskas: So, you know, I know that the current topicals are not ideal with the side effect profile. I wondered if you could comment on the recent data for Tepenerov with a PASI score that looked on par with Otesla. And my specific question is more, you know, what percentage of Otesla use is with low surface involvement patients?

In the year, we're encouraged.

We continue to execute well I think you see that in the numbers and then the progress we're making in our market shares in our pipeline.

We know that this is a year. Unlike any other so we're we're trying.

I'd be prudent as we look at the balance of the year or the beginning of next year.

I can answer nurses or risk posed risk posed by COVID-19. So we appreciate your joining our call look forward to seeing you are speaking to you in the new year.

Murdo Gordon: And do you see these new topicals that are coming out potentially disruptive on a share or price? Yeah, thanks, Robyn. We really see these as unique segments of the market. The topical segment doesn't necessarily compete with the oral segment, but we do see right now that we do see some low surface area usage. But I think as we look at our mild to moderate indication in the future, I think there would be more potential overlap with, say, let's say, more effective topicals for low surface areas and orals. But it's really not impeding our ability to grow. And I don't see them as overlapping sectors.

And in the meantime, urban and his team are here for any questions that you might have thank you. Thank you everybody.

Ladies and gentlemen, this concludes Amgens third quarter financial results Conference call you may now disconnect.

Yes.

[music].

Bob Bradway: I think when patients say they want the convenience of an oral, it's a very clear choice to go to a Tesla. Bob, would you like to make any closing comments? Sure. Just briefly, with nine or so weeks left in the year, we're encouraged that we continue to perform well. I think you see that in the numbers and in the progress that we're making in our market shares and in our pipeline, but we know that this is a year unlike any other, so we're trying to be prudent as we look at the balance of the year and the beginning of next year, particularly as regards the risks posed by COVID-19. So we appreciate your joining us on our call. We'll look forward to seeing you or speaking to you in the new year.

Bob Bradway: And in the meantime, Arvind and his team are here for any questions that you might have. Thank you. Thank you, everybody. Ladies and gentlemen, this concludes Amgen's third quarter 2020 financial results conference. Srinivas Jyothibodhanamayam, Arvind Sood, Arvind Sood, Arvind Sood, Arvind Sood, Arvind Sood,,,,,,,,,,,,,,,,,