Q4 2020 Bristol-Myers Squibb Co Earnings Call

Please standby.

Good day and welcome to the Bristol Myers Squibb, 'twenty 'twenty fourth quarter results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Tim Power Vice President Investor Relations. Please go ahead Sir.

Operator: Good day, and welcome to the Bristol-Myers Squibb 2020 fourth quarter results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Tim Power, Vice President, Investor Relations. Please go ahead, sir.

Thanks Lauren.

Tim Power: Thanks, Lauren. And good morning, everyone. Thanks for joining us today for our fourth quarter 2020 earnings call. Joining me this morning with prepared remarks as usual are Giovanni Caforio, our Board Chair and Chief Executive Officer, and David Elkins, our Chief Financial Officer. I'm also taking part in today's call are Chris Boerner, our Chief Commercialization Officer, and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. You'll note that we've posted slides on BMS.com that you can use to follow along with Giovanni and David.

Morning, everyone. Thanks for joining us today for our fourth quarter 2020 earnings call. Joining me. This morning with prepared remarks that you guys are Giovanni before you Board Chair and Chief Executive Officer, David Elkins, Our Chief Financial Officer I'm also taking part in today's call are Chris Boerner, Our chief commercialization officer, I'm sitting here of what our chief medical.

Also certain head of global drug development.

You'll note that we've posted slides to BMS dot com that you can use to follow along with first for Giovanni David's remark.

Before we get started let me read our forward looking statements during today's call, we'll make statements about the company's future plans and prospects that constitute forward looking statements actual results may differ materially from those indicated by these forward looking statements actual events at various important factors, including those discussed in the company's SEC filings.

Tim Power: But before we get started, let me read our forward-looking statement. Here on today's call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's SEC financial statements. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date.

These forward looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future day.

We disclaim any obligation to update forward looking statements, even if price of exchange will also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items reconciliations of those non-GAAP financial measures. The most comparable GAAP measures are available at <unk> Dot com.

Tim Power: If you specifically disclaim any obligation to update COVID-looking statements, please

Tim Power: We'll also focus our comments on our non-GAAP financial measures, which are adjusted to include certain specified items. Reconciliations of those non-GAAP financial measures to the most comparable GAAP measures are available at BMS.com.

Let me hand over to Giovanni.

Tim Power: And with that, I will hand over to Giovanni.

Thank you Tim and good morning, everyone I hope, you're all staying safe and healthy.

Giovanni Caforio: Thank you, Tim. And good morning, everyone.

Giovanni Caforio: I hope you're all staying safe and healthy. I want to open by saying I'm really proud of what we accomplished in 2020. Our teams executed well commercially, advanced our pipeline, kept our integration efforts ahead of schedule, and executed important business development activities. We did this while managing through the complexities of the pandemic, keeping our teams safe and our patients at the center of everything.

I want to open by saying I'm really proud of what we accomplished in 2020.

Our teams executed well commercially and advance our pipeline.

Our integration efforts are ahead of schedule and executed in Boston business development activities. We did this while managing through the complexities of the pandemic, keeping our teams safe and our patients and the central Bank.

Turning to slide four.

In Q4, we delivered another strong quarter.

Giovanni Caforio: In Q4, we delivered another strong performance. Commercial performance was strong, with sales increasing 10% compared to performance sales for the same period in the prior year. And we made significant progress to advance our pipeline. Of note, we continue to make progress with our law, including good momentum for Obdivo Placervo in first line, which supports our confidence in a return to growth for Obdivo DC. Red Motel, which has seen a strong launch with rapid adoption in India; Siposia, which is well positioned as the S1P modulator of choice in multiple sclerosis; and Onyreg, which is the only oral option with an overall survival benefit in first-line AML response maintenance.

Performance was strong with sales, increasing 10% compared to pro forma sales for the same period in the prior year.

We made significant progress towards brands our pipeline.

Yeah.

Of note, we continue to make progress with our launches, including good momentum for a view of loss you had bought your first line lung, which supports our confidence in a return to growth of Opdivo. This year.

Like Marseille, which has seen a strong launched with rapid adoption in M. D S.

Suppose here, which is well positioned as the S. One Pete modulator of choice in multiple sclerosis.

On the right, which is the only oral option with an overall survival benefit in first line AML response maintenance.

We closed the acquisition of myocardium, bringing us Lubbock Hampton.

Giovanni Caforio: We closed?

Giovanni Caforio: The Acquisition of Myocardium, bringing us Novacantin and strengthening our existing presence in Cardiovascular. During the quarter, we also continued to advance our timeline, including regulatory filings and approvals in our IELTS immunology and hematology portfolio. Most recently, with positive top-line results for the Traverse Settlement in Sorai, we demonstrated strong financial results, enabling an increased non-gap earnings per share outcome for 2020. As you have just seen, we have entered into a licensing arrangement with Rockefeller University for the development of a dual antibody combination for the treatment of COVID-19. In the world, we believe this treatment could be differentiated with the potential for low-dose subcutaneous administration.

Maintaining our existing presence in cardiovascular.

During the quarter. We also continued to advance our pipeline, including regulatory filings and approvals in our IL immunology and hematology portfolio.

Most recently with positive topline results.

Sydney in psoriasis.

We demonstrated strong financial results, enabling and increased non-GAAP earnings per share outlook for 2021.

As you read up Justin we have entered into a licensing arrangement with the Hawker satellite University for the development.

Dual anti body combination for the treatment of COVID-19.

Well early we believe these treatment who didn't set and created with the potential for low dose subcutaneous administration.

We are pleased to partner with all of the following.

Giovanni Caforio: We are pleased to partner with Rockefeller University and leverage our expertise in Antibody Technology and Strength in Development, Manufacturing, and Distribution to bring this potential option to base. Moving to slide five, let me put the performance for the quarter and full year 2020 into context. Thanks to excellent execution throughout the year, we have continued to deliver on all value drivers of the Celgene acquisition and laid a strong foundation for future growth of our new company. We are well positioned to accelerate the renewal of our portfolio and support the long-term growth of our business. Last month at J.P. Morgan, I shared why I have confidence in the future of Bristol-Myers. The integration of Celgene has gone very well.

A university and leverage our expertise in anti bot technology and strength in development manufacturing and distribution to bring this potential option to patients.

Moving to slide five let me called the performance from the quarter and full year 2020 into context.

Thanks to excellent execution throughout the year, we have continued to deliver on all body of drivers of the Celgene acquisition.

And laid a strong foundation for future growth of our new company.

We are well positioned to accelerate revenue all of our portfolio and support the long term growth of our business.

Last month at Jpmorgan I share why I have confidence in the future of Bristol Myers Squibb.

The integration of Celgene has gone very well based on progress last year, we now expect synergies to be close to 3 billion by the end of 'twenty two.

Giovanni Caforio: Based on progress last year, we now expect total synergies to be close to $3 billion by the end of 2020. We have proven commercial capability that enables us to fully realize the opportunities to grow our inline portfolio and support strong execution of our mission. The breadth and depth of our late-stage pipeline is reflected in the significant number of milestones delivered last year. Finally, our financial strength makes it possible for us to continue to invest in future growth internally and externally through business development. Now turning to slides. Overall, we are in a strong position to unlock the potential of the company we planned to build when we acquired Seltzer. We're building a company with a younger, more diversified portfolio of metrics, better positioned for the second half of the decade. Let me remind you, when we believe, we are free. We are confident we can more than offset the impact of near-term budget expiries, including revenue.

We have proven commercial capabilities, which enable us to fully realize the opportunity to grow our we like portfolio and support strong execution of our emotions.

The breadth and depth of our late stage pipeline.

That is a significant number of milestones delivered last year.

Finally, our financial strength makes it possible for us to continue to invest in future growth internally and externally through business development.

Now turning to slide six.

Overall, we are in a strong position to unlock the potential of the company we plan to build when we acquired Celgene.

We're building a company with a younger more diversified portfolio of medicines better positions in the second half of the decade.

Let me remind you when we believe we are heading.

We are confident we can more than offset the impact of near term expiries, including Revlimid.

We expect to grow our revenue and earnings through 2025.

Giovanni Caforio: We expect to grow our revenue and earnings through 2025, with a low to mid single-digit revenue figure for 2025, driven by the significant growth potential of our continuing business, which is comprised of our in-line drivers and our launch. We see strong momentum for this portfolio, which excludes Red Limit and POMERANZ, with a low double-digit revenue figure during the same. Looking out to 2025, we expect the continuing business will represent approximately 90% of the top, with 30% of that revenue from our newly launched product. Importantly, looking out to the second half of the decade on slide seven. We have multiple sources for portfolio reading.

With low to mid single digit revenue per car.

2025, driven by the significant growth potential of our continuing business, which.

Which is comprised of our in line growth drivers and our launch brands.

We see strong momentum for this portfolio, which excludes revlimid and populist with low double digit revenue CAGR during the same period.

Looking out to 2025, we expect the continuing business will represent approximately 90% of the company.

With 30% of that revenue from our newly launched products.

Importantly, looking out to the second half of the decade on slide seven.

We have multiple sources of portfolio really well.

Our recently launched products will continue to grow.

Giovanni Caforio: Our recently launched products will continue to grow, and most have significant expansion opportunities beyond the launch indication. We have a rich mid to late stage pipeline, with assets such as our Factor 11A inhibitor and our multiple myeloma salmons, Cibergamide and CC9248. We will continue to advance our diverse early R&D portfolio and further invest in this business development opportunity, just as we have done with Myoka. We believe we can achieve this while maintaining very strong profitability with operating margins expected in the low to mid-4s. Turning to our execution scorecard on slide 8, and JP Morgan, I outlined several important milestones that would support our success. And as mentioned, we've already delivered on a number; Obdivo Cascavo was recently approved by the FDA for patients with first-line R.C.C. This week, we delivered the second positive phase 3-4-2-crabacipinib phase in plaque psoriasis.

Most have significant expansion opportunities beyond the launch indication.

We have a reach mid to late stage pipeline.

With assets such as other factor 11 day inhibitor.

And our multiple myeloma, sandbox, <unk> and Cc $94 million.

We will continue to advance our diverse early R&D portfolio and further invest in the business development opportunities just as we have done with myocardial.

We believe we can achieve this while maintaining very strong profitability with operating margins expected in the low to mid forties.

Turning to our execution scorecard on slide eight.

At JP Morgan I outlined several important milestones that would support our success.

And as mentioned we've already delivered on a number of accounts.

Legal cost Gaba was recently approved by the FDA per patients with first line RCC.

This week, we deliver the second positive phase III for <unk> in block psoriasis.

Importing the filing of this potential new therapy to health authorities in the near term.

Giovanni Caforio: Supporting the filing of this potential new therapy to help authorities in the near term. Zipozia was filed for the treatment of ulcerative colitis in the U.S., and we look forward to launching that indication later this year. Moving to slide nine, as we think about this, based on the strength of our business and the exciting opportunities ahead, we are increasing our no-gap earnings-per-share guidance for 2021. David will provide more details on the finale.

<unk> volume for the treatment of ulcerative colitis in the U S and we look forward to launching that indication later this year.

Moving to slide nine as we think about this year.

Based on the strength of our business and the exciting opportunities ahead.

We are increasing our non-GAAP earnings per share guidance for 'twenty one.

David will provide more details on the financials, but let me offer some perspective on key areas of focus in 'twenty one.

Giovanni Caforio: But let me offer some perspective on key areas of focus in 2021. Commercially, we expect revenue growth across key businesses. This was driven in large part by the continued execution of our recent launches of Divo's Return to Growth and others. We will continue to advance our pipeline and have important milestones ahead this year, such as Filey-Maragantin, Phase II data for factor 11A, proof-of-concept data for bucranocidinib in ulcerative colitis, and initial data for ibergamide in refractory multiple myelom We will maintain a balanced approach to capital management. Disciplined business development is a top priority and provides an opportunity to further invest in future growth. David will provide more color on our consistent approach to capital allocation in a few months. This year, we also anticipate the U.S. policy environment will continue to evolve. And I'm confident the diversification of our portfolio will help us navigate potential challenges. We agree that patient affordability needs to be improved, and we are supportive of policies that can address that.

Commercially we expect our revenue growth across key businesses driven in large part by the continued execution about what recent launches Opdivo has returned to growth.

Of course, we.

We will continue to advance our pipeline and have important milestones I had this year.

The filing of a campaign.

Just two data for factories M&A.

<unk> got some data for the crowd Sydney in ulcerative colitis and initial data for <unk> in refractory multiple myeloma.

We will maintain a balanced approach to capital allocation.

Disciplined business development is a top priority and provides an opportunity to further invest in future growth.

David will provide more color on our consistent approach to capital allocation in a few minutes.

This year, we also anticipate the U S policy environment will continue to evolve.

And I'm confident the diversification of our portfolio will help us navigate potential changes.

We agree that patient affordability needs to be improved and we are supportive of policies that can address these issues.

We look forward to working with the New administration and congressional leaders to foster an environment that supports innovation and enhances patient access to medicines.

Giovanni Caforio: We look forward to working with the new administration and Congress to foster an environment that supports innovation and enhances patient access to medicine. To close, I am encouraged by the strength and momentum across the top. Across our four key therapeutic areas of Hematology, Oncology, Cardiovascular, and Immunology, we have leading inline medicines, significant short-term launch opportunities, and a rich pipeline. Our diversified portfolio and leading position in each business allows us to be less dependent on any one product or business. I'm also immensely proud of our end. Their talent is second to none, and their commitment is inspiring. I feel very good about the future of Bristol-Myers Squibb and the potential that lies ahead. I will now hand it over to David to walk you through the financials. David

To close I am encouraged by the strength and momentum across the company.

Across our four key therapeutic areas of hematology oncology cardiovascular and immunology, we have leading medicines.

Short term launch opportunities.

<unk> pipeline.

Our diversified portfolio and leading position in each business allows us to be less dependent on any one product or business.

I'm also immensely proud of our employees their talent second to none and that commitment is inspiring.

I feel very good about the future of Bristol Myers Squibb, and the potential that lies before us.

I will now hand, it over to David to walk you through the financials David.

Thank you Giovanni and Hello, everyone and thanks again for joining our call today.

David V. Elkins: Thank you, Giovanni. And hello, everyone.

David V. Elkins: And thanks again for joining our call today. If you turn to slide 11, I'd like to discuss our robust top-line performance for the quarter. Our teams continue to operate well in a virtual environment, delivering very strong quarterly and four-year results. For the fourth quarter, revenues grew 10% on a performance basis versus the prior year, reflecting strong execution across the world. During the quarter, we also saw approximately $250 million of favorable inventory bills versus the third quarter, primarily driven by Eloquus and Reblimid, as well as a 2% favorable impact from foreign exchange. Full-year revenues were equally strong and reflect a performer growth of 7%. I'll now provide additional color and performance information on our key brands and new launches.

If you turn to slide 11, I'd like to discuss our robust pipeline coupling performance for the quarter. Our teams continued to operate well in a virtual environment, delivering very strong quarterly and full year results.

For the fourth quarter revenues grew 10% on a pro forma basis versus prior year, reflecting strong execution across the world. During the quarter. We also saw approximately $250 million of favorable inventory build versus the third quarter, primarily driven by the liquids and revlimid as well as a 2% favorable impact from foreign exchange.

<unk>.

Full year revenues were equally strong and reflect the pro forma growth of 7%.

I'll now provide additional color on the performance of our key brands and new launches.

Starting with Otis on Slide 12, global sales continued to perform very well growing double digits for both the fourth quarter and the full year.

David V. Elkins: Starting with Elkins on slide 12, global sales continue to perform very well, growing double-digits for both the fourth quarter and the full year. In the U.S., fourth quarter sales increased 6% versus prior year, driven by robust 17% TRX growth and an inventory bill partially offset by expected higher gross-to-net impact from the coverage. Inventory build versus prior quarter was approximately $100 million. We saw total news scripts for oral anticoagulants declining during last year due to COVID.

In the U S fourth quarter sales increased 6% versus prior year, driven by robust 17% to your ex growth and inventory build partially offset by expected higher gross to net impact from the coverage gap.

Inventory build versus prior quarter was approximately $100 million.

We sold total new scripts for all enterprise declining during last year due to COVID-19.

We are starting to see volumes return to pre COVID-19 levels.

David V. Elkins: We are starting to see naive volumes return to pre-COVID levels. Internationally, sales remain strong with revenue of approximately $1 billion, growing 19% versus the prior year. Eloquence continues to be the number one NOAC in multiple key markets internationally, including Germany, France, and the UK.

Internationally sales remained strong with revenue of approximately $1 billion.

Growing 19% versus prior year.

<unk> continues to be the number one <unk> in multiple key markets internationally, including Germany, France, and the U K.

In the U S and internationally, we believe that the growth outlook for <unk> remains strong as we continue to grow the oral anti Gregory clients as well as increasing our share within the class.

David V. Elkins: Both in the U.S. and internationally, we believe that the growth outlook for outputs remains strong as we continue to grow the oral anticoagulant class, as well as increase our share within the. Turning to slide 13, global sales of Updiva grew 2% in the fourth quarter versus the prior year, primarily driven by strong growth in international markets. In the U.S., the teams continue to execute well, largely through remote engagement. During the fourth quarter, we saw an expected unwind of the favorable inventory we discussed last quarter. Importantly, our first-line lung cancer product continues to sell very well, with their share now in the low double-digit range. This is visible by the strong 20% sales growth of William Quarter versus the prior year. We continue to work through the pressure of our second line indication, which is stabilizing and now starting to be balanced out by the momentum we're building in first line month.

Turning to slide 13 global sales of Opdivo grew 2% in the fourth quarter versus prior year, primarily driven by strong growth in international markets.

In the U S teams continue to execute will largely through remote engagement.

During the fourth quarter, we saw an expected unwind a favorable inventory we discussed last quarter.

Importantly, our first line lung cancer continues to go very well with their share now in the low double digit range.

This is visible by the strong 20% sales growth a year ago in the quarter versus prior year.

We continue to work through the pressure of a second line indication, which is stabilizing and now starting to be balanced out with momentum. We are building in first line non res.

We remain very confident and returned to growth for Opdivo in the U S. This year.

We expect continued growth in first lien loans combined with launches in additional indications, including first line renal with the recent approval of Opdivo plus Cabo Andy.

And then the opportunity to be the first Io agents in first line gastric as well as several new adjuvant launches.

David V. Elkins: We remain very confident in the return to growth for Upizo in the U.S. this year. We expect continued growth in Firstline Lung, combined with launches in additional indications, including Firstline Renal with the recent approval of Vivo plus Cabo and the opportunity to be the first IO agent in Firstline Gastric, as well as several new adjuvants. Internationally, we continue to see strong commercial execution, with growth primarily driven by first-line melanoma and RCC as we continue to secure reimbursement around the world. We are pleased with the recent Japanese approvals and the launch of first line long with a broad label in all comers, as well as the EU approval of 9LA. And we'll be working on securing reimbursements in various countries throughout 2021. Now moving to our inline multiple myeloma portfolio on slide 14.

Internationally, we continue to see strong commercial execution with growth, primarily driven by first line melanoma and RCC as we continue to secure reimbursement around the world.

We are pleased with the recent Japanese approvals and the launch in first lien loans with a broad label in all comers as.

As well as the EU approval of nine O way and we'll be working on securing reimbursement in various countries throughout 2021.

Now moving to our in line multiple myeloma portfolio on slide 14.

Revlimid and problem loans continue to perform very well with strong double digit quarterly growth on a pro forma basis.

Globally Revlimid grew 18%, primarily driven by continued increase in treatment duration.

In the U S fourth quarter revenues increased 15%, primarily driven by solid demand and inventory build compared to prior year.

The inventory build versus prior quarter was approximately $100 million and we expect this inventory build to reverse in the first quarter.

Third the U S.

<unk> were strong with growth of 24% in the fourth quarter versus prior year due to growth in the triplet combination which include new reimbursement for <unk> in several countries.

David V. Elkins: Revlimid and Pomelos continue to perform very well with strong double-digit quarterly growth on a performance basis. Globally, Revlimid grew 18%, primarily driven by a continued increase in treatment duration. In the U.S., fourth-quarter revenues increased 15%, primarily driven by solid demand and inventory bills compared to the prior year. The inventory bill versus the prior quarter was approximately $100 million, and we expect this inventory bill to reverse in the first quarter.

Note that this strong revenue growth included an earlier than expected tender of approximately $80 million.

Almost global pro forma revenues continue to reflect significant growth up 21%.

In the U S pro forma revenues increased 18% and internationally up 27% driven by increased usage in earlier lines and longer treatment durations.

As we look to the first quarter of 2021 are in the portfolio. In addition to the inventory build in the U S. I would like to remind you of a typical seasonality revlimid lymphoma experience do patients entering the Medicare coverage gap earlier in the year.

David V. Elkins: Outside the U.S., revenues were strong, with growth of 24% in the fourth quarter versus the prior year due to growth in the triple combination, which included new reimbursement for RVD in several countries. We should note that this strong revenue growth included an earlier-than-expected tender of approximately $80 million. Pamela's global performance revenues continue to reflect significant growth, up 21%, and U.S. performer revenues increased 18%, and internationally, up 27%, driven by increased usage in earlier lines and longer treatment duration.

Now moving onto our recent launches on slide 15, our new launches contributed just over $300 million in 2020.

<unk>, Brazil is off to a great start with global revenues in the year of $274 million in the U S. We experienced significant pent up demand from the MBS launch in Q2, and Q3 and during the fourth quarter, we began to see expected evolution from the original bolus to true underlying demand.

We continue to expect growth through new patient starts early in their treatment journey.

Internationally initial launches in Germany, and Austria are doing very well, we continue our launches in various markets globally over the course of 'twenty, one as we receive reimbursement.

David V. Elkins: As we look to the first quarter of 2021, our image portfolio, in addition to the inventory bill in the U.S., I would like to remind you of the typical seasonality of Revlimid and Palmos for patients entering the Medicare coverage gap earlier in the year. Now moving on to our recent launches on 5.15. Our new launches contributed just over $300 million in 2020. Rebozel is off to a great start with global revenues of $274 million.

Now turning to suppose you strong commercial access has been secured with greater than 90% of U S. Commercial lives covered.

We remain focused on driving demand and establishing as opposed to you as the leading <unk> modulator in multiple sclerosis.

So our U S. We have now launched in Germany, Switzerland, Canada, the Netherlands, Norway, We will continue to secure reimbursement other markets throughout the year.

In addition to our <unk> launch, we now have a <unk> date for suppose you in you'd see in May.

And look forward to building momentum of this differentiated medicine.

David V. Elkins: In the U.S., we experienced significant pent-up demand from the MBS launch in Q2 and Q3, and during the fourth quarter, we began to see expected evolution from the original bolus to true underlying demand. We continue to expect growth through new patient starts early in their treatment journey. Internationally, initial launches in Germany and Austria are going very well. We will continue our launches in various markets globally over the course of 2021 as we receive reimbursement. I'm turning to suppose that strong commercial access has been secured with greater than 90% of US commercial lives covered. We remain focused on driving demand and establishing Symposia as the leading S1P modulator in multiple sclerosis.

And any early.

<unk> has been validated in Europe, and we will work with European health authorities to bring this medicine to patients as soon as possible.

Moving on to Andre initial feedback from physicians has been very positive and establishing <unk> as the first and only oral treatment demonstrating overall survival benefit for first line AML maintenance patients.

The data now published in the New England Journal of Medicine, we are focusing on educating physicians on net new maintenance therapy for patients.

The MAA remains under review in the EU with approval expected this year.

Now moving to our balance sheet and capital allocation on Slide 16, you will see we continue to generate a significant amount of cash flow from operations of approximately $3 $4 billion in the fourth quarter.

We ended the quarter in a strong liquidity position with approximately $16 billion free cash and marketable securities.

Our capital allocation priorities are unchanged.

David V. Elkins: Outside the U.S., we have now launched in Germany, Switzerland, Canada, the Netherlands, and Norway, and we'll continue to secure reimbursement in other markets throughout the year. In addition to our MS launch, we now have a PDUFA date for Symposia in UC in May and look forward to building momentum for this differentiated medicine. MAA has been validated in Europe, and we will work with European health authorities to bring this medicine to patients as soon as possible. Moving on to Onurag. Initial feedback from physicians has been very positive, establishing Onurag as the first and only oral treatment to demonstrate an overall survival benefit for first-line AML maintenance patients.

Development remains top priority for.

We are committed to reducing our debt and returning capital to shareholders.

With respect to business development, we plan to focus on strengthening our pipeline on mid sized bolt on deals that further strengthen the company into the second half of the decade.

We will remain disciplined with respect to deals that we execute and consistent with our criteria of being strategically aligned scientifically sound and financially attractive.

As it relates to reducing debt, we will continue to be focused on further strengthening our ability to invest for growth.

This morning, we announced the debt reduction transaction booked a $4 billion.

Based upon the bonds, we are targeting we still expect to see our leverage ratio reduced by one five times debt to EBITDA in 2004.

David V. Elkins: With the data now published in the New England Journal of Medicine, we are focusing on educating physicians on this new maintenance therapy for patients. The MAA remains under review in the EU, with approval expected this year. Now moving to our balance sheet and capital allocation on slide 16, you'll see we continue to generate a significant amount of cash flow from operations of approximately $3.4 billion in the fourth quarter. We ended the quarter in a strong liquidity position with approximately $16 billion in cash and marketable security. Our capital allocation priorities are unchanged.

Accordingly, we are committed to a strong investment grade credit rating, which is apparent through her willingness to use excess cash to proactively accelerate debt reduction.

Lastly, we are committed to returning capital to shareholders through continued dividend growth and share repurchases.

We have increased our dividend for the 12th consecutive year and recently increased our share repurchase authorization with plans to execute a total of three to 4 billion in share repurchases by the end of this year.

Now, let's turn to our guidance for 2021 on slide 17, let.

Let me start by giving you a quick update on our synergies as Giovanni mentioned the integration has gone very well and increased our total expected synergies to approximately $3 billion by the end of 'twenty two.

David V. Elkins: Business development remains our top priority. We're committed to reducing our debt and returning capital to shareholders. With respect to business development, we plan to focus on strengthening our pipeline on midsize, bolt-on deals that further strengthen the company in the second half of the decade. We will remain disciplined with respect to the respective deals that we execute and consistent with our criteria of being strategically aligned, scientifically sound, and financially attractive. As it relates to reducing debt, we will continue to be focused on this, further strengthening our ability to invest for growth. This morning, we announced a debt reduction transaction of up to $4 billion.

We achieved about one 4 billion in 2020 and expect the remaining synergy capture to be split evenly.

Through this year and into 'twenty two.

With that in mind, when considering the momentum we saw in the business in 2020, we've increased our non-GAAP diluted EPS guidance for 2021.

Now touching on our non-GAAP expectation at constant exchange rates, we expect high single digit revenue growth over 2020 based on the strength of our in line products and the launches were executed.

We expect to sustain a high enterprise gross margin of approximately eight 5%.

And I wanted to take a moment to touch on MSR net in 2020, we had the opportunity to make a number of incremental and accelerated investments to support our prioritized brands and product launches.

David V. Elkins: Based on the bonds we are targeting, we still expect to see our leverage ratio reduce by one and a half times that of EBITDA in 2024. Importantly, we are committed to a strong investment grade credit rating, which is apparent through our willingness to use excess cash to proactively accelerate that reduction. Lastly, we're committed to returning capital to shareholders to continue dividend growth and share repurchase. We have increased our dividend for the 12th consecutive year and recently increased our share repurchase authorization with plans to execute a total of $3 to $4 billion in share repurchases by the end of this year. Now, let's turn to our guidance for 2021 on slide 17. Let me start by giving you a quick update on our synergies.

Also with Covid recovery and higher expenses due to minor cardio are reflected.

For 2021, we expect M&A to increase in the low single digits as we invest in our launches and includes the full year spend for myocardial.

We expect mid single digit increase in R&D as we invest behind the robust pipeline COVID-19.

Covid recovery plans in preclinical and clinical study and incorporate spend of myocardial.

We expect our tax rate to remain about 16%.

And finally based on the strength and the momentum in the business. We are now increasing our non-GAAP 2021 diluted EPS.

$7 35 to $7 55.

I would also like to provide some color on why do you need and.

Share count is likely will see royalty income and net interest expense roughly offset each other in 2021, resulting in net neutral or unique.

David V. Elkins: As Giovanni mentioned, the integration has gone very well, and we increased our total expected synergies to approximately $3 billion by the end of 2022. We achieved about $1.4 billion in 2020 and expect the remaining synergy capture to be split evenly through this year and in 2020. With that in mind, and considering the momentum we saw in the business in 2020, we've increased our non-debt diluted EPS guidance for 2021. Now, touching on our non-GAAP expectation, a constant exchange rate. We expect high single-digit revenue growth over 2020 based on the strength of our inline products and the launches we are executing. Additionally, we expect to sustain a high enterprise gross margin of approximately 80.5%.

Regarding our share count we ended 2020 with approximately $2 3 billion.

$2 3 billion shares outstanding, which will decrease based upon the $3 billion to $4 billion repurchase activity, we are planning for the year.

Now before we move on to Q&A session I want to thank our teams around the world for delivering such outstanding results in 2020.

These results demonstrate the resiliency of our portfolio and position us well for strong growth in 2021 and into the future.

I'll now turn the call back over to Tim and Giovanni for Q&A.

Thanks, very much David Lauren can we go to the first question. Please.

Thank you.

Like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to layer seven other reach our equipment again that is star one to ask a question. Our first question comes from Geoff Meacham with Bank of America.

David V. Elkins: Now I want to take a moment to touch on MS&A. In 2020, we had the opportunity to make a number of incremental and accelerated investments to support our prioritized brands and product launches. Also, COVID recovery and higher expenses due to myocardia are reflected. For 2021, we expect MSNA to increase in the low single digits as we invest in our launches and include the full year spend for myocardium. We expect a mid-single-digit increase in R&D as we invest behind a robust pipeline, COVID recovery plans in preclinical and clinical studies, and incorporate the spend for myocardium. We expect our tax rate to remain about 16%.

Good morning, guys. Thanks for the question just had two quick ones.

Chris when you look at the new launches on Slide 15, obviously these are a big part of the L. O E offset over time. So the question is what do you see that tipping point in demand for these three products and how should we think about initial adoption for Liza sell on either sell later this year.

And then development question for do Crab is sitting at just wanted to get your thoughts on safety Tolerability not having a black box will obviously be a big commercial driver, but it's.

It's possible that the recent safety data for Xeljanz and Thats somewhat related mechanism directly impacting you guys don't want to get your thoughts on that thank you.

David V. Elkins: And finally, based on the strength and momentum in the business, we are now increasing our non-GAAP 2021 diluted EPS from $7.35 to $7.55. I would also like to provide some color on OI&E and share, which likely will likely see royalty income and net interest expense roughly offset each other in 2021, resulting in net neutral OI&E. Regarding our share count, we end 2020 with approximately $2.3 billion, about $2.3 billion in shares outstanding, which will decrease based upon the $3 to $4 billion in repurchase activity we're planning for the year.

Sure Let me, let me start with the cash.

On the.

Tipping point and then also your question with respect to <unk>, maybe I'll start with a question on life.

Life to sell and how we're thinking about the launch there. We're obviously very excited about the opportunity to launch a lifestyle and <unk>, we expect that eminently.

We are obviously going to be very much focused on.

During at launch the debt sites are.

Activated very quickly that we were able to get patients sufficiently moved onto therapy and then as we've stated repeatedly really the tipping point with respect to <unk> is going to be.

Our ability to continue to expand the car T market by driving referrals and expanding its footprint and then ultimately being able to leverage what we believe to be a differentiate it.

David V. Elkins: Now, before we move on to the Q&A session, I want to thank our teams around the world for delivering such outstanding results in 2020. These results demonstrate the resilience of our portfolio and position us well for strong growth in 2021 and into the future. I'll now turn the call back over to Tim and Giovanni for Q&A. Thanks very much, David. Lauren, can we go for the first question, please? Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Product profile in order to drive brand share and so that's going to be very important and a similar story will be four per either sell where obviously, we have a very strong position in multiple myeloma to leverage with respect to staying in hematology.

Of the three products that were on the slide while Brazil.

Obviously revenue that was off to a very good start and we're very pleased with the launch so far the execution for this product has gone very well and we continue to believe that revenue is going to play in a very important role in both Mds and beta thalassemia.

As we look at.

Where the where the launches at this point, we think thus far we've had very good.

Demand some of that demand frankly has been pent up.

Geoff Meacham: Again, that is star number one to ask a question. Our first question comes from Geoff Meacham with Bank of America. Morning, guys. Thanks for the question. I just have two quick ones.

And as we get into the first quarter and certainly into this year, we think we'll be tapping into the true underlying demand, but we continue to see real opportunity to grow this brand both in its labeled indication.

As well as potentially to expand into their first line Esa naive with the command study is and ultimately potentially.

Geoff Meacham: For Chris, when you look at the new launches on 5.15, obviously, these are a big part of the LOE offset over time. So the question is, where do you see the tipping point in demand for these three products? And how should we think about initial adoption for LysisVal and ItisVal later this year? And then, for development, for Duke-Cravos-Sitneb, just wanted to get your thoughts on safety tolerability. Not having a black box will obviously be a big commercial driver, but it's possible that recent safety data from Zellejant and a somewhat related mechanism could directly impact you guys. I want to get your thoughts on that. Thank you.

And that.

And then for <unk> on your Reg is obviously off to a very good start as David mentioned, there remains a very high unmet need for patients in first line AML, who have achieved the CR post intensive chemo, but aren't candidates for stem cell.

We believe that really the opportunity here is going to be to continue to drive the benefit that we see from an overall survival standpoint with anti Iraq, but importantly, this is a market where there is no established.

Treatment approach in AML maintenance so.

What we're going to have to do is continue to build that market and convince physicians that.

Chris Boerner: Thank you.

Chris Boerner: Sure. Let me start with the question on the tipping point and then also your question with respect to YSSL. And maybe I'll start with the question about YSSL and how we're thinking about the launch there. We're obviously very excited about the opportunity to launch YSSL in DOBCL. We expect that imminently, and we are obviously going to be very much focused on ensuring at launch that sites are activated very quickly, and we're able to get patients efficiently moved on to therapy. And then, as we've stated repeatedly, really the tipping point with respect to Brionzi is going to be our ability to continue to expand the CAR T market by driving referrals and expanding the site footprint and then ultimately being able to leverage what we believe to be a differentiated product profile in order to drive brand share. And so that's going to be very important.

It's.

A new paradigm to treat these patients and if there is a real urgency to treat and then finally to pick up on the question on <unk>. We are very pleased with what we have seen with the opportunity for as opposed to not only NMS, but particularly in IBD. The MF launch. We think is it's going well in spite of.

The situation with Covid, we've seen good uptake from physicians in terms of willingness to prescribe importantly.

Senator deposition tool now believe that symposia is the best that's one P is very much on track with what we had hoped for and given the data that we saw with true North we think theres considerable opportunity for us to drive business there as well so very excited about the opportunity with the cozy, maybe I'll turn it over a day.

Chris Boerner: And a similar story will be for IDSL, where obviously we have a very strong position in multiple myeloma to leverage. With respect to staying in hematology, of the three products that were on the slide, Reblazil, obviously, is off to a very good start. We're very pleased with the launch so far. The execution for this product has gone very well. And we continue to believe that Reblazil is going to play a very important role in both MDS and beta thalassemia. As we look at where the launch is at this point, we think, thus far, we've had very good demand. Some of that demand, frankly, has been pent up.

Yes, Amit.

Thanks.

Chris and thank you for the question, but the collapse of the let me start by saying that the core Arctic dual inhibitor of <unk>.

This is not a JAK inhibitor and the reason I say that is because of the specificity and selectivity in terms of targeting total downstream inhibition of IL 12, R 22, and interferon Alpha which leads to a profile that is differentiated we do not see the signals of a lab abnormalities.

Or are generally associated with JAK inhibitors, we do not see the signals.

We can move that identity associated debt.

<unk>.

What we have two.

Two very well conducted phase III trials, showing remarkable efficacy, they're very pleased with the data that we've seen in meeting the primary and secondary endpoints and we're now looking forward to the data evolving as Giovanni mentioned above other slides.

Chris Boerner: And as we get into the first quarter and certainly into this year, we think we'll be tapping into the true underlying demand. But we continue to see real opportunity to grow this brand both in its labeled indication as well as potentially to expand into the first line ESA, NIE with the command studies, and ultimately potentially into MF. And then for Onurag, Onurag is obviously off to a very good start, as David mentioned. However, there remains a very high unmet need for patients in first line AML who've achieved a CR after intensive chemo but aren't candidates for stem cell therapy. We believe that really the opportunity here is going to continue to drive the benefit that we see from an overall survival standpoint with Onurag. But importantly, this is a market where there is no established treatment approach for AML maintenance.

And the next generation of trials that are ongoing in IBD and beyond so we're looking forward to the readout of those trials Im very pleased revenue of course.

Oh.

Thanks.

Lauren can we go to the next question. Please.

Our next question comes from Terence Flynn with Goldman Sachs.

Great. Thanks for taking the question.

I just maybe two parts first on Opdivo, Chris I was just wondering if you can help us think about the cadence of contribution from some of the new approvals. So checkmate non yard and then maybe on the adjuvant side when we could start seeing some pull through there or is this more of the growth is going to be weighted to the second half of the year and then on factor 11 eight summit.

Maybe you could just opine here on kind of what you're hoping to see on the profile from the initial phase two trial later this year. Thank you.

Chris Boerner: So what we're going to have to do is continue to build that market and convince physicians that it's a new paradigm to treat these patients and that there's a real urgency to treat them. And then, to pick up on the question about Ziposia, we are very pleased with what we have seen with the opportunity for Ziposia not only in MS but particularly in IBD. The MS launch, we think, is going well in spite of the situation with COVID. We've seen good uptake from physicians in terms of willingness to prescribe. Importantly, the percentage of physicians who now believe that Ziposia is the best S1P is very much on track with what we had hoped for. And given the data that we saw with True North, we think there's a considerable opportunity for us to drive business there as well. I'm so very excited about the opportunity with Ziposia. Maybe I'll turn it over to Summit.

Let me start accounts, and then I'll turn it over to summit. So yeah. So we're excited for the outlook for Opdivo as was mentioned earlier in the call. We do see continued confidence that opdivo is going to return to growth in 2021 and contribute meaningfully.

Part of the Io franchise to company growth beyond that what I would say to answer. Your question on <unk> is first of all 90 or needs to be put within the context of first of all a very stable business that we're starting to see in the U S and a strong business as you saw in the numbers.

In Q4 ex U S and then as David mentioned, we've seen good uptake in first line lung launch.

The U S and it's still very early days outside of the us reducing.

We do assume debt there is a nice opportunity with 90 or in first line renal again as we've talked about we've got a.

Establish footprint with Opdivo, plus Euro boy, there and we think that by giving us the opportunity of the combined with what we believe to be a best in class PKI with Cabo theres opportunity to grow that business, particularly as we think about getting into the favorable patient population still very early days since we were just approved.

Samit Hirawat: And the reason I say that is because of the specificity and selectivity in terms of targeting tick-2, downstream inhibition of IL-12, IL-23, and interferon alpha, which leads to a profile that is differentiated. We do not see the signals of lab abnormalities that are generally associated with JAK inhibitors. We do not see the signals for VTEs that are generally associated with JAK inhibitors.

On the 22nd and then with respect to the additional opportunities as you know we have derisk launch opportunities with gastric cancer in.

In the.

First line metastatic space as well as in the adjuvant stage space as well as with adjuvant bladder. We do think that those are going to be more indexed to the latter half of this year and then as we get into 'twenty to 'twenty two in terms of their contribution to growth.

Samit Hirawat: What we have are two very well-conducted phase 3 trials showing remarkable efficacy. We are very pleased with the data that we've seen, meaning the primary and secondary influence, and we are now looking forward to the data evolving, as Giovanni mentioned on one of the slides, in the next generation of trials that are ongoing in IBD, SLE, and beyond. So we are looking forward to the readout of those trials and are very pleased, as you've seen.

With that I'll turn it over to summit.

Thanks, Chris and thanks for the question a perpetual revenue we expect to have the data from the first of the two proof of concept clinical studies that are ongoing.

The first one being in the total knee replacement.

Population in there.

Those ranging study and we are.

Validating safety and efficacy of the overall factor 11, a single agent versus Enoxaparin admits.

Tim Power: Lauren, can we go to the next question, please? Our next question comes from Terence Flynn with Goldman Sachs. Great. Thanks for taking the question. I just have two parts.

Administered subcutaneously COVID-19 subject. So what we're trying to see is the profile of other margins from a bleeding perspective revenue.

We can have a similar or better efficacy with net premium.

Terence C. Flynn: First on Opdivo, Chris, I was just wondering if you could help us think about the cadence of contribution from some of the new approvals, so Checkmate 9ER, and then maybe on the adjuvant side when we could start seeing some pull through there. Is this more growth going to be weighted to the second half of the year? And then, at the Factor 11A Summit, maybe you could just comment here on kind of what you're hoping to see on the profile from the initial Phase 2 trial later this year. Thank you. Let me start, Terence, and then I'll turn it over to Samit.

More importantly, then there will be the second study next year looking at a combination with a background therapy of the anti platelet agents. We had again it is very important to notice that profile what impact it will have a meeting and if you are able to combine that it opens up additional indications that we can pursue going forward. So those are the two things that we'll be watching out for defining.

For those looking at the safety and of course efficacy will also be a point or point of view. Thank you.

Can you go to the next question please.

Our next question comes from Seamus Fernandez with Guggenheim.

Seamus are you on mute.

Yeah.

We'll take our next question that.

That will come from Steve Scala with Cowen.

Chris Boerner: So, yeah, we're excited about the outlook for Optivo. As was mentioned earlier in the call, we do see continued confidence that Optivo is going to return to growth in 2021 and contribute meaningfully as part of the I.O. franchise to company growth beyond that. What I would say to answer your question on 9ER is, first of all, 9ER needs to be put within the context of, first of all, a very stable business that we're starting to see in the U.S. And then, with respect to the additional opportunities, as you know, we have de-risk launch opportunities with gastric cancer in the first-line metastatic space, as well as in the adjuvant space We do think that those are going to be more indexed to the latter half of this year and then as we get into 2022 in terms of their contribution to growth. Maybe with that, I'll turn it over to Samit.

Thank you I have two questions first on TIK, two well Bristol conduct a large long term cardiovascular outcomes trial to fully convinced physicians that there is no CV risk and if not why not bristol's view as clear, but prescribers don't seem convinced and then on Opdivo does first of all we'll see.

Any risk from potential new PD, one and trends such as Lilly tie that novartis is because it wasn't a mab or now the judge shoe co Harris antibody I assume their primary angle will be a price. So what is the rest from that thank you very much.

Okay.

Maybe I can start off.

Sales of express question under glass net.

So we have just had a readout of the first phase III studies in psoriasis.

Certainly data will continue to evolve as we look at the long term extension studies from psoriasis. We will continue to follow these we have additional indications ongoing we do not see the profile of that has been described projected EBITDA is from amaze perspective, ETE perspective, etcetera, we'll have to continue to evaluate we will have the discussion with the.

Chris Boerner: Can we go to the next question, please? Our next question comes from Seamus Fernandez with Guggenheim. Seamus, are you on mute? We'll take our next question. That will come from Steve Scala with Cowan. Thank you. I have two questions.

Prescribers with.

The other parties.

Other to understand what profile is that we need to further investigate.

This is not a commercialized drug yet so in terms of talking about whether the prescribers are convinced some other I think that is still.

Steve Scala: First, on TIC-2, will Bristol conduct a large, long-term cardiovascular outcomes trial to fully convince physicians that there is no CV risk? And if not, why not? Bristol's view is clear, but prescribers don't seem convinced. And then on Updevo, does Bristol see any risk from potential new PD-1 entrants, such as Lily's Tyvid or Novartis' Tizolizumab, or now the Junshu Coheras antibody? I assume their primary angle will be price. So what is the risk from that? Thank you very much.

Got to be further evaluated then we are able to present, the data and share that profile clearly with the community and share their perspective.

The data in hand, so I think it's too early to define what additional studies to be conducted and you'll continue to flow that very closely.

Let me pick up on the question on any risks from new entrants on PD, one and particularly the concern about price. So first of all we watch the competitive dynamics of the PD lone marketplace extremely carefully as you can imagine.

<unk> that we've been looking at considerably.

It has been the question of Commoditization, that's been with US really since we were approved with Opdivo from a U S standpoint, we actually don't see considerable risk from from these new entrants in part driven by a number of factors first.

Samit Hirawat: Maybe I can start off, Steve, with the first question on the question that So we have just had the readout of the first phase three studies in psoriasis. Certainly, data will continue to evolve as we look at the long-term extensions for each of the ICES. We will continue to follow these. We have additional indications ongoing. We do not see the profile that has been described for JAK inhibitors from a MACE perspective, from a VTE perspective, etc., but we'll have to continue to evaluate. We'll have discussions with prescribers, with the health authorities, in order to understand what profile it is that we need to further investigate. This is not a commercialized drug yet. So in terms of talking about whether prescribers are convinced or not, I think that is still got to be further evaluated when we are able to present the data and share that profile fully with the community and hear their perspectives with the data in hand. So I think it's too early to define what additional studies should be conducted, and we'll continue to follow that very closely.

Oncology continues to be a very data driven.

Our field in the U S and so we've got a wealth of data covering both opdivo and Uruguay, which gives us confidence second we've established a very strong position across tumors and of course, we built very significant capabilities to operate in a competitive context and I think we're demonstrating that now in both renal cell lung cancer.

For example, ex U S. Again, it's something that we're going to continue to stay very focused on and we see that in some markets. You may see some risk of commoditization, but those tend to be relatively small markets for us.

General I would say, we're very confident with our competitive position we don't see.

Meaningful risks with respect to Commoditization from where we sit today, but it's something we'll continue to monitor.

Thanks, Chris Historically, you go to the next one please.

We will take our next question from Seamus Fernandez with Guggenheim.

Chris Boerner: Let me pick up on the question of any risk from new entrants into PD-1 and, particularly, the concern about price. So, first of all, we watch the competitive dynamics of the PD-L1 marketplace extremely carefully, as you can imagine. Something that we've been looking at a lot has been the question of commoditization that's been with us really since we were approved for Updivo. From a U.S. standpoint, we actually don't see much risk from these new entrants, in part driven by a number of factors.

Oh, thanks, sorry about that.

Non-GAAP.

So I wanted to just kind of walk through the strategy and multiple myeloma given the number of mechanisms that you guys have.

Play and how you see the market evolving.

Chris.

I think this is.

Likely falling under your offices.

More so than anything so I was just wondering if you could help us understand how you see the treatment of multiple myeloma evolving.

The transition away from or towards Revlimid generics.

Chris Boerner: First, oncology continues to be a very data-driven field in the U.S., and so we've got a wealth of data covering both Updivo and Urovoid, which gives us confidence. Second, we've established a very strong position across tumors, and, of course, we've built very significant capabilities to operate in a competitive context. And I think we're demonstrating that now in both renal cell and lung cancer, for example.

Obviously, there's lots of opportunities out there by specific cell therapy cell mod.

Is this simply about segmenting the market.

Or do you see the transformational opportunities for potential internal combinations and then.

It puts your question for free.

Giovanni Giovanni.

We're continuing to see.

Lot of activity on the BB from from your team as we think about the.

The next sort of lack of opportunities.

Are you most focused on sort of phase two three opportunities.

Chris Boerner: XUS, again, it's something that we're going to continue to stay very focused on. We see that in some markets you may see some risk of commoditization, but those tend to be relatively small markets for us. But in general, I would say we're very confident with our competitive position. We don't see any meaningful risk with respect to commoditization from where we sit today, but it's something we'll continue

And again continuing to build out the pipeline in that regard is it more additional legs to the store.

<unk>.

Fully understand.

How you're continuing to focus our efforts on enhancing the pipeline.

Growing.

Returning to the company or returning the company to growth, but extending the growth profile post 2025.

Thanks, Seamus for the questions and some of them I mean, sorry.

R&D aspects of multiple myeloma strategy and uncertainty Chris can sales in the commercial aspects of it so as you know beyond that.

Chris Boerner: Thanks, Chris. Lauren, can we go to the next one, please?

Operator: We'll take our next question from Seamus Fernandez on Guggenheim.

Core classes of medicines that are being developed in multiple myeloma and out of the.

Cell therapy, certainly the ADP that have recently been approved in multiple multiple follow there are the cell mods and then there are going to be.

Seamus Christopher Fernandez: Oh, thanks. Sorry about that. My phone got cut off. So, just kind of

Seamus Christopher Fernandez: I'm going to kind of walk through this strategy in multiple myeloma given the number of mechanisms that you guys have.

The combination as we have also.

Talked about then right now what we're trying to do is to get to a stage, where this disease, which is in total and then in patients who are heavily pre treated.

Seamus Christopher Fernandez: I think, you know, this is likely falling under Uroscopy's responsibilities more so than anything.

In the fourth line plus share progression free survival remains very low with our response rates of 30% or so we're trying to transform that disease. So from that perspective cell therapies are going to play a major role and that's where <unk> is coming in to begin with or where we have shown the data. We've shown the all other sponsored we've shown but very durable.

Seamus Christopher Fernandez: I was just wondering if you could help us understand how you see the treatment of multiple myeloma evolving amidst the transition of

Seamus Christopher Fernandez: The Bulletproof Executive, 2013

Seamus Christopher Fernandez: Obviously, there's lots of opportunities out there, five specific.

Seamus Christopher Fernandez: therapy

Deep responses and a very manageable safety profile.

Seamus Christopher Fernandez: Is this simply about segmenting the market?

As we look towards the next generation of molecule day with T cell engaging outside of all day ADT.

Seamus Christopher Fernandez: or do you see transformational opportunities for potential internal combinations? And then, you know, a bigger picture question for Giovanni. Giovanni, you know, we're continuing to see a lot of activity on the BD front from your team. As we think about

Wages are going to be also very important.

As we've spoken about earlier, there could be Ah patients, who may not be able to receive co therapy and will be more appropriate in terms of being treated through the <unk>.

<unk> of course, there are challenges right now with the formulations that we have available we've seen data from multiple companies coming up showing the IV administration fees associated why other good efficacy there are challenges in terms of finding the right dose administration schedule from a safety perspective. So you have to be careful in terms of power.

Seamus Christopher Fernandez: The next sort of leg of opportunities, are you most focused on, you know, sort of phase two, three opportunities?

Seamus Christopher Fernandez: And again, continuing to build out the pipeline in that regard. Is it more additional legs to the stool? Just trying to more fully understand how you're continuing to focus your efforts on enhancing the pipeline and growing and returning the company, or not returning the company?

We go forward with that and so certainly.

Many other than we are now investigating subcutaneous formulation what it seems early data from from other presentations that we've seen.

Giovanni Caforio: Thanks, Seamus, for the question, Samit. And let me start with the R&D aspect of the multiple myeloma strategy, and then, certainly, Chris can fill in the commercial aspects of it. So, as you know, beyond MS, there are four classes of medicines that are being developed for multiple myeloma primarily. [inaudible] Certainly the ADP that has recently been approved and more to follow, there are the cell mods, and then there are going to be combinations, as we have also talked about. Then, right now, what we're trying to do is to get to a stage where this disease, which is incurable, and in patients who are heavily pre-treated, are in the fourth-line plus stage, where progression-free survival remains very low, with a response rate of 30%. We're trying to transform that disease.

The efficacy can be maintained of co.

Safety will be continuing to re evaluated their small numbers right now, but it seems to go in the right direction.

Part of the cell mods, and that's where we are.

So the first off the expansion data later this year and depending on what the durability and the magnitude of the response or we might have an opportunity to convey that to the authorities on how to have a discussion with other going forward, but from a strategic point of view a higher level how to moving forward. The next day the development, that's definitely going to be combinations we've shown.

Some of the data already.

If we talk about.

Our go to market for example data at Ash showed us high response rate when combined with the value of other Mexico, Brazil, as well as Velcade and dexamethasone. So those other strategies moving forward in the early alone.

In a similar way going to investigating combinations with other Paul and as the data evolves with the T cell engagement, we'll look for combination.

The ultimate goal is to move sales models much earlier in line. So that we can have.

Samit Hirawat: So from that perspective, cell therapy is going to play a major role. And that's where either cell comes in to begin with, where we have shown the data, we have shown the overall response rate, we have shown very durable and deep responses and a very manageable safety goal. As we look towards the next generation of molecules, whether it's T cell engagers or cell modulators, T cell engagers are also going to be very important.

The.

Comparisons versus image to be able to ultimately to place them in the longer run and then of course drive the move the other modalities also further up in line, but ultimately, yes, there will be segmentation of patients. Some net it seems like therapy some net.

T cell engages and there could still be an opportunity for us.

Sequencing.

Modalities, Chris absolutely.

Actually I think you've covered most of it the only thing that I would add is obviously is revlimid and Pamela go generic our focus is going to continue to be on bringing transformational opportunities forward as you well know Seamus Theres concern continues to be considerable unmet need particularly for patients as they get into later lines of therapy in multiple myeloma.

Samit Hirawat: And as we've spoken about earlier, there could be patients who may not be able to receive cell therapy and would be more appropriate in terms of being treated through the pre-cell invaders. Of course, there are challenges right now with the formulation that we have available. We've seen data from multiple companies coming out showing that IV administration is associated well with good efficacy. However, there are challenges in terms of finding the right dose and administration schedule from a safety perspective. So we have to be careful in terms of how we go forward with that. And certainly, many others, and we are now investigating a subcutaneous formulation where it seems, early data from other presentations that we've seen, that the efficacy can be maintained.

I was going to be an important.

Piece of that innovative pipeline that we bring forward. Initially in later line therapy, and then as we as we've discussed potentially moving that into earlier lines of therapy in a broader patient population and then as Tom had mentioned the opportunity to launch next generation Bcm. It may targets with T cell engages and potentially next generation a small net.

Tools, which we think have the potential to displace today's backbone and then Oh.

Over time, you could envision these newer therapies being combined and targeting different patient populations across lines of therapy.

And then also thinking about targeting the specific type of drug to the age performance status or preference of patients. So we're excited about having all of these promising modalities in our portfolio. We think that gives us a unique opportunity to build on our leadership position.

Samit Hirawat: Of course, safety will continue to be evaluated. There are small numbers right now that seem to go in the right direction. The third part is the cell models, and that's where we will show the first of the expansion data later this year. And depending on what the durability and the magnitude of the response are, we might have an opportunity to convey that to the authorities and have a discussion of how to bring it forward. But from a strategic point of view, at a higher level, how to move this forward, the next phase of development is definitely going to be a combination. You've shown us some of the data already.

Thank you Chris Seamus This is Giovanni let me just start.

Rapidly answer your question on business do you have on the so first of all I see that continuing to be a central pillar of our capital allocation strategy and continue to be focused on areas that are strategically aligned with our commercial presence and research efforts.

Samit Hirawat: If we talk about Abirtamide, for example, data at ASH showed us high response rates when combined with valinol and dexamethasone, as well as valcate with dexamethasone. So those are the strategies moving forward in the earlier line. We are, in a similar way, going to be investigating combinations with IdaCell. And as the data evolves with the T cell engagers, we will look for combinations. The ultimate goal is to move cell mobs much earlier in line so that we can have the comparison versus image to be able to ultimately replace them in the longer run. And then, of course, try to move the other modalities also further up in line. But ultimately, yes, there will be segmentation of patients. Some may receive cell therapy, some may receive T cell engagers, and there could still be an opportunity for sequencing of these modalities.

Obviously, we'll continue to look at.

Things that are scientifically.

Exciting and compelling.

Definitely we will continue to be disciplined from a financial perspective.

There will always be a part of our business development strategy that will be about continuing to strengthen and complement our research pipeline and.

Early stage assets and you've seen us doing a number of deals.

In that space last year.

I do see that continuing because it's clearly our strategy at the same time I've been very clear and.

JP Morgan.

In my presentation is an example that as we.

Continue to assess our later stage opportunities at deals like the myocardium deal given the right assets at the opportunity to generate value.

Objective to continue to strengthen the growth outlook.

Samit Hirawat: Chris, do you want to add something?

Chris Boerner: Actually, I think, Samit, you've covered most of it. The only thing I would add is that, obviously, as Revlimid and Pomalyst go generic, our focus is going to continue to be on bringing transformational opportunities forward. As you well know, Seamus, there continues to be considerable unmet need, particularly for patients as they get into later lines of therapy and multiple myeloma. IdaCell is going to be an important piece of that innovative pipeline that we bring forward.

The company in the second half of the decade. These are deals we're always going to be interested in.

Thanks, Giovanni or could we go to the next question. Please.

Our next question question comes from Chris Schott with J P. Morgan.

Great. Thanks, so much.

Just building on earlier question regarding the TIK two commercial dynamics in this kind of balance between what do you see as a clearly differentiated profile emerging from the JAKKS, but theyre being some perception issue with at least some physicians in terms of the profile of the drug how are you thinking that translates from a commercial standpoint, so I wonder how do you think the biscuits largely.

Chris Boerner: Potentially in later-line therapy and then, as we've discussed, potentially moving that into earlier lines of therapy in a broader patient population. And then, as Samit mentioned, the opportunity to launch the next generation BCMA targets with T cell engagers and potentially the next generation of small molecules, which we think have the potential to displace today's backbone. And then, over time, you could imagine these newer therapies being combined and targeting different patient populations across lines of therapy. And then also, thinking about targeting the specific type of drug to the age, performance status, or preference of patients. So, we're excited about having all of these promising modalities in our portfolio. We think it gives us a unique opportunity to build on our leadership position.

Address through your data presentations and we can think about a quicker ramp here given the superior efficacy you're seeing relative to the oil on the market or youre anticipating this could be a bit slower launch and there's going to be a big education component to getting the product established given that over time it seems to be a large opportunity before that first kind of initial stage of the ramp.

And then the second question I had was on the factor 11, a I guess how much will the data from this first study reporting this year inform or increase or decrease your confidence in the second study and do we really have to think about both of these phase II programs reading out before you'll make a decision on moving the asset forward or based on this first study could we could you see it.

I guess, the mono therapy setting the product moving forward. Thank you.

Chris Let me I'll start and then I'll turn it over.

The other should come in on the second part of your question. So with respect to the opportunity that we have with pick and sort of the pace of the commercial execution look I think we're excited about the opportunity that we have here, we think that based on the data we've seen from the phase two as well as both <unk>, one and two we have the opportunity to establish <unk> as the frontline branded.

Giovanni Caforio: Thank you, Chris. Seamus, this is Giovanni.

Giovanni Caforio: Let me just rapidly answer your question on business development.

Giovanni Caforio: So, first of all...

Giovanni Caforio: I see that continuing to be the central pillar of our capital allocation strategy and continue to be focused on areas that are strategically aligned with our commercial presence and research efforts. Thank you very much. There will always be a part of our business development strategy that will be about continuing to strengthen and complement our research pipeline and early stage efforts. You've seen us do a number of deals in that space last year. I do see that continuing because it's clearly our strategy. At the same time, I've been very clear in my presentation as an example that as we continue to assess later stage opportunities, deals like the Myocardia deal, given the right assets, the opportunity to generate value, and the objective to continue to strengthen the growth outlook of the company in the second half of the decade, these are deals we're always going to be interested in.

The world of choice for.

For these patients now.

As it relates to how quickly we'll be able to do that clearly this is gonna be a market, where we've got very compelling data versus the only world Thats in the space now. So we think that there were going to have an opportunity to educate physicians relatively quickly. Obviously you were going to have to work through access and the like which is part of any any new launch and that will typically take a bit of <unk>.

But we think with respect to our position versus the existing world agent that we think we have a relatively.

Relatively quick opportunity with a very very.

Compelling data set against the only existing player. There now as we think about additional opportunities to expand from there that's probably going to take a bit more time as do you have competitors that have been established in this marketplace, but that's certainly the way we've been thinking about it at this point from it.

Chris just to be very very short because we know the timing.

Others are also up questions. We believe that both studies have individually a very important role to play to define the dose and the safety profile. The time difference between the readout of this study was not too long. So I think we will.

Operator: Thank you, Bobby. Can we go to the next question? Our next question comes from Chris Schott with J.P. Morgan. Great, thanks so much.

Obviously, you've been able to build developed brands based out of the first study execution will probably take into accounts both studies.

Chris Schott: Just building on an earlier question regarding Commercial Dynamics and this kind of balance. What do you see as a clearly differentiated profile emerging from the Jacks, but there being some perception issues with at least some physicians? Profile the Drug, How are you thinking that this translates from a commercial standpoint? So on the one hand, do you think that this gets largely addressed through your data presentations? And we can think about a quicker ramp here, given the superior efficacy you're seeing relative to oral on the market. Or you're anticipating this could be a bit slower launch and that there's going to be a big education. , and the second question I had was on Factor XI-A.

As I said the time difference between the readout is not that long so execution wise, both datasets will be important.

Can we go to the next question please.

Our next question comes from Tim Anderson with Wolfe Research.

Thank you going back to the.

PD one question about Commoditization I wanted to ask about China specifically.

And Roche.

Roche today painted a cautious picture on the China opportunity due to an ordeal in local manufacturer proliferation.

I'd be curious to get your view is this ever going to be a market that's meaningful for Bristol or other multinationals and just as importantly, if it is happening in China and a PD one category why would have happened in other disease categories oncology or otherwise.

Chris Boerner: I guess how much the data from this first study will report, Chris, let me start and then I'll turn it over to others to comment on the second part of your question. So with respect to the opportunity that we have with TIC and sort of the pace of the commercial execution, look, I think we're excited about the opportunity that we have here. We think that based on the data we've seen from phase two, as well as both PSO1 and two, we have the opportunity to establish TIC as the frontline branded world of choice for these patients. Now, as it relates to how quickly we'll be able to do that, clearly this is going to be a market where we've got very compelling data versus the only world that's in the space now.

And then second question on Revlimid.

Largest product now for the company. It goes off patent next year analysts are guessing how to erode it in the first year. We don't know if it's a 1 billion or 3 billion down or what exactly.

It would be great to have some clarity on.

How to think about first share erosion.

Sam Thanks for letting me, let me start on both questions and.

I'll ask Chris and David has spent Wanna add yourself.

On China.

Let me say first of all as you know we have that we.

We have a relatively small business in China, but we see an opportunity to continue to strengthen our presence in that market.

Yes, our pipeline continues to progress and we have launched opportunities going forward in China.

Chris Boerner: So we think that there we're going to have an opportunity to educate physicians relatively quickly. Obviously, we're going to have to work through access and the like, which is part of any new launch, and that will typically take a bit of time. But we think with respect to our position versus the existing world agent, there, we think we have a relatively quick opportunity with a very, very compelling data set against the only existing player there. Now, as we think about additional opportunities to expand from there, that's probably going to take a bit more time as you have competitors that have been established in this marketplace. But that's certainly the way we've been thinking about it at this point.

I would agree that from a.

Net and R&D out perspective.

It is it is appropriate to be cautious because of the number.

Of PD, one agents that have been launched at the same time, including a number of local players.

And so I I share their perspective.

The opportunity in China, I would be cautious about I do believe though.

Couple of things so first of all Brad examples of brands in oncology and other therapeutic areas.

Debt recently have had.

Samit Hirawat: And Chris, just to be very, very short, because we know the time is short here and others also have questions. We do believe that both studies individually have a very important role to play in defining the dose and the safety profile. The time difference between the readout of the two studies is not too long, so I think we will obviously be able to build development plans based on the first study. Execution will probably take into account both studies. But as I said, the time difference between the readout is not that long. So execution-wise, both data sets will be important.

A more differentiated profile with fewer local competitors have been able to be income.

Included in net.

RTL.

Investment and built to be meaningful contributors to growth in the.

The market. So I don't think every therapeutic area is the same in every classroom drivers is the same and specifically in our portfolio. We believe that a truly differentiated medicines that can have a very meaningful price.

In China, when you look at the medium and the long term.

I I think actually.

The development opportunities in China will continue to grow not only through.

The government channel, but also over time.

Operator: Can we go to the next question, please?

Tim Anderson: Our next question comes from Tim Anderson with Wolf Research. Thank you.

Elements of commercial insurance for what is that what is a relatively large population of patients have access to that so I do see that in the medium term.

Tim Anderson: Going back to the P1 question about commoditization, I want to ask about China specifically. And Roche today, you know, painted a cautious picture of the Chinese opportunity due to NRDL and local manufacturer proliferation. I'd be curious to get your view. Is this ever going to be a market that's meaningful for Bristol or other multinationals? And, just as importantly, if it's happening in China in the PD-1 category, why wouldn't it happen in other disease categories, oncology or otherwise? And then the second question on Revlimid, the largest product now for the company. It goes off patent next year. Analysts are guessing, you know, how to erode it in the first year. We don't know

The composition, if you will.

If you want of the marketplace in China.

In terms of AUR dynamics will be more diversified and I think that will strengthen opportunities across the board. So we continue to be really committed to China with respect to.

With respect to your question on glad limit.

As you can imagine.

We have a number of discussions ongoing litigations on volume with.

With players.

That debt continue we're not going to be in a position to provide multiple year guy.

Our guidance going into the future, but I think we've been pretty clear.

Stimulating our position on travel.

Erosion of the beginning of 'twenty two.

Giovanni Caforio: agree that from an NRDL perspective, you know, it is appropriate to be cautious because of the number of PD-1 agents that have been launched at the same time, including a number of local players. And so I share the perspective that the opportunity in China I would be cautious that has left.

As we've as we've mentioned we see.

The low <unk>.

Portfolio of Revlimid, and Palmer, who is representing.

No more in fact less than 10% of the company by 2025 so.

But the evolution of that business I think it's.

Giovanni Caforio: has a more differentiated profile.

It's pretty clear.

Giovanni Caforio: It's pretty clear. And from my perspective, what's more important is to really look at the potential for double-digit growth or continued business and the growth of the total company between now and 2025. Chris, do you have anything to add on China?

From my perspective, and what's more important is to really look at the.

The potential for double digit growth or co.

Continuing business and the growth of the total company between now and 2025, Chris do you have anything to add on China.

Chris Boerner: Giovanni, I think you've covered it. Tim, the only thing is that I agree with Giovanni.

Giovanni I think you've covered it Tim the only thing is that I agree with Giovanni and the medium to long term, we see significant opportunity. The NR deal is only one of the payer channels that are available as Giovanni mentioned, there is a rapidly emerging commercial and private health care market there.

Chris Boerner: In the medium to long term, we see significant opportunity. The NRDL is only one of the payer channels that are available. As Giovanni mentioned, there is a rapidly emerging commercial and private health care market there, and we think that's going to continue to be an important opportunity for locals and multinational companies. And I wouldn't extrapolate the dynamics for PD-1 to other therapeutic categories just given the intense level of competition that you see in China with those products.

We think that's going to continue to be an important opportunity for local and multinational companies and I wouldn't over extrapolate.

The dynamics for PD, one to other therapeutic categories, just given the intense level of competition that you see in China with those products.

Chris Boerner: Thanks, Chris. And Lauren, can we go to the next question, please?

Thanks, Chris Lauren can we go to the next question. Please.

Our next question comes from David Risinger with.

Operator: Our next question comes from David Risinger with Morgan Stanley. Yes, thanks very much. I have two questions.

Morgan Stanley.

Yes, thanks, very much I have two questions first could you discuss why your CMA Orva cell was dropped and second.

David R. Risinger: First, could you discuss why your PCMA or the cell was dropped? And second, Bristol's peak expectations for reblosal are higher than consensus. What do you think investors underappreciate? Thank you.

Yeah.

Crystal peak expectations for local.

Our higher than consensus what do you think investors underappreciated. Thank you.

Samit Hirawat: Maybe I can start off on Orvacel and then certainly pass it on for Chris to comment on the BASOC. For Orvacel, we always look at our portfolio overall and ensure that we are going to develop the best medicines and take them forward. Orvacel, as you know, is a BCNA-directed cell therapy. We have Idacel as a front-runner, which has the data and has been submitted for review and approval both in the U.S. as well as in the EU. When we look at the evolution of Orvacel's data, and we put it in terms of the landscape and the evolution of data from outside as well, we believe that Idacel fits perfectly in terms of further development, and Orvacel's platform becomes very important for the next generation of card cell development rather than the medicine, the particular medicine itself. So, we have not taken Orvacel forward in the current form, and we use it as a platform for the evolution of cell therapies.

Maybe I can start off from all of the cell and then certainly.

Pass it on for Christopher.

Chris to comment on the Brazil.

Oh, sorry, sorry.

We always look at our portfolio overall and ensure that we're going to develop the best medicines and take them forward. All this other.

The bcm redirected cell therapy, we have either debt as a front runner, which has the data and has been submitted for review.

With your approval both in.

In the U S as well as the EU.

When we look at the evolution of the data and we put it in terms of the landscape and the evolution of data from outside as though we believe that cytosorb fits.

Perfectly in terms of further developing and all the sales platform becomes very important for the next generation of part sales development with other than the medicine. The particular medicine itself. So therefore, we have not taken part of the South Florida.

I think the current tour and they use the platform for evolution of the cell therapies.

David R. Risinger: David, with respect to rublozil in terms of the opportunity, the way I think about it is our initial indication in MDS, remember, that's a relatively smaller percentage of the overall incidence of MDS. So in the US, for example, the incidence of MDS is roughly 21,000. The on-label population is a relatively small percentage of that.

David with respect to the rubble zone in terms of the opportunity the way I think about it as our initial indication in Mds remember that's a relatively smaller percentage of the overall NDS incident. So in the U S. For example, the incidence of Mds is roughly 21000. The on label population is a relatively small percentage of that in.

That's because the initial indication obviously focus on those patients who are lower risk Esa eligible Rs positive and in the second line. So the way we think about it is first and foremost we've got to continue to drive utilization in existing indication. We have we think there's continued opportunity. There then obviously there is an opportunity to expand.

Chris Boerner: And that's because the initial indication, obviously, focuses on those patients who are lower risk, ESA eligible, RS positive, and then the second line. So the way we think about it is, first and foremost, we've got to continue to drive utilization in the existing indication we have. We think there's continued opportunity there. And then, obviously, there's an opportunity to expand within MDS. And we think that the command study gives us a meaningful opportunity to both include those patients who are RS negative and move into earlier lines of therapy. And then, obviously, beyond MDS, there are other opportunities, beta-thal, which is on-label today, but we also have additional opportunities in areas like myelofibrosis.

And.

Within the NDS and we think that the command study gives us a meaningful opportunity to both include those patients who are Rs negative and moving into earlier lines of therapy.

And then obviously beyond India as there are other opportunities data doll, which is on label today, but then also we have additional opportunities in areas like myelofibrosis.

Access or can we go to the next question. Please.

Next question comes from Ronny Gal with Bernstein.

Operator: Can we go to the next question, please?

And good morning, and thanks for fitting me in two questions if I may sorry.

Ronnie Gelm: Our next question comes from Ronnie Gelm with Bernstein.

About the part D restructuring you mentioned your support for isolating patients from.

And paying out of pocket at the last two glasses scene in Congress.

Ronnie Gelm: and Good morning, and thanks for fitting me in.

Ronnie Gelm: Man, a few questions if I may. First, about the party restructuring you mentioned...

Got 20, or 30% responsibility for pharma and because its traffic.

Part of the.

Sure.

Given your portfolio in oral oncology I understand it.

Giovanni Caforio: [inaudible] Michael M. Let me start with your question on Part D redesign. So, first of all, you know, there is a real need to think about redesigning benefits in a way that is more aligned with the treatment of today and, most importantly, that addresses significant affordability issues that are faced by patients because of the inappropriate design of benefits and the high copays and the high out-of-pocket exposures patients have. You know, I think it's premature to say.

It will be material.

I was wondering if you can just give us a quick update where you believe the.

The baby's standing weird concern around that issue herd is this part of which we can take a stab and second as we think about the kind of IL 23 mechanism coming to IBD. I was wondering if you were able to compare the cocky ethics day level you have a good share with the oral versus the antibody.

As the GAAP, they're small enough that you can compete head to head with the IL 20, threes, assuming that mechanism becoming dominant.

It could be in those indications.

Thank you let me start with your question on price.

But the early design so first of all.

There is a real need to think about redesigning.

Giovanni Caforio: [inaudible]

Chris Boerner: Sure. So Ronny, we're obviously very enthusiastic about the opportunity that we have to play with potentially multiple drugs and IBD initially with Zipozie and then, pending data with Tick, potentially an opportunity with Zucrapacitinib as well. The thing to keep in mind is that while IBD is a competitive space, there continues to be a need for efficacious drugs that have a manageable safety profile. Ultimately, we believe that the competitive dynamics are going to play out along a few dimensions.

Redesigning benefits in a way that is.

More aligned with the treatments up today and most importantly.

That addresses significant affordability issues.

By patients because of appropriate design benefits and the high co pay.

Hi, other pocket exposures that patients have I think it's premature to say exactly where potential legislation in Congress would halt.

We've been very clear that we are supportive of it.

Thinking about the evolution of the of the design.

And you know.

I think when you look at our portfolio.

Chris Boerner: Obviously, efficacy, safety, and route of administration are very important here. And because this is a chronic disease where patients are going to cycle through multiple products, we think having a novel mechanism of action is important. And so when you look at the two broad categories of treatments that are available today, notably biologics and JAK inhibitors, we think our initial foray into the space with Zipozie is favorably positioned. For example, we think Zipozie demonstrates efficacy that is competitive with biologics in an oral formulation with an improved safety profile, certainly versus TNF inhibitors. So we think we play very well there. And similarly, with respect to the JAKs, Zipozie demonstrates efficacy that's generally competitive with JAKs as well. And again, an improved safety profile across both of those categories, being a novel S1P in the space we think is going to be important.

You have there is we have a diversified portfolio so.

Depending on how the coverage gap contribution of the industry evolves.

That's correct, 717% and Bob May actually have an impact on anti Chris should that be reduced.

On the catastrophic side Youre right some of the specialty.

All medicines will be impacted by changes.

In that area. So it really depends on that.

You know when you have a diversified portfolio that may be adding that back debt.

The negative would be that there are adding exponential impact positively in terms of patients, but also in terms of the contribution we already make so when we look at concrete proposals will be able to assess the impact on our portfolio better, but I think it's important to remember that different medicines in our portfolio today.

Backup differently in various phases of coverage in Medicare.

Chris.

Sure. So ronny, we're obviously very enthusiastic about the opportunity that we have to play with potentially multiple drugs in IBD initially with <unk> and then pending the data would check.

And potentially an opportunity would you grab a segment as well the thing to keep in mind as debt well IBD is a competitive space. There continues to be a need for efficacious drugs that have a manageable safety profile ultimately we believe that the.

Tim Power: Thanks, Chris. I know we're running short on time, but I think we have a few extra minutes, maybe, to get to a few more questions. If we can go to the next one, please, Lauren.

The competitive dynamics are going to play out along a few dimensions, obviously efficacy safety route of administration is very important here and because this is a chronic disease, where patients are going to cycle through multiple products. We think having a novel mechanism of action is important and so when you look at the two broad categories of treatments that are available.

Operator: Thank you. Our next question comes from Luisa Hector with Berenberg. Hello, thank you for taking my questions. One clarification on the inventory build: you gave

The day, notably Biologics and JAK inhibitors, we think our initial foray into this space was opposed yet is favorably positioned for example, we think the cozy demonstrates efficacy that is competitive with biologics and an oral formulation with an improved safety profile certainly versus the TNF any.

Luisa Caroline Hector: Unknown Executive, Mohit Bansal, Akash Tewari, Timothy Power, Yihan Li, Lynelle Hoch, Wendy Bartie, Bristol-Myers Squibb Co

So we think we play very well there and similarly with respect to the jacks debt.

The other demonstrates efficacy this generally competitive with JAKKS as well and again, an improved safety profile across both of those categories being a novel <unk> in this space, we think is going to be important.

Luisa Caroline Hector: And also on TIC-2, you know, we've seen the very positive headline press releases about psoriasis. I'm wondering when we might see the data.

Thanks, Chris I know, we're running short on time, but I think it's a few.

A few minutes extra maybe take us through a few more questions and excellent Laurence.

Thank you. Our next question comes from Luisa Hector with Baron Burke.

Luisa Caroline Hector: https://www.fda.gov.uk

Hello, Thank you for taking my question.

Luisa Caroline Hector: And just a quick comment, perhaps, because in the press releases, you do mention the secondary endpoints, someone met, which implies someone not met, and I just wondered how crucial they were for the competitive profile.

One just a clarification on the inventory builds your day.

Listen on the quarter on core tests can you confirm the year on year impact.

Then also on the tips to.

You've seen the very positive headline press releases in psoriasis.

David V. Elkins: That's a good job, thank you. So, on the first question, the year-over-year impacts, about $200 million in the fourth quarter of inventory bill, and that was mainly related to Eliphas and Revlimid. We expect all that to come out in the first quarter.

I'm wondering when we might see the day clock, how soon you could file and whether you expect an SBA tunnel.

Just a quick comment.

Press releases.

You mentioned the secondary endpoints someone that split some clients.

Samit Hirawat: Great. So, David, I can take the second part of the question around data collection very quickly. In terms of the presentation of the data, we anticipate presenting the first of the two studies at AD. Later, this, I think it's in the second quarter, it's in the vehicle.

Someone not smart and I, just wondered how crucial day rapid that competitive profile.

Thank you.

So on the first question the year over year impacts of about $200 million in the fourth quarter of them to rebuild net was mainly related to our price and revlimid.

And we expect all that to come out in first quarter.

Okay. So I can take the second part of the question around because thats not very quickly in terms of the presentation of the data we anticipate presenting the first of the two studies.

Later this I think it's in the second quarter.

Samit Hirawat: And then the second one, we have to find that appropriate conference in the second half of the year so that we can share the data more broadly, so the investigators can share it with the community. Second, about the filing, we are working very diligently, and it is a priority for us. So, we do anticipate filing quite rapidly. And, of course, as soon as we have the producer date, we will be broadly communicating that and sharing that information with you and others. Third, about the FDA panel, we obviously can't comment on that because we don't know.

In April and then the second one we have to find the appropriate current conference in the second half of the year. So that we can share that data more broadly.

With investigators can share with the community second about the filing we are working very diligently and it is a priority for us. So we do anticipate filing quite rapidly and of course, that's where you have the participate we will be broadly communicating that I can share that information with you and others about the FDA panel, we obviously can't comment on that we don't know.

All of that.

We'd have to continue to have the dialogue with regulatory agencies and they will ultimately decide that they sit on this as.

Samit Hirawat: We have to continue to have dialogue with regulatory agencies, and they will ultimately decide where they sit on this as we're looking forward to that conversation with the health authorities. And last point about the secondary endpoints: as we've said, we've met the primary endpoint. And the secondary endpoint, we are very comfortable with the data that we've seen showing superiority not only against placebo but also against Alteza. And we've looked at it from a PASI 75 perspective, a SPGA 01 perspective, and a PASI 100 perspective. So, we are very comfortable with the data that we've seen thus far from both primary and secondary endpoints.

So looking forward to that conversation would be hesitant Ortiz and last point around the secondary endpoints as we've said we've met the primary endpoint and the secondary endpoints. We are very comfortable with the data that we've seen showing the superiority not only against a placebo, but also against Oh Tesla and we've looked at it from a Patsy.

75 perspective, SPD as their lung perspective.

100 perspective, so we are very comfortable with the data that we've seen thus far from both primary and secondary endpoints.

Thanks.

And then we go to the last one please.

Operator: Can we go to the last one, please? Our next question comes from Andrew Baum with Citi. Thank you.

Our next question comes from Andrew Baum with Citi.

Thank you two questions on the factory <unk> inhibitor. Please.

Andrew Baum: Q&A

Andrew Baum: Chapter 11a inhibitor, please. First, I'm interested in how quickly you can initiate it.

First I'm interested in how quickly you can initiate a phase three program I'm, assuming given the high potency that you anti body put on the probability of success in the phase III.

Andrew Baum: The planning for a phase three program has already begun given how lengthy many of these

Andrew Baum: I'm assuming you've also identified sites as well, given both the company's previous experience and then

Debt planning for a phase III program has already begun given how lengthy many of these program is it going to be I, just want to confirm that that's the case.

Andrew Baum: And second, you've previously spoken about ESUS, acute coronary syndrome, some of the areas that you want to go on the arterial side, do you see any?

Assuming you've also identified sites as well given both the company's previous experience and then second.

You've previously spoken to.

Andrew Baum: ...

Andrew Baum: Thank you.

Samit Hirawat: Thanks, Andrew. Let me start with the second question first. I don't think we should disregard it for some fibrillation from any further trial. Those are the discussions that we still need to have. And of course, conversations will need to be had both with our collaborator, Jensen, as well as with our regulatory authorities to determine whether the appropriate competitor would be in the right population. So more to come on that as we gather the data and the conversations gear up. In terms of starting again with phase 3 studies, one, we need to see data first from the first trial of total need replacement.

He says to acute coronary syndrome, some of the average whats going on the arterial side do you see any subpopulation of atrial fibrillation, where you could go head to head, but it's adequate or should we would disregard the atrial fibrillation population completely from any phase III trial program. Thank you.

Yeah.

Thanks, Andrew Let me start with the second question first I don't think we shouldn't disregard for.

Emulation.

Any trials or their build out of the discussions that we still need to have and of course, the conversations that need to be add both with our with our collaborator Janssen as well as the regulatory authorities will be appropriate competitor.

Would be in the right population so more to come on that as the debt with the data and the conversations gear up in terms of starting again with phase III studies, one we need to see the beta players from the first trial of the <unk>.

Total knee replacement both of the companies of course.

Samit Hirawat: Both of the companies, of course, want to proceed as quickly as possible, and we certainly honor the excitement that is around there. And, of course, this is a priority module that we need to move forward with. So we will be able to initiate phase 3 trials quite rapidly. You very correctly said both companies have the expertise in conducting these trials.

One to proceed as quickly as possible and we certainly are.

Honor the excitement that is around there and of course. These other priority molecule that we need to move forward. So we will be able to initiate a phase III trial is quite rapidly you're very correct me if that both companies have.

Expertise in conducting these trials and thereby experiences that we have we will be able to initiate very quickly, but certainly looking forward to see the first data I cannot share timelines, yet because we have to obviously collaborate with janssen to be able to define those but as soon as those are the other doesn't do share in due course as well.

Samit Hirawat: And with the prior experiences that we have, we will be able to initiate very quickly. But I am certainly looking forward to seeing the first data. I cannot share timelines yet because we have to obviously collaborate with Jensen to be able to define those.

Giovanni Caforio: But as soon as those are available, they will be shared in due course. Thank you, Samit. And thanks, everyone. Let me just make a couple of comments.

Thank you Sam and thanks, everyone. Let me just make a couple of comments first of all let me say I E.

Giovanni Caforio: First of all, let me say I am excited that 2020 was a really important year for us. It was a great year, the first year for us as a combined company, and our performance was strong during a challenging year from so many different points of view. And we've established a really strong foundation for our new company. There is solid momentum in our business going into 2021. And that's reflected in our outlook for 21. And the guidance we provided today. We feel really good about the company that we're building, the way in which we are executing and delivering on the value drivers of the acquisition of Celgene. We see all significant opportunities for sustained long-term growth ahead and the acceleration of the renewal of our portfolio. And we look forward to continuing to update all of you as we make progress by continuing to remain focused on execution and advancing the many priorities we have as a company. I know the team will be available to answer any additional questions. And I'd like to thank you for participating in our call today. Thank you. And that does not con

I am excited about 2020 was.

Really importantly for US is a great first year for us as a combined.

Company outperformance was strong.

During a challenging year from so many different points of view and we've established a really strong foundation.

Our new company.

There is a solid momentum in our business going into 2021.

And that's reflected in our outlook for 'twenty, one and the guidance we provided today.

We feel really good about the company that we're building.

<unk>, which we are executing and delivering on the value drivers of the acquisition of Celgene.

We see significant.

Significant opportunities for.

Sustained long term growth ahead, and the acceleration of the renewal of our portfolio and we look forward to continuing to update all of you as we make progress by continuing to remain focused on execution and advancing the many priorities. We have as a company I know the team will be available to answer any additional questions.

I'd like to thank you for participating in our call today. Thank you.

And that does conclude today's conference. We thank you for your participation you may now disconnect.

Operator: And that does conclude today's conference. We thank you for your participation. You may now disconnect. Thank you for watching!

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