Q2 2021 Amgen Inc Earnings Call

August 3, 2021

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Erica and I will be your conference facilitator today for Amgen's second quarter 2021 financial results Conference call. All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speaker's prepared remarks.

Conference Facilitator: and I will be your conference facilitator today for Amgen's second quarter 2021 financial results conference call. All lines have been placed on mute to prevent any background noise.

Conference Facilitator: There will be a question and answer session at the conclusion of the last speaker's prepared remarks. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session. To ask a question, please press the star key, then the number one on your telephone keypad. To withdraw your question, please press the pound key. I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

In order to ensure that everyone has a chance to participate we would like to request that you limit yourself to asking 1 question during the Q&A session to ask a question. Please press Star then the number 1 on your telephone keypad to withdraw your question. Please press the pound key I would now like to introduce Arvind Sood Vice.

President of Investor Relations. Mr. Sood, you may now begin.

Arvind Sood: Erica, thank you. Good afternoon, everybody.

Eric Hi, Thank you good afternoon, everybody welcome to our Q2 call.

Arvind Sood: Welcome to our Q2 call. I think the three key themes for this quarter are great execution in a challenging environment, pipeline advancement, and smart and strategic business development. Lots to cover, so let's jump right in. The slides are up. Quick reminder that we'll use non-GAAP financial measures in our presentation, and some of the statements will be forward-looking statements. Our SEC filings identify factors that could cause our actual results to differ materially. So with that, I would like to turn the call over to our chairman and CEO, Bob Bradway. Okay, Bob?

I think the 3 key themes for this quarter, a great execution in a challenging environment pipeline advancement and smart and strategic business development lots to cover so let's jump right. In slides are up quick reminder, that we'll use non-GAAP financial measures in our presentation and some of the statements will be forward looking statements are.

SEC filings identify factors that could cause our actual results to differ materially so with that I would like to turn the call over to our chairman and CEO, Bob Bradway, Bob Okay. Thank you Arvind and Hello, everyone and thank you for joining our call.

Bob Bradway: Okay. Thank you, Arvind. And hello, everyone, and thank you for joining our call. Through the first six months of the year, Amgen has continued to execute well, driving demand for our current products globally while also paving the way for growth from future products. Total revenues in the second quarter increased 5% over the prior year and 11% over the prior quarter. We achieved this growth despite the lingering effects of COVID-19 and increased competition in many of our therapeutic categories.

Through the first 6 months of the year Amgen has continued to execute well.

Driving demand for our current products globally, while also paving the way for growth from future products.

Total revenues in the second quarter increased 5% over the prior year and 11% over the prior quarter.

We achieved this growth despite the lingering effects of COVID-19, and increased competition in many of our therapeutic categories.

We continued to see strong volume driven growth from re Paso, who Tesla prolia and <unk> entity and a number of our oncology biosimilar or excuse me all oncology medicines as well all of which address significant health challenges.

Bob Bradway: We continue to see strong, volume-driven growth from Repatha, Lutezla, Prolia, and Avenity and a number of our oncology biosimilars, or excuse me, oncology medicines as well, all of which address significant health challenges. We also saw strong growth in the quarter from our biosimilars, supporting our commitment to deliver value to healthcare systems around the world. We generated volume growth of 22% outside the United States and were particularly encouraged by our progress in the Asia-Pacific region, where two notable approvals in the second quarter should provide additional growth moving forward.

Yes.

We also saw strong growth in the quarter from our Biosimilar supporting our commitment to deliver value to healthcare systems around the world.

We generated volume growth of 22% outside the United States, and we're particularly encouraged by our progress in the Asia Pacific Region were 2 notable approvals in the second quarter should provide additional growth moving forward.

Bob Bradway: In China, our partner Beijing secured approval for Coprolis, which joins Bensido and Xgeva in our oncology collaboration there. And in Japan, the approval of Amavig for migraine marks another important milestone for us in that market. In the U.S., we're excited by the strong launch of Lumicrast, which is providing hope to lung cancer patients in need of new treatment options. We are very pleased with the enthusiasm Lumicrous has generated in the oncology community. We're also excited that the FDA granted priority review to tezapelumab, further confirming our belief that it offers significant advantages over currently available treatment alternatives for people with severe asthma. A debilitating disease that affects millions worldwide.

In China, our partner Peking secured approval for Kyprolis, which joins <unk> in ex Java, and our oncology collaboration there.

And in Japan, the approval of <unk> for migraine marks another important milestone for us in that market.

In the U S. We're excited by the strong launch of <unk>, which is providing hope to lung cancer patients in need of new treatment options.

Very pleased with the enthusiasm <unk> is generated in the oncology community.

We're also excited that the FDA granted priority review to <unk> further confirming our belief that it offers significant advantages over currently available treatment alternatives for people with severe asthma.

Debilitating disease that affects millions worldwide.

We have long sought to complement our internal innovation efforts with the best.

Bob Bradway: We've long sought to complement our internal innovation efforts with the best available external innovation, and in the first half of this year, we've executed on several compelling business development transactions that fit squarely in our stated areas of interest. The acquisition of Five Prime Therapeutics and our partnership with Kiowa Kirin, for example, have added two potential first-in-class Phase III-ready assets in cancer and inflammation, two therapeutic categories where there remains high unmet need.

Available external innovation and in the first half of this year, we've executed on several compelling business development transactions, which fits squarely in our stated areas of interest.

The acquisition of 5 Prime Therapeutics, and our partnership with Kyowa Kirin. For example have added 2 potential first in class phase III ready assets in cancer and inflammation.

2 therapeutic categories, where there remains high unmet need.

The acquisition of <unk>, bio, which Dave will address in a moment, we will significantly strengthen our protein engineering capabilities across therapeutic areas.

Our strong balance sheet and cash flows will enable us to take advantage of additional business development opportunities.

Like these as they arise.

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All the work we do is focused on advancing our mission to serve patients and to do so in a way that helps to address the many challenges facing society.

Bob Bradway: All the work we do is focused on advancing our mission to serve patients and do so in a way that helps to address the many challenges facing society. You may have seen our recently announced plans to invest approximately $1 billion to build two new manufacturing facilities, one in North Carolina and the other in Ohio, to meet the demand for our medicine. Both facilities will utilize cutting-edge technologies to be much more efficient and environmentally friendly than traditional plants, supporting our goal of achieving carbon neutrality by 2027.

They have seen our recently announced plans to invest approximately $1 billion to build 2 new manufacturing facilities, 1 in North Carolina and the other in Ohio to meet the demand for our medicines.

Both facilities utilized cutting edge technologies to be much more efficient and environmentally friendly than traditional plants.

Supporting our goal of achieving carbon neutrality by 2027.

Bob Bradway: Both plants will also draw from very diverse talent pools, as we, along with a number of other large companies that are part of the 110 coalition, look to collectively hire 1 million black Americans into well-paying jobs over the next 10 years. You can learn more about our commitment to good corporate citizenship by reading our ESG report, which can be found in the Responsibility section of Amgen.com. Finally, before I turn things over to Murdo, let me thank my Amgen colleagues for their continued commitment to serving patients around the world and delivering strong performance across all aspects of our business. Murdo, over to you.

Both plants will also draw from very diverse talent pools, as we along with a number of other large companies that are part of the 110 coalition look to collectively higher 1 million Black Americans into well paying jobs over the next 10 years.

You can learn more about our commitment to good corporate citizenship by reading, our ESG report, which can be found in the responsibility section of Amgen Dot com.

Finally, before I turn things over to Murdo, Let me. Thank my Amgen colleagues for their continued commitment to serving patients around the world and delivering strong performance across all aspects of our business murdo over to you. Thank.

Thank you Bob.

Cost of product sales increased 3% year over year volumes increased 8% driven by double digit growth across a number of our products, including Prolia <unk> and.

And our Biosimilar products <unk> and <unk>.

Murdo Gordon: Thank you, Bob. Second quarter product sales increased 3% year over year. Volumes increased 8%, driven by double-digit growth across a number of our products, including Prolia, Repatha, and our biosimilar products in Bassi and Cangenti. Our ex-US business grew 18%, with volume growth of 22% year over year. We continue to see gradual recovery from the impacts of the COVID-19 pandemic in Q2 when compared to Q1 2021. Patient visits and lab test procedure trends continue to improve but remain below pre-COVID-19 levels. We remain focused on customer execution.

U S business grew 18% with volume growth of 22% year over year.

We continue to see gradual recovery from the impacts of the COVID-19 pandemic in Q2, when compared to Q1.2021.

Patient visits and lab test procedure trends continued to improve but remain below pre COVID-19 levels.

We remain focused on customer execution.

Overall U S field activity improved quarter over quarter, reaching 80% of pre COVID-19 levels face to face customer interactions are increasing and accounted for 60% of activity during the second quarter.

Over the course of the pandemic the cumulative decline in diagnosis has suppressed the volume of new patients starting treatment, which we expect will continue to impact our business during the second half of the year.

Murdo Gordon: Overall, U.S. field activity improved quarter over quarter, reaching 80% of pre-COVID levels. Face-to-face customer interactions are increasing, and they accounted for 60% of activity during the second quarter. Over the course of the pandemic, the cumulative decline in diagnoses has suppressed the volume of new patients starting treatment, which we expect will continue to impact our business during the second half of the year. Now, let me review some product details, beginning with our innovative portfolio. In bone health, Prolia increased 24% year-over-year, driven primarily by volume growth. In the second quarter, osteoporosis diagnosis rates remained at approximately 90% of pre-pandemic levels.

Now, let me review some product details beginning with our innovative portfolio.

Focus on driving patient growth and are optimistic about probably a strength in the second half of the year.

<unk> sales increased 30% year over year, driven by 32% volume growth.

U S sales nearly doubled year over year as we saw an acceleration in demand trends driven by new and continuing patients.

We believe his entities unique bone building attributes will continue to drive revenue growth.

Moving to <unk>, which has reached more than 1 million patients since launch.

Net sales increased 43% year over year, driven by 49% volume growth and we maintain U S and global share leadership in BCS canine class.

In the U S. Total volumes grew 37% year over year and outside the U S volumes grew 66% year over year.

Murdo Gordon: We remain focused on driving patient growth and are optimistic about Prolia's strength in the second half of the year. Affinity sales increased 30% year-over-year, driven by 32% volume growth. In the U.S., sales nearly doubled year-over-year, as we saw an acceleration in demand trends driven by new and continuing patients. We believe Avenaty's unique bone building attributes will continue to drive revenue growth.

Volume growth in the quarter was partially offset by lower net selling price, resulting from an increase in Medicare part D patients receiving <unk> and entering the coverage gap.

Looking forward, we expect some ongoing reduction in global net selling price on a sequential basis.

Overall, we're confident in our ability to grow with us to help more patients at risk of developing a heart attack or stroke.

Now onto <unk>, which grew 24% quarter over quarter on a year over year basis net sales declined 16% volte.

Murdo Gordon: Moving to Repatha, which has reached more than one million patients since launch. Repatha sales increased 43% year-over-year driven by 49% volume growth, and we maintain U.S. and global share leadership in the PCSK9 class. In the U.S., total volumes grew 37% year over year, and outside the U.S., volumes grew 66% year over year. Volume growth in the quarter was partially offset by lower net selling prices resulting from an increase in Medicare Part D patients receiving Repatha and entering the coverage gap.

Volume grew 11%, but were more than offset by lower net selling price and unfavorable changes to estimated sales deductions in.

In the U S. <unk> volume grew 7% year on year and the brand maintained total prescription share leadership among subcutaneous <unk>.

Looking ahead, we see continued rebate pressure as <unk> compete per share in the market.

To date more than half a million patients worldwide have been prescribed day moving in.

We believe <unk> has significant potential to help many more patients suffering from chronic migraine given the clinical data that will be published soon showing <unk> superiority versus topiramate.

Moving to our inflammation portfolio with Tesla sales were $534 million in the quarter with 5% volume growth more than offset by unfavorable changes to estimated sales deductions.

Murdo Gordon: Looking forward, we expect some ongoing reduction in global net selling price on a sequential basis. Overall, we're confident in our ability to grow Repatha to help more patients at risk of developing a heart attack or stroke. Now on to Amovig, which grew 24% quarter over quarter. However, on a year over year basis, net sales declined 16%.

And lower net selling price in the U S. So Tesla maintained first line share leadership in psoriasis.

The branded prescription volumes grew 10% year over year, even as patient visits to dermatologists remained 15% below pre pandemic levels.

The number of new patients, who started treatment with <unk> in Q2 was near pre pandemic levels, but those gains were largely offset by a lower percentage of 90 day prescription pills and lower prescription refill rates per hour Tesla.

Murdo Gordon: Volumes grew 11% but were more than offset by lower net selling price and unfavorable changes to estimated sales deductions. In the U.S., Imavig TRX volume grew 7% year-on-year, and the brand maintained total prescription share leadership among subcutaneous CGRPs. Looking ahead, we see continued rebate pressure as oral CGRPs compete for share in the market. To date, more than half a million patients worldwide have been prescribed Amivig. We believe AimaVig has significant potential to help many more patients suffering from chronic migraine given the clinical data that will be published soon showing AimaVig's superiority versus topiramidine.

We expect that recovery in the dermatology segment will progress over the coming quarters.

Looking forward, we're preparing for the anticipated approval of the mild to moderate psoriasis indication in the U S. Later this year and for the launch of Tesla in China.

Enbrel sales decreased 8% year over year, mainly driven by a lower net selling prices and favorable changes to estimated sales deductions on a year over year basis volumes declined 1% supported by Ambrose long track record of efficacy and safety.

Turning to Biosimilars Q2 sales were $567 million driven by strong volume growth, which was partially offset by declines in net selling price we can.

Continue to hold leading biosimilar shares in Europe for Amgen Vita and in the U S for <unk> for.

For the remainder of the year, we expect worldwide biosimilar volume growth to be offset by declines in net selling price due to increased competition.

Murdo Gordon: Moving to our inflammation portfolio, Tesla sales were $534 million in the quarter with 5% volume growth, more than offset by unfavorable changes to estimated sales deductions and lower net selling price in the U.S. However, Tesla maintained first-line share leadership in Surrey.

Longer term growth for Biosimilars will come from expansion of existing products in new markets and launches of additional biosimilar molecules such as <unk> in the U S and Biosimilars for Soliris <unk> and Eylea.

And oncology Neulasta on pro remains the preferred long acting G CSF with 52% volume share in the quarter.

Murdo Gordon: New to brand prescription volumes grew 10% year over year, even as patient visits to dermatologists remained 15% below pre-pandemic levels. The number of new patients who started treatment with Otezla in Q2 was near pre-pandemic levels, but those gains were largely offset by a lower percentage of 90-day prescription fills and lower prescription refill rates for Otezla. We expect that hemomic recovery in the dermatology segment will progress over the coming quarters. Looking forward, we're preparing for the anticipated approval of the mild to moderate psoriasis indication in the U.S. later this year and for the launch of a Tesla in China. NBRL sales decreased 8% year-over-year, primarily driven by lower net selling prices.

Sales declined 18% year over year, driven by lower net selling price and lower volume. This was partially offset by a $75 million year over year benefit from favorable changes in reimbursement mix.

<unk> is U S average selling price declined 35% year over year, and 12% quarter over quarter.

We expect this trend will continue throughout 2021, driven by intensifying competition.

Kyprolis sales increased 11% year over year, primarily driven by volume growth and net selling price moving forward, we expect growth from Kyprolis use in combination with <unk> antibodies, including <unk> since our Cleveland.

I'd like to take this opportunity to comment on our recent.

<unk>, which is off to a strong start with unaided brand awareness, increasing 20 points since launch K Ras testing in patients with metastatic non small cell lung cancer now stands at 70% and 46 of the top 50 testing lab now.

Murdo Gordon: On a year-over-year basis, volumes declined 1%, supported by Embrill's long track record of efficacy and safety. Turning to biosimilars, Q2 sales were $567 million, driven by strong volume growth, which was partially offset by declines in net selling price. We continue to hold leading biosimilar shares in Europe for Amgevita and in the U.S. for Mvasi and Kanjindi. For the remainder of the year, we expect worldwide biosimilar volume growth to be offset by declines in net selling price due to increased competition.

I'll identify <unk> as actionable in their lab reports, we're very pleased with the positive reaction from the oncology community and we will be working closely with them to ensure access for patients who can benefit from this breakthrough medicine.

Overall, I'm pleased with our Q2 execution given the sustained impact of COVID-19 on our business.

Murdo Gordon: Longer-term growth for biosimilars will come from expansion of existing products in new markets and launches of additional biosimilar molecules, such as Amgivita in the U.S. and biosimilars for Solaris, Stellara, and ILEA. In Oncology, Neulasta Onpro remains the preferred long-acting GCSF with 52% volume share in the quarter. Sales declined 18% year-over-year, driven by a lower net selling price and lower volume. However, this was partially offset by a $75 million year-over-year benefit from favorable changes in reimbursement. Nolaska's U.S. average selling price declined 35% year-over-year and 12% quarter-over-quarter.

Closely monitor over the course of the pandemic and its impact on patient and physician behavior during the second half here.

Maintain our focused execution to ensure our medicines continue to reach the patients they can benefit and with that I will turn it over to David.

Thanks, Murdo and good afternoon, everyone.

We made several important advances in R&D last quarter I will begin with our acquisition of <unk>, which will strengthen amgen leadership in developing engineered protein based medicines to treat patients with serious illnesses.

There are 3 important components to the acquisition first <unk> core antibody technology will enable the development of multi specific biologics directed against targets and a wide range of diseases across our key therapeutic areas.

<unk> antibody platform offers capabilities complementary to our Zeno models.

It is genetically modified to express human <unk> molecules, comprising only a heavy chain a small single chain antigen binding VH domains from these molecules are soluble and stable and can be easily strung together like beads on a stream to generate multi specific molecules.

Murdo Gordon: We expect this trend will continue throughout 2021, driven by intensifying competition. Kyprolis sales increased 11% year-over-year, primarily driven by volume growth and net selling price. Moving forward, we expect growth from Kyprolis use in combination with CD38 antibodies, including Darzalex and Sarkleza. I'd like to take this opportunity to comment on our recent launch at Womacraz, which is off to a strong start, with unaided brand awareness increasing 20 points since launch. KRAS testing in patients with metastatic non-small cell lung cancer now stands at 70%.

In addition to Naomi I'll also brings a novel lower affinity lower affinity CD 3 engaging technology that complements our bite platform the.

The availability of a second CD 3 engaged or will allow us to broaden our bi specifics capabilities and enable customization of the T cell engaging domain, depending on the disease and target.

Finally, we are acquiring clinical and preclinical oncology programs directed against high value targets of interest, which we specifically selected based on our own discovery efforts and target validation.

These include a phase 1 by specific antibody for prostate cancer that complements a capacitive map AMG 160 also targeting <unk> and AMG 509 targeting steep 1 which was recently granted fast track designation by the FDA.

Murdo Gordon: And 46 of the top 50 testing labs now identify KRAS G12C as actionable in their lab reports. We're very pleased with the positive reaction from the oncology community, and we'll be working closely with them to ensure access for patients who can benefit from this breakthrough medicine. Overall, I'm pleased with our Q2 execution given the sustained impact of COVID-19 on our business. Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal, And with that, I will go.

Turning to oncology, we continue to advance <unk> registration around the globe with regulatory reviews and progress in multiple jurisdictions, including Europe and Japan feed.

Feedback from the medical community on the <unk> launch in the U S has been overwhelmingly positive and I've heard personally from oncologists, who are excited to have <unk> available and are heavily screening their patients for <unk> 12 <unk> mutations.

I am pleased to report that more than 2000 patients have received <unk> across more than 1000 sites and 900 investigators or treating physicians, including through our global early access programs.

Dave: I will turn it over to Dave.

Dave: Thanks, Murdo. Good afternoon, everyone.

And the <unk> development program, we continue to advance our broad based combination efforts initial data from our <unk> combination in colorectal cancer has been accepted for presentation at ESMO in September and the Mec and oral Egfr combination abstracts will be submitted to a medical meeting in the fourth quarter.

Dave: We made several important advances in R&D last quarter, and I will begin with our acquisition of KineoBio, which will strengthen Amgen's leadership in developing engineered, protein-based medicines to treat patients with serious illnesses. There are three important components to the acquisition. First, TeneoBio's core antibody technology will enable the development of multi-specific biologics directed against targets and a wide range of diseases across our key therapeutic areas. The Neobios Antibody Platform offers capabilities complementary to our Xenomod platform

To expand our <unk> experience with <unk> 2 inhibition, along with our ongoing collaboration with Revolution medicines. We have also entered into a collaboration with Novartis for a ship 2 combination trial.

Updates from our monotherapy non small cell lung cancer study, including additional biomarker analyses as well as data in patients with stable brain metastases have been accepted for presentation at the World Congress on lung cancer.

Dave: It is genetically modified to express human IgG molecules comprising only a heavy chain. Small, single-chain, antigen-binding VH domains from these molecules are soluble and stable, and can be easily strung together, like beads on a string, to generate multi-specific, In addition, TeneoBio also brings a novel, lower-affinity CD3-engaging technology that complements our Byte platform.

Recall that we are also investigating <unk> in patients with active brain metastases.

We also plan on initiating a phase III first line non small cell lung cancer study in patients with PD Lone negative <unk> SDK 11 mutant tumors in the third quarter.

And the <unk> program, we are having good discussions with regulators on the phase III gastric cancer development path and plan to initiate a registrational program by year end.

This will include 2 phase III trials, 1 investigating the utility of <unk> in combination with chemotherapy and the other evaluating the addition of <unk> to chemotherapy and checkpoint inhibitor.

Dave: The availability of a second CD3 engager will allow us to broaden our bi-specific capabilities and enable customization of the T cell engaging domain depending on the disease and target. Finally, we are acquiring clinical and preclinical oncology programs directed against high-value targets of interest, which we specifically selected based on our own discovery efforts and target validation. These include a Phase I bispecific antibody for prostate cancer that complements acapatamab, AMG-160, also targeting PSMA, and AMG-509, targeting STEEP-1, which was recently granted fast-track designation by the FDA. Turning to oncology, we continue to advance LumaCraft's registration around the world. With regulatory reviews and progress in multiple jurisdictions, including Europe and Japan.

We are also planning a potentially pivotal phase II study with tornado Mab AMG 757 are halfway of extended bite molecule targeting DLL 3 for small cell lung cancer, and we look forward to discussing next steps with regulators in the coming weeks.

Im also pleased to report that we have completed enrollment in the castrate resistant prostate cancer expansion cohort for <unk> or AMG 160.

Okay.

In inflammation, continuing our leadership in dermatology, we are working closely with kyowa Kirin to advance AMG 4.

Also known as Cage K $40.83, a first in class <unk> for the antibody into phase III for atopic dermatitis, we look forward to the presentation of the phase 2 atopic dermatitis data at the annual meeting of the European Academy of Dermatology and Venereology at the end of September.

As well as initiating discussions with regulators on our phase III development plans in the coming months.

In addition, the FDA accepted the hotels supplemental filing for mild to moderate psoriasis.

Finally, we and our partners Astrazeneca, we're very pleased that the FDA granted <unk> priority review for the treatment of asthma, reflecting significant unmet medical need in closing I would like to thank the entire organization for continuing to advance important medicines for our patients Peter.

Dave: Feedback from the medical community on the LUMACRAS launch in the U.S. has been overwhelmingly positive, and I've heard personally from oncologists who are excited to have LUMACRAS available and are heavily screening their patients for KRAS G12C mutations. I'm pleased to report that more than 2,000 patients have received Lumicrast across more than 1,000 sites and 900 investigators or treating physicians, including through our global early In the LUMACRAS development program, we continue to advance our broad-based combination efforts.

Thank you day and good day everyone.

I'll briefly walk through our second quarter financial results before discussing 2021 guidance.

The second quarter marked another period of solid performance as we grew volume, 8% increased investment in both internal and external innovation and delivered 4% year over year non-GAAP EPS growth.

Dave: Initial data from our Vectabix combination in colorectal cancer have been accepted for presentation at ESMO in September, and the MEK and oral EGFR combination abstracts will be submitted to a medical meeting in the fourth quarter, to expand our Lumocrast experience with SHIP2 inhibition along with our ongoing collaboration with Revolution Medicines. We have also entered into a collaboration with Novartis for a SHIP2 combination trial. Updates from our monotherapy, non-small cell lung cancer study, including additional biomarker analyses, as well as data in patients with stable brain metastases, have been accepted for presentation at the World Congress on Lung Cancer. Recall that we are also investigating rheumatographs in patients with active brain metastases.

As stated earlier.

Q2 revenues at $6.5 billion increased 5% year over year.

Other revenues at $412 million increased 38% year over year, primarily driven by shipments of the COVID-19 antibody therapy to Lilly.

We continue to expect full year 2021, other revenues to be in the range of 1.4 to $1.5 billion.

Second quarter total non-GAAP operating expenses increased 15% year over year, as we continued to make investments to drive growth and maximize shareholder value.

We expect full year operating expenses, including approximately $200 million of operating expenses related to the rodeo 5 prime and <unk> bio acquisitions and also to the <unk> collaboration on an absolute basis to increase about 6% to 7% over last year, while delivering a fee.

Full year operating margin of roughly 50%.

On a non-GAAP basis cost of sales as a percent of product sales increased 4.1 percentage points on a year over year basis to 16, 9% driven primarily by product mix, including COVID-19 antibody shipments to Lilly as well as profit share and royalties.

Dave: We also plan on initiating a phase, Firstline Non-Small Cell Lung Cancer Study in Patients with PD-L1 Negative and or STK-11 Mutant Tumors in the Third Quarter. On the Bemerituzumab program, we are having good discussions with regulators on the phase 3 gastric cancer development path and plan to initiate a registrational program by year-end. This will include two Phase III trials, one investigating the utility of bimerituzumab in combination with chemotherapy, and the other evaluating the addition of bimerituzumab to chemotherapy and to checkpoint inhibitors.

For the full year, we continue to expect cost of sales as a percent of product sales to be 16% to 17%.

Our cost of sales as increase as products with royalties and product share profit share payments have increased.

As a reminder, a few of our products subject to royalties, our aim of Vic and Biosimilars, such as <unk> <unk> and <unk>.

Subject to profit sharing arrangements, our <unk> entity and Tessa pallium app.

Upon approval and launch.

Non-GAAP R&D spend increased 11% year over year due to investments in bema acquired in Q2 as part of the 5 Prime acquisition and increased investments in discovery research.

Dave: We are also planning a potentially pivotal Phase 2 study with Tarlatumab, AMG-757, our half-life extended bite molecule targeting DLL-3 for small cell lung cancer, and we look forward to discussing next steps with regulators in the coming weeks. I'm also pleased to report that we have completed enrollment in the Castrate Resistant Prostate Cancer Expansion Cohort for a CAPADIMAB or AMG1 cell.

For the full year, we continue to expect non-GAAP R&D spend will increase as we progress our innovative early and late stage pipeline programs.

For the full year, we expect non-GAAP SG&A spend to decline.

Non-GAAP other income and expenses were favorable by $146 million on a year over year basis, due primarily to our portion of Beijing results, which we record 1 quarter in arrears.

Q1, Beijing results reflect the upfront payment Beijing received in connection with our collaboration agreement.

Dave: In inflammation, continuing our leadership in dermatology, we are working closely with Kiowa Kirin to advance AMG-461, also known as KHK-4083, a first-in-class OX40 antibody, into Phase 3 for atopic dermatitis. We look forward to presenting the Phase 2 atopic dermatitis data at the annual meeting of the European Academy of Dermatology and Venereology at the end of September, as well as initiating discussions with regulators on our Phase 3 development plans in the coming months. In addition, the FDA accepted the Otesla supplemental filing for mild to moderate psoriasis.

We expect our Q3 and Q4 non-GAAP other income and expense to be more in range with our Q1 and expect full year net expense in the range of 1.3 to $1.5 billion.

Now turning to the outlook for the business for 2021.

We are excited by our pipeline.

Innovation is augmenting our balanced by the business development that we have announced this year.

Based on underlying market dynamics and our investment plans, we are reaffirming our 2021 revenue guidance range of $25.8 billion to $26.6 billion and our non-GAAP EPS guidance range of 16 to $17.

Notwithstanding absorbing the roughly $200 million of operating expenses mentioned above related to business development activities, including 5 prime rodeo <unk> and the key or Karen collaborations.

Dave: Finally, we and our partners, AstraZeneca, were very pleased that the FDA granted tezapelimab priority review for the treatment of asthma, reflecting significant unmet medical needs. In closing, I would like to thank the entire organization for continuing to advance important medicines for our patients. Peter. Thank you, Dave. Good day, everyone.

These ranges reflect uncertainty continuing in the second half of the year related to emerging variants.

Patient visits and lab test procedure trends in the United States continue to improve.

But still remain below pre COVID-19 levels.

Our non-GAAP tax rate guidance remains unchanged at 13, 5 to 14, 5%.

Peter: I will briefly walk through our second quarter financial results before discussing 2021 guidance. The second quarter marked another period of solid performance as we grew volumes 8%, increased investment in both internal and external innovation, and delivered 4% year-over-year non-GAAP EPS growth. As stated earlier, Q2 revenues at $6.5 billion increased 5% year over year. Other revenues, at $412 million, increased 38% year-over-year, primarily driven by shipments of the COVID-19 antibody therapy to Lilly.

Our capital expenditure guidance remains unchanged at $900 million and our capital expenditures continue to reflect our investments in our manufacturing and related facilities, including improving their environmental footprint.

<unk> and digital technologies throughout our business and increasing ESG investments.

We expect share repurchases for 2021 to be in the upper range of $3 billion to $5 billion.

This concludes the financial update I will turn it over to Bob for Q&A.

Okay, Erica let's open the lines for questions, maybe you could remind our callers.

Procedure and our desire for them to ask 1 question. So that we have the opportunity to get to everybody who has a desire to ask a question of us and I feel sure our colors would like to know that it's arvin's birthday today.

Peter: We continue to expect full year 2021 other revenues to be in the range of $1.4 to $1.5 billion. Second quarter total non-GAAP operating expenses increased 15% year over year, as we continue to make investments to drive growth and maximize shareholder value. We expect full-year operating expenses, including approximately $200 million of operating expenses related to the Rodeo, 5 Prime, and Teneo bio acquisitions and also to the Kiowa-Kirin collaboration, on an absolute basis, to increase about 6 to 7 percent over last year while delivering a full-year operating margin of roughly 50 percent.

So bear that in mind when you ask questions of US here. This afternoon, Okay, Eric open them up.

As a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound key.

Standby, while we compile the Q&A roster.

And your first question is from your line of Robert with Cowen <unk> Company.

Hi, This is Dave on for your own thanks for taking my question and congratulations on the quarter.

My question is focused on the lunar Cross study in first line lung cancer in patients with low PDL, 1 and or SDK 11.

Could you just kind of talk about the I guess your.

Your benchmarks for historical comparisons and the SDK 11, and <unk> and what you would use.

Peter: On a non-GAAP basis, cost of sales as a percent of product sales increased 4.1 percentage points on a year-over-year basis to 16.9 percent. This was driven primarily by product mix, including COVID-19 antibody shipments to Lilly, as well as profit share and royalty. For the full year, we continue to expect cost of sales as a percent of product sales to be 16 to 17 percent. Our cost of sales has increased as royalties and profit share payments have increased. As a reminder, a few of our products subject to royalties are Amavic and biosimilars such as Embasi, Riabni, and Congente. Those subject to profit-sharing arrangements are Avenity and Tezapeliamap, upon approval and launch.

As you referenced there and any update on your discussions with regulators in the past you mentioned that there could be a need for head to head studies in the future and what those could look like what the comparison arms would be thank you.

Yes, Thanks, Dave.

So as we mentioned as you pointed out this study in first line non small cell lung cancer will be conducted in patients who are either.

PDL, 1 negative or SDK 11.

These are populations of patients of course, who.

Ah patients, who don't typically benefit from checkpoint inhibitors, where theres really.

We think a lot of residual unmet medical need in.

In fact, our SDK 11, mutational status may help confer resistance to checkpoint inhibition also.

That is the population that we're targeting whether this can be potentially registration, enabling or not I think it's too early to speculate the FDA has generally been clear that in first line lung cancer.

Peter: Non-GAAP R&D spend increased 11% year-over-year due to investments in BEMA, acquired in Q2 as part of the five-prime acquisition, and increased investments in discovery research. For the full year, we continue to expect non-GAAP R&D spend to increase as we progress our innovative early and late stage pipeline program. For the full year, we expect non-GAAP SG&A spend to decline. Non-GAAP, other income, and expenses were favorable by $146 million on a year-over-year basis.

To see randomized trials also 1 would have to anticipate having.

A pretty spectacular efficacy readout to lead.

Registration based on single arm phase II trial obvious if we saw.

Compelling data, we would have the appropriate conversations going forward.

Our next question from.

Your next question is from Omar <unk> with Evercore ISI.

Hi, guys. Thanks for taking my question I, just really wanted to focus on Arvind age today.

Yeah.

You and me both earned <unk> 36.

Peter: Due primarily to our portion of Beijing's results, which we record one quarter in arrears because Q1 Beijing results reflect the upfront payment Beijing received in connection with a collaboration, We expect our Q3 and Q4 non-GAAP other income and expense to be more in range with our Q1 results and expect full year net expense in the range of $1.3 to $1.5 billion. Now turning to the outlook for the business for 2021, we are excited by our pipeline.

Thank you both.

Alright.

Inquiry level.

Congratulations.

My question today was on the.

<unk> and really around.

Whether there is.

Any if you could just remind us what the plan for the interim is.

For the ongoing phase III study as well as weather.

There is any primary analysis is limited to PD lone negative subset in particular I am quite intrigued that the first line phase II trial is limited to PD lone negatives or SDK 11, Thank you very much.

Yes in terms of the.

Phase III trial, I think the best way to think about that rumors that we expect data.

In the first half of next year.

Given the.

General rapidity of progression.

Patients historically.

In second and third line lung cancer to standard therapy.

Peter: This innovation is augmented and balanced by the business development that we have announced this year. Based on underlying market dynamics and our investment plans, we are reaffirming our 2021 revenue guidance range of $25.8 billion to $26.6 billion and our non-GAAP EPS guidance range of $16 to $17. Notwithstanding absorbing the roughly $200 million of operating expenses mentioned above related to business development activities including Five Prime, Rodeo, Teneo Bio, and the Kiowa-Karin collaboration, these ranges reflect uncertainty continuing in the second half of the year related to emerging variants. Patient visits and lab test procedure trends in the United States continue to improve but still remain below pre-COVID-19 levels.

The utility of an interim analysis.

It may not be particularly useful meaning the primary analysis often falls very quickly after an interim analysis. So of course, we'll take a look at that as we get a better sense in the second half of the year of the event rates, but I would really point to the primary analysis in the first half of next year as the major event.

And then in first line as I said.

We think that there is significant unmet medical need in the.

PDL, 1 negative SDK 11 mutant <unk> SDK 11 mutant population given the relative refractoriness of those tumors to currently available treatments and so we're we're very much looking forward to getting that study launched shortly and seeing the data readout will provide guidance on timelines.

As soon as enrollment is really underway.

Okay.

Your next question is from Jay Olson with Oppenheimer.

Oh, Hey, happy birthday, Arvind and thank you so much for taking the questions.

I'm curious about the combination data of Luna cash with Vectibix will that be in colorectal cancer, only or should we expect to see combination data in non small cell lung cancer and related to that can you comment on the potential for that combination data to.

Peter: Our non-GAAP tax rate guidance remains unchanged at 13.5% to 14.5%. Our capital expenditure guidance remains unchanged at $900 million, and our capital expenditures continue to reflect our investments in our manufacturing and related facilities, including improving their environmental footprint, investments in digital technologies throughout our business, and increasing ESG investments. We expect share repurchases for 2021 to be in the upper range of $3 to $5 billion.

Drive incremental use of Vectibix. Thank you.

Thanks Jay.

Given the regimen that we're studying you can expect that most of the patients that have been enrolled on that particular combination of <unk> and vectibix.

We'll have colorectal cancer, given the backbone of <unk>.

<unk> here.

Although the trial is open across all malignancies for treating.

<unk> to enroll patients if they feel that regimen may be appropriate in terms of driving uptake of Vectibix I don't want to speculate on that our job here is really to generate these combination data.

And CFR, we think we can really drive things forward, particularly in colorectal cancer.

Peter: This concludes the financial update. I'll turn it over to Bob for Q&A. Okay, Erica, let's open the lines for questions. Maybe you could remind our callers: Ramanan Laxminarayanan, Arvind Sood, Arvind Sood, Arvind Sood,

Your next question is from Salim Syed with Mizuho.

Great. Thanks, so much for the question guys and I'll add my happy birthday Arvind.

And you were both 30.

So I just wanted to focus on the tax.

If I can.

Conference Facilitator: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And your first question is from Yaron Werber with Cowan & Company.

So it seems like this.

Noticed the deficiency was not just for 1 year, but it was for 3 years 2010, 2011 and 2012. So I'm just curious is it.

Pattern here and how you guys are doing the accounting is triggered this notice of deficiencies.

And I guess the underlying question here should we be expecting I noticed a deficiency or <unk> for 2013 through 20.

Gabon: Hi, this is Gabon from your own. Thanks for taking my question. Congratulations on the quarter.

Gabon: My question is focused on the LumaCrest study in first-line lung cancer in patients with low PD-L1 and or STK-11. Could you just kind of talk about your benchmark for historical comparisons?

And then just curious what the interest rate is that the IRS with them pose here. Thank you.

Selim. Thank you, it's Peter and on your question around the IRS matter. The dispute with these notices are related to a transfer pricing dispute with the IRS regarding the allocation of profits between the U S. In the territory of Puerto Rico. So you can see we have a difference of opinion on the value of the significant.

Dave: [inaudible] Yeah, thanks, Dave.

Dave: Thanks Dave. So as we mentioned, as you pointed out, this study in first-line non-small cell lung cancer will be conducted in patients who are either PD-L1 negative or STK-11 mutant. These are populations of patients, of course, of patients who don't typically benefit from checkpoint inhibitors where there's really, we think, a lot of residual unmet medical need. In fact, STK-11 mutational status may help confer resistance to checkpoint inhibition.

And the complexity, we undertake with activities performed at our Puerto Rico facility with.

We strongly believe the Irs's position is without merit, and we have appropriate tax reserves and this dispute will take several years to resolve.

I would like to note saline net quarter Rico is our flagship manufacturing facility responsible for the majority of Amgen Global manufacturing, we're proud of our Puerto Rico operations very proud of them and our colleagues Eric We've had a major manufacturing presence in Puerto Rico for about 30 years, we have more than.

Dave: So that is the population that we're targeting. Whether this can be potentially registration-enabling or not, I think it's too early to speculate. The FDA has generally been clear that in first-line lung cancer, they wish to see randomized trials. So one would have to anticipate having a pretty spectacular efficacy readout to lead to registration based on a single-arm Phase II trial. Obviously, if we saw compelling data, we would have the appropriate conversations going forward. Okay, let's go to the next question. Your next question is from Umer Raffat with Evercore ISD.

2200, highly skilled colleagues in Puerto Rico, and who produced very sophisticated biologic medicines for patients all over the world with serious diseases.

Invested nearly $4 billion to expand and modernize those facilities in Puerto Rico, and we're proud to be consistently recognized as 1 of the island's best and most responsible employers.

So on the matter of.

Interest rate I'll have to refer you to the IRS for that.

But that's the IRS matter and brief.

Okay. Thanks, so much.

Your next question is from Terence Flynn.

With Goldman Sachs.

Great. Thanks, so much for taking the question maybe.

Maybe another 1 for Peter I was just wondering if you can.

Comment.

On margins longer term I noticed you called out that royalty and profit splits are going to be increasing here given some of the newer products youre launching but how should we think about that 50% operating margin this year and the cadence on the forward. Thank you.

Umer Raffat: Your next question is from Umer Raffat with Evercore ISI.

Umer Raffat: A, If you could just remind us what the plan for the interim is for the ongoing.

Terence Thank you.

Dave: [inaudible]

As always we don't give long term margin guidance, but what I and I'd really like to say our north star around this we always pause and think about our objective is to grow our after tax cash flows for the enterprise versus targeting specific operating margin or opex growth rates. So we're going to continue to make prudent investments that lead to that.

Dave: Yeah, you know, in terms of the phase three trial, you know, I think the best way to think about that, Umer, is that we expect data in the first half of next year. And, you know, given the general rapidity of progression of patients historically, you know, in second and third line lung cancer, to standard therapy, the utility of an interim analysis may not be particularly useful, meaning the primary analysis often falls very quickly after an interim analysis.

<unk>. So I would just note we're continuing to invest in internal and external innovation, you've seen the fruits of that in the second quarter the launches of new products broader digitalization efforts.

Lee we highlighted our expectation that R&D expenses are going to grow year over year as we increase our spend on AMG $160.757 million dose expansion, we're going to rapidly advance those assets in prostate in small cell lung cancer we.

Dave: So, of course, we'll take a look at that to get a better sense in the second half of the year of the event rates, but I would really point to the primary analysis in the first half of next year as the major event. And then, first of all, as I said, you know, we think that there is significant unmet medical need in the PD-L1 negative, STK-1 mutant, and or STK-11 mutant population given the relative refractoriness of those tumors to currently available treatments. And so we're very much looking forward to getting that study launched shortly and seeing the data read out. We'll provide guidance on timelines as soon as enrollment is really underway.

We have 3 biosimilars in phase III, <unk>, III and flamm assets in phase 2.

Third I will just note parents that we're absorbing the upfront costs related to the acquisition of <unk> as well as the cost of the 5 Prime acquisition. Our recent collaboration with Kyowa Kirin and our recently announced acquisition of <unk>, which we do expect to close in the second half of 2021, we also plan to rapidly.

These phase III ready molecules in development of Bema and <unk> hundred 83.

We began seeing higher manufacturing costs in Q2, those were related to the Lilly Covid antibody effort efforts net adds to the opex build for the rest of the year or 2 but on a year over year basis remember, we're comparing a depressed spend in Q2 and Q3.2020 due to COVID-19.

No.

At the end of the day, there is any number of financial metrics that we expect to be measured on by our investors and the analysts and we take pride in knowing that we want to end up really.

Jay Olson: Your next question is from Jay Olson with Oppenheimer.

Jay Olson: Oh, hey, happy birthday, Arvind. And thank you so much for taking the questions. I'm curious about the combination data of

And the top of the group in terms of our operating efficiency. So that's very important to us. So you can rest assured that we will continue to stay focused on that.

Our next question is from Matthew Harrison with Morgan Stanley.

Great. Good afternoon. Thanks for taking the question Dave I was wondering if you could just comment on the IL 2 <unk> I know we're going to.

Dave: [inaudible] Thanks, Jay. Given the regimen that we're studying, you can expect that most of the patients that have been enrolled in that particular combination of Lumicrast and Vectabix will have colorectal cancer, you know, given the backbone of Vectabix here. Although the trial is open, you know, across malignancies for treating physicians to enroll patients if they feel that the regimen may be appropriate, you know, in terms of driving up the uptake of Vectabix, I don't want to speculate on that. You know, our job here is really to generate these combination data and see if, you know, we can really drive things forward, particularly in colorectal cancer.

See some of the data here for SLA towards the end of the year, but it looks like you started a phase II and Youre also looking at UC, just maybe broadly on the on the profile and what you think you need to generate it on phase to be to have that be a competitive asset.

Yes, Thanks, Matt I'm glad you brought up AMG 592, our IL 2 mu Tina just to remind everyone. This is a molecule designed to enhance the number.

The function of T regulatory cells some of the key modular Tory cells in the immune system and the <unk>.

Many autoimmune diseases are the T regulatory axis is out of whack.

As you mentioned, we anticipate sharing phase <unk> data in lupus.

At a medical meeting.

Towards the end of the year.

And we will look forward to being able to share those data.

Salveen Richter: Your next question is from Salim Saeed, with Mazzuho.

With you.

In addition, a phase II trial in lupus is actively enrolling now and then finally as you mentioned Matt VR.

Salveen Richter: Great. Thanks so much for the question, guys. And I'll add my happy birthday, Arvind. Me and you were both 30.

Launching a study in ulcerative colitis, another autoimmune disorder in which there is quite a bit of evidence of dysregulation of the T. Reg access. So I think it's really the phase II readouts here.

Salveen Richter: So, I just wanted to focus on the tax petition, if I can. It seems like this notice of deficiency was not just for one year, but it was for three years, 2010, 2011, and 2012. So I'm just curious if there is a pattern here in how you guys are doing the accounting and is triggering these notices of deficiencies. And I guess the underlying question here is, should we be expecting a notice of deficiency or ease for 2013 through 20? And then I was just curious what the interest rate is that the IRS would impose here.

That will be critical as we accrue those data and as always we'll look to make sure that we are adding something to what is standard Lee available in lupus. There remains very large residual unmet medical need there was an approval within the last day or 2 of course, but only the second.

Drug in 40 years.

And a very large patient population, they're still requiring active medicines are ulcerative colitis, particularly for long term remission.

Peter: Salim, thank you.

Peter: Salim, thank you. It's Peter. And on your question about the IRS matter, the dispute, look, these notices are related to a transfer pricing dispute with the IRS regarding the allocation of the profits between the U.S. and the territory of Puerto Rico. So you can see we have a difference of opinion on the value of the significant risk and the complexity we undertake with activities performed at our Puerto Rico facility. We strongly believe the IRS's position is without merit, and we have appropriate tax reserves. This dispute will take several years to resolve.

It is also an area with substantial unmet medical need. So it's full speed ahead in the IL 2 mutant program and we'll look forward to sharing these data with you.

Your next question is from Geoff Meacham with Bank of America.

Afternoon, guys. Thanks for the question then happy birthday Arvind.

Question on Tesla for Murdo. So when you look at the growth in the first half of this year.

How much of a factor was COVID-19 versus say competition or pricing and do you think any of these headwinds could impact the upcoming launch when you look at the mild to moderate disease patient population. Thank you.

Yes, Thanks, Jeff I would say throughout the course of last year, we saw a slowdown in the.

<unk>.

Number of bio naive psoriasis patients moving into.

The market based on Covid disruption to patient visits and given that <unk> is an early option in the treatment of psoriasis. We were we were impacted by that I would say more than the biologics, which tend to gain growth from Oh Tesla and from each other.

Peter: I would like to note, Salim, that Puerto Rico is our flagship manufacturing facility, responsible for the majority of Amgen's global manufacturing. We're proud of our Puerto Rico operations, very proud of them, and our colleagues there. We've had a major manufacturing presence in Puerto Rico for about 30 years. We have more than 2200 highly skilled colleagues in Puerto Rico who produce very sophisticated biologic medicines for patients all over the world with serious diseases.

So that that slowdown in the new patient diagnoses last year compounds into our growth rate. This year. The good news on the quarter as we saw new patient trends tick up so we did see 10% growth in new patient.

Prescribed new to brand prescriptions in the quarter. However, this was somewhat offset by.

An increase in the number of patients that switched away from old Tangela to another treatment and we think that that was pent up treatment decision, making.

Peter: We've invested nearly $4 billion to expand and modernize those facilities in Puerto Rico, and we're proud to be consistently recognized as one of the island's best and most responsible employers. So on the matter of interest rates, I'll have to refer you to the IRS for that, but that's the IRS matter in brief. Okay.

That didn't happen because patients weren't going to see their dermatologist last year.

There were some price reductions mostly related to our co pay programs, but thats, usually a good indication of new patients starting.

So overall I would say, it's primarily COVID-19 impact.

Unknown Executive: Your next question is from Terrence Flynn with Goldman Sachs.

With respect to other products coming in I'm not sure how to answer that what I can say is we continue to like our share position that our share has held in the share of bio naive psoriasis patients and we continue to feel optimistic about the growth of <unk>, given the pending indication in mild to moderate patients which.

Unknown Executive: Great. Thanks so much for taking the question. Maybe another one for Peter. I was just wondering...

Unknown Executive: I'm wondering if you can comment.

Unknown Executive: I noticed you called out that, you know, royalty and profit splits are going to be increasing here, given some of the newer products you're launching. But how should we think about that 50% operating margin this year and the cadence on the forward? Thank you.

Should come hopefully by the end of this year.

<unk> continued to execute well our field execution as I mentioned in my opening remarks is improving.

Peter: Terrence, thank you. And, you know, as always, we don't give long-term margin guidance. But what I and I'd really like to say is our North Star around this, we always pause and think about our objective is to grow our after-tax cash flows for the enterprise versus targeting specific operating margin or op ex growth rates. So we're going to continue to make prudent investments that lead to that objective. So I would just say we're continuing to invest in internal and external innovation. You've seen the fruits of that.

And we're very focused on making sure we continue to grow with Tesla over the long haul.

Great. Thank you next.

Our next question is from Ronny Gal with Bernstein.

Good afternoon, and thank you for taking my question, let's start with the immunology theme here.

You guys are developing both stellar and neumeyer for 2023.2024, as biosimilars, given you're going to be a both sides.

The innovator and Biosimilar World I was wondering if you had a thought about kind of like the long term trajectory of pricing in the immunology market.

Without giving specific numbers you kind of should we begin to see something along the lines of what we see with diabetes with an ongoing gradual price decreases so like how do you think about this market longer term.

Peter: In the second quarter, the launches of new products and broader digitalization efforts. Secondly, we highlighted our expectation that R&D expenses are going to grow year over year as we increase our spend on AMG 160 and 757 and dose expansion. We're going to rapidly advance those assets and those for prostate and small cell lung cancer. We have three biosimilars in phase three, and three inflamatory assets in phase two. Third, I'll just note, Terrence, that we're absorbing the upfront costs related to the acquisition of Rodeo, as well as the cost of the five prime acquisition, our recent collaboration with Kiowa Kirin, and our recently announced acquisition of Teneo Bio, which we do expect.

Go ahead, Murdo you want to procure underwriting thanks for the question Ronny.

I'm hesitant to go out too far what we are seeing of course in inflammation right. Now is a lot of new entrants a lot of new mechanisms and a lot of competition, which is increasing.

The gross to net that new entrants have to pay to secure access. We're also seeing increased management by the large national Pbms of.

National Formularies as to which mechanisms get placed in a preferred status versus.

Being held in reserve after patients fail in.

Earlier lines of therapy. So if we take rheumatoid arthritis for as an example, I do see tnf's continuing to.

Entrench themselves in that first lien position and novel mechanisms are likely to be in second and perhaps even third line after patients of Av.

Peter: So at the end of the day, there's any number of financial metrics that we expect to be measured on by our investors and our analysts. And we take pride in knowing that we want to end up really in the top of the group in terms of our operating efficiency. So that's very important to us. So you can rest assured that we'll continue to stay focused on that.

Fail to have resolution of there.

Ray symptoms or improve their progression of their disease.

In the Biosimilar dynamics I think we're seeing the increase in.

Interest from both payers and Pbms and providers given some of the trends that we're seeing with the early biosimilars in the inflammation category and I do think that.

Matthew Harrison: Our next question is from Matthew Harrison with Morgan Stanley.

Matthew Harrison: Good afternoon. Thanks for taking the time to answer the question. Dave, I was wondering if you could just comment on the IL-2 mutine. I know we're going to see some of the data here for SLE towards the end of the year, but it looks like you've started phase two, and you're also looking at UC. Just maybe broadly on the profile and what you think you need to generate out of phase 2B to have that be a competitive asset.

Interest in Biosimilars will increase.

King that biosimilar penetration of parent molecule originator molecule.

Will will accelerate with new entrants. So we're we're expecting that to be the condition on the ground by the time, we launch <unk> in the U S.

But overall I would just I would just come back to the strength that we have as a company.

Dave: Yeah, thanks, Matt. And I'm glad you brought up MG592, or IL-2 mutine. Just to remind everyone, this is a molecule designed to enhance the number and function of T regulatory cells, some of the key modulatory cells in the immune system. In many autoimmune diseases, the T regulatory axis is out of whack. As you mentioned, we anticipate sharing phase 1B data in lupus at a medical meeting towards the end of the year, and we'll look forward to being able to share those data with you.

Given our portfolio of innovator in originator molecules enhanced with the presence of our Biosimilar portfolio and I think that affords us an opportunity to serve many patients across a host of auto immune diseases as well as.

Serve providers payers and Pbms with.

A lot of value to deliver to the healthcare system.

Your next question is from Geoffrey Porges with SBB Leerink.

Thank you. Thank you very much for taking the question I'll continue with the Biosimilar Brian.

Dave: In addition, a phase 2 trial in lupus is actively enrolling now. And then, as you mentioned, Matt, we are launching a study in ulcerative colitis, another autoimmune disorder, in which there's quite a bit of evidence of dysregulation of the T reg axis. So I think it's really the phase 2 readouts here that will be critical as we accrue those data. And, as always, we'll look to make sure that we are adding something to what is standardly available.

Specifically on to answer them.

What are you thinking in terms of the <unk>.

First biosimilar coming in.

Net.

Excuse me and then would you expect the erosion trajectory for branded per <unk> to be similar to for example in the last several weeks of the erosion of the oncology.

<unk> or would you expect it to be more gradual or fast.

I'm wondering what you think the trajectory will look like.

Dave: In lupus, there remains a very large residual unmet medical need. There was an approval within the last day or two, of course, but only the second drug in 40 years. And a very large patient population there still requiring active medicines. Ulcerative colitis, particularly for long-term remission, is also an area with substantial unmet medical need. So it's full speed ahead in the IL-2 mutine program, and we'll look forward to sharing these data with you.

Thanks, Geoffrey for the question I would say, it's again hard to project into the future as to how health care.

Systems payers and providers will change in their adoption of Biosimilars, but I think given that denosumab as a part D product the oncology biosimilar curves would be a close approximation of what we'd be financially.

Geoff Meacham: Your next question is from Geoff Meacham with Bank of America.

Yeah.

Thank you.

Your next question is from Michael Yee with Jefferies.

Geoff Meacham: Afternoon, guys. Thanks for the question and happy birthday, Arvind.

Hi, guys. Thanks for the question.

A 2 parter for David.

Geoff Meacham: Commercial question on a Tesla for Murdo. So when you look at the growth in the first half of this year, how much of a factor was COVID versus, say, competition or pricing? And do you think there is any

K Roger you have upcoming data for Mac, plus or minus Egfr just wanted to understand in.

The context for how to interpret that data what is good data and is the goal too.

Significantly increase response rate in PFS beyond Noma crashed alone maybe just help us right size how to think about that study and you also announced that you expanded a combination with novartis ship too is that just diversifying and spreading it around or how to think about ship too. If you have got a second collaboration there.

Geoff Meacham: And do you think any of these headwinds could impact the upcoming launch when you look at the mild to moderate disease patient population? Thank you.

Murdo: Yeah, thanks, Geoff. I would say throughout the course of last year, we saw a slowdown in the number of bio-naive psoriasis patients moving into the market based on COVID disruption to patient visits. And given that Otezla is an early option in the treatment of psoriasis, we were impacted by that, I would say, more than the biologics, which tend to gain growth from Otezla and from each other. So that slowdown in new patient diagnoses last year compounds into our growth rate this year.

Thank you.

Yes, Thanks, Mike Let me start with the second part first.

Youre exactly right Thats simply diversifying our experience we're moving forward as I noted with both Revolution medicines combination as well as this new collaboration with Novartis, where we will look forward to both datasets.

In terms of the.

Or egfr combinations as I've said before in terms of response rate, it's going to vary by line of therapy.

Murdo: The good news for the quarter is that we saw new patient trends pick up, so we did see 10% growth in new to brand prescriptions in the quarter. However, this was somewhat offset by an increase in the number of patients that switched away from Otezla to another treatment. And we think that that was pent-up treatment decision making that didn't happen because patients weren't going to see their dermatologist last year. There were some price reductions, mostly related to our copay programs, but that's usually a good indication of new patients starting. So overall, I would say it's primarily COVID impact. With respect to other products coming in, you know, I'm not sure how to answer that.

And indication in terms of what sort of increment that you want to see but generally 10.20, 30%.

Relative improvement in response rates.

Progression free survival certainly beyond first line is typically what we would want to see and those are the rough sort of benchmarks that we'll use non these first cohorts of course, the critical thing upfront of safety and determining appropriate doses and then moving into expansion cohorts for efficacy.

Thanks again.

Thank you.

Your next question is from Alethia young with Cantor Fitzgerald.

Hey, guys. Thanks for taking my question and happy birthday to 1 of the best in the IR game here.

<unk>.

I wanted to get a little bit of flavor on that and I know youre seeing very nice volume growth, but like continued kind of.

Murdo: But what I can say is we continue to like our share position, that our share has held in the share of bio-naive psoriasis patients. And we continue to feel optimistic about the growth of Otezla given the pending indication in mild to moderate patients, which should come hopefully by the end of this year. Teams continue to execute well. Our field execution, as I mentioned in my opening remarks, is improving. And we're very focused on making sure we continue to grow Otezla over the long haul.

Pricing pressure, our discounting pressure do you think we're kind of hitting a stabilization point I know you talked about a little bit of sequential deceleration, but if you can give us some flavor on how to think about when that might start to right size and stabilize and see real growth from the volume that you're generating.

Yes, Thanks, Alicia we're quite happy with the performance of the pathogen ability now to really treat.

A large number of patients we reached 1 million patients now with <unk>, so quite a milestone.

Unknown Attendee: Our next question is from Ronnie Gale with Bernstein.

The overall dynamic that is that is dragging price down is really a U S. D patient dynamic as patients enter into the coverage gap or as we sometimes refer to the donut hole and as we expand our percentage our share of business.

Unknown Attendee: Good afternoon, and thank you for taking my question. Let's start with the immunology theme. You guys are developing both Stelara and Umair for 2023-2024 as biosimilars, and given you're going to be on both sides of the innovator biosimilar world, I was wondering if you had any thoughts about kind of like the long-term trajectory of pricing in the immunology market. That is, without giving specific numbers, do you think we should begin to see something along the lines of what we see with diabetes with ongoing gradual price decreases? It's like, how do you think about this market in the longer term? Thanks for the question, Ronnie. I'm hesitant to go out too far.

In the part D or Medicare part D business.

<unk> segment of the market, we will see some net.

Net negative price drag quarter over quarter no it's not.

Not going to be as precipitous as the price changes that we've made historically, so our volumes outpacing that and we will see that drop.

So the net sales.

Sales line, so overall good evolution.

Also seeing nice growth on <unk> ex U S where prices relatively stable year on year. So.

Murdo: What we are seeing, of course, in inflammation right now, is a lot of new entrants, a lot of new mechanisms, and a lot of competition, which is increasing the gross to net amount that new entrants have to pay to secure access. We're also seeing increased management by the large national PBMs of national formularies as to which mechanisms get placed in a preferred status versus being held in reserve after patients fail in earlier lines of therapy.

That that part of the mix is helping bolster price evolution over time as well, but some some slight drag will continue but again its a good sign because it means we're expanding that Medicare pool of patients much more rapidly than we did historically.

Great. Thank you.

Your next question is from Kennan Mackay with RBC capital markets.

Hey, thanks for per ton.

The question, maybe just would love to get a perspective on rich combinations. You are most excited about currently for whom across weather.

It's more in line with previously with the oral antibiotic that can inhibitors <unk> inhibitor, maybe or with the Novartis collaboration does see this.

The ship to now.

Murdo: So, if we take rheumatoid arthritis as an example, I do see TNS continuing to entrench themselves in that first line position, and novel mechanisms are likely to be in second and perhaps even third line after patients have failed to have resolution of their RA symptoms or improve the progression of their disease. In the biosimilar dynamics, I think we're seeing an increase in interest from both payers and PBMs and providers, given some of the trends that we're seeing with the early biosimilars in the inflammation category.

The top seed and then just 1 quick question on the Biosimilar pipeline.

Do you see as the earliest that you might be able to launch your bias.

Yes.

<unk> 938, thanks, so much and congrats on the brake.

Yes, maybe I'll start.

With the question on combinations of course are the ones. We like the best are the ones that work and Thats.

What we're what we're testing right now.

All of these combinations have been selected for 1.

Yes.

Or another reason for both 1 and most importantly biologic plausibility.

So a reason to believe in either.

Additive or synergistic effects.

And then 2 if.

Murdo: And I do think that interest in biosimilars will increase, and I think that biosimilar penetration of the parent molecule or originator molecule will accelerate with new entrants. So we're expecting that to be the situation on the ground, you know, by the time we launch Amgivita in the US. But overall, I would just come back to the strength that we have as a company, given our portfolio of innovator and originator molecules enhanced with the presence of our biosimilar portfolio. And I think that affords us an opportunity to serve many patients across a host of autoimmune diseases, as well as serve providers, payers, and PBMs with a lot of value to deliver to patients.

Combining molecules are part of a background regimen.

And so we think we're really covering the waterfront in terms of indications of interest with relevant combinations here and at this point and Kevin I think it's really an empirical matter of generating the data and of course, we will share that as we've outlined.

And Kevin we haven't announced our timing on Eylea, but we are moving quickly in the enrollment of that program and we anticipate being.

Early in the sequence of launches for that product.

Fair enough. Thanks, Murdo. Thank you very much.

Our next question is from Carter Gould with Barclays.

Good afternoon, I'll pass on my happy birthday wishes to Arvind to I wanted to ask on your Ox 40 program I know that's moving into phase III next year just wanted to see.

Any further color on the population of our dosing youre looking to move forward with net phase III the lingering uncertainty over the JAKKS has in any way changed or evolved.

Your underlying assumptions around that market would be helpful. Thank you.

Murdo: [inaudible]

Geoffrey Christopher Meacham: Our next question is from Geoffrey Porges with SBB Lehring.

Yes, Thanks Carter.

And we're very enthusiastic about this molecule.

Geoffrey Christopher Meacham: Thank you. Thank you very much for taking the question. I'll continue with the biosimilar variants.

Atopic dermatitis is disease widespread prevalence actually global.

Geoffrey Christopher Meacham: What are you thinking in terms of the first biosimilar coming in for denosum?

Populations.

<unk> existing therapies, we think there is a very large amount of residual unmet medical need patients often cycle through therapies, given the novel mechanism of action Youre targeting the ox 40 per.

Geoffrey Christopher Meacham: Did you expect the erosion trajectory for Brandon, Pearlea, and Xchiva to be similar to, for example, New Lhasa or to the erosion of the oncology biologics, or would you expect it to be more gradual or faster? Just wondering what you think the trajectory will look like. Thanks, Geoffrey, for the question.

<unk>, we think there is.

Quite a big opportunity to have a real impact in this field as I mentioned, we'll be presenting the phase <unk> data at the end of September at 1 of the major European Dermatology meetings on I think there you'll get a sense of our thoughts on dosing and what things may look like going forward and of course.

Geoffrey Christopher Meacham: I would say it's again hard to project into the future as to how healthcare systems, payers, and providers will change in their adoption of biosimilars, but I think given that Denosumab is a Part B product, the oncology biosimilar curbs would be a close approximation of what we would be planning to do.

As we have discussions with regulators will outline our plans on the phase III program, which.

Michael J. Yee: Your next question is from Michael Yee with Geoffrey Meacham. Hi guys, thanks for the question. We had a two-parter for David on KRAS, and you have

In all likelihood be a suite of studies, let me ask murdo to comment a little further here.

Michael J. Yee: We had a two-parter for David. On KRAS, you have upcoming data for MEK plus or minus EGFR. I just wanted to understand, in the context of how to interpret that data, what is good data, and is the goal to significantly increase the response rate in PFS beyond LumaCREST alone? Maybe just help us right-size how to think about that study. And you also announced that you expanded your combination with the Nabarda SHIP-2. Is that just diversifying and spreading it around, or should we think about SHIP-2 differently if you have done a second collaboration there? Yeah, thanks, Mike. Let me start with the second part. First, you know, you're exactly right.

Yes Carter we.

We obviously pay close attention to the JAK safety concerns as raised on the Xeljanz data.

And applied some reduction in Jack penetration assumptions to the AG market. When we were evaluating the attractiveness of the <unk> asset and I think.

That was 1 of the drivers here.

The biologics still have a large role to play.

We think initially the ox.

<unk> asset will.

Establish perhaps a second line opportunity in the market and we can expand from there, but the portion of the market that we think will be addressed by JAKKS is probably smaller than was once considered.

Your next question is from Macquarie Casino with J P. Morgan.

Hey, good afternoon, guys. Thanks for taking my question and most importantly, happy birthday to Arvind.

Dave: That's simply diversifying our experience. We're moving forward, as I noted, with both the Revolution Medicines combination, as well as this new collaboration with Novartis, and we'll look forward to both data sets. In terms of the MEK or EGFR combinations, you know, as I've said before, in terms of response rate, it's going to vary by line of therapy and indication in terms of what sort of increments that you want to see, but generally, 10, 20, 30% relative improvement in response rates and progression-free survival, certainly beyond first line, is typically what we would want to see, and those are the rough sort of benchmarks that we'll use.

Wanted to go back to the line of questioning around the <unk> combination work and ask specifically about what youre doing with PD ones. At this point when you expect to have an update there and is it really still just about trying to figure out the dosing currently before you move forward. Thank you.

Yes, Thanks Cory.

We've discussed before we're looking at direct.

Direct combinations and sequential therapy here.

So I think you can see you can expect to see data from both of those sometime through the first half of next year or so as we accumulate enough data to define what the relevant path forward is with checkpoint inhibitors. So more to come there, but we continue to actively work on these development pro.

Graham.

Okay. Thank you David.

Your next question is from Chris Raymond with Piper Sandler.

Hi, This is Alex <unk> on for Chris. This afternoon. Thanks for taking our question just on BD you have had a lot of activity in the oncology and inflammation space.

Dave: Thanks again. Thank you. Your next question is from Alethea Young with Cantor Fitzgerald. Hey guys, thank you for taking my question and happy birthday to one of the best in the IR game. Here's to you, Arvind.

Any color on how youre prioritizing other areas of interest on the <unk>.

Unknown Attendee: Your next question is from Alethea Young with Cantor Fitzgerald.

<unk> side versus the opportunity to bolster some of your more legacy commercial franchises like renal and then maybe more specifically on renal how are you thinking about your all your longer term strategy, our prioritization for investing in the franchise.

Unknown Attendee: Yeah, thanks, Alethea. We're quite happy with the performance of Repatha and now to really treat a large number of patients. We've reached a million patients now with Repatha, so quite a milestone. The overall dynamic that is dragging price down is really a US Part D patient dynamic, as patients enter into the coverage gap, or as we sometimes refer to the donut hole. And as we expand our percentage or share of business in the Part D or Medicare Part D business and segment of the market, we will see some net negative price drag quarter over quarter.

Through internal or external innovation. Thanks.

So Ali.

I'll just repeat what I've said, many times before which is that our business development efforts are focused there.

The areas, where we have ongoing strong research.

Vince.

<unk> commercial presence so.

Youre right, we have been active in oncology and immunology area. We continue to look for opportunities in both those spaces as well as in general medicine and to the extent that we see things that we think we can add value to nephrology or bone health.

Unknown Attendee: Now, it's not going to be as precipitous as the price changes that we've made historically, so our volume's outpacing that, and we will see that drop to the net sales line. So overall, a good evolution. We're also seeing nice growth on Repatha ex-US where price is relatively stable year on year. So, you know, that part of the mix is helping bolster price evolution over time as well. But some slight drag will continue. But again, it's a good sign because it means we're expanding that Medicare pool of patients much more rapidly than we did historically.

Or the migraine area, where we'll look there as well so.

We have active efforts underway and we look.

And across the marketplace actively.

Our focus on how we can earn a return from our shareholder for our shareholders from from the assets that we might license or acquire.

Just sorry, just quickly I don't think I addressed your nephrology question, we don't have as much active research in nephrology and bone at the moment.

And because we haven't seen it.

Internally opportunities to advance novel therapies, and we think.

Murdo: Your next question is from Kenan McKay with RBC Capital Markets.

The medicines, we have are addressing.

Geoffrey Christopher Meacham: Hey, thanks for taking the question. Maybe I just would love to get a perspective on which combinations you're most excited about currently for LumaCraft, whether it's more in line with previously with the

The needs in the marketplace very effectively but that's the extent that there are things outside of of Amgen that fit well with our 30 years of leadership for example, nephrology or with our.

Global leadership in bone, and we pay close attention to that as well.

Your next question is from Dane Leone with Raymond James.

Okay.

Hi, Thank you for taking our questions and my congratulations.

Geoffrey Christopher Meacham: Srinivas Jyothibodhanamayi, Anirudh Srinivasanamayi, Anirudh Srinivasanamayi,

Relations too.

Arvind Hope you have a fund birthday Tonight after the call. So I'll keep it brief.

Geoffrey Christopher Meacham: [inaudible]

Geoffrey Christopher Meacham: Schott, but you might be able to launch your biosimilar ilea. It's ABP 938. Thanks so much and congratulations.

Hi, My question voluntarily item.

Question for me here is what you guys.

Thank you need to see is you're planning for this phase III study, obviously initial data seemed encouraging from the first 52 patients who had earlier this year.

Geoffrey Christopher Meacham: Thanks so much and congrats on your birthday, Arvind.

Dave: Yeah, maybe I'll start with the question on combinations. Of course, the ones we like the best are the ones that work, you know, and that's what we're testing right now. It would actually, you know, all of these combinations have been selected for one or another reason for both. One, most importantly, biological plausibility. So there is reason to believe in either additive or synergistic effects. And then two, if the [inaudible] Kennan. We haven't announced our timing for ILEA, but we are moving quickly in the enrollment of that program,

But where do you want to think about positioning.

This drug in the different lines of small cell lung cancer now and.

What are you may be seen as the dose escalation studies progressed since maybe we've seen in the last data update.

How you're thinking about a pivotal study now thank you.

Yeah. Thanks Dane.

I think so.

Take the last part of your question first what we've seen our ongoing response rate consistent.

Sponsor rates consistent.

With the data that you saw from the later cohorts that represented a month or 2 ago and in addition, we've actually been impressed with duration of response most of these patients.

Dave: [inaudible]

Carter Gould: Our next question is from Carter Gould with Barclays.

Carter Gould: Thank you. Good afternoon. I'll pass on my happy birthday wishes to Arvind, too.

Our third line plus which as you know is a very aggressive disease.

Carter Gould: I wanted to ask about your OX40 program. I know it's moving into Phase 3 next year. Just wanted to see, you know, any further color on the population or dosing you're looking to move forward with in that Phase 3, and if the lingering uncertainty over the JACs has in any way changed or, I guess, devolved your underlying assumptions around that market. It would be helpful. Thank you.

Small cell lung cancer.

And.

Durable responses here are vanishingly rare so that I think is in addition, what really gives us encouragement here.

As we discussed a potential registrational path.

With the FDA in the coming weeks I think we will focus on the patient population, but I think the.

Dave: You know, we're, you know, we're very enthusiastic about this molecule. Atopic dermatitis is a disease of widespread prevalence in, actually, global populations. Despite existing therapies, we think there is a very large amount of residual medical need. Patients often cycle through treatments. Given the novel mechanism of action targeting the OX40 pathway, we think there is quite a big opportunity to, you know, have a real impact in this field. As I mentioned, we'll be presenting the Phase 2B data at the end of September at one of the major European dermatology meetings.

Your initial foray is likely to be those later lines of therapy. We are moving forward in our development programme now and are actively investigating earlier lines of therapy as well all of that is clearly the end game that we're pointing for.

To allow to Matt.

Given this sort of activity that we're seeing in the clinic right now.

Thank you our next.

Next question is from Michael Schmidt with Guggenheim.

Yes.

Hey, guys I have 1 more on <unk>. Thanks for taking my question Arvind Congrats from me as well.

Should should hypothetically should the efficacy safety profile of the alumina Kras PD 1 inhibitor combinations.

Turn out to be insufficient.

I guess could be possible what are other likely avenues to possibly enable access to a broad first line non small cell lung cancer indications.

Dave: And I think there, you'll get a sense of our thoughts on dosing and what things may look like going forward. And, of course, as we have discussions with regulators, we'll outline our plans for the Phase 3 program, which will, in all likelihood, be a suite of studies. Let me ask Murdo to comment a little further here. Yeah, and Carter, we obviously pay close attention to the jack safety concerns as raised by the Zelljans data and applied some reduction in jack penetration assumptions to the AD market when we were evaluating the attractiveness of the AUX40 asset.

Should we think about.

Pension chemo combinations or are there others that are not to come to mind. Thanks. So much.

Yes, Thanks, Michael I think you're exactly right.

Would be chemotherapy combinations number 1 and then.

Going into biomarker selected populations as we've discussed in terms of our planned upcoming first line.

Which will be launched shortly and so.

Checkpoint inhibitor combinations not be feasible I would expect that we would piece together other routes to first line to find patients who are most likely to benefit.

Dave: And I think that was one of the drivers here; we, the biologics still have a large role to play. We think initially, the AUX40 asset will establish a perhaps a second line opportunity in the market, and we can expand from there. But the portion of the market that we think will be addressed by jacks is probably smaller than was once considered.

Great. Thanks.

Eric we're pushing up against the top of the IRR why don't we take our final 2 questions.

Your next question is from Brian <unk> with Baird.

Hey, good afternoon, everyone. Thanks for taking my question.

Happy birthday Arvind digging.

Digging a little more on the disclosed notice a deficiency did I think last year. You also received NRA RF modified RNA are related to 2013.2015 and are also under investigation.

Murdo: Your next question is from Corey Kasimov with JPMorgan.

For 2016 through 2018 by the IRR. So it just seems like there is all related to issues around profit allocation on Puerto Rico. So I was wondering if you could just kind of like.

Unknown Executive: Hey, good afternoon, guys. Thanks for taking my question. Most importantly, happy birthday to Arvind. I wanted to go back to the line of questioning around the LumaCrest combination work and ask specifically about what you're doing with PD1s at this point and when you expect to have an update there. And is it really still just about trying to figure out the dosing currently?

Walk through the next steps in terms of the tax Court protection.

Can the petition to be heard in tax court fail.

Does it go to court.

Decision goes against you or does that sort of established precedence for the other years as well and based on the IRS calculation methodology for 2010 for 2012 have you run that same calculation to establish what an upper bound of liability for 2013 for now would be.

Unknown Executive: Singh. Currently, before you move forward. Yeah, thanks, Corey.

Dave: Yeah, thanks, Corey. As we've discussed before, we're looking at both direct combinations and sequential therapy here. So, you know, I think you can expect to see data from both of those sometime through the first half of next year or so as we accumulate enough data to define what the relevant path forward is with checkpoint inhibitors. So, more to come there, but we continue to actively work on these development programs.

Okay Brian.

Look we filed a petition with the U S tax Gordon this case could take several years to resolve.

The IRS is also proposing significant adjustments to 2013 to 15 relate to the similar issues. As you know we disagree strongly disagree with the proposed adjustments were pursuing resolution with the IRS administrative appeals outs on that the IRS. As you noted they are currently auditing years 2016 through.

<unk>, so yes sure they'll take the same position for the other periods under audit, we believe that we have adequate reserves for that.

Robert A. Bradway: Hi, this is Allie Bradshawn on behalf of Chris this afternoon. Thanks for taking our question. Just on CD, you've had a lot of activity in the oncology and inflammation space. Can you give any color on how you're prioritizing other areas of interest on the development side versus opportunities to bolster some of your more legacy commercial franchises like Renal? And then maybe more specifically on Renal, how are you thinking about your longer-term strategy or prioritization for investing in the franchise, be it through internal or external innovation? Thanks.

Great. Thank you.

The final question.

Your final question is from Tim Anderson with Wolfe Research.

Hi, This is Andrew Geller on per Tim I, just wanted to ask 1 question on <unk>. So given your partner Astrazeneca officially discontinued atopic dermatitis last week can you just.

We will have any impact on your competitive positioning, especially in eosinophilic asthma dupee, given the high coincidence of EBIT atopic conditions.

Yes, I think the short answer there is no and we remain extremely bullish about <unk> given its activity across a range of patients with asthma, regardless of <unk>.

Dave: Yeah, Ali, I'll just repeat what I've said many times before, which is that our business development efforts are focused on the areas where we have an ongoing presence.

The film Count.

As we mentioned we were granted priority review by the FDA clearly an acknowledgment of the potential fit of this medicine with a large residual unmet medical need so that.

Dave: [inaudible] I don't think I addressed your nephrology question. We don't have as much active research in nephrology and bone at the moment because we haven't seen opportunities internally to advance novel therapies there. We think the medicines we have are...

That does give us pause at all Tim.

Okay, Eric Let me just thank our callers for joining the call today.

Dave: [inaudible]

Dane Vincent Leone: Your next question is from Dane Leone with Raymond James.

We're excited about the second half of the year lot going on here and so we look forward to having the opportunity to gather with you in October and update you on the next quarter.

Dane Vincent Leone: Hi, thank you for taking the questions and my congratulations to Arvind. I hope you have a fun birthday tonight after the call. So I'll keep it brief.

I appreciate your interest in Amgen. Thank you.

Thanks, everybody.

Dane Vincent Leone: My question is on Tarl Atomab. The question for me here is what you guys need to see as you plan for this Phase 2 study, obviously, initial data seemed encouraging from the first 52 patients you had earlier this year, but where do you want to think about positioning this drug in the different lines of small cell lung cancer now, and what have you maybe seen as the dose escalation studies progressed since maybe we've seen the last data update? That has you thinking about a pivotal study now. Thank you. Yeah, thanks, Dane.

And this concludes amgen's second quarter 2021 of financial results Conference call you may now disconnect.

[music].

Yes.

[music].

Dave: Yeah, thanks, Dane. I think, you know, to take the last part of your question about small cell lung cancer. And, you know, the durable responses here are vanishingly rare.

Dave: So that, in addition, what really gives us encouragement here. You know, as we discuss potential registrational paths with the FDA in the coming weeks, I think we'll focus on the patient population. But I think, you know, the initial foray is likely to be those later lines of therapy. We are moving forward in our development program now and are actively investigating earlier lines of therapy as well. That is clearly the end game that we're aiming for with Tarlatumab, you know, and given the sort of activity that we're seeing in the clinic right now.

Yes.

Michael Smith: Your next question is from Michael Smith with Guggenheim.

Michael Smith: Oh, hey, guys, I have one more question on lumacrass. Thanks for taking my question. And Arvind, congrats for me as well. So I guess it should should hypothetically should work should the efficacy and safety profile of the lumacrass PD-1 inhibitor combinations turn out to be insufficient, which I guess could be possible. What are other likely avenues to possibly enable

[music].

Dave: [inaudible]

Erica: Yeah, thanks, Michael. You know, I think you're exactly right. You know, it would be chemotherapy combinations, number one, and then going into biomarker-selected populations, as we've discussed in terms of, you know, our planned upcoming first-line study, which we'll be launching shortly. And so, should checkpoint inhibitor combinations not be feasible, I would expect that we would piece together other routes to first line to find patients who are most likely to benefit.

Erica: Eric, as we're pushing up against the top of the hour, why don't we take our final two questions?

Christopher Thomas Schott: Okay, your next question is from Brian Scorney with Baird.

Christopher Thomas Schott: Hey, good afternoon everyone. Thanks for taking the question and happy birthday, Arvind. Digging a little more on the Disclosed Notice of Deficiency today, I think last year you also received an RIR and modified RIR related to 2013 through 2015 and are also under investigation for 2016 through.

Christopher Thomas Schott: Arvind Sood, Yaron Werber, Salveen Richter, and Daniel Lundquist

Peter: And if you could just kind of like walk through the next steps in terms of the tax court petition. Can they, you know, can the petition to be heard in the tax court fail? And if it does go to court, and the decision goes against you, does that sort of establish precedent for the other years as well? And based on the IRS calculation methodology for 2010 and 2012, have you run that same calculation to establish what an upper bound of liability for 2013 through now would be?

Peter: Ryan, thank you for the question.

Peter: Good question. Look, we filed a petition with the U.S. Tax Court. In this case, it could take several years to resolve.

Peter: The IRS is also proposing significant adjustments to 2013-15 that relate to similar issues, as you know. We disagree and strongly disagree with the proposed adjustments. We're pursuing resolution with the IRS Administrative Appeals Office on that.

Peter: Nathaniel, Daniel Lundquist, David Reese, Arvind Sood, Yaron Werber, Salveen Richter, Daniel Lundquist, Jamie Shen, Robert Bradway, Murdo Gordon, David Reese, Arvind Sood, Yaron Werber

Timothy Minton Anderson: Your final question is from Tim Anderson with Wolf. This is Andrew Galler on for Tim.

Unknown Attendee: Hey, this is Andrew Geller on for Tim. I just wanted to ask one question about Tezi. So given your partner AstraZeneca officially discontinued atopic dermatitis last week, do you think this will have any impact on your competitive positioning, especially in eosinophilic asthma compared to DUPI, given the high coincidence of these atopic conditions? Yeah, I mean, I think the short answer there is no, and we remain extremely bullish about tezapelumab given its activity across a range of patients with asthma, regardless of their eosinophil count.

Unknown Attendee: As we mentioned, we were granted priority review by the FDA, clearly an acknowledgment of the potential fit of this medicine with a large residual unmet medical need. So, you know, that doesn't really give us pause at all, Tim.

Bob Bradway: Okay, Erica, well, let me just thank our callers for joining the call today. We're excited about the second half of the year. We have a lot going on here. And so we look forward to having the opportunity

Bob Bradway: We look forward to having the opportunity to gather with you in October and update you on the next quarter and appreciate your interest in Amgen. Thank you. Thanks, everybody. And this concludes Amgen's second quarter of 2021.

Conference Facilitator: And this concludes Amgen's second quarter 2021 financial results conference call. You may now disconnect. (Inaudible)

Conference Facilitator: This is Erica, and I will be your conference facilitator today for Amgen's second quarter 2021 financial results conference call. All lines have been placed on mute to prevent any background noise.

Arvind Sood: There will be a question and answer session at the conclusion of the last speaker's prepared remarks. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session. To ask a question, please press the star key, then the number one on your telephone keypad. To withdraw your question, please press the pound key. I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

[music].

Arvind Sood: Erica, thank you. Good afternoon, everybody. Welcome to our Q2 call.

Arvind Sood: I think the three key themes for this quarter are great execution in a challenging environment, pipeline advancement, and smart and strategic business development. Lots to cover, so let's jump right in. Slides are up. Quick reminder that we'll use non-GAAP financial measures in our presentation, and some of the statements will be forward-looking statements. Our SEC filings identify factors that could cause our actual results to differ materially.

Bob Bradway: So with that, I would like to turn the call over to our chairman and CEO, Bob Bradway. Okay, Bob? Okay. Thank you, Arvind. And hello, everyone, and thank you for joining our call. Through the first six months of the year, Amgen has continued to execute well, driving demand for our current products globally while also paving the way for growth from future products. Total revenues in the second quarter increased 5% over the prior year and 11% over the prior quarter.

Bob Bradway: We achieved this growth despite the lingering effects of COVID-19 and increased competition in many of our therapeutic categories. We continue to see strong, volume-driven growth from Repatha, Otesla, Prolia, and Avenity, and a number of our oncology biosimilars, or excuse me, oncology medicines as well, all of which address significant health challenges.

Bob Bradway: We also saw strong growth in the quarter.

Bob Bradway: We generated volume growth of 22% outside the United States, and we're particularly encouraged by our progress in the Asia-Pacific region, where two notable approvals in the second quarter should provide additional growth moving forward. In China, our partner Beijing secured approval for Coprolis, which joins Bensido and Xgeva in our oncology collaboration there. And in Japan, the approval of Amavig for migraine marks another important milestone for us in that market.

Bob Bradway: In the U.S., we're excited by the strong launch of LumiCrast, which is providing hope to lung cancer patients in need of new treatment options. We're very pleased with the enthusiasm LumaCraft has generated in the oncology community. We're also excited that the FDA granted priority review to tezapelumab, further confirming our belief that it offers significant advantages over currently available treatment alternatives for people with severe asthma. A debilitating disease that affects millions worldwide.

Bob Bradway: We've long sought to complement our internal innovation efforts with the best available External Innovation, and in the first half of this year, we've executed on several compelling business development transactions that fit squarely in our stated areas of interest. The acquisition of Five Prime Therapeutics and our partnership with Keowa Kirin, for example, have added two potential first-in-class phase three ready assets in cancer and inflammation, two therapeutic categories where there remains high unmet need.

[music].

Bob Bradway: The acquisition of TeneoBio, which Dave will address in a moment, will significantly strengthen our protein engineering capabilities across therapeutic areas. Our strong balance sheet and cash flows will enable us to take advantage of additional business development opportunities like these as they arise. All the work we do is focused on advancing our mission to serve patients and do so in a way that helps to address the many challenges facing society. You may have seen our recently announced plans to invest approximately $1 billion to build two new manufacturing facilities, one in North Carolina and the other in Ohio, to meet the demand for our medicines. Both facilities will utilize cutting-edge technologies to be much more efficient and environmentally friendly than traditional plants.

This is Erica and I will be your conference facilitator today for Amgen's second quarter 2021 financial results Conference call. All lines have been placed on mute to prevent any background noise. There will be a question didn't answer session at the conclusion of the last speaker's prepared remarks in order to ensure that.

Everyone has a chance to participate we would like to request that you limit yourself to asking 1 question during the Q&A session to ask a question. Please press Star then the number 1 on your telephone keypad to withdraw your question. Please press the pound key I would now like to introduce Arvind Sood, Vice President of Investor Relations.

Mr. Sood, you may now begin.

Michael Thank you good afternoon, everybody welcome to our Q2 call I think the 3 key themes for this quarter, a great execution in a challenging environment pipeline advancement and smart and strategic business development lots to cover so let's jump right. In slides are up quick reminder, that we'll use non-GAAP financial measures in our presence.

Bob Bradway: Finally, before I turn things over to Murdo, let me thank my Amgen colleagues for their continued commitment to serving patients around the world and delivering strong performance across all aspects of our business. Murdo, over to you.

Patients and some of the statements will be forward looking statements are SEC filings identify factors that could cause our actual results to differ materially so with that I would like to turn the call over to our chairman and CEO, Bob Bradway, Bob Okay.

Murdo Gordon: Thank you, Bob. Second quarter product sales increased 3% year over year. Volumes increased 8%, driven by double-digit growth across a number of our products, including Prolia, Repatha, and our biosimilar products, Embasi, and Cangenti. Additionally, our ex-US business grew 18%, with volume growth of 22% year over year. We continue to see gradual recovery from the impacts of the COVID-19 pandemic in Q2 when compared to Q1 2021. Patient visits and lab test procedure trends continue to improve but remain below pre-COVID-19 levels. We remain focused on customer execution. Overall, U.S. field activity improved quarter over quarter, reaching 80% of pre-COVID levels. Face-to-face customer interactions are increasing and accounted for 60% of activity during the second quarter.

Thank you Arvind and Hello, everyone and thank you for joining our call.

Through the first 6 months of the year Amgen has continued to execute well driving demand for our current products globally.

Also paving the way for growth from future products.

Total revenues in the second quarter increased 5% over the prior year and 11% over the prior quarter.

We achieved this growth despite the lingering effects of COVID-19, and increased competition in many of our therapeutic categories.

We continued to see strong volume driven growth from re Paso, who Tesla per.

And if entity and a number of our oncology biosimilar or excuse me all oncology medicines as well all of which address significant health challenges.

We also saw strong growth in the quarter from our Biosimilar supporting our commitment to deliver value to health care systems around the world.

Murdo Gordon: Over the course of the pandemic, the cumulative decline in diagnoses has suppressed the volume of new patients starting treatment, which we expect will continue to impact our business during the second half of the year. Now, let me review some product details, beginning with our innovative portfolio. In bone health, Prolia increased 24% year over year, driven primarily by volume growth. In the second quarter, osteoporosis diagnosis rates remained at approximately 90% of pre-pandemic levels.

In China, our partner Peking secured approval for <unk>, which joins <unk> and <unk> in our oncology collaboration there.

And in Japan.

The aim of Vig for migraine marks another important milestone for us in that market.

Murdo Gordon: We remain focused on driving patient growth and are optimistic about Prolia's strength in the second half of the year. Evertity sales increased 30% year-over-year, driven by 32% volume growth. In the U.S., sales nearly doubled year-over-year as we saw an acceleration in demand trends driven by new and continuing patients. We believe Avenity's unique bone building attributes will continue to drive revenue growth. Moving on, Repatha, which has reached more than one million patients since launch.

In the U S. We're excited by the strong launch of <unk>, which is providing hope to lung cancer patients in need of new treatment options.

I'm pleased with the enthusiasm lunar crash is generated in the oncology community.

We're also excited that the FDA granted priority review to test to tell Ya man further confirming our belief that it offers significant advantages over currently available treatment alternatives for people with severe asthma.

A debilitating disease that affects millions worldwide.

Murdo Gordon: Repatha Sales increased 43% year-over-year, driven by 49% volume growth, and we maintain U.S. and global share leadership in the PCSK9 class. In the U.S., total volumes grew 37% year-over-year, and outside the U.S., volumes grew 66% year-over-year. The volume growth in the quarter was partially offset by lower net selling prices, resulting from an increase in Medicare Part D patients receiving Repasa and entering the coverage gap. Looking forward, we expect some ongoing reduction in global net selling prices on a sequential basis.

We have long sought to complement our internal innovation efforts with the best.

Available external innovation and then the first half of this year, we've executed on several compelling business development transactions, which fits squarely in our stated areas of interest.

The acquisition of 5 Prime Therapeutics, and our partnership with Kyowa Kirin. For example have added 2 potential first in class phase III ready assets in cancer and inflammation.

2 therapeutic categories, where there remains high unmet need.

The acquisition of <unk>, bio, which Dave will address in a moment, we will significantly strengthen our protein engineering capabilities across therapeutic areas.

Our strong balance sheet and cash flows will enable us to take advantage of additional business development opportunities.

Like these as they arise.

All the work we do is focused on advancing our mission to serve patients and to do so in a way that helps to address the many challenges facing society.

Murdo Gordon: Overall, we're confident in our ability to grow Repatha to help more patients at risk of developing a heart attack or stroke. Now on to Amovig, which grew 24% quarter over quarter. However, on a year over year basis, net sales declined 16%.

They have seen our recently announced plans to invest approximately $1 billion to build 2 new manufacturing facilities, 1 in North Carolina and the other in Ohio to meet the demand for our medicines.

Both facilities utilized cutting edge technologies to be much more efficient and environmentally friendly than traditional plants.

Murdo Gordon: Volumes grew 11% but were more than offset by lower net selling price and unfavorable changes to estimated sales deductions. In the US, Imavig TRX volume grew 7% year-on-year, and the brand maintained total prescription share leadership among subcutaneous CGRP. Looking ahead, we see continued rebate pressure as oral CGRPs compete for share in the market. To date, more than half a million patients worldwide have been prescribed Amivig. We believe AimaVig has significant potential to help many more patients suffering from chronic migraine given the clinical data that will be published soon showing AimaVig superiority versus topiramidin.

Supporting our goal of achieving carbon neutrality by 2027.

You can learn more about our commitment to good corporate citizenship by reading, our ESG report, which can be found in the responsibility section of Amgen Dot com.

Thank you Bob.

<unk> quarter product sales increased 3% year over year volumes increased 8% driven by double digit growth across a number of our products, including prolia.

Murdo Gordon: Moving to our inflammation portfolio, Well, Tesla sales were $534 million in the quarter with 5% volume growth, more than offset by unfavorable changes to estimated sales deductions and lower net selling price in the U.S., so Tesla maintained first-line share leadership in Tsaraisis.

And our Biosimilar products in Bassi income Jenny.

Ex U S business grew 18% with volume growth of 22% year over year.

We continue to see gradual recovery from the impacts of the COVID-19 pandemic in Q2, when compared to Q1.2021.

Murdo Gordon: New to brand prescription volumes grew 10% year-over-year, even as patient visits to dermatologists remained 15% below pre-pandemic levels. The number of new patients who started treatment with Otezla in Q2 was near pre-pandemic levels, but those gains were largely offset by a lower percentage of 90-day prescription fills and lower prescription refill rates for Otezla. We expect that the epidemic recovery in the dermatology segment will progress over the coming quarters. Looking forward, we're preparing for the anticipated approval of the mild to moderate psoriasis indication in the U.S. later this year and for the launch of a Tesla in China. Ambrose Sales decreased 8% year-over-year, primarily driven by lower net selling prices.

Patient visits and lab test procedure trends continued to improve but remain below pre COVID-19 levels were.

We remain focused on customer execution.

Over the course of the pandemic the cumulative decline in diagnosis has surpassed the volume of new patients starting treatment, which we expect will continue to impact our business during the second half of the year.

Now, let me review some product details beginning with our innovative portfolio.

In bone health Prolia increased 24% year over year, driven primarily by volume growth in the second quarter osteoporosis diagnoses rates remained at approximately 90% of pre pandemic levels. We remain focused on driving patient growth and are optimistic about prolia strength in the second half of the year.

Murdo Gordon: On a year-over-year basis, volumes declined 1%, supported by Embrill's long track record of efficacy and safety. Turning to biosimilars, Q2 sales were $567 million, driven by strong volume growth, which was partially offset by declines in net selling price. We continue to hold leading biosimilar shares in Europe for Amgevita and in the U.S. for Mvasi and Kangenzi. For the remainder of the year, we expect worldwide biosimilar volume growth to be offset by declines in net selling prices due to increased competition.

<unk> sales increased 30% year over year, driven by 32% volume growth in the U S.

Net sales nearly doubled year over year as we saw an acceleration in demand trends driven by new and continuing patients.

We believe his entities unique 1 building attributes will continue to drive revenue growth.

Moving to <unk>, which has reached more than 1 million patients since launch.

Net sales increased 43% year over year, driven by 49% volume growth and we maintain U S and global share leadership in BCS canine class.

Murdo Gordon: Longer-term growth for biosimilars will come from expansion of existing products in new markets and launches of additional biosimilar molecules, such as Mjavita in the U.S. and biosimilars for Solaris, Stellara, and ILEA. In Oncology, Neulasta Onpro remains the preferred long-acting GCSF with 52% volume share in the core. Sales declined 18% year-over-year, driven by a lower net selling price and lower volume. However, this was partially offset by a $75 million year-over-year benefit from favorable changes in reimbursement. Nolaska's US average selling price declined 35% year-over-year and 12% quarter-over-quarter.

In the U S. Total volumes grew 37% year over year and outside the U S volumes grew 66% year over year.

Volume growth in the quarter was partially offset by lower net selling price, resulting from an increase in Medicare part D patients receiving repass, an entering the coverage gap.

Looking forward, we expect some ongoing reduction in global net selling price on a sequential basis.

Overall, we're confident in our ability to grow with us to help more patients at risk of developing a heart attack or stroke.

Now onto <unk>, which grew 24% quarter over quarter on a year over year basis, net sales declining 16% volte.

Volume grew 11%, but were more than offset by lower net selling price and unfavorable changes to estimated sales deductions in the U S. T. Rx volume grew 7% year on year and the brand maintained total prescription share leadership among subcutaneous <unk> looking.

Murdo Gordon: We expect this trend will continue throughout 2021, driven by intensifying competition. Kyprolis sales increased 11% year-over-year, primarily driven by volume growth and net selling price. Moving forward, we expect growth from Kyprolis use in combination with CD38 antibodies, including Darzalex and Sarclezine. I'd like to take this opportunity to comment on our recent launch at Womacraz in the U.S., which is off to a strong start, with unaided brand awareness increasing 20 points since launch. KRAS testing in patients with metastatic non-small cell lung cancer now stands at 70%.

[noise] ahead, we see continued rebate pressure as <unk> compete per share in the market.

To date more than half a million patients worldwide have been prescribed day mosaic.

And we believe <unk> has significant potential to help many more patients suffering from chronic migraine given the clinical data that will be published soon showing <unk> superiority.

<unk> Topiramate.

Moving to our inflammation portfolio with Tesla sales were $534 million in the quarter with 5% volume growth more than offset by unfavorable changes to estimated sales deductions and lower net selling price.

In the U S. So Tesla maintained first line share leadership in psoriasis.

Murdo Gordon: And 46 of the top 50 testing labs now identify KRAS G12C as actionable in their lab reports. We're very pleased with the positive reaction from the oncology community, and we'll be working closely with them to ensure access for patients who can benefit from this breakthrough measure. Overall, I'm pleased with our Q2 execution given the sustained impact of COVID-19 on our business. [inaudible] Maintain our focus on execution to ensure our medicines continue to reach the patients they can benefit. And with that, I will turn it over to Dave. Thanks, Murdo. Good afternoon, everyone.

Branded prescription volumes grew 10% year over year, even as patient visits to the dermatologist remains 15% below pre pandemic levels.

The number of new patients, who started treatment with Tesla in Q2 was near pre pandemic levels.

Those gains were largely offset by a lower percentage of 90 day prescription pills and lower prescription refill rates per hour Tesla.

We expect that Eric recovery in the dermatology segment will progress over the coming quarters.

Looking forward, we're preparing for the anticipated approval of the mild to moderate psoriasis indication in the U S. Later this year and for the launch of a Tesla in China.

Enbrel sales decreased 8% year over year highly driven by a lower net selling prices and favorable changes to estimated sales deductions on a year over year basis volumes declined 1% supported by Enbrel has long track record of efficacy and safety.

Dave: We made several important advances in R&D last quarter, and I will begin with our acquisition of KineoBio, which will strengthen Amgen's leadership in developing engineered, protein-based medicines to treat patients with serious illnesses. There are three important components to the acquisition. First, TeneoBio's core antibody technology will enable the development of multi-specific biologics directed against targets in a wide range of diseases across our key therapeutic areas. The Neobios Antibody Platform offers capabilities complementary to Xenoma.

Turning to Biosimilars Q2 sales were $567 million driven by strong volume growth, which was partially offset by declines in net selling price.

We continue to hold leading biosimilar shares in Europe for Amgen Vita and in the U S for <unk> and Tianjin day.

For the remainder of the year, we expect worldwide biosimilar volume growth to be offset by declines in net selling price due to increased competition.

Longer term growth for Biosimilars will come from expansion of existing products in new markets and launches of additional biosimilar molecules, such as Amgen either in the U S and Biosimilars for Soliris <unk> and Eylea.

In oncology Neulasta Umbro remains the preferred long acting G CSF with 52% volume share in the quarter.

Sales declined 18% year over year, driven by lower net selling price and lower volume.

Was partially offset by a $75 million year over year benefit from favorable changes in reimbursement mix.

Alaska is U S average selling price declined 35% year over year, and 12% quarter over quarter.

Dave: The availability of a second CD3 engager will allow us to broaden our bispecifics capabilities and enable customization of the T cell engaging domain depending on the disease and target. Finally, we are acquiring clinical and preclinical oncology programs directed against high-value targets of interest, which we specifically selected based on our own discovery efforts and target validation. These include a Phase I bispecific antibody for prostate cancer that complements acapatamab, AMG-160, also targeting PSMA, and AMG-509, targeting STEEP-1, which was recently granted fast-track designation by the FDA. Turning to oncology, we continue to advance LumaCraft's registration around the world. With regulatory reviews and progress in multiple jurisdictions, including Europe and Japan.

We expect this trend will continue throughout 2021, driven by intensifying competition.

Kyprolis sales increased 11% year over year, primarily driven by volume growth and net selling price moving forward, we expect growth from Kyprolis use in combination with CD 38 antibodies, including <unk> since our Cleveland.

I'd like to take this opportunity to comment on our recent.

Lab reports.

We're very pleased with the positive reaction from the oncology community and will be working closely with them to ensure access for patients who can benefit from this breakthrough medicine.

Overall im pleased with our Q2 execution given the sustained impact of COVID-19 on our business.

Closely monitored over the course of the pandemic and its impact on patient and physician behavior during the second half per year.

We maintain our focus on execution to ensure our medicines continue to reach the patients they can benefit and with that I will turn it over to Dave.

Thanks, Murdo and good afternoon, everyone.

There are 3 important components to the acquisition first to <unk> core antibody technology will enable the development of multi specific biologics directed against targets and a wide range of diseases across our key therapeutic areas.

<unk> antibody platform offers capabilities complementary to our zena miles.

Dave: Initial data from our Vectabix combination in colorectal cancer have been accepted for presentation at ESMO in September, and the MEK and oral EGFR combination abstracts will be submitted to a medical meeting in the fourth quarter. We have also entered into a collaboration with Novartis for a SHIP-2 combination trial. Updates from our monotherapy, non-small cell lung cancer study, including additional biomarker analyses, as well as data in patients with stable brain metastases, have been accepted for presentation at the World Congress on Lung Cancer. Recall that we are also investigating rheumatographs in patients with active brain metastases.

It is genetically modified to express human agg molecules, comprising only a heavy chain a small single chain antigen binding BH domains from these molecules are soluble and stable and can be easily strung together like beads on our strength to generate multi specific molecules.

In addition to Naomi I'll also brings a novel lower affinity lower affinity CD 3 engaging technology that complements our bite platform the.

The availability of a second CD, 3 engage or will allow us to broaden our bi specifics capabilities and enable customization of the T cell engaging domain, depending on the disease and target.

Finley, we're acquiring clinical and preclinical oncology programs directed against high value targets of interest, which we specifically selected based on our own discovery efforts and target validation.

Dave: We also plan on initiating a phase, Firstline Non-Small Cell Lung Cancer Study in Patients with PD-L1 Negative and or STK-11 Mutant Tumors in the Third Quarter. On the Vimerituzumab program, we are having good discussions with regulators on the Phase 3 gastric cancer development path and plan to initiate a registrational program by year end. This will include two Phase III trials, one investigating the utility of bimerituzumab in combination with chemotherapy and the other evaluating the addition of bimerituzumab to chemotherapy and a checkpoint inhibitor.

These include a phase 1 by specific antibody for prostate cancer that complements a patent map AMG 160 also targeting <unk> and.

And AMG 509 targeting steep 1 which was recently granted fast track designation by the FDA.

Turning to oncology, we continue to advance <unk> registration around the globe with regulatory reviews and progress in multiple jurisdictions, including Europe and Japan.

Dave: We are also planning a potentially pivotal Phase 2 study with Tarlatumab, AMG-757, our half-life extended bite molecule targeting DLL-3 for small cell lung cancer, and we look forward to discussing next steps with regulators in the coming weeks. I'm also pleased to report that we have completed enrollment in the castrate-resistant prostate cancer expansion cohort for kepatomab or MG1C.

I am pleased to report that more than 2000 patients have received luma kras across more than 1000.

<unk> and 900 investigators or treating physicians, including through our global early access programs.

And the <unk> development program, we continue to advance our broad based combination efforts initial data from our Vectibix combination in colorectal cancer has been accepted for presentation at ESMO in September.

Mick and oral Egfr combination abstracts will be submitted to a medical meeting in the fourth quarter.

Dave: In inflammation, continuing our leadership in dermatology, we are working closely with Kiowa Kirin to advance AMG-481, also known as KHK-4083, a first-in-class OX40 antibody, into Phase III for atopic dermatitis. We look forward to presenting the Phase II atopic dermatitis data at the annual meeting of the European Academy of Dermatology and Venereology at the end of September, as well as initiating discussions with regulators on our Phase III development plans in the coming months. In addition, the FDA accepted the Otesla supplemental filing for mild to moderate psoriasis.

To expand our <unk> experience with ship to inhibition of <unk>.

Along with our ongoing collaboration with Revolution medicines. We have also entered into a collaboration with Novartis for a ship 2 combination trial.

Updates from our monotherapy non small cell lung cancer study, including additional biomarker analysis as well as data in patients with stable brain metastases have been accepted for presentation at the World Congress on lung cancer for.

Recall that we are also investigating <unk> in patients with active brain metastases.

We also plan on initiating a phase III first line non small cell lung cancer study in patients with PD Lone negative <unk> SDK 11 mutant tumors in the third quarter.

And the <unk> program, we are having good discussions with regulators on the phase III gastric cancer development path and plan to initiate a registrational program by year end.

This will include 2 phase III trials, 1 investigating the utility of <unk> in combination with chemotherapy and the other evaluating the addition of <unk> to chemotherapy and checkpoint inhibitor.

We are also planning a potentially pivotal phase II study with tornado map AMG 757, our half life extended bite molecule targeting DLL 3 for small cell lung cancer, and we look forward to discussing next steps with regulators in the coming weeks.

Im also pleased to report that we have completed enrollment in the castrate resistant prostate cancer expansion cohort for a capacitor mab or AMG 160.

Okay.

In inflammation, continuing our leadership in dermatology.

We're working closely with kyowa Kirin to advance AMG 4.

Also known as Cage K $40.83, a first in class ox 40 antibody into phase III for atopic dermatitis, we look forward to the presentation of the phase III atopic dermatitis data at the annual meeting of the European Academy of Dermatology and Venereology at the end of September.

As well as initiating discussions with regulators on our phase III development plans in the coming months.

In addition, the FDA accepted the hotels, the supplemental filing for mild to moderate psoriasis.

Peter: Other revenues, at $412 million, increased 38% year-over-year, primarily driven by shipments of the COVID-19 antibody therapy to Lilly. We continue to expect full-year 2021 other revenues to be in the range of $1.4 to $1.5 billion. Second quarter total non-GAAP operating expenses increased 15% year over year as we continue to make investments to drive growth and maximize shareholder value. We expect full-year operating expenses, including approximately $200 million of operating expenses related to the Rodeo, 5 Prime, and Teneo bio acquisitions and also to the Kiowa-Kirin collaboration, on an absolute basis, to increase about 6 to 7 percent over last year while delivering a full-year operating margin of roughly 50 percent.

Thank you day and good day everyone.

I will briefly walk through our second quarter financial results before discussing 2021 guidance the.

The second quarter marked another period of solid performance as we grew volume, 8% increased investment in both internal and external innovation and delivered 4% year over year non-GAAP EPS growth.

As stated earlier.

Q2 revenues at $6.5 billion increased 5% year over year.

Other revenues at $412 million increased 38% year over year, primarily driven by shipments of the COVID-19 antibody therapy to Lilly.

We continue to expect full year 2021, other revenues to be in the range of 1.4 to $1.5 billion.

Second quarter total non-GAAP operating expenses increased 15% year over year, as we continued to make investments to drive growth and maximize shareholder value.

Peter: On a non-GAAP basis, cost of sales as a percent of product sales increased 4.1 percentage points on a year-over-year basis to 16.9 percent. This was driven primarily by product mix, including COVID-19 antibody shipments to Lilly, as well as profit share and royalty. For the full year, we continue to expect cost of sales as a percent of product sales to be 16 to 17 percent. Our cost of sales has increased as royalties and profit share payments have increased. As a reminder, a few of our products subject to royalties are Amavic and biosimilars such as Imvasi, Riabni, and Congente. Those subject to profit-sharing arrangements are Avenity and Tezapelumab, upon approval and launch.

We expect full year operating expenses, including approximately $200 million of operating expenses related to the rodeo 5 prime and <unk> bio acquisitions and also to the COO of <unk> collaboration on an absolute basis to increase about 6% to 7% over last year, while delivering.

Full year operating margin of roughly 50%.

For the full year, we continue to expect cost of sales as a percent of product sales to be 16% to 17%.

Our cost of sales as increase as products with royalties and product share profit share payments have increased.

Peter: Non-GAAP R&D spend increased 11% year-over-year due to investments in BEMA, acquired in Q2 as part of the 5 Prime acquisition, and increased investments in discovery research. For the full year, we continue to expect non-GAAP R&D spend to increase as we progress our innovative early and late stage pipeline program. For the full year, we expect non-GAAP SG&A spend to decline. Non-GAAP, other income, and expenses were favorable by $146 million on a year-over-year basis. Due primarily to our portion of Beijing's results, which we record one quarter in arrears.

As a reminder, a few of our products subject to royalties, our aim of Vic and Biosimilars, such as <unk> <unk> and <unk>.

Those subject to profit sharing arrangements, our <unk> entity and Tessa pallium app upon approval and launch.

Non-GAAP R&D spend increased 11% year over year due to investments in bema acquired in Q2 as part of the 5 Prime acquisition.

And increased investments in discovery research.

For the full year, we continue to expect non-GAAP R&D spend will increase as we progress our innovative early and late stage pipeline programs.

For the full year, we expect non-GAAP SG&A spend to decline.

Non-GAAP other income and expenses were favorable by $146 million on a year over year basis, due primarily to our portion of Beijing results, which we record 1 quarter in arrears.

Peter: Q1 Beijing results reflect the upfront payment Beijing received in connection with a collaboration. We expect our Q3 and Q4 non-GAAP other income and expense to be more in range with our Q1 and expect full year net expense in the range of $1.3 to $1.5 billion. Now turning to the outlook for the business for 2021, we are excited by our pipeline.

Q1, Beijing results reflect the upfront payment Beijing received in connection with our collaboration agreement.

We expect our Q3 and Q4 non-GAAP other income and expense to be more in range with our Q1 and expect full year net expense in the range of 1.3 to $1.5 billion.

Now turning to the outlook for the business for 2021.

Peter: This innovation is augmented and balanced by the business development that we have announced this year. Based on underlying market dynamics and our investment plans, we are reaffirming our 2021 revenue guidance range of $25.8 billion to $26.6 billion and our non-GAAP EPS guidance range of $16 to $17. Notwithstanding absorbing the roughly $200 million of operating expenses mentioned above related to business development activities including 5 Prime, Rodeo, Teneo Bio, and the Kiowa-Karin collaboration, these ranges reflect uncertainty continuing in the second half of the year related to emerging variants. Patient visits and lab test procedure trends in the United States continue to improve but still remain below pre-COVID-19 levels.

We are excited by our pipeline.

Innovation is augmenting our balanced by the business development that we have announced this year.

Based on underlying market dynamics and our investment plans, we are reaffirming our 2021 revenue guidance range of $25.8 billion to $26.6 billion and our non-GAAP EPS guidance range of 16 to $17 <unk>.

Notwithstanding absorbing the roughly $200 million of operating expenses mentioned above related to business development activities, including 5 prime rodeo <unk> and the COO Karen collaborations.

These ranges reflect uncertainty continuing in the second half of the year related to emerging variants.

Patient visits and lab test procedure trends in the United States continue to improve.

But still remain below pre COVID-19 levels.

Peter: Our non-GAAP tax rate guidance remains unchanged at 13.5 to 14.5 percent. Our capital expenditure guidance remains unchanged at $900 million, and our capital expenditures continue to reflect our investments in our manufacturing and related facilities, including improving their environmental footprint. Investments in Digital Technologies Throughout Our Business and Increasing ESG Investment. We expect share repurchases for 2021 to be in the upper range of $3 to $5 billion. This concludes the financial update. I'll turn it over to Bob for Q&A. Okay, Erica, let's open the lines for questions. Maybe you could remind our callers. Ramanan Laxminarayanan, Arvind Sood, Yaron Werber, Salveen Richter, Daniel Lundquist

Our non-GAAP tax rate guidance remains unchanged at 13, 5 to 14, 5%.

<unk> and digital technologies throughout our business and increasing ESG investments.

We expect share repurchases for 2021 to be in the upper range of $3 billion to $5 billion.

This concludes the financial update I will turn it over to Bob for Q&A.

Okay, Erica let's open the lines for questions, maybe you could remind our callers.

Procedure.

Buyer for them to ask 1 question. So that we have the opportunity to get to everybody who has a desire to ask a question of us and I feel sure our colors would like to know that it's arvin's birthday today. So.

So bear that in mind when you ask questions over here. This afternoon, Okay, Eric open them up.

As a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound key.

Gabon: Hi, this is Gabon for your own. Thanks for taking my question. Congratulations on that.

<unk> will begin the Q&A roster.

Gabon: [inaudible]

Dave: Thanks, Dave.

Dave: Yeah, thanks, Dave. Yeah, so as we mentioned, as you pointed out, this study in first-line non-small cell lung cancer will be conducted in patients who are either PD-L1 negative or STK-11 mutant. These are populations of patients, of course, of patients who don't typically benefit from checkpoint inhibitors where there's really, we think, a lot of residual unmet medical need. In fact, STK-11 mutational status may help confer resistance to checkpoint inhibition.

And your first question is from line of Robert <unk> with Cowen <unk> Company.

Hi, This is Dave on for your own thanks for taking my question and congratulations on the quarter Michael.

My question is focused on the <unk> study in first line lung cancer in patients with low PDL, 1 and or SDK 11.

Could you just kind of talk about the I guess your.

Benchmark or historical comparisons and the SDK 11, and <unk> and what you would use.

As you referenced there and any update on your discussions with regulators in the past you've mentioned that there could be a need for head to head studies in the future and what those could look like what the comparison arms would be thank you.

Thanks, Dave.

Dave: So, you know, that is the population that we're targeting. Whether this can potentially be registration-enabling or not, I think it's too early to speculate. The FDA has generally been clear that in first-line lung cancer, they wish to see randomized trials. So one would have to anticipate having, you know, a pretty spectacular efficacy readout to lead to registration based on a single-arm phase two trial. Obviously, if we saw compelling data, we would have the appropriate conversations going forward.

So as we mentioned as you pointed out this study in first line non small cell lung cancer will be conducted in patients who are either.

PDL, 1 negative or SDK 11.

These are populations of patients of course, who.

Ah patients, who don't typically benefit from checkpoint inhibitors, where theres really.

We think a lot of residual unmet medical need.

Dave: Okay, let's go to the next question. Your next question is from Umer Raffat with Evercore ISI. Hi guys, thanks for taking my question. I just really wanted to focus on Arvind's age today.

Clear that in first line lung cancer, they wish to see randomized trials also 1 would have to anticipate having.

A pretty spectacular efficacy readout.

Lead.

Registration based on single arm phase II trial obvious if we saw.

Umer Raffat: Nathaniel, David Reese, Arvind Sood, Yaron Werber, Salveen Richter, Daniel Lundquist

Compelling data, we would have the appropriate conversations going forward.

Our next question from you.

Umer Raffat: A, if you could just remind us what the plan for the interim is for the ongoing phase 3 study, as well as whether there is any primary analysis limited to the PD-L1 negative subset in particular. I'm quite intrigued that

Your next question is from Omar <unk> with Evercore ISI.

Hi, guys. Thanks for taking my question I, just really wanted to focus on Arvind H today.

[laughter], you and me both are $36 million.

Both.

Alright.

Inventory level.

Umer Raffat: The Bursch Line Phase 2 Trial is limited to PD-L1 negatives or STK-11. Thank you very much.

Congratulations.

My question today was on.

The care App and really around.

Whether there is.

Dave: Yeah, you know, in terms of the phase three trial, you know, I think the best way to think about that, Umer, is that we expect data in the first half of next year. And, you know, given the general rapidity of progression of patients historically in second and third line lung cancer to standard therapy, the utility of an interim analysis may not be particularly useful, meaning the primary analysis often falls very quickly after an interim analysis.

Any if you could just remind us what the plan for the interim is for the ongoing phase III study as well as weather.

Any primary analysis is limited to PDL, 1 negative subset in particular I'm quite intrigued that.

The first line phase 2 trial is limited to PD lone negatives or SDK 11, Thank you very much.

Yes in terms of the.

Phase III trial, I think the best way to think about that.

We expect data.

In the first half of next year.

Given the.

General rapidity of progression.

Patients historically.

In second and third line lung cancer to standard therapy.

The utility of an interim analysis.

Dave: So, of course, we'll take a look at that, and get a better sense in the second half of the year of the event rates, but I would really point to the primary analysis in the first half of next year as the major event. And then, first of all, as I said, you know, we think that there is significant unmet medical need in the PDL1 negative, SDK1 mutant, and or SDK11 mutant population given the relative refractoriness of those tumors to currently available treatments. And so we're very much looking forward to getting that study launched shortly and seeing the data read out. We'll provide guidance on timelines as soon as enrollment is really underway.

And then in first line as I said.

We think that there is significant unmet medical need in the.

As soon as enrollment is really underway.

Jay Olson: Your next question is from Jay Olson with Oppenheimer.

Okay.

Your next question is from Jay Olson with Oppenheimer.

Jay Olson: Oh, hey, happy birthday, Arvind. And thank you so much for taking the questions. I'm curious about the combination data of

Oh, Hey, happy birthday, Arvind and thank you so much for taking the question.

Dave: [inaudible] Thanks, Jay. Given the regimen that we're studying, you can expect that most of the patients that have been enrolled on that particular combination of Lumicrast and VectiBix will have colorectal cancer, given the backbone of VectiBix here, although the trial is open across malignancies for treating physicians to enroll patients if they feel that the regimen may be appropriate. In terms of driving up the uptake of VectiBix, I don't want to speculate on that. Our job here is really to generate these combination data and see if we can really drive things forward, particularly in colorectal cancer.

Drive incremental use of Vectibix. Thank you.

Thanks Jay.

Given the regimen that we're studying you can expect that most of the patients that have been enrolled on that particular combination of <unk> and vectibix.

We'll have colorectal cancer, given the backbone of <unk>.

<unk> here.

Although the trial is open across all malignancies for treating physicians to enroll patients if they feel that regimen may be appropriate in terms of driving uptake of Vectibix I don't want to speculate on that our job here is really to generate these combination data.

Salveen Richter: Your next question is from Salim Saeed, with Mazzuho.

Salveen Richter: Great. Thanks so much for the question, guys. And I'll add my happy birthday, Arvind. Me and you were both 30.

And CFO.

I think we can really drive things forward, particularly in colorectal cancer.

Your next question is from Salim Syed with Mizuho.

Great. Thanks, so much for the question guys and I'll add my happy birthday Arvind.

And you were both 30.

So.

I just wanted to focus on the tax.

If I can.

So it seems like this notice of deficiency was not just for 1 year, but it was for 3 years 2010, 2011 and 2.

2012, so I'm just curious if there is a pattern here and how you guys are doing.

The accounting is triggered this notice of deficiencies.

And I guess the underlying question here should we be expecting I noticed a deficiency or <unk> for 2013 through 20.

And then just curious what the interest rate is that the IRS with them pose here. Thank you.

Peter: Salim, thank you.

Peter: Salim, thank you. It's Peter.

Selim. Thank you it's Peter.

Peter: And on your question about the IRS matter, the dispute, look, these notices are related to a transfer pricing dispute with the IRS regarding the allocation of the profits between the U.S. and the territory of Puerto Rico. So you can see we have a difference of opinion on the value of the significant risk and the complexity we undertake with activities performed at our Puerto Rico facility. We strongly believe the IRS's position is without merit, and we have appropriate tax reserves. This dispute will take several years to resolve.

On your question around the IRS matter. The dispute look these notices related to transfer pricing dispute with the IRS regarding the allocation of the profits between the U S. In the territory of Puerto Rico. So you can see we have a difference of opinion on the value of the significant risk and complexity, we undertake with ACA.

<unk> performed at our Puerto Rico facility.

We strongly believe the Irs's position is without merit, and we have appropriate tax reserves and this dispute will take several years to resolve.

I would like to note Celine that quarter Rico is our flagship manufacturing facility responsible for the majority of Amgen Global manufacturing, we're proud of our Puerto Rico operations very proud of them and our colleagues Eric We've had a major manufacturing presence in Puerto Rico for about 30 years, we have more than.

2200, highly skilled colleagues in Puerto Rico, and who produced very sophisticated biologic medicines for patients all over the world with serious diseases, we've invested nearly $4 billion to expand and modernize those facilities in Puerto Rico, and we're proud to be consistently recognized as 1 of the island's best and most responsible employers.

So on the matter of.

Interest rates I'll have to refer you to the IRS for that.

But that's the IRS matter and brief.

Okay. Thanks, so much.

Unknown Executive: Your next question is from Terrence Flynn with Goldman Sachs.

Your next question is from adherent.

With Goldman Sachs.

Great. Thanks, so much for taking the question maybe.

Unknown Executive: Great, thanks so much for taking the question. Maybe another one for Peter. I was just wondering if you could comment.

And maybe another 1 for Peter I was just wondering if you can.

Comment.

Unknown Executive: [inaudible] Smeets and Jack Bothwell.

Unknown Executive: Srinivasan, and the cadence on the forward. Thank you.

Peter: Terrence, thank you. And, you know, as always, we don't give long-term margin guidance. But what I and I'd really like to say about our North Star around this is that we always pause and think about our objective is to grow our after-tax cash flows for the enterprise versus targeting specific operating margin or opex growth rates. So we're going to continue to make prudent investments that lead to that objective.

Terence Thank you.

As always we don't give long term margin guidance, but what I and I'd really like to say our northstar around this we always pause and think about our objective is to grow our after tax cash flows for the enterprise versus targeting specific operating margin or opex growth rates. So we're going to continue to make prudent investments that lead to that.

Peter: So I would just say we're continuing to invest in internal and external innovation. You've seen the fruits of that in the second quarter, the launches of new products, and broader digitalization efforts. Secondly, we highlighted our expectation that R&D expenses are going to grow year over year as we increase our spend on AMG 160 and 757 and dose expansion. We're going to rapidly advance those assets for prostate and small cell lung cancer. We have three biosimilars in phase three, and three inflamed assets in phase two.

Secondly, we highlighted our expectation that R&D expenses are going to grow year over year as we increase our spend on AMG $160 and 757 million dose expansion, we're going to rapidly advance those assets in prostate in small cell lung cancer we.

We have 3 biosimilars in phase III, <unk>, III and flamm assets in phase 2.

Peter: Third, I'll just note, Terrence, that we're absorbing the upfront costs related to the acquisition of Rodeo, as well as the cost of the five prime acquisition, our recent collaboration with Kiowa Kirin, and our recently announced acquisition of Tenayo Bio, which we do expect to close in the second half of 2021. We also plan to rapidly progress these phase three ready molecules in the development of BMNKHK4083.

Third ill just note parents that we're absorbing the upfront costs related to the acquisition of <unk> as well as the cost of the 5 Prime acquisition. Our recent collaboration with Kyowa Kirin and our recently announced acquisition of <unk>, which we do expect to close in the second half of 2021, we also plan to rapidly.

These phase III ready molecules in development beam Encage K 40.83.

Peter: We began seeing higher manufacturing costs in Q2. Those were related to the Lilly COVID antibody efforts. That adds to the OPEX bill for the rest of year two. But on a year over year basis, remember, we're comparing a depressed spend in Q2 and Q3 2020 due to COVID.

We began seeing higher manufacturing costs in Q2, those were related to the Lilly Covid antibody effort efforts net adds to the opex build for the rest of the year or 2 but on a year over year basis. Remember, we're comparing is depressed spend in Q2 and Q3.2020 due to COVID-19.

Peter: So, you know, at the end of the day, there are any number of financial metrics that we expect to be measured on by our investors and our analysts. And we take pride in knowing that we want to end up really in the top of the group in terms of our operating efficiency. So that's very important to us. So you can rest assured that we'll continue to stay focused on that.

No.

At the end of the day, there is any number of financial metrics that we expect to be measured on by our investors and the analysts and we take pride in knowing that we want to end up really.

And the top of the group in terms of our operating efficiency. So that's very important to us. So you can rest assured that we will continue to stay focused on that.

Matthew Harrison: Our next question is from Matthew Harrison with Morgan Stanley.

Okay.

Our next question is from Matthew Harrison with Morgan Stanley.

Matthew Harrison: Great. Good afternoon.

Dave: Thanks for taking the question. Dave, I was wondering if you could just comment on the IL-2 mutine. I know we're going to see some of the data here for SLE towards the end of the year, but it looks like you've started phase II and you're also looking at UC. Maybe broadly on the profile and what you think you need to generate out of phase IIB to have that be a competitive asset. Yeah, thanks, Matt.

Great. Good afternoon. Thanks for taking the question David I was wondering if you could just comment on the IL 2 mutation I know we're going to.

See some of the data here for SLE towards.

The end of the year, but it looks like you started a phase II and Youre also looking at U C. Just maybe broadly on the on the profile and what you think you need to generate at a pace to be to have that be a competitive asset.

Yes, Thanks, Matt.

Dave: And I'm glad you brought up MG592, or IL-2 mutine. Just to remind everyone, this is a molecule designed to enhance the number and function of T-regulatory cells, some of the key modulatory cells in the immune system. In many autoimmune diseases, the T-regulatory axis is out of whack.

Roger brought up AMG 592, our IL 2 mu Tina just to remind everyone. This is a molecule designed to enhance the number.

And function of T regulatory cells, some of the key modular Tory cells and the immune.

System.

The audit many autoimmune diseases are the T regulatory axis is out of whack.

Dave: As you mentioned, we anticipate sharing phase 1B data in lupus at a medical meeting towards the end of the year, and we'll look forward to being able to share those data with you. In addition, a phase 2 trial in lupus is actively enrolling now. And then finally, as you mentioned, Matt, we are launching a study in ulcerative colitis, another autoimmune disorder in which there's quite a bit of evidence of dysregulation of the T-regulatory axis.

As you mentioned, we anticipate sharing phase <unk> data in lupus.

At a medical meeting.

Towards the end of the year.

And we will look forward to being able to share those data.

With you.

In addition, a phase II trial in lupus is actively enrolling now and then finally as you mentioned Matt VR.

Launching a study in ulcerative colitis, another autoimmune disorder in which there is quite a bit of evidence of dysregulation of the T. Reg access. So I think it's really the our phase II readouts here that will be critical as we accrue those data.

Dave: And we're looking forward to sharing that data with you. So I think it's really the phase 2 readouts here that will be critical as we accrue those data. And, as always, we'll look to make sure that we are adding something to what is standardly available.

Always will look to make sure that we are adding something to <unk>.

As standards available in lupus there remains very large residual unmet medical need there was an approval within the last day or 2 of course, but only the second drug in 40 years.

And a very large patient population, they're still requiring active medicines are ulcerative colitis, particularly for long term remission.

<unk> is also an area with substantial unmet medical need. So it's full speed ahead in the IL 2 mutant program and we'll look forward to sharing these data with you.

Geoff Meacham: Your next question is from Geoff Meacham with Bank of America.

Your next question is from Geoff Meacham with Bank of America.

Geoff Meacham: Afternoon, guys. Thanks for the question and happy birthday, Arvind.

Afternoon, guys. Thanks for the question then happy birthday Arvind.

Geoff Meacham: Commercial question on a Tesla for Murdo. So when you look at the growth in the first half of this year, how much of a factor was COVID versus, say, competition or pricing?

Commercial question on hotels for Murdo. So when you look at the growth in the first half of this year.

How much of a factor was COVID-19 versus say competition or pricing.

Geoff Meacham: And do you think any of these headwinds could impact the upcoming launch when you look at the mild to moderate disease patient population? Thank you.

And do you think any of these headwinds could impact the upcoming launch when you look at the mild to moderate disease patient population. Thank you.

Yes, Thanks, Jeff I would say throughout the course of last year, we saw a slowdown in.

The.

Number of bio naive psoriasis patients moving into.

So that that slowdown in the new patient diagnoses last year compounds into our growth rate. This year. The good news on the quarter as we saw new patient trends tick up.

Murdo: The good news for the quarter is that we saw new patient trends tick up. So we did see 10% growth in new patient, new to brand prescriptions in the quarter. However, this was somewhat offset by an increase in the number of patients that switched away from Otezla to another treatment. And we think that that was pent up treatment decision making that didn't happen because patients weren't going to see their dermatologist last year.

So we did see 10% growth in new patient.

Prescribed new to brand prescriptions in the quarter. However, this was somewhat offset by an.

An increase in the number of patients that switched away from Tesla to another treatment and we think that that was pent up treatment decision, making that didn't happen because patients weren't going to see their dermatologist last year.

Murdo: There were some price reductions, mostly related to our copay programs, but that's usually a good indication of new patients starting. So overall, I would say it's primarily COVID impact. With respect to other products coming in, I'm not sure how to answer that. What I can say is we continue to like our share position. Our share has held in the share of bio-naive psoriasis patients.

There were some price reductions mostly related to our co pay programs, but thats, usually a good indication of new patients starting.

So overall I would say, it's primarily COVID-19 impact.

With respect to other products coming in.

Not sure how to answer that what I can say is we continue to like our share position that our share has held in the share of bio naive.

<unk> patients and we continue to feel optimistic about the growth of votes as given the pending indication in mild to moderate patients.

Murdo: And we continue to feel optimistic about the growth of Otezla, given the pending indication in mild to moderate patients, which should come hopefully by the end of this year. Teams continue to execute well. Our field execution, as I mentioned in my opening remarks, is improving. And we're very focused on making sure we continue to grow Otezla over the long haul.

Which should come hopefully by the end of this year.

The teams continue to execute well.

The field execution as I mentioned in my opening remarks is improving and we're very focused on making sure we continue to grow as well over the long haul.

Unknown Attendee: Your next question is from Ronnie Gale with Bernstein.

Great. Thank you next.

Next question is from Ronny Gal with Bernstein.

Unknown Attendee: Good afternoon, and thank you for taking my question. Let's start with the immunology theme. You guys are developing both Stelara and Umair for 2023-2024 as biosimilars. And given you're going to be on both sides of the innovator biosimilar world, I was wondering if you had any thoughts about the long-term trajectory of pricing in the immunology market. That is, without giving specific numbers, do you kind of, should we begin to see something along the lines of what

Good afternoon, and thank you for taking my question, let's start with the immunology theme here.

You guys are developing both still Ara and <unk> for 2023, 2024, as Biosimilars and Kevin you're going to be in both sides of the innovator Biosimilar World. I was wondering if you had a thought about kind of like the long term trajectory.

Pricing in the immunology market.

That is without giving specific numbers kind of shall we.

We began to see something along the lines of what we see with cash.

Bts with an ongoing gradual price decreases so like how do you think about this market longer term.

Murdo: Thanks for the question, Ronnie. I'm hesitant to go out too far.

Greg Murdo, you want to procure underwriting thanks for the question Ronny.

I'm hesitant to go out too far what we are seeing of course in inflammation right. Now is a lot of new entrants a lot of new mechanisms and a lot of competition, which is increasing.

The gross to net debt new entrants have to pay to secure access. We're also seeing increased management by the large national Pbms of.

National Formularies as to which mechanisms get placed in a preferred status versus.

Being held in reserve after patients fail.

Earlier lines of therapy, so if we take rheumatoid arthritis for us.

Murdo: So, if we take rheumatoid arthritis as an example, I do see TNS continuing to entrench themselves in that first line position, and novel mechanisms are likely to be in second and perhaps even third line after patients have failed to have resolution of their RA symptoms or improve the progression of their disease. In the biosimilar dynamics, I think we're seeing an increase in interest from both payers and PBMs and providers given some of the trends that we're seeing with the early biosimilars in the inflammation category, and I do think that interest in biosimilars will increase, and I think that biosimilar penetration of the parent molecule or originator molecule will accelerate with new entrants.

As an example, I do see Tnf's continuing to.

Entrench themselves in that first lien position and novel mechanisms are likely to be in second and perhaps even third line after patients of <unk>.

Failed to have resolution of their IRA.

Ray symptoms or improves their that progression of their disease.

In the Biosimilar dynamics I think we're seeing now the increase in.

Interest from both payers and Pbms and providers given some of the trends that we're seeing with the early biosimilars in the inflammation category and I do think that.

Interest in Biosimilars will increase and I think that biosimilar penetration of parent molecule originator molecule.

Will will.

Accelerate with new entrants. So we're we're expecting that to be the condition on the ground by the time, we launch Amgen Vita in the U S.

Murdo: So we're expecting that to be the condition on the ground by the time we launch Amgivita in the U.S. But overall, I would just come back to the strength that we have as a company given our portfolio of innovator and originator molecules enhanced with the presence of our biosimilar portfolio, and I think that affords us an opportunity to serve many patients across a host of autoimmune diseases as well as serve providers, payers, and PBMs with a lot

But overall I would just I would just come back to the strength that we have as a company.

Serve.

<unk> payers and Pbms with.

Murdo: They have a lot of value to deliver to the health care system.

A lot of value to deliver to the health care system.

Jeffrey Porges: Our next question is from Jeffrey Porges with SBB Laring.

Your next question is from Geoffrey Porges with SBB Leerink.

Jeffrey Porges: Thank you. Thank you very much for taking the question. I'll continue with the biosimilar variants.

Thank you. Thank you very much for taking the question I'll continue with the Biosimilar Brian.

Specifically on to answer them.

Jeffrey Porges: Dhanasana. What are you thinking in terms of the first biosimilar coming in for Dhanasana? Would you expect the erosion trajectory for Brandon, Prolia, and Xchiva to be similar to, for example, in Ulasta or to the erosion of oncology biologics, or would you expect it to be more gradual or faster? Just wondering what you think the trajectory will look like.

What are you thinking in terms of the first biosimilar coming in plus it also net.

Excuse me and then would you expect the erosion trajectory for branded per liter and achieve to be similar to for example in the last several weeks of the erosion of the oncology biologics or would you expect it to be more gradual path.

I'm wondering what you think the trajectory will look like.

Geoffrey Christopher Meacham: Thanks, Geoffrey, for the question. I would say it's, again, hard to project into the future as to how health care systems, payers, and providers will change in their adoption of biosimilars, but I think given that Denosumab is a Part B product, the oncology biosimilar curbs would be a close approximation of what we'd be planning for. Your next question is from Michael Yee with Jeffrey

Thanks, Geoffrey for the question I would say, it's again hard to project into the future as to how health care systems payers and providers will.

And their adoption of Biosimilars, but I think given that denosumab as a part b product the oncology biosimilar curves would be a close approximation of what we are good financial.

Thank you.

Your next question is Robert Michael Yee with Jefferies.

Hi, guys. Thanks for the question.

We had a 2 parter for David.

Michael J. Yee: Your next question is from Michael Yee with Geoffrey Meacham. Hi guys, thanks for the question. We had a two-parter for David on KROG.

K Ras you have upcoming data for Mac, plus or minus Egfr just wanted to understand.

<unk>.

The context for how to interpret that data what is good data and is the goal too.

Michael J. Yee: [inaudible]

Dave: Bansal, Amgen Bansal, Amgen Bansal, Amgen Bansal Yeah, thanks, Mike.

Significantly increase response rate in PFS beyond Noma crashed alone maybe just help us right size how to think about that study and you also announced that you expanded a combination with the Novartis ship too is that just diversifying and spreading it around or how to think about ship too. If you have got a second collaboration there.

Dave: Yeah, thanks, Mike. Let me start with the second part first.

Dave: You know, you're exactly right. That's simply diversifying our experience. We're moving forward, as I noted, with both Revolution Medicines combinations, as well as this new collaboration with Novartis, and we'll look forward to both data sets. In terms of the MEK or EGFR combinations, you know, as I've said before, in terms of response rate, it's going to vary by line of therapy and medication in terms of what sort of increments that you want to see, but generally, you know, 10, Now, in these first cohorts, of course, you know, the critical thing up front is safety and determining appropriate doses and then moving into expansion cohorts for efficacy.

Thank you.

Yes, Thanks, Mike Let me start with the second part first.

In terms of the.

Or egfr combinations as I've said before in terms of response rate, it's going to vary by line of therapy.

And indication in terms of what sort of increment that you want to see but generally 10.20, 30%.

Relative improvement in response rates.

Progression free survival certainly beyond first line is <unk>.

Typically what we would want to see and those are the rough sort of benchmarks that we'll use non these first cohorts of course, the critical thing upfront safety and determining appropriate doses and then moving into expansion cohorts for efficacy. Thanks again.

Thank you.

Your next question is from Alethia young with Cantor Fitzgerald.

Unknown Attendee: Yeah, thanks again. Thank you. Your next question is from Alethea Young with Cantor Fitzgerald. Hey guys, thank you for taking my question and happy birthday to one of the best in the IR game. Here's to you, Arvind.

Hey, guys. Thanks for taking my question and happy birthday to 1 of the best in the IR game here.

[laughter].

I wanted to get a little bit of flavor on that first of all I thought and I know youre seeing very nice volume growth, but like continued kind of.

Pricing pressure, our discounting pressure do you think we're kind of hitting a stabilization point I know you touched on a little bit of sequential deceleration, but if you can give us some flavor on how to think about.

Unknown Attendee: Your next question is from Alethea Young with Cantor Fitzgerald.

That might start to right size and stabilize and see real growth from the volume that you're generating.

Murdo: Yeah, thanks, Alethea. We're quite happy with the performance of Repatha and the ability now to really treat a large number of patients. We've reached a million patients now with Repatha, so quite a milestone. The overall dynamic that is dragging price down is really a US Part D patient dynamic, as patients enter into the coverage gap, or as we sometimes refer to it, the doughnut hole. And as we expand our percentage or share of business in the Part D or Medicare Part D business and segment of the market, we will see some net negative price drag quarter over quarter. Now, it's not going to be as precipitous as the price changes that we've made historically. So our volume is outpacing that, and we will see that drop to the net sales line.

Yes, Thanks, Alicia we're quite happy with the performance of the pathogen ability now to really treat.

A large number of patients we reached 1 million patients now with <unk>, so quite a milestone.

In the part D or Medicare part D business.

Segment of the market, we will see some.

Net negative price drag quarter over quarter.

<unk>.

Not going to be as precipitous as the price changes that we've made historically, so our volumes outpacing that and we will see that drop.

So the net.

Murdo: Yeah, so you know that that part of the mix is helping bolster price evolution over time as well.

Sales line. So overall good evolution. We're also seeing nice growth on <unk> ex U S where prices relatively stable year on year. So.

Geoffrey Christopher Meacham: [inaudible]

That that part of the mix is helping.

Geoffrey Christopher Meacham: Your next question is from Kenan McKay with RBC Capital Markets.

Most of their price evolution over time as well, but some some slight drag will continue but again its a good sign because it means we're expanding that Medicare pool of patients much more rapidly than we did historically.

Geoffrey Christopher Meacham: Thanks for taking the question. Maybe I just would love to get a perspective on which combinations you're most comfortable with.

Great. Thank you.

Your next question is from Kennan Mackay with RBC capital markets.

Hey, Thanks for taking the question, maybe just would love to get a perspective on rich combinations. You are most excited about currently FERC loom across weather.

Geoffrey Christopher Meacham: Srinivas Jain, Anirudh Singh, Anirudh Singh, Anirudh Singh, Anirudh Singh, Anirudh Singh,

It's more in line with previously with the oral and antibody like inhibitors, <unk> inhibitor, maybe or with the Novartis collaboration Doug.

Geoffrey Christopher Meacham: Ramanan Laxminarayanan, Anirudh Singh, Anirudh Singh, Anirudh Singh, Anirudh Singh

The ship to.

The top seat and then just 1 quick question on the Biosimilar pipeline.

Dave: [inaudible] Yeah, maybe I'll start. With the question about combinations, you know, of course, the ones we like the best are the ones that work, you know, and that's what we're testing right now. It would actually, you know, all of these combinations have been selected for one or another reason for both. One, most importantly, biological plausibility. So there is reason to believe in either additive or synergistic effects. And then two, if, Ken, and we haven't announced our timing on ILEA, but we are moving quickly in the enrollment of that program, and we anticipate being early.

Do you see as the earliest that you might be able to launch your bias.

ABP 938, thanks, so much and congrats on the brake there.

Yes, maybe I'll start.

With the question on combinations of course are the ones. We like the best are the ones that work.

What we're.

Testing right now.

All of these combinations have been selected.

Or.

Other reasons for both 1 and most importantly biologic plausibility.

So reason to believe in either.

Additive or synergistic effects.

And then 2 if.

Combining molecules are part of a background regimen.

And so we think we're really covering the waterfront in terms of indications of interest with relevant combinations here and at this point, Kevin I think it's really an empirical matter of generating the data and of course, we will share that as we've outlined.

Kevin we haven't had that.

Dave: I anticipate being early in the sequence of launches for that product.

Our interest our timing on Eylea, but we are moving quickly in the enrollment of that program and we anticipate being.

Carter Gould: Your next question is from Carter Gould with Barclays.

Early in the sequence of launches for that product.

Carter Gould: Thank you. Good afternoon. I'll pass on my happy birthday wishes to Arvind, too.

Fair enough. Thanks, Murdo. Thank you very much.

Our next question is from Carter Gould with Barclays.

Good afternoon, and I'll pass on my happy birthday wishes to Arvind to I wanted to ask on your Ox 40 program I know that's moving into phase III next year just wanted to see.

Any further color on the population of our dosing youre looking to move forward with net phase III, if the lingering uncertainty over the Jackson in any way changed or evolved.

Your underlying assumptions around that market would be helpful. Thank you.

Yes, Thanks Carter.

We're very enthusiastic about this molecule.

Topic dermatitis disease widespread prevalence actually global populations.

Despite existing therapies, we think there is a very large amount of residual unmet medical need patients often cycle through therapies, given the novel mechanism of action Youre targeting the ox 40 pathway. We think there is.

Quite a big opportunity to have a real impact in this field as I mentioned, we'll be presenting the phase II data at the end of September at 1 of the major European Dermatology meetings, and I think there you'll get a sense of our thoughts on dosing.

What things May look like going forward and of course as we have discussions with regulators will outline our plans on the phase III program, which will in all likelihood be a suite of studies, let me ask murdo to comment a little further here.

Yes, Carter, we obviously.

Obviously pay close attention to the JAK safety concerns as raised on the Xeljanz data.

And applied some reduction in Jack penetration assumptions to the ADC market. When we were evaluating the attractiveness of the Alex <unk> asset and I think that.

That was 1 of the drivers here David.

The biologics still have a large role to play.

Think initially the.

Ox 40 asset will.

Murdo: Your next question is from Cora Kasimov with JP Morgan.

Your next question is from Macquarie <unk> with J P. Morgan.

Hey, good afternoon, guys. Thanks for taking my question, most importantly, happy birthday to Arvind.

Wanted to go back to the line of questioning around the <unk> combination work and ask specifically about what youre doing with PD ones. At this point when you expect to have an update there.

Unknown Executive: [inaudible] Yeah, thanks, Corey.

Is it really still just about trying to figure out the dosing currently before you move forward. Thank you.

Yes, Thanks Cory.

As we've discussed before we're looking at.

Direct combinations and sequential therapy here.

We continue to actively work on these development programs.

Okay. Thank you David.

Your next question is from Chris Raymond with Piper Sandler.

Hi, This is Eric rats on for Chris. This afternoon. Thanks for taking our question just on IBD, you've had a lot of activity in the oncology and inflammation space.

Robert A. Bradway: Hi, this is Allie Bradshawn on behalf of Chris this afternoon. Thanks for taking our question. Just on BD, you've had a lot of activity in the oncology and inflammation space. Can you give any color on how you're prioritizing other areas of interest on the development side versus opportunities to bolster some of your more legacy commercial franchises like Renal? And then maybe more specifically on Renal, how are you thinking about your longer-term strategy or prioritization for investing in the franchise, be it through internal or external innovation? Thanks.

Just any color on how youre prioritizing other areas of interest on the development side versus the opportunities to bolster some of your more legacy commercial franchises like renal and then maybe more specifically on renal how are you thinking about your all your longer term strategy, our prioritization for investing in the franchise yet 2 inch.

And all our external innovation.

So Ali.

To repeat what I've said, many times before which is that our business development efforts are focused in.

The areas, where we have ongoing.

<unk> research presence.

Dave: Yeah, Ali, I'll just repeat what I've said many times before, which is that our business development efforts are focused.

And our commercial presence so.

Dave: Sorry, just quickly, I don't think I addressed your nephrology question. We don't have as much active research in nephrology and bone at the moment. And because we haven't seen internally opportunities to advance...

Or the migraine area, where we'll look there as well so.

We have active efforts underway and we look.

Cross the marketplace actively.

Focus on how we can earn a return from our shareholder for our shareholders from from the assets that we might license or acquire.

Alright.

Sorry, just quickly I don't think I adjust your nephrology question, we don't have as much active research in nephrology and bone at the moment.

And because we haven't seen.

Internally opportunities to advance novel therapies, there we think.

The medicines, we have are addressing.

The the needs in the marketplace very effectively but not to the extent that there are things outside of of Amgen that fit well with our 30 years of leadership for example, nephrology or with our.

Dave: [inaudible]

Dane Vincent Leone: Your next question is from Dane Leone with Raymond James.

Our global leadership in bone, we pay close attention to that as well.

Your next question is from Dane Leone with Raymond James.

Dane Vincent Leone: Hi, thank you for taking the questions and my congratulations to Arvind. I hope you have a fun birthday tonight after the call.

Hi, Thank you for taking our questions.

My congratulations too.

Arvind Hope you have a fund birthday Tonight after the call. So I'll keep it brief.

Dane Vincent Leone: So I'll keep it brief. My question is about Tarlatamap. Question for me here is what you guys need to see as you plan for this phase two study. Obviously, initial data seemed encouraging from the first 52 patients you had earlier this year, but where do you want to think about positioning this drug in the different lines of small cell lung cancer now? And what have you maybe seen as the dose escalation studies progressed since maybe we've seen the last data update that has you thinking about a pivotal study now? Thank you. Yeah, thanks, Dane.

My question voluntarily item.

Question for me here is what you guys.

Thank you need to see as you're planning for this phase III study, obviously initial data seemed encouraging from the first 52 patients who had earlier this year.

But where do you want to think about positioning.

This drug in the different lines of small cell lung cancer now.

And what are you may be seen as the dose escalation studies progressed since maybe we've seen the last data update.

How you're thinking about a pivotal study now thank you.

Yeah. Thanks Dane.

Dave: Yeah, thanks, Dane. You know, I think, you know, to take the last part of your question Bansal.

Think.

To take the last part of your question first what we've seen our ongoing response rate consistent.

Dave: So we've seen our ongoing response rate consistent with the data that you saw from the later cohorts that we presented a month or two ago, and in addition, we've actually been impressed with the duration of response. Most of these patients are third-line plus, which, as you know, is a very aggressive disease in small cell lung cancer, and, you know, durable responses here are vanishingly rare. So that, I think, is, in addition, what really gives us encouragement here.

Response rates consistent with the data that you saw from the later cohorts that represented a month or 2 ago.

And in addition, we've actually been impressed with duration of response most of these patients are.

Third line.

<unk>, which as you know is a very aggressive disease in small cell lung cancer.

<unk>.

Durable responses here are vanishingly rare so that I think is in addition, what really gives us encouragement here.

Dave: You know, as we discuss potential registrational paths with the FDA in the coming weeks, I think we'll focus on the patient population, but I think, you know, the initial foray is likely to be those later lines of therapy. We are moving forward in our development program now and are actively investigating earlier lines of therapy as well. That is clearly the endgame that we're aiming for with Tarlatumab, you know, given the sort of activity that we're seeing in the clinic right now.

As we discussed a potential registrational path.

With the FDA in the coming weeks I think we will focus on the patient population, but I think the initial foray is likely to be those later lines of therapy. We are moving forward in our development programme now and are actively investigating earlier lines of therapy as well that is clearly there.

And game that we're pointing for.

With <unk>.

Given this sort of activity that we're seeing in the clinic right now.

Michael Smith: Oh, hey guys, I have one more on LumaCrest. Thanks for taking my question and Arvind, and congratulations on my behalf as well.

Thank you our next.

Your next question is from Michael Schmidt with Guggenheim.

Yes.

Hey, guys I have 1 more on <unk>. Thanks for taking my question and then congrats from me as well.

Yes.

Should should hypothetically should be efficacy safety profile of the alumina Kras PD 1 inhibitor combinations.

Michael Smith: So I guess it should should should, hypothetically, should

Turn out to be insufficient, which I guess could be possible what are the likely avenues to possibly enable access to a broad first line non small cell lung cancer indication should we think about potential chemo combinations or are there others that are logical I'll come to mind. Thanks, so much.

Michael Smith: , , , , , , , , , , , , , ,

Michael Smith: Should you think about a potential chemo combination, or are there...

Dave: or Are there others that come to mind? Thanks.

Erica: Yeah, thanks, Michael. You know, I think you're exactly right. You know, it would be chemotherapy combinations, number one, and then going into biomarker-selected populations, as we've discussed in terms of our planned upcoming first-line study, which we'll be launching shortly. And so, should checkpoint inhibitor combinations not be feasible, I would expect that we would piece together other routes to first-line treatment to find patients who are most likely to benefit. Great, thanks so much. Eric, as we're pushing up against the top of the hour, why don't we take our final two questions?

Yes, Thanks, Michael I think Youre exactly right.

Would be chemotherapy combinations number 1 and then.

Going into biomarker selected populations as we've discussed in terms of our planned upcoming first line study.

Which will be launched shortly and so.

Good checkpoint inhibitor combinations not be feasible I would expect that we would piece together other routes to first line to find patients who are most likely to benefit.

Great. Thanks.

Eric we're pushing up against the top of the <unk> why don't we take our final 2 questions.

Your next question is from Brian <unk> with Baird.

Hey, good afternoon, everyone. Thanks for taking my question.

Christopher Thomas Schott: Okay, your next question is from Brian Scorney with Baird.

Happy birthday Arvind.

Digging a little more on the disclosed notice a deficiency that I think last year. You also received NRA RF modified RNA are related to 2013 through 2015 under off under investigation.

Christopher Thomas Schott: Hey, good afternoon everyone. Thanks for taking the question and happy birthday, Arvind. Digging a little more on the Disclosed Notice of Deficiency today, I think last year you also received an R.A.R. and modified R.A.R. related to 2013 through 2015 and are also under investigation for 2016 through 2015.

For 2016 through 2018 by the IRR. So it just seems like there is all related to issues around profit allocation on Puerto Rico. So I was wondering if you could just kind of like.

Walk through the next steps in terms of the tax Court protection.

Kevin kind of a petition to be heard in tax court fail.

If it does go to court.

Christopher Thomas Schott: 2018 by the IRS. It just seems like there are all related issues around profit allocation.

The decision goes against you or does that sort of establish precedent for the other years as well and based on the IRS calculation methodology for 2010 for 2012 have you run that same calculation to establish what an upper bound of liability for 2013 for now.

Christopher Thomas Schott: [inaudible]

Peter: Ryan, thanks for the question. Look, we filed a petition with the U.S. Tax Court. In this case, it could take several years to resolve. The IRS is also proposing significant changes...

Yes, Brian.

Look we filed a petition with the U S tax court in this case could take several years to resolve.

Peter: Bansal, Yaron Werber, David Reese, Arvind Sood, Yaron Werber, David Reese, Amgen Bansal

Peter: Disagree, strongly disagree.

Peter: We're pursuing resolution with the IRS Administrative Appeals Office on that. The IRS, as you noticed, is currently auditing years 2016 through 2018. So yes, we're sure they'll take the same position for the other periods under audit. We believe that we have adequate reserves for that.

<unk>. So yes, we are sure they will take the same position for the other periods under audit, we believe that we have adequate reserves for that.

Peter: Let's go to the final question.

Operator: Operator, your final question is from Kim Anderson with Hey, this is Andrew Geller on for 10.

Great. Thank you.

The final question.

Your final question is from Tim Anderson with Wolfe Research.

Timothy Minton Anderson: Hey, this is Andrew Galler on for Tim. I just wanted to ask one question about Tassie.

Hi, This is Andrew Geller on per Tim I, just wanted to ask 1 question on <unk>. So given your partner Astrazeneca officially discontinued atopic dermatitis last week can you give us more of any impact on your competitive positioning.

Unknown Attendee: So given your partner AstraZeneca officially discontinued atopic dermatitis last week, do you think this will have any impact on your competitive positioning, especially in eosinophilic asthma compared to DUPI, given the high coincidence of these atopic conditions? Yeah, I mean, I think the short answer there is no, and we remain extremely bullish about tezapelumab, given its activity across a range As we mentioned, we were granted priority review by the FDA, clearly an acknowledgment of the potential fit of this medicine with a large residual unmet medical need. So, you know, that doesn't really give us pause at all.

So like asthma dupee, given the high coincidence of these atopic conditions.

Yes, I mean, I think the short answer there is no and we remain extremely bullish about <unk> given its activity across a range of patients with asthma, regardless of <unk>.

The film Count.

As we mentioned we were granted priority review by the FDA clearly an acknowledgment of the potential fit of this medicine with a large residual unmet medical need so that.

That doesn't give us pause at all Tim.

Bob Bradway: Okay, Erica, well, let me just thank our callers for joining the call today. We're excited about the second half of the year. There is a lot going on here. And so we look forward to having the opportunity to gather with you in October and update you on the next quarter and appreciate your interest in Amgen. Thank you.

Okay, Eric Let me just thank our callers for joining the call today, we're excited about the second half of the year a lot going on here and so we look forward to having the opportunity to gather with you in October and update you on the next quarter.

I appreciate your interest in Amgen. Thank you.

Conference Facilitator: And this concludes Amgen's second quarter 2021 financial results conference call. You may now disconnect.

Thanks, everybody.

And this concludes Amgen the second quarter 2021 of financial results Conference call you may now disconnect.

Q2 2021 Amgen Inc Earnings Call

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