Q1 2022 Amgen Inc Earnings Call

Marsh, Nigeria Moore.

Thank you all for attending Radio Free International's Center on Radiation Direction.

In oncology in General Medicine.

<unk> to invest in our innovative marketed brands and Biosimilars.

Again, thank you and good night.

Since our business review, we've had important data readouts for Luma Kras for Panther and AVP, six 504, which is our phase III Biosimilar candidate to Lora.

Thank you all.

And please be safe out there and in this world.

We have several more data milestones that come through the remainder of the year.

Looking to the longer term, we continue to thoughtfully invest in an integrated set of discovery research capabilities, including human data and generative biology, as we look to significantly expand the number of targets we can pursue, reduce cycle times, and increase the probability of our success.

Looking to the longer term, we continue to thoughtfully invest in an integrated set of discovery research capabilities, including human data and generative biology, as we look to significantly expand the number of targets, we can pursue reduce cycle times and increase the probability of our success.

As to our commitment to innovation, we are committed to pursuing the best innovation available whether it comes through our own efforts or is sourced externally and our strong balance sheet and cash flows will enable us to continue to invest in innovation and both organically and through business development.

As to our commitment to innovation, we're committed to pursuing the best innovation available, whether it comes through our own efforts or is sourced externally, and our strong balance sheet and cash flows will enable us to continue to invest in innovation, again,

both organically and through business development.

Our work to serve patients comes at a time when society is confronting many challenges.

Our work to serve patients comes at a time when societies confronting many challenges and we're doing our part to address these as we have throughout our history with a focus on four areas removing barriers that limit limit equitable access to health care working toward a more just society minimizing our environmental impact and ensuring that our.

We're doing our part to address these, as we have throughout our history, with a focus, in four areas. Removing barriers that limit equitable access to health care, working toward a more just, society, minimizing our environmental impact, and ensuring that our actions and culture reflect Amgen values.

And culture reflect amgen values, if you're interested in learning more our latest environmental social and governance report was published earlier today and is available on our website.

If you're interested in learning more, our latest environmental, social, and governance

report was published earlier today and is available on our website.

Before I turn to Peter, let me just thank my Amgen colleagues around the world for their

Before I turn to Peter Let me just thank my Amgen colleagues around the world.

commitment to serving patients and outstanding execution.

Their commitment to serving patients and to outstanding execution, our Peter over to you.

Now, Peter, over to you.

Thank you Bob we are pleased with our execution in growth this quarter as we drive towards our long term goal.

Thank you, Bob.

We're pleased with our execution and growth this quarter as we drive towards our long-term goal.

I will walk through our first quarter financial results before discussing our 2022 guidance. The financial results are shown on slide five of the slide deck. The first quarter marked another period of solid execution with year-over-year revenue, growth of 6% and non-GAAP EPS growth of 15%. For product sales, strong volume growth of 9% was driven by Repatha, Prolia, and Aveni. Volume growth was partially offset by declines in net selling price and foreign exchange, headwinds.

I will walk through our first quarter financial results before discussing our 2022 guidance.

Actual results are shown on slide five of the slide deck.

The first quarter marked another period of solid execution with year over year revenue growth of 6% and non-GAAP EPS growth of 15% for.

For product sales strong volume growth of 9% was driven by your path of Prolia and events.

Volume growth was partially offset by declines in net selling prices and foreign exchange headwinds.

Our established portfolio, comprised of Epogen, Aranes, Elastin, Epogen, Sensopar, and Parsaville, generated almost $1 billion of product sales and continues to deliver strong cash flows.

Our established portfolio comprised of EOG Aeronef Neulasta neupogen since acquiring <unk>.

Generated almost $1 billion of product sales and continues to deliver strong cash flows.

Transitioning to our Biosimilars Amgen for Ya remains the most prescribed adalimumab biosimilar in Europe , and looking forward, we will leverage the successful experience as we prepare to launch and grow this product in the United States in January 2023.

Transitioning to our biosimilars, Amgevita remains the most prescribed adalimumab biosimilar, in Europe, and looking forward, we will leverage this successful experience as we prepare to launch and grow this product in the United States in January of 2023.

For Ambasi and Tangente, as anticipated, we experienced year-over-year declines driven

For <unk> as anticipated, we experienced a year over year declines driven by net selling price reductions and.

by net selling price reductions, and we expect this trend to continue for these products.

And we expect this trend to continue for these products.

Myrto will discuss product sales in more detail in his remarks.

Peter will discuss product sales in more detail in his remarks.

Other revenues of $500 million increased 64% year-over-year, primarily driven by our COVID-19, antibody collaboration.

Other revenues of $500 million.

Increased 64% year over year, primarily driven by our COVID-19 antibody collaboration.

First quarter, total non-GAAP operating expenses increased 2% year-over-year as we invest in, On a non-GAAP basis, cost of sales as a percent of product sales increased 1.1 percentage points on a year-over-year basis to 16.6 percent, primarily due to higher direct manufacturing costs, COVID-19 antibody manufacturing costs, and increased royalties and profit shares.

<unk> first quarter total non-GAAP operating expenses increased 2% year over year as we invest in our pipeline execute product launches and drive digitalization across the company.

On a non-GAAP basis cost of sales as a percent of product sales increased one one percentage points.

On a year over year basis to 16, 6%.

Primarily due to higher direct manufacturing cost.

Over 19 antibody manufacturing costs and increased royalties and profit shares.

non-GAAP R&D spend in the quarter decreased 1% year over year.

Non-GAAP R&D spend in the quarter decreased 1 percent year-over-year. Recall that Q1 2021 included $53 million related to our acquisition of Rodeo Therapeutics. Excluding the 53 million for Rodeo in 2021, non-GAAP R&D increased 5 percent year-over-year.

Recall that Q1 2021 included $53 million related to our acquisition of radio therapeutics exclude.

Excluding the $53 million for radio in 2021, non-GAAP R&D increased 5% year over year.

Non-GAAP SG&A expenses in the first quarter declined 1 percent year-over-year.

non-GAAP SG&A expenses in the first quarter declined 1% year over year.

We continue to focus on prioritizing key investments and activities and driving productivity.

We continue to focus on prioritizing key investments and activities and driving productivity.

non-GAAP other income and expenses were a net $413 million expense in Q1.

Non-GAAP other income and expenses were a net $413 million expense in Q1. This line item is driven by interest expense, and our share of Beijing results is the result, of our use of the equity method of accounting.

This line item is driven by interest expense and our share of Beijing results as a result of our use of the equity method of accounting.

We have a strong balance sheet generates significant cash flow and.

We have a strong balance sheet, generate significant cash flow, and retain excellent financial, flexibility to evaluate strategic business development opportunities.

And retain excellent financial flexibility to evaluate strategic business development opportunities.

We continue to execute on our capital allocation priorities.

We continue to execute on our capital allocation priorities. First, investing in the best innovation, internal and external. Second, investing in our business through capital expenditures, including for our new, environmentally friendly facilities under construction in Ohio and North Carolina.

First investing in the best innovation internal and external.

Second investing in our business through capital expenditures, including for our new environmentally friendly facilities under construction in Ohio, and North Carolina.

And third, returning capital to shareholders through growing dividends, including $1.94, per share in the quarter, representing a 10 percent increase from Q4 2021. And fourth, opportunistic share repurchases, including 24.6 million shares of common stock, in the first quarter, which included 23.3 million initial shares received and retired under the accelerated stock buyback agreement.

And third returning capital to shareholders through growing dividend.

Including $1 94 per share in the quarter, representing a 10% increase from Q4 2021.

And for opportunistic share repurchases, including $24 6 million shares of common stock in the first quarter, which.

Which included $23 3 million initial shares received and retired under the accelerated stock buyback agreement.

Turning to the outlook for the business for 2022, we're pleased with our growth to date, in 2022, and we're tracking to our 2022 plan. Accordingly, we're reaffirming our 2022 guidance with a revenue range of $25.4 billion to $26.5, billion, and a non-GAAP EPS range of $17 to $18.

Yeah.

Turning to the outlook for the business for 2022.

We're pleased with our growth to date in 2022, and we're tracking to our 2020 to plan. Accordingly, we are reaffirming our 2022 guidance with a revenue range of $25 4 billion to $26 5 billion.

And our non-GAAP EPS range of $17 to $18.

This non-GAAP EPS guidance does not include upfront expenses that may occur from certain types of transactions in the future.

This non-GAAP EPS guidance does not include up-front expenses that may occur from certain, types of transactions in the future. Similar to our peers, we have updated our non-GAAP policy to no longer exclude such, expenses from our non-GAAP results in accordance with guidance recently issued by the SEC. For reference, the only impact as we recast 2021 to incorporate this change is that our, non-GAAP operating expenses will now include two items that were previously excluded in, 2021.

Similar to our peers, we have updated our non-GAAP policy to no longer exclude such expenses from our non-GAAP results in accordance with guidance recently issued by the SEC.

For reference the only impact as we recast 2021 to incorporate this change is that our non-GAAP operating expenses will now include two items that were previously excluded in 2021 first $1 5 billion recorded in acquired in process R&D associated with the five Prime acquisition in Q2 2012.

First, $1.5 billion recorded in acquired in-process R&D associated with the five-prime acquisition, in Q2 2021, and second, $400 million recorded in research and development related to an up-front payment to license rights to AMG 451 from Kiewit-Kirin Corporation in Q3 2021.

One and second $400 million recorded in research and development related to an upfront payment to license rights to AMG $4 51 from Kyowa Kirin Corporation in Q3 2021.

Yes.

Important additional points to consider for the remainder of 2022.

Important additional points to consider for the remainder of 2022, foreign exchange had, an adverse impact on our Q1 2022 sales, and based on current rates, it is expected to We note that while the results of our hedging program are reported in product sales, our, hedging program is designed to partially mitigate the foreign exchange impact on our net income over the full year.

Foreign exchange had an adverse impact on our Q1 2022 sales and based on current rates. It is expected to create headwinds to our reported product sales of approximately $400 million year over year and.

And has been included in our guidance.

Note that while the results of our hedging program our reported in product sales. Our hedging program is designed to partially mitigate the foreign exchange impact on our net income over the full year.

In total, our 2022 non-GAAP EPS guidance includes a negative impact from foreign exchange of, approximately 2% or approximately $0.35.

In total our 2022 non-GAAP EPS guidance includes the negative impact from foreign exchange of approximately 2%.

Or approximately 35.

We continue to expect other revenue for 2022 to be in the range of $1 4 billion to $1 7 billion Q.

We continue to expect other revenue for 2022 to be in the range of $1.4 billion to $1.7, billion. Q1 included a majority of our full year's projected revenue from our COVID collaboration. And recall that these revenues in 2021 were recognized across Q2 to Q4. Our COVID collaboration revenue outlook depends on the state of the pandemic and continued, government support.

Q1 included a majority of our full year's projected revenue from our Covid collaboration and recall that these revenues in 2021 were recognized across Q2 to Q4.

Our COVID-19 collaboration revenue outlook depends on the state of the pandemic and continued government support.

Our expectations for total non-GAAP operating expenses for 2022 are unchanged from the last time, we spoke.

Our expectations for total non-GAAP operating expenses for 2022 are unchanged from the last, time we spoke. However, when comparing against our recast 2021 results, total non-GAAP operating expenses, will now reflect a low double-digit decrease year over year.

However, when comparing against a recast 2021 results.

Total non-GAAP operating expenses will now reflect a low double digit decrease year over year.

We continue to expect 2022 operating margin as a percentage of product sales to be roughly, 50%. We continue to expect cost of sales as a percent of product sales to be 15.5 to 16.5%.

We continue to expect 2022 operating margin as a percentage of product sales to be roughly 50%.

We continue to expect cost of sales as a percent of product sales to be 15, 5% to 65%.

Our expectations for non-GAAP R&D expenses in 2022 remain unchanged. Based on our recast 2021 results in response to the SEC guidance mentioned above, which, increased non-GAAP R&D expense in 2021 by $400 million, our expected 2022 non-GAAP R&D expense now equates to a decrease of 4 to 6% year over year.

Our expectations for non-GAAP R&D expenses in 2022 remain unchanged.

Based on our recast 2021 results in response to the SEC guidance mentioned above.

Which increased non-GAAP R&D expense in 2021 by $400 million.

Our expected 2022, non-GAAP R&D expense now equates to a decrease of 46% year over year.

We continue to expect SG&A spend to be flat year over year as a percentage of product, sales.

We continue to expect SG&A spend to be flat year over year as a percentage of product sales.

And we now expect other income and expenses to be in the range of $1 6 billion to $1 8 billion.

And we now expect other income and expenses to be in the range of $1.6 billion to $1.8, billion, reflecting increasing interest rates and our share of Beijing's results. This is a change from our previous range of $1.4 billion to $1.6 billion. And for the full year, we anticipate a non-GAAP tax rate range of 13.5 to 14.5% from our prior, guidance of 13 to 14%.

Reflecting increasing interest rates.

And our share of <unk> results.

This is a change from our previous range of $1 4 billion to $1 6 billion.

And for the full year, we anticipate a non-GAAP tax rate range of 13, five to 14, 5%.

Up from our prior guidance of 13% to 14%.

You've had an opportunity to read the update to our litigation and dispute with the IRS over the proposed adjustments for the period from 2010 to 2015 included in the press release.

You've had an opportunity to read the update to our litigation and dispute with the IRS, over the proposed adjustments for the period from 2010 to 2015 included in the press release. We firmly believe that the adjustments proposed by the IRS for that time period and the penalties, proposed by the IRS for the 2013 to 2015 period are without merit.

We firmly believe that the adjustments proposed by the IRS for that time period and the penalties proposed by the IRS for the 2013 to 2015 period are without merit.

Further, the amount of the adjustments proposed by the IRS for 2010 to 2015 period overstates, by billions of dollars the magnitude of the dispute.

Further the amount of the adjustments proposed by the IRS for 2010 to 2015 period overstates by billions of dollars of the magnitude of the dispute with.

We filed a petition in the U.S. Tax Court in July 2021 to contest the adjustments previously, proposed for the 2010 to 2012 period.

We filed a petition in the U S tax court in July 2021 to contest the adjustments previously proposed for the 2010 to 2012 period.

And we plan to file another petition in the U.S. Tax Court to contest the adjustments, proposed in the notice for the 2013 to 2015 period.

And we plan to file another petition in the U S tax court to contest the adjustments proposed in the notice for 2013 to 2015 period.

The dispute is expected to take several years to resolve.

The dispute is expected to take several years to resolve.

Amgen believes the IRS assertion of approximately $2 billion in penalties for the 2013 to 2015 period is wholly unwarranted.

Amgen believes the IRS assertion, of approximately $2 billion in penalties for the 2013 to 2015 period is wholly unwarranted.

We've applied a consistent transfer pricing methodology since 2002. We've documented that, transfer pricing methodology is required under relevant tax regulations and have extensively discussed that methodology with the IRS across multiple tax audits over multiple tax years.

We have applied a consistent transfer pricing methodologies since 2002.

We've documented that transfer pricing methodology as required under relevant tax regulations and have extensively discussed that methodology with the IRS across multiple tax audits over multiple tax years.

The IRS has never previously proposed transfer pricing penalties.

The IRS has never previously proposed transfer pricing penalties.

Amgen also belief based upon the position advanced by the IRS that the IRS adjustments for the 2010 to 2015 period are overstated by approximately $2 billion due to the IRS failure to account for certain income and expenses.

Amgen also believes, based, upon the position advanced by the IRS, that the IRS adjustments for the 2010 to 2015 period are overstated by approximately $2 billion due to the IRS failure to account for certain income and expenses.

Amgen has reported its income and expenses in a consistent manner for many years, and the IRS has appropriately accounted for the company's income and expenses in all prior audits.

Amgen has reported its income and expenses in a consistent manner for many years and the IRS has appropriately accounted for the company's income and expenses and all prior audits.

Any additional tax that could be imposed for the 2010 to 2015 period would be reduced by up to approximately $3.1 billion of repatriation tax previously accrued with respect to the company's Puerto Rico earnings.

Any additional tax that could be imposed for the 2010 to 2015 period would be reduced by up to approximately $3 $1 billion of repatriation tax previously accrued with respect to the company's Puerto Rico earnings.

Amgen previously made advanced tax deposits to the IRS totaling $1.1 billion for the 2010 to 2015 period. These deposits would further reduce any additional cash tax that could be imposed. The IRS is currently auditing the 2016 to 2018 period. We expect the audit to continue for several years, and it is possible that the 2010 to 2015 dispute will be resolved before the conclusion of the 2016 to 2018 audit and administrative appeals process.

Amgen previously made advanced tax deposits to the IRS totaling $1 $1 billion for the 2010 to 2015 period.

These deposits with further reduce any additional tax.

Cash tax that could be imposed.

The Irs's currently auditing the 2016 to 2018 period, we expect the audit to continue for several years and it is possible that the 2010 to 2015 dispute will be resolved before the conclusion of the 2016 to 2018 audit and.

<unk> appeals process.

Any transfer pricing adjustments the IRS may proposed for this period will be lessened by the change in tax rates, resulting from the 2017 tax reform law.

Any transfer pricing adjustments the IRS may propose for this period will be lessened by the change in tax rates resulting from the 2017 tax reform law, which reduces the difference between the tax rates applicable in the U.S. and Puerto Rico by approximately two-thirds beginning in 2018.

Which reduce the difference between the tax rates applicable in the U S and Puerto Rico by approximately two thirds beginning in 2018.

We are highly confident in our positions in the litigation and dispute.

We are highly confident in our positions in the litigation and dispute.

We are grateful to all of our highly skilled colleagues in Puerto Rico, and they are important and ongoing contributions to amgen's mission of serving patients.

We are grateful to all of our highly skilled colleagues in Puerto Rico and their important and ongoing contributions to Amgen's mission of serving patients.

And now back to the mission of serving every patient every time.

And now back to the mission of serving every patient every time.

Our confidence in the long-term growth of Amgen remains strong given the strength of the business and our outstanding and dedicated team of 24,000 colleagues that deliver every day for patients.

Our confidence in the long term growth of Amgen remains strong given the strength of the business and our outstanding and dedicated team of 24000 colleagues that deliver everyday for patients.

This concludes the financial update.

This concludes the financial update.

I'll now turn it over to Murdo.

I'll now turn it over to Merto.

Thanks, Peter first quarter product sales increased 2% year over year, we continue to progress our volume driven growth strategy, which led to a 9% volume increase globally in Q1, we.

Thanks, Peter.

First quarter product sales increased 2% year-over-year. We continued to progress our volume-driven growth strategy, which led to a 9% volume increase globally in Q1. We delivered record quarterly sales for Repatha, Evenity, and Blancito, and double-digit volume growth for several additional products, including Prolia, Kyprolis, and Amgevita.

We delivered record quarterly sales for <unk>, <unk> and billing cycle.

And double digit volume growth for several additional products, including Prolia Kyprolis and <unk> Vita.

In the first two months of the year, COVID-19 affected our business in the US and around the, world as the Omicron variant led to diminished capacity in the healthcare sector and reduced working days for our own sales forces. In March and continuing into April, the impact of Omicron in the US receded, which allowed us to engage in increased face-to-face customer interactions. Provider and patient activity have also increased, leading to improvements in demand for our, products.

In the first two months of the year COVID-19 affected our business in the U S and around the world as the Omicron variant led to diminished capacity in the health care sector and reduced working days for our own sales forces.

In March and continuing into April the impact of <unk> in the U S receded, which allowed us to engage in increased face to face customer interactions.

Provider and patient activity also increased leading to improvements in demand for our products.

Now, let me review some product details, beginning with our general medicine portfolio, which includes Prolia, Avenity, Repatha, and Aimavic. Overall revenue for our general medicine portfolio grew 19% year over year, with 23% volume growth. In bone health, Prolia sales grew 12% year over year. Volumes grew 10%, fueled by an increase in both new and repeat patients.

Now, let me review some product details beginning with our general medicine portfolio, which includes Prolia <unk> <unk> and <unk> overall revenue for our general medicine portfolio grew 19% year over year with 23% volume growth.

In bone health Prolia sales grew 12% year over year volumes grew 10% fueled by an increase in both new and repeat patients.

Avenity, which complements Prolia in our bone portfolio, had record sales of $170 million, for the quarter, driven by strong volume growth across our markets.

Entity, which complements prolia and our loan portfolio had record sales of $117 million for the quarter driven by strong volume growth across our markets.

Moving to <unk>, the global leader in the <unk> nine class robotic sales increased 15% year over year, driven by 49% volume growth and in the U S. We saw 41% volume growth.

Moving to Repatha, the global leader in the PCSK9 class, Repatha sales increased 15% year over year, driven by 49% volume growth. And in the US, we saw 41% volume growth.

Net selling prices declined as we offered higher, rebates to support broad Medicare Part D and commercial patient access.

Net selling prices declined as we offered higher rebase to support broad Medicare part D and commercial patient access.

Outside the US, sales grew 12%, with strong volume growth coming from the inclusion of Repatha on China's national reimbursement drug list beginning January 1st. We remain focused on increasing Repatha market penetration globally to address the significant unmet medical need in treating high-risk cardiovascular patients.

Outside the U S sales grew 12% with strong volume growth coming from the inclusion of <unk> on China's national reimbursement drug list beginning January one.

We remain focused on increasing our market penetration globally to address the significant unmet medical need in treating high risk cardiovascular patients.

Moving to our inflammation portfolio, Otezla delivered 7% year over year volume growth in the first quarter. In the US, we saw strengthening of the market, with Otezla remaining the market leader, achieving a 30% share of patients who are new to systemic agents for psoriasis.

Moving to our inflammation portfolio, Oh, Tesla delivered 7% year over year volume growth in the first quarter in the U S. We saw a strengthening of the market without Tesla remaining the market leader, achieving a 30% share of patients who are new to systemic agents for psoriasis.

Otezla's recently expanded label has been well received by payers, providers, and patients.

<unk> recently expanded label has been well received by payers providers and patients. We're seeing early signs of physicians using more systemic treatments for mild psoriasis patients.

We're seeing early signs of physicians using more systemic treatments for mild psoriasis patients. And a majority of dermatologists anticipate increasing the use of Otezla for mild psoriasis.

And the majority of dermatologists anticipate increasing the use of <unk> for mild psoriasis glue.

Globally, Otezla sales decreased 5% year over year, due to net price, declines and lower inventory levels in the US across wholesale and specialty pharmaceutical channels. Otezla net price declines in the US were driven primarily by enhancements to our co-pay and bridge programs to support new patients starting treatment.

Global <unk> sales decreased 5% year over year due to net price declines and lower inventory levels in the U S across wholesale and specialty pharmaceutical channels.

<unk> net price declines in the U S were driven primarily by enhancements to our co pay enbridge programs to support new patients starting treatment.

Looking forward, we expect lower year on year price erosion.

Looking forward, we expect lower year-on-year price erosion for the remaining quarters of 2022.

Meaning quarters of 2022, we also expect continued volume growth driven by broader adoption of <unk>, given our unique broad indication regardless of the severity of psoriasis.

We also expect continued volume growth, driven by broader adoption of Otezla, given our unique broad indication, regardless of the severity of psoriasis.

Enbrel sales decreased 7% year over year for the first quarter driven by declines in net selling price and inventory levels year over year volume remained flat in the first quarter supported by Ambrose long track record of efficacy and safety.

Enbrel sales decreased 7% year over year for the first quarter, driven by declines in net selling price and inventory levels.

Year over year, volume remained flat in the first quarter, supported by Enbrel's long track record of efficacy and safety.

Our launch of TezPyre is off to a strong start, with $7 million in sales in the first quarter. Initial feedback from payers, providers and patients is very positive.

Our launch of test buyers off to a strong start was $7 million in sales in the first quarter.

Initial feedback from payers providers and patients is very positive physicians unneeded awareness increase to greater than 65% since launch supported by our disease State education programs on the access front test fires a medical benefit product for which we expect permanent reimbursement coding as of July one of this year.

Physicians' unneeded, awareness increased to greater than 65% since launch, supported by our disease state education programs.

On the access front, TezPyre is a medical benefit product for which we expect permanent reimbursement coding as of July 1st of this year. Both allergists and pulmonologists acknowledge TezPyre's unique differentiated properties and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled or biologic eligible without any phenotypic and biomarker limitations.

Both allergists and Pulmonologists acknowledged test buyers unique differentiated properties and its broad potential.

The $2 5 million patients worldwide with severe asthma, who are uncontrolled.

Biologic eligible without any phenotypic and biomarker limitations.

Moving to the hematology and oncology business, our six innovative products grew 17% year-over-year, with 11% volume growth. We saw strong volume growth from Kyprolis, Enplate and Blancito, which we expect to continue throughout this year.

Moving to the hematology and oncology business, our six innovative products grew 17% year over year with 11% volume growth. We saw strong volume growth from Kyprolis and plate and bond cycle, which we expect to continue throughout this year.

Xgeva sales grew 7% year-over-year, while volumes declined 2%.

<unk> sales grew 7% year over year, while volumes declined 2%.

Our launch of <unk> is progressing well with revenues of $62 million in the first quarter, representing 38% quarter over quarter growth in the U S. <unk> has been prescribed to approximately 2500 patients by over 1500 physicians in both academic and community setting since launch.

Our launch of Lumicraz is progressing well, with revenues of $62 million in the first quarter, representing 38% quarter-over-quarter growth. In the U.S., Lumicraz has been prescribed to approximately, 2,500 patients by over 1,500 physicians in both academic and community settings since launch.

While approximately 80% of patients in the U.S. are tested for their KRAS and G12C status, the test result is not always available and or reviewed when the patient, progresses beyond first-line therapy. The opportunity to improve care is to ensure the KRAS G12C status is available in the patient chart or electronic medical record and reviewed, by the oncologist to ensure that Lumicraz is discussed as an option for the patient.

While approximately 80% of patients in the U S are tested for their <unk> <unk> status.

The result is not always available and or reviewed when the patient progresses beyond first line therapy.

The opportunity to improve cure is to ensure the <unk> status is available in the patient chart, our electronic medical record and reviewed by the oncologist to ensure that <unk> discussed as an option for the patient.

Lumicraz has strong payer coverage in the U.S., with 93% of patients having formulary, access.

<unk> has strong payer coverage in the U S with 93% of patients having formulary access outside the U S. Soda asset has now been approved in nearly 40 countries around the world with recent reimbursement approvals in the United Kingdom and Japan.

Outside the U.S., sodoracib has now been approved in nearly 40 countries around the world, with recent reimbursement approvals in the United Kingdom and Japan.

Sales of our oncology biosimilars declined 25% year-over-year.

Sales of our oncology Biosimilars declined 25% year over year, while our Biosimilars and vaccine <unk>, both hold leading shares we expect continued net selling price deterioration in volume declines driven by increased competition and ASP erosion.

While our biosimilars in Vasi and Congenti both hold leading shares, we expect continued net selling price deterioration and volume declines driven by increased competition and ASP erosion.

Over time, we expect long term growth in our Biosimilars business to be driven by the addition of new molecules and additional launches beginning with Amgen Vita in the United States in January of 2023.

Over time, we expect long-term growth in our biosimilars business to be driven by the addition of new molecules and additional launches, beginning with Amgivita in the United States in January of 2023.

Overall, we're executing well against our growth strategy, with strong volume trends

Overall, we're executing well against our growth strategy with strong volume trends across our portfolio.

across our portfolio.

With that I'll turn it to Dave.

With that, I'll turn it to Dave.

Thanks, Murdo and good afternoon, everyone.

First quarter was one of continued execution in R&D, where we.

Thanks, Murdo.

Focused on progressing our robust innovative clinical pipeline comprised of many potential first in class opportunities beginning with inflammation, we initiated two additional studies with Ted spire in severe asthma.

<unk> phase III <unk> study designed to demonstrate a reduction in oral corticosteroid use in adult participants on long term oral corticosteroid therapy and the passage phase for real World effectiveness study designed to evaluate <unk> in adult and adolescent participants, including underrepresented populations such as Black Americans.

Smokers in patients with asthma COPD overlap.

Phase III planning continues for ROE continuum, App, formerly AMG 451, and anti ox 40, monoclonal antibody being investigated in patients with heterogeneous moderate to severe atopic dermatitis.

<unk> binds activated pathogenic T cells expressing ox 40.

Unique mechanism of action for continual mab inhibits and prevents the expansion of activated pathogenic T cells and reduces their numbers.

Brokerage <unk> has the potential to lead to profound disease control.

In addition, this provides a rationale for longer dosing intervals with the prospect of achieving disease modification.

Market comprehensive Rocha <unk> phase III program remains on track to initiate in mid 2022.

And our Biosimilar portfolio last week, we announced preliminary results from a phase III study evaluating the efficacy and safety of <unk> 654, compared to <unk>, Lora, which the Kenyan mab in adult patients with moderate to severe plaque psoriasis. The study met the primary efficacy endpoint.

<unk> no clinically meaningful differences between ABP 654, and the Lora.

Good afternoon, everyone.

Now turning to oncology earlier.

Earlier this month, we presented data at ACR on outcomes from a two year analysis of <unk> co break 100 trial, which demonstrates the long term clinical benefit, including overall survival of patients with <unk> mutated advanced non small cell lung cancer treated with lunar crash.

First quarter was one of continued execution in R&D, where we focused on progressing our robust, innovative clinical pipeline comprised of, many potential first-in-class opportunities.

Beginning with inflammation, we initiated two additional studies with Tespire and severe asthma.

The Wayfinder Phase 3B study, designed to demonstrate a reduction in oral corticosteroid use in adult participants on long-term oral corticosteroid therapy, and the Passage Phase 4 real-world effectiveness study, designed to evaluate Tespire in adult and adolescent participants, including underrepresented populations, such as black Americans, smokers, and patients with asthma-COPD overlap.

Phase 3 planning continues for rocatinlamab, formerly AMG451, an anti-Ox40 monoclonal antibody, being investigated in patients with heterogeneous moderate to severe atopic dermatitis. Rocatinlamab binds activated pathogenic T-cells expressing Ox40. Through its unique mechanism of action, rocatinlamab inhibits and prevents the expansion of activated, pathogenic T-cells and reduces their number. Thus, rocatinlamab has the potential to lead to profound disease control.

In addition, this provides a rationale for longer dosing intervals with the prospect of achieving disease modification.

ROCCIT, the comprehensive rocatinlamab phase 3 program, remains on track to initiate in mid-2022.

In our biosimilar portfolio, last week we announced preliminary results from a phase 3 study evaluating the efficacy, and safety of ABP654 compared to Stelara, Ustekinumab, in adult patients with moderate to severe plaque psoriasis. The study met the primary efficacy endpoint, demonstrating no clinically meaningful differences between ABP654 and Stelara.

Now turning to oncology, earlier this month we presented data at AACR on outcomes from a two-year analysis, of the LUMACRAS Code Break 100 trial, which demonstrated the long-term clinical benefit, including overall survival of patients with KRAS T12C mutated advanced non-small cell lung cancer treated with LUMACRAS. These data showed that roughly a third of patients were still alive at two years, and that prolonged tumor response was at 41% objective response rate by central review.

These data showed that roughly a third of patients were still alive at two years.

Long tumor responses.

A 41% objective response rate by Central review.

While this was a single-arm trial without a control arm, the efficacy data compared favorably, with anticipated outcomes in this patient population based on historical data.

While this was a single arm trial without a control arm the efficacy data compare favorably with anticipated outcomes in this patient population based on historical data.

There were no new safety signals reported over the course of this two-year follow-up analysis.

No new safety signals reported over the course of this two year follow up analysis.

We have submitted data from the LUMACRAS PD-1 combination and SHIP-2 combination cohorts, to a medical congress taking place in the late summer, while top-line results from the LUMACRAS confirmatory Phase 3 study versus dosotaxel and the dose comparison study are on track for Q3 and Q4, respectively.

We have submitted data from the <unk> PD, one combination and shipped two combination cohorts to a medical Congress taking place in the late summer.

Topline results from the <unk> confirmatory phase III study versus Docetaxel and the dose comparison study are on track for Q3 and Q4, respectively.

Also in the lung cancer setting, we have submitted updated Phase 1 data of Tarlatumab, our DLL-3 targeting half-life extended bite molecule, being used in patients with relapsed refractory small cell lung cancer to a medical congress taking place in the late summer.

Also in the lung cancer setting we have submitted updated phase one data of <unk>, our DLL three targeting half life extended bite molecule being used in patients with relapsed refractory small cell lung cancer to a medical Congress taking place in the late summer.

And we plan to initiate DELPHI-303, a Phase 1b study testing Tarlatumab, in combination with standard of care and first-line small cell lung cancer this quarter.

And we plan to initiate Delphi 303, a phase <unk> study testing <unk> in combination with standard of care in first line small cell lung cancer this quarter.

Finally, in squamous non-small cell lung cancer, we are enrolling patients in a Phase 1b study, of bimerituzumab, a monoclonal antibody directed against FGFR-2b.

Finally in squamous non small cell lung cancer, we are enrolling patients in a phase <unk> study of <unk> monoclonal antibody directed against F GFR to be.

Turning to gastrointestinal cancers, we presented data at the ASCO plenary series in February, where LUMACRAS demonstrated a centrally confirmed objective response rate of 21 percent and disease control rate of 84 percent across 38 heavily pre-treated advanced pancreatic cancer patients.

Turning to gastrointestinal cancers, we presented data at the Astro Plenary series in February <unk> demonstrated the centrally confirmed objective response rate of 21% and disease control rate of 84% across 38 heavily pretreated advanced pancreatic cancer patients we continue to explore.

We continue to explore the benefit of lumacrass as a monotherapy and when combined with other, agents in this setting.

For the benefit of <unk> as a monotherapy and when combined with other agents in this setting.

In third-line colorectal cancer, a phase 3 study of lumacrass in combination with Vectabix, is enrolling patients.

And third line colorectal cancer, a phase III study of <unk> in combination with Vectibix is enrolling patients.

In gastric cancer, a phase 1b study of the vomerituzumab plus oral chemotherapy regimens, in tumors with FGFR 2b overexpression has been initiated.

In gastric cancer, a phase <unk> study of <unk>, plus oral chemotherapy regimens in tumors with <unk> expression has been initiated.

In general medicine, we were pleased to announce the results from two Repatha open-label extension, trials, the FOREA OLE studies designed to assess the long-term safety and tolerability of Repatha in more than 6,600 high-risk adults with clinically evident atherosclerotic cardiovascular disease, unstable, effective statin therapy. In the OLE studies, patients received Repatha for approximately five years, with some patients, receiving Repatha for up to eight and a half years in aggregate across the FOREA and OLE studies. The combined results from these studies reinforce the long-term safety and tolerability of Repatha, in lowering LDL cholesterol.

General Medicine.

Pleased to announce the results from two <unk>, our open label extension trials before OLED studies designed to assess the long term safety and Tolerability of <unk> and more than 6600 high risk adults with clinically evident a thorough sclerotic cardiovascular disease on stable effective statin therapy.

And the <unk> studies patients receive <unk> for approximately five years and some patients receiving the path for up to eight five years in aggregate across the 48 and <unk> studies.

The combined results from these studies reinforce the long term safety and Tolerability of a path in lowering LDL cholesterol.

We are extremely encouraged by the sustained benefit of this medicine in patients with, cardiovascular disease who still struggle to get their LDL cholesterol level below the recommended targets.

We are extremely encouraged by the sustained benefit of this medicine in patients with cardiovascular disease, who still struggle to get their LDL cholesterol level below the recommended targets.

These extended results for patients on Repatha are consistent with what the healthcare community, has learned over the past seven decades about the benefits of lowering cholesterol. That is, robust and sustained LDL cholesterol reduction affects the spectrum of important, cardiovascular outcomes.

These extended results for patients on the path are consistent with what the health care community has learned over the past seven decades about the benefits of lowering cholesterol.

Is robust and sustained LDL cholesterol reduction affects the spectrum important cardiovascular outcomes. We look forward to sharing these data at a medical Congress later this year.

We look forward to sharing these data at a medical congress later this year.

In conclusion, we continue to execute CRISPR-E across our innovative and biosimilar portfolios, and look forward to sharing new data from a number of our programs throughout the rest of the year.

In conclusion, we continue to execute crisply across our innovative and biosimilar portfolios and look forward to sharing new data from a number of our programs throughout the rest of the year.

With that, I'll turn it back to Bob for Q&A.

I'll turn it back to Bob for Q&A.

Okay.

Okay. Thank you, Dave RJ could you remind our callers of the process for submitting a question we're happy to answer your questions now.

Thank you, Dave.

R.J., could you remind our callers of the process for submitting a question?

We're happy to answer questions now.

Yes, sir.

As a reminder, to ask a question, please press star followed by the number one on your telephone

Yes, Sir.

A reminder to ask a question. Please press star followed by the number one on your telephone keypad again.

keypad.

Again, that is star one.

<unk> are one to withdraw your question. Please press the pound key.

To withdraw your question, please press the pound key.

Please stand by while we compile the Q&A roster.

Please standby, while we compile the Q&A roster.

The first question comes from the line of Michael Yee from Jefferies. Your line is open.

The first question comes from the line of Michael Yee from Jeffries.

Your line is open.

Hey, good afternoon.

Can you hear me okay?

Yes, Mike.

Hey, good afternoon can you hear me okay.

Go ahead.

Very good.

Hey, a question for Dave.

Yes, Mike go ahead.

Obviously, the KRAS field is quite competitive and you have a very important phase three

Alright, good question for Dave.

Obviously, the <unk> field is quite competitive and you have the very important phase III lunar crash confirmatory study reading out I just wanted to know you our confidence around that expectation for a positive result, there against Docetaxel, how fast you could file that and whether that changes the paradigm for accelerated.

LumaKRAS confirmatory study you're reading out.

I just wanted to know your confidence around the expectation for a positive result there

against docetaxel, how fast you could file that, and whether that changes the paradigm

for accelerated approvals for competitors around you.

Approvals for competitors around here, so maybe just comment on that study and the ramifications. Thank you.

So maybe just comment on that study and the ramifications.

Thank you.

Yeah.

Yes.

I mean, you know, if we replicate what we've observed so far with LumaKRAS, I think, Mike,

If we replicate what we've observed so far with whom across I think Mike we'd be quite confident in the.

you'd be quite confident in the likelihood that the phase three trial against docetaxel,

Likelihood that the phase III trial against Docetaxel, which of course has been around for decades will be positive.

you know, which, of course, has been around for decades, will be positive.

You know, we would, of course, discuss with the FDA and other regulatory bodies how to

We would of course discussed with the FDA and other regulatory regulatory bodies, how to file these data and move forward with full approvals in terms of effects on the competitive landscape I'll leave that to others to comment on but we're very confident in <unk> at this point were approved in <unk>.

file these data and move forward with full approvals.

In terms of, you know, effects on the competitive landscape, you know, I'll leave that to, you

know, others to comment on.

But, you know, we're very confident in LumaKRAS at this point.

We're approved in roughly 40 countries around the program, is moving forward very briskly,

<unk> <unk> 40 countries around the program is moving forward very briskly.

and that's our focus right now.

And that's our focus right now.

Your next question comes from the line of Jay Olson from Oppenheimer.

Your next question comes from the line of Jay Olson from Oppenheimer. Your line is open.

Oh, Hey, thanks for the update and thanks for taking the question.

You continue to generate important new clinical data for <unk>.

Data coming occur will pass Saran AMG 133, I can tell you.

<unk> published data for AMG 986 for heart failure. It seems like you are building an increasingly strong cardiovascular portfolio can you just talk about your strategy in cardiovascular disease and what are the large opportunities there and are there any gaps senior cardiovascular portfolio, where you may want to.

To pursue business development opportunities. Thank you.

Why don't I take the last piece of that and Dave Why don't you respond for sure I'll start I think murdo wanted to comment as well.

Your line is open.

Jump in.

Thanks, Jay I think you raise an incredibly important question.

You are all aware.

Cardiovascular disease is one of our three principal areas of therapeutic areas for research it remains.

Thanks for the update and thanks for taking the question.

Area of focus for us going forward. It remains the number one public health burden in terms of morbidity and mortality across the globe.

And part is what Spurs, our commitment here, which were Paso Murdo will comment in a minute, but we believe there is tremendous opportunity to serve patients.

As you continue to generate important new clinical data for Repatha,

AMG-133, I saw you recently published data for AMG-986 for heart failure.

On a hypothesis, that's probably the best proved in medicine in terms of LDL cholesterol.

Mentioned, the LP little a program or <unk> or AMG 890, just to remind everyone.

<unk> is probably the single most important driver outside of LDL cholesterol in terms of the pathogenesis of <unk> cardiovascular disease.

As I noted, we're looking forward to over the next couple of months phase <unk> data in those programs and our goal would be to transition to phase III as quickly as possible. If those data replicate what we saw in phase. One. In addition, we have a very active preclinical research portfolio.

I think indicating our ongoing strategic commitment to this area.

Maybe I'll turn it to you next and then Bob can talk about the business development.

Thanks, Dave underpinning obviously.

Huge.

Unmet medical need of cardiovascular diseases, our ability to reach that global population of patients and with the medical and commercial capabilities and global footprint to support that business, we reported 49% volume growth on our path of 15% sales.

<unk> year on year, So we clearly have momentum now.

And we continue to feel that there is there's more for us to do for these patients.

We're also very clear that we're focused on improving the affordability of our medicines for these patients and I think that thats. Another area, where we've made great progress so adding to that portfolio with our own internal pipeline.

Is a welcome thing and I think Dave's team is working very hard not only on the pipeline assets, but also to improve the profile of <unk> with the Sally is trial, which is ongoing and of course, the recently announced long term follow up trials that.

It seems like you're building an increasingly strong cardiovascular portfolio.

We're continued so the profile of Amgen in cardiovascular disease is strong and I'll turn it over to Bob on the business development. There. It's very simple Jay we've challenged our business development and research teams to find attractive innovation externally that we can add to our portfolio. So.

Can you talk about your strategy in cardiovascular disease and what are the large opportunities there and are there any gaps in your cardiovascular portfolio where you may want to pursue business development opportunities?

So we're looking for things that we can add value to every day.

Cardiovascular disease, as well as in inflammatory diseases and cancer.

Thank you.

Okay very helpful. Thank you very much.

Your next question comes from the line of Chad Meacham from Bank of America. Your line is open.

Hey, guys. Thanks, so much the question.

Peter a lot more commentary on the tax dispute with the IRS on this earnings call compared to when you first talked about it last year.

I think probably a higher number.

Got it.

The investor's expected. So the question is has there been a recent discussion with the agency the.

The service it prompted broader language today, and I know, it's going to take years to fully resolve but would you expect your your tax reserves to change over the course of that discussion or is that just something that's going to be a stagnant number and then when you fully resolve it Daniel Youll youll appropriately make that change. Thanks.

Yes, Jeff. Thank you for the question look we wouldn't we're in.

Litigation, So we wouldn't comment on discussions with with the IRS first and then secondly on reserves as you can understand we don't comment on where we're at in terms of the.

The size of the reserves other than we would just simply say that we're very confident in our position in the level of reserves that we've established.

And as we said.

This is.

This is about Puerto Rico and the allocation of.

Profits between the United States in the U S territory in Puerto Rico, where we perform a majority of our global manufacturing, Puerto Rico's home to our flagship manufacturing complex 30 year presence too.

<unk> 4000, 2400, highly skilled employees over $4 billion in capital investments and.

And as we said, we believe that the IRS positions are with.

Without merit and we're going to vigorously contest those adjustments proposed for 2010 through 2015.

Okay makes sense. Thanks, Thanks, Jeff.

Yes.

Why don't I take the last piece of that and Dave, why don't you respond first?

Your next question comes from the line of <unk> Richter from Goldman Sachs. Your line is open.

Sure, I'll start.

Good afternoon. Thank you for taking my question alumina craft, what steps can you take to ensure that <unk> got it.

I think Murdo wanted to comment as well.

<unk> is recognized by physicians.

Physician took right Chris.

Prescription Karen could you also frame the outlook for the combo study with Keytruda, that's reading out in late summer.

Good.

Jump in.

Thanks, Kelvin, maybe I'll start and then turn it over to Dave.

On the on the data question.

Thanks, Jay.

We're obviously working extremely closely with all of the oncology providers to improve their own internal systems, whereby they have that <unk> status.

I think you raise an incredibly important question.

Literally fingertip ready for making treatment choices for their patients what.

As you're all aware, cardiovascular disease is one of our three principal areas of therapeutic areas for research.

It remains an area of focus for us going forward.

What we are seeing is a little bit of a KOL that hangover effect. Many of these large oncology networks in the U S are short staffed and constrained and the resources that they can deploy against things like EMR enhancements against things like better workflows for diagnostics and Biomarkers, particularly new Biomarkers.

It remains the number one public health burden in terms of morbidity and mortality across the globe and that in part is what spurs our commitment here with Repatha.

Murdo will comment in a minute, but we believe there is tremendous opportunity to serve patients on a hypothesis that's probably the best proved in medicine in terms of LDL cholesterol.

You mentioned the LP little A program, Opasaran or AMG 890.

Just to remind everyone, LP little A is probably the single most important driver outside of LDL cholesterol in terms of the pathogenesis of atherosclerotic cardiovascular disease.

So we are working literally account by account across the country. We've made huge improvements and we've seen some very large community oncology networks, which is where 80% of the patient base is treated they are treated in the community centers I think in the academic institutions. The testing is very strong robust the care is.

As I noted, we're looking forward to over the next couple months, Phase 2B data and those programs and our goal would be to transition to Phase 3 as quickly as possible if those data replicate what we saw in Phase 1.

In addition, we have a very active preclinical research portfolio, I think indicating our ongoing strategic commitment to this area.

Clear and the test results are available for patients who progress. So it's really in the U S community setting, where we're working as we look ex U S.

Murdo, maybe I'll turn it to you next and then Bob can talk about the business development.

We see that.

Current pattern by country. So countries that have advanced biomarker technology, and very clear systems, like Germany and France.

We expect good uptake there and we're already seeing early indicators of that.

France as you May recall has a an early access program called an ATM program, where we can actually charge for the product and that is being used already fairly broadly and in Germany, where we're just launching in a few weeks old.

As we are in Japan so.

I think it's a network by network project that we're working intensely with our medical colleagues with our commercial teams to make sure that no patient.

Slips through.

Thanks, Dave.

Underpinning obviously the huge unmet medical need of cardiovascular disease is our ability to reach that global population of patients and we've built the medical and commercial capabilities and global footprint to support that business.

Dave.

We're also very clear that we're focused on improving the affordability of our medicines for these patients and I think that that's another area where we've made great progress.

Great.

Adding to that portfolio with our own internal pipeline is a welcome thing and I think Dave's team's working very hard, not only on the pipeline assets, but also to improve the profile of Repatha with the Baselius trial, which is ongoing.

<unk>. Thanks for the question in terms of data availability as we as we noted we've submitted the data for one of those summer oncology conferences. We are looking at both combination in sequential approaches.

Of course, the recently announced long-term follow-up trials that were continued.

The profile of Amgen and cardiovascular disease is strong and I'll turn it over to Bob on the business development.

With PD one inhibitors I'd also point out that one of the things we're beginning to examine as the whole population of patients with non small cell lung cancer, you can divide them roughly into.

Third a third our PDL one negative tumors third I'll have low to intermediate PD lone expression.

And a third have high PD lone expression in the PDL one negative population for instance, the effective checkpoint inhibitors is quite modest.

It's an area where.

We are looking at combinations of <unk> with straight chemotherapy. So one thing to keep in mind as this field evolves is that depending on PD lone expression. The approach clinically may vary as well and we are crafting our development program Accordingly.

It's very simple, Jay.

RJ, let's take the next.

Your next question comes from the line of Matthew Harrison from Morgan Stanley . Your line is open.

We've challenged our business development and research teams to find attractive innovation externally that we can add to our portfolio.

So we're looking for things that we can add value to every day in cardiovascular disease as well as in inflammatory diseases and in cancer.

Great. Thanks, good afternoon.

Your next question comes from the line of Geoff Meacham from Bank of America.

I was hoping my question for Murdo.

Mark can you just maybe comment I know your comment on a business review around your thoughts around contracting and typically biosimilar contracting as we think about.

The Humira launch and some of the other product any updated thoughts in terms of how that's going or.

Your expectation on specifically Humira for 2023 versus 2024.

Your line

Thanks, Matthew for the question.

No I don't really have.

A lot of new information to update you on we continue to feel like were extremely well positioned for the opportunity.

To be among the first if not the first.

Potentially only biosimilar for a period of time in the market in.

2023 as of January 31.

We like our profile.

Competitively given that we as Youll recall, we use the existing.

Inflammation commercial organization that currently commercialized enbrel and <unk> that have relationships intact with Rheumatologists and dermatologists, we actually have a.

Gi footprint as well supporting our solar so we feel that we've got the customer relationships, we definitely have the payer relationships.

We have obviously 40 years of biologics manufacturing and supplying every patient every time.

To provide the confidence for pharmacy benefit managers to make the <unk>.

Decision to make our product available as early as possible. So.

We're excited about the opportunity and then of course after.

The launch of <unk> in the U S. We have.

Several other launches still our Eylea Soliris and then additional launches thereafter, so six new biosimilars coming into the market. So this is a <unk>.

An area, where we're very focused we've invested in this area. It's important to us for our long term growth and we have the capabilities in the market to ensure success.

Let's go with the next question.

is open.

Your next question comes from the line of your own Werber from Cowen and company. Your line is open.

Hey, guys.

Great. Thanks for taking my question I guess, Peter maybe.

For you and for the rest of the team.

Yes.

For your first the tax rate is increasing incrementally this year is that relating to the ongoing litigation.

Sure.

The IRS or is that for a different reason.

And then maybe for you.

In the U S is growing but it's Tom.

We're probably a little bit lower than we expected are you are you.

You have to be bigger or similar in size to the U S. Thank you.

Thanks so much for the question.

Yes, let me let me jump in first year I don't think Murdo wants to take the tax part of that so.

Peter, a lot more commentary on the tax dispute

Look we're only moving it up by 50 basis points here on it's not related at all to the tax litigation just maybe maybe that highlight the point that I should make.

with the IRS on this earnings call, you know, compared to when you first talked about it

In response to Jeff Jeff Good question, a little bit earlier, which is why more commentary now I think this is exactly why because.

This is a complicated area for all of you for the analysts and we want to make sure.

You understand our position.

We think that it's been a struggle to understand for folks.

This on prior conference calls so we just want to be more specific on it but in the case of that.

Question itself, it's not related at all and again your own thanks for the question.

last year.

I think probably a higher number of, you know, than the investors expected.

So the question is, you know, has there been a recent discussion with the agency or the

We're confident in our position in the level of reserves, where we're at but we're wanting to provide some more.

Background for you on it so hopefully that's helpful and now I'll turn it over to Mario to get back to business. Thanks.

service that prompted broader language today?

Thanks Peter.

And I know it's going to take years to fully

I would say.

Yes.

In the U S. What we're seeing with <unk> when that <unk> <unk> status is known at the point of progression from first line treatment of second line, we're getting we're getting over 80% of those patients to be treated by wind Mcgrath. So we're penetrating the population when the identification of the <unk>.

<unk> status is there so that's clearly the lever that we need to ensure.

Improved and as I answered Sylvia.

<unk> question earlier. This this is really an account by account.

Our book of work and we're doing it with argent because we really can have.

Patients progressing from first line to second line and not have the choice of <unk>. So this is really important work that we're doing for patients. When we look at the epidemiology of disease in the U S versus ex U S. I.

I would say that the overall incidence of non small cell lung cancer.

<unk> is similar between the U S and Europe in terms of size that one thing just to think about as you go into Asia as the incidence of <unk>.

<unk> status as a bit lower if you take Japan as an example.

It's about 4% of patients who have non small cell lung cancer that also have a <unk> mutation compared to 13% in the U S. So the mutational epidemiology does change a little when you go outside of U S and Europe .

So we would expect that.

Business to be slightly bigger than the U S than it will be in Europe and rest of the world.

resolve, but would you expect your tax reserves to change over the course of that discussion?

Take the next question.

Your next question comes from the line of Omar rapid from Evercore ISI. Your line is open.

Or is that just something that's going to be a stagnant number?

Hi, guys. Thanks for taking my question.

I guess, two if I may 1st perhaps on kiosks.

It is an interesting disclosure on the slides on how 'twenty 500 patients have taken it in U S commercially and.

Third party datasets would suggest perhaps 200 patients.

Were on the drug in March and I'm.

Trying to square those two about 1200 patients were on therapy in March and 2500 as total exposure crude math would suggest that duration of therapy is tracked five ish months or so is that consistent with your observation.

And then when you fully

And then secondly, Peter on the tax Court side can you guide us through what the timeline could look like because I feel like this is one of those topics now theirs.

resolve it, then you'll, you know, you'll appropriately make that change.

Two sets of liabilities that people will put in their models somehow at certain probability and having a sense for what the timeline could look like for resolution or at the very least on when the hearing is our went up key coordinates coming up on the tax code that'd be very helpful. Thank you.

Yes, perhaps on the first.

Question regarding patient numbers and duration of therapy I think it's.

That's a little bit premature to be able to draw conclusions from numbers on drug versus numbers treated to get to our duration of therapy.

What you what you need to understand our guests in the 2500 patients as we've got a combination of patients who.

We're very late stage disease third line and beyond potentially who were challenged with the product and didn't do very well.

Whereas the steady state will be more second line patients having experienced maybe one prior line of therapy, who.

Could do quite well as indicated by the long term follow up data that we just put out at ACR, where you see about a third of patients being alive.

At the two year follow up Mark So I think.

It's too early to infer from existing in market patient numbers to understand what the effective duration of therapy will be and in fact eni.

I often say this is you really actually need 24 months in market to understand what your look back period is to understand what your duration of therapy. So it's going to be quite some time before we know what our real world duration of therapy will be.

Okay.

Peter here so on the tech side. Thank you.

Terms of next steps and timeline.

We will be filing a petition with the U S tax court within 90 days.

As I mentioned, we will vigorously contest the 2013 through 2015 notice through the judicial process, we plan to seek consolidation of the 2013.

15 period.

Ongoing 2010 to 2012 tax court case, and as I said it will take.

Several years for this to resolve itself. So that's the current timeframe as we see it.

Alright, good luck.

Over the next one.

Thanks.

Our next question comes from the line of Carter Gould from Barclays. Your line is open.

Yeah, Geoff, thank you for the question.

Good afternoon. Thanks for taking the question, maybe just focus for a second on test fire will kind of get a little bit more color. There specifically, how you think about the.

Look, we wouldn't, you know, we're in litigation,

so we wouldn't comment on discussions with the IRS first.

The importance of the J code, there and the extent that could drive an inflection in sales I guess.

That's been an impediment to date and then obviously you started when you find a recently in the past you guys kind of talked down the importance of the source results. So as we think about <unk> is that sort of critical in addressing that gap or simply a nice to have some color there would be helpful. Thank you.

And then secondly, on reserves,

as you can understand, we don't comment on where we're at in terms of the size of the

reserves, other than we would just simply say that we're very confident in our position

and the level of reserves that we've established.

Thanks Carter on the question regarding test by we're really excited about the market response to test by our having such a novel unique product, where the profile really simplifies the treatment of severe uncontrolled asthma, particularly for pulmonologists to have so much else to do that theyre looking.

And, you know, as we said, this is, you know,

this is about Puerto Rico and the allocation of profits between the United States and the

U.S. territory of Puerto Rico, where we perform a majority of our global manufacturing.

Puerto

Rico is home to our flagship manufacturing complex, 30-year presence, 2.4 thousand 24

hundred highly skilled employees, over $4 billion in capital investments.

And as we

For a simple solution that they can treat their patients with without being limited by phenotypic or biomarker status. So overall, we think it's going really well.

It's clearly a benefit to have a permanent J code.

In the market, which as I mentioned, we'll be coming July 1st that gives confidence to providers and to their their billing staff that they can code the product appropriately and half.

A high degree of assurance on reimbursement I think they know the reimbursement is happening now, but it's also tightened to reimbursement for some of these practices some of them run pretty tight cash flows.

Knowing that the permanent J code should expedite the time to reimbursement will actually help. So so yes, I would say, it's going to be helpful. But I would say that the end market responds currently is really good.

We're clearly providing product to patients who are going through that reimbursement step in that process. So that they can get on therapy and have access to the medicine.

But yes, we'd be looking for additional.

Sales for sales growth in the back half of the year.

said, you know, we believe that the IRS positions are without merit, and we're going to vigorously

Yes Carter.

contest those adjustments proposed for 2010 through 2015.

In terms of way finder.

Okay.

This trial.

Makes sense.

We believe will address some of our mezzanine logic limitations. We believe we saw in the source trial. The sample size is much larger it's a single arm trial samples sample size over 300 patients.

Thanks.

Your next question comes from the line of Salveen Richter from Goldman Sachs.

Patients can be on a higher dose of steroids, there can be a more rapid corticosteroid taper and we're looking at the effects earlier at earlier time points all of these I think.

Give us confidence that we will see effectiveness of test aspire in the setting of lowering oral corticosteroid use. In addition, we presented recently at the Quad AI meeting updated data from navigator.

Other trials, showing a very profound reduction in exacerbations in patients on oral corticosteroids.

Again, I think this is going to be a really important drug for the treatment of asthma across a range of phenotypes.

We're quite confident in the development program going forward.

We'll take the next question.

Your line is open.

Our next question comes from the line of Robyn <unk> from <unk>. Your line is open.

Hi, Thanks for taking my questions.

A couple on a path that so just your thoughts on in closer in.

The permanent J code coming in July and your thoughts on.

The impact on our path in the second half of the Air and then just the second year of impressive growth.

Past that maybe you could give a little bit more color on.

Script trends by Doctor are you seeing more scripts by cardiologists.

Christian tried thinking you're confident that that growth.

As far as who is prescribing the drug versus I think previously and that really means that we've looked at all of this thing.

Thanks Robyn.

We are pleased with the with the evolution of the.

Growth is actually fairly consistent across the broad cardiology community. So it's not just here.

The dollar just variety of cardiologists were seeing general community Cardiologists. We also have a large effort focused on integrated delivery networks and hospital systems, where we have been.

<unk> been successful in establishing a more standardized way of treating the some 25 million high risk at CVD patients in the U S. So that end up in an acute care facility or their NII or other event that <unk> been admitted for.

Unfortunately, many of them don't even get a lipid panel and many of them get discharged without appropriate recommendations or initiation of treatment. So we've stepped that up quite a bit.

And we're seeing improvements in quality of care and those patients are being discharged then to the community cardiologists <unk> primary care physicians with clear intent on more aggressive lipid lowering therapy for cardiovascular risk reduction so that's definitely helping.

For future growth, we're obviously going to continue that effort and we're going to continue to expand.

Got it.

And work that we're going to do in the U S. But we're also going to invest incrementally in primary care given that we're seeing some spontaneous prescribing with primary care. So.

We're very pleased with the growth of <unk> ex U S. The other thing I would mention is we got the Jan first listing for <unk>.

China National reimbursement drug list, which has been a good launch for US there and our team in China is doing a nice job of ensuring that reports as an option for high risk <unk> patients in that country.

So really I think we've got.

A large amount of headroom for growth in this product there is a large patient population and we've got good momentum now in cardiology, and we need to continue to build that into primary care and around the world with respect to and closer and obviously there.

They are a competitor in the market, but given that they don't yet have event reduction data.

Even with the reimbursement coding I think there is still limited in what they can promote but again there's tons of patients out there that need more aggressive lipid lowering therapy more aggressive cardiovascular risk reduction and we see that the market can bear.

A lot of people talking about this severe disease number one killer in the world for.

For everybody that's concerned about patients and.

What we can do about it so overall, we're still very bullish.

I know, we've got several colors still hoping to ask questions.

We will probably grow a few minutes over the top of hours. So when we take the next question, we will do our best to get to everybody and if we're unable to do that.

Obviously, arvind and his team will be available later, let's take the next question.

Good afternoon.

Your next question comes from the line of Mohit Bansal from Wells Fargo. Your line is open.

Thank you for taking my question.

Great. Thanks for taking my question.

Maybe a question on <unk>.

No.

You can bet right now it needs to be administered by a provider do you what kind of.

What kind of reservation do you do you expect from the doctors at this point in terms of prescribing the agent given given that <unk> is available for self administration and the question is is that a possibility in the future that you could come up with to satisfy administration injection, which could actually help us.

Has it become a self administered at home product. Thank you.

Thanks Mohit.

The unfortunately, because severe asthma, especially uncontrolled severe asthma as such.

An acute condition. Many of these patients are under frequent care, although pulmonologists, there or an allergist and so they're seeing their physician on a very regular basis and I think given our very convenient once monthly dosing.

It's seen as a fairly easy product to administer and.

Of course, it's early days in the launch, but the feedback has been that the physician administration is not a barrier.

Two initiation of test buyer.

And allergists in particular are used to.

Physician administered products, what I think the benefit side of this is really playing out as they have much less work to do on the biomarker side or the phenotypic assessment site and so we've simplified the workflow in that regard.

I do think over over the long haul will continue to evaluate what we need to do to ensure that there is convenience and maintenance for patients and obviously, we're looking at other indications and other lifecycle opportunities for test buyer. So we will continue to assess whether or not we want to provide a self administered.

Option I mean, clearly the product could be developed that way and we continue to look at that.

Thank you.

Okay.

Sure.

On Lumicraft, what steps can you

Our next question comes from the line of Dane Leone from Raymond James Your line is open.

take to ensure that G12C status is recognized by physicians to drive prescriptions here?

Alright, Thank you for taking the questions and congrats on the quarter.

And

One question for me.

could you also frame the outlook for the combo study with Keytruda that's reading out in late

summer?

Thanks, Salveen.

Presuming the dose equivalency study of Luna Kras actually demonstrates that 240 milligram Q days is equivalent to 960.

Maybe I'll start and then turn it over to Dave on the data question.

How are you planning on managing that transition at the end of the year and the reason we get this question a lot from investors is obviously that will coincide with a presume a launch of a competitor.

We're obviously working extremely closely with all of the oncology providers to improve their

own internal systems, whereby they have that KRAS G12C status, which, you know, literally

fingertip ready for making treatment choices for their patients.

What we are seeing is a little

The <unk> space.

Maybe just frame it just from a script being.

Given 30 day script being given at the end of the year at this dose equivalency. It does show that the lower doses equivalently effective that 30 days right turns into a 100 day 120 days script.

Just how does your team thinking of managing this and is there any expected change to pricing that would be enacted if the lower doses is seen as equivalent. Thank you.

Yes, it's a it's a pretty detailed hypothetical.

But what I would say is first off we remain confident that the 960 milligram dose is the right dose.

Clearly the safety and efficacy benefit of that product looks very good and given the long term follow up data.

Clearly, it's a high bar for us to be able to see if the if it can be approved upon at a lower dose. So that's that's the one question that remains to be answered.

The way I guess I can't directly answer your question because there's so many different complicated variables to it but what I would say is we continue to.

We'll look at the best way to provide the right treatment for continuing patients. So if you are.

Second line non small cell lung cancer patient, who have been prescribed <unk> at 960, <unk>, taking it you've responded and your stable I'm not sure any oncologists is going to want to lower your dose if youre continuing patient now we've seen that in other disease areas, where there might have been a dose change out of the go up or go down.

Patients who are on a stable dose usually stay on that so that would be.

One bit of additional commentary to your question, but we'll wait and we'll see the data will handle it.

According to what the data say on what the FDA guided us to.

Very helpful. Thank you.

The next question.

bit of a COVID hangover effect.

Your next question comes from the line of Evan <unk> from BMO capital markets. Your line is open.

Many of these large oncology networks in the U.S. are short

I will thank you for taking my question and squeezing me in.

staffed and constrained in the resources that they can deploy against things like EMR enhancements,

against things like better workflows for diagnostics and biomarkers, particularly new

biomarkers.

So we are working literally account by account across the country.

Wanted to ask one for Murdo on <unk> now that we have the full label kind of the.

We've made huge

improvements and we've seen some very large community oncology networks, which is where 80

percent of the patient base is treated.

They're treated in the community centers.

I think in the

Full spectrum approval as of last December so have you seen any sort of barrier for.

academic institutions, the testing is very strong, robust, the care is clear, and the test results

The more mild patients do these patients need to go to any sort of step edits are they able to get pretty freely do you expect that to change over the course of the year.

Color on how you're pushing it.

Mark.

Thank you.

are available for patients who progress.

Thanks for the question Evan we're really pleased with the response from.

So it's really in the U.S. community setting where we're

working.

As we look ex-U.S., we see a different pattern by country.

So countries that have advanced

biomarker technology and very clear systems, like Germany and France, we expect good uptake there,

Payers and pbms to ensuring that the expanded label now regardless of.

Severity of psoriasis that patients can have.

Strong access and good affordability for the product in fact, we've actually improved access.

This year versus last year. So we've we've been able to use some of the prior authorization.

and we're already seeing early indicators of that.

France, as you may recall, has an early access

program called an ATU program, where we can actually charge for the product and it's being

Criteria things like percentage of body surface area.

There are there are some medical policies prior authorizations, where that's described as a percentage we've had many of those were removed.

used already fairly broadly.

So we've actually opened up access for those patients and I think that it's here.

And in Germany, we're just launching and are a few weeks old,

as we are in Japan.

Year to prescribe <unk> left for that milder patient I was at the American Academy of Dermatology meeting in March and spoke to many dermatologists and ask them what their prescribing experience was like and what the reimbursement experience was and I think many of them played back to us that <unk> was easy.

Year than it had been in the past to prescribed for that milder patient. The other thing. We did was we enhanced our copay assistance and our own bridging programs to ensure that that launch would go well. So so far so good off to a good start, but I don't anticipate access being an impediment.

So I think it's a network by a network project that we're working intensely

And considering some of the folks on the east coast.

with our medical colleagues, with our commercial teams, to make sure that no patient slips through.

Dave.

So why don't we take two more questions. Please.

Great.

Your next question comes from the line of Cory <unk> from Jpmorgan. Your line is open.

And Salveen, thanks for the question.

In terms of data availability, as we noted, we've submitted the data for one of the summer

Gavin on for Cory Thanks for taking our question just a follow up from a question earlier on the Q.

oncology conferences.

We are looking at both combination and sequential approaches with PD-1 inhibitors.

I'd also point out that one of the things we're beginning to examine is the whole population

Pat Enbrel combo data late in the summer.

of patients with non-small cell lung cancer.

I guess, just about the lung cancer patients in Europe buying debt.

You can divide them roughly into thirds.

It will predominantly second line plus or will there be sufficient patients frontline pop.

A third are PD-L1 negative tumors, a third have low-to-intermediate PD-L1 expression,

and a third have high PD-L1 expression.

In the PD-L1 negative population, for instance, the effect of checkpoint inhibitors is quite

modest, and that's an area where we are looking at combinations of lumacrass with straight

Pathway for our path forward.

And then <unk>.

Multiple plausible and our different dosing administration I think you've talked in the past sequential bulk numbers.

Other almost strategies.

Thank you yes. Thanks.

Thanks, Corey most of those patients will be second line and beyond maybe there is a limited experience in first line.

And we are looking across a range of doses with both combination and sequential therapy. So you can expect to see all of that when the data are presented.

Let's take one last question RJ and after the clubs just kind of make a couple of concluding comments.

Your next question comes from the line of Colin Bristow from UBS. Your line is open.

Good evening and thank you for squeezing me in I'll keep it quick just quickly on the tax.

Issue could you could you just talk about whether we should view that as being essentially limited to 2015 or is that really kind of the eight through too.

The 2021.

And then just quickly on <unk> there was a small investigator led data set presents the LCC.

A few weeks ago, we call some relatively highlight key innovations with middle class.

Sequence with PD one.

I was just curious how this compare to your early experience with the combo.

Dosing.

And anything else you can say about the path forward that thank you.

Okay. Colin Thank you look on an.

On the case, we're very confident in the position we've had.

And our structure.

How we've allocated profits between Puerto Rico, and the United States. So we're very confident in those reserves. If you did think about going forward.

I did suggested in the press release articulated that the IRS is currently auditing 2016 through 18.

If they did propose any transfer pricing issues.

The magnitude of those adjustments will be lessened by the change in tax rate.

From the 2017 tax Act.

Which reduced the differences between the tax rates applicable in the United States and Puerto Rico by approximately two third beginning in 2000.

But once again, we're very confident.

Okay.

We're very confident in the level of our reserves and so we don't anticipate any changes going forward.

And the second piece of that with regards to the LCC.

Data were uncontrolled data from.

An investigator in France.

Patients receiving monotherapy potentially after checkpoint inhibitors I can tell you that the rates of.

Hepatic toxicity were higher than we've observed in our clinical trials program and through our ongoing pharmacovigilance efforts. So I'm not sure why that was the case, but it was a heterogeneous on selected group of patients it's hard for us to comment any further on those data.

Bob do you want to let me let me just thank all of you for dialing in and we appreciate your support and your interest in the company.

chemotherapy.

So, one thing to keep in mind as this field evolves is that, depending on PD-L1 expression,

the approach clinically may vary as well, and we are crafting our development program

accordingly.

RJ, let's take the next question.

As we've tried to convey through this call we feel we're executing well here into the two.

2022 calendar year, and we look forward to being back together with you after the second quarter to report on our progress through the mid year. Thank you sorry, we went a few minutes over thanks. Thank you everybody.

Your next question comes from the line of Matthew Harrison from Morgan Stanley.

Your line is open.

Great.

Ladies and gentlemen, this concludes today's conference call and we thank you all for participating.

Ladies and gentlemen, this concludes today's conference call and we thank you all for participating you may now disconnect.

Thanks.

Good afternoon.

I was hoping a question for Murdo.

Murdo, can you just maybe comment?

I know you commented at Business Review around your thoughts around contracting, and specifically

You may now disconnect.

similar contracting as we think about both the Humira launch and some of the other products.

Any updated thoughts in terms of how that's going, or your expectations on specifically

Humira for 2023 versus 2024?

Thanks.

Okay.

Thanks, Matthew, for the question.

No, I don't really have a lot of new information to update you on.

[music].

We continue to feel like we're extremely well-positioned for the opportunity to be among the first,

if not the first, and potentially only biosimilar for a period of time in the market in 2023

as of January 31st.

We like our profile competitively, given that we, as you'll recall, we use the existing

inflammation commercial organization that currently commercialize Enbrel and Otesla

that have relationships intact with rheumatologists and dermatologists.

We actually have a GI footprint as well, supporting Afsola.

We feel that we've got the customer relationships.

We definitely have the payer relationships.

We have, obviously, 40 years of biologics manufacturing and supplying every patient

every time to provide the confidence for pharmacy benefit managers to make the decision to make

our product available as early as possible.

So, you know, we're excited about the opportunity.

And then, of course, after the launch of Amgivita in the U.S., we have, you know, several other

launches, you know, Stelara, ILEA, Solaris, and then additional launches thereafter.

So, you know, six new biosimilars coming into the market.

So this is an area where we're very focused.

We've invested in this area.

It's important to us for our long-term growth.

And we have the capabilities in the market to ensure success.

Let's go with the next question.

Your next question comes from the line of Yaron Werber from Cowen and Company.

Your line is open.

Great.

Thanks for taking my question.

I guess, Peter, maybe for you and for the rest of the team.

I guess, Peter, for you first, the tax rate is increasing incrementally this year.

Is that relating to the ongoing litigation with the IRS, or is that for a different reason?

And then maybe, Murdo, for you, in the U.S., LumaCrest is growing, but it's growing probably a little bit lower than we expected.

Are you expecting XUS to be bigger or similar in size to the U.S.?

Thank you.

Yeah, let me jump in first here.

I don't think Murdo wants to take the tax part of that.

Look, we're only moving it up by 50 basis points, Yaron.

It's not related at all to the tax litigation.

Maybe that highlights a point that I should make in response to Jeff's good question a little bit earlier, which is, why more commentary now?

I think this is exactly why, because this is a complicated area for all of you, for the analysts, and we want to make sure you understand our position.

We think that it's been a struggle to understand for folks this on prior conference calls, so we just want to be more specific on it.

But in the case of that question itself, it's not related at all.

And again, Yaron, thanks for the question.

We're confident in our position and the level of reserves where we're at, but we're wanting to provide some more background for you on it.

So hopefully that's helpful, and now I'll turn it over to Murdo and get back to business.

Thanks, Peter.

Yaron, I would say, in the U.S., what we're seeing with Lumicraz is when that KRAS G12C status is known at the point of progression from first-line treatment to second-line.

We're getting over 80 percent of those patients to be treated by Lumicraz, so we're penetrating the population when the identification of the KRAS G12C status is there.

So that's clearly the lever that we need to ensure is improved.

And as I answered Sylvain's question earlier, this is really an account-by-account book of work, and we're doing it with urgency because we really can't have patients progressing from first-line to second-line and not have the choice of Lumicraz.

So this is really important work that we're doing for patients.

When we look at the epidemiology of disease in the U.S. versus ex-U.S., I would say that the overall incidence of non-small-cell lung cancer is similar between the U.S. and Europe in terms of size.

[music]

Now, one thing just to think about as you go into Asia is the incidence of KRAS G12C mutational status is a bit lower.

If you take Japan as an example, it's about 4 percent of patients who have non-small-cell lung cancer that also have a KRAS G12C mutation compared to 13 percent in the U.S.

So the mutational epidemiology does change a little when you go outside of U.S. and Europe.

So we would expect the business to be slightly bigger in the U.S. than it will be in Europe and the rest of the world.

Your next question comes from the line of Umer Raffat from Evercore ISI.

Your line is open.

Hi guys, thanks for taking the question.

I guess two, if I may.

First, perhaps on KRAS, there's an interesting disclosure on the slides on how 2,500 patients have taken it in U.S. commercially.

And third-party data sets would suggest perhaps 1,200 patients were on the drug in March. And I'm trying to square those two. About 1,200 patients were on therapy in March and 2,500 as total exposure.

Crude math would suggest that duration of therapy has tracked five-ish months or so.

Is that consistent with your observation?

And then secondly, Peter, on the tax court side, can you guide us through what the timelines could look like?

Because I feel like this is one of those topics.

Now there's two sets of liabilities that people will put in their models somehow at certain probability and having a sense for what the timelines could look like for resolution or at the very least on when a hearing is or when a key court date is coming up on the tax court, that would be very helpful.

Thank you.

Yeah, perhaps on the first question regarding patient numbers and duration of therapy, I think it's a little bit premature to be able to draw conclusions from numbers on drug versus numbers treated to get to DOT or duration of therapy.

So I think it's too early to infer from existing in-market patient numbers to understand what the effective duration of therapy will be.

And in fact, I often say this is you really actually need 24 months in market to understand what your look-back period is, to understand what your duration of therapy is.

So it's going to be quite some time before we know what our real-world duration of therapy will be.

Peter.

Peter here.

So on the tax side, thank you.

In terms of next steps and timeline, we will be filing a petition with the U.S. Tax Court within 90 days.

And as I mentioned, we will vigorously contest the 2013 through 2015 notice through the judicial process.

We plan to see consolidation of the 2013 to 2015 period with the ongoing 2010 to 2012 tax court case.

And as I said, it will take several years for this to resolve itself.

So that's the current timeframe as we see it.

Thank you.

Arjun, let's go with the next one.

Your next question comes from the line of Carter Gould from Barclays.

Your line is open.

Yes.

Good afternoon.

[music].

Thanks for taking the question.

Maybe to focus for a second on Tespire.

I was looking to get a little bit more color there, specifically how you think about the importance of the J code there

and the extent that could drive an inflection in sales and, I guess, the extent that's been an impediment to date.

And then, obviously, you started Wayfinder recently.

In the past, you guys kind of talked down the importance of the source results.

So as we think about Wayfinder, is that sort of critical in addressing that gap or simply nice to have some color there would be helpful?

Thank you.

Thanks, Carter.

On the question regarding Tespire, we're really excited about the market response to Tespire,

having such a novel, unique product where the profile really simplifies the treatment of severe uncontrolled asthma,

particularly for pulmonologists who have so much else to do that they're looking for a simple solution that can treat their patients

without being limited by phenotypic or biomarker status.

So overall, we think it's going really well.

It's clearly a benefit to have a permanent J code in the market, which, as I mentioned, will be coming July 1st.

That gives confidence to providers and to their billing staff that they can code the product appropriately

and have a high degree of assurance on reimbursement.

I think they know the reimbursement is happening now,

but it's also time to reimbursement for some of these practices.

Some of them run pretty tight cash flows.

And knowing that the permanent J code should expedite the time to reimbursement will actually help.

So, yeah, I'd say it's going to be helpful.

But I would say that the in-market response currently is really good.

And, you know, we're clearly providing product to patients who are going through that reimbursement step

and that process so that they can get on therapy and have access to the medicine.

But, yeah, we'll be looking for additional sales for sales growth in the back half of the year.

Yeah, Carter, in terms of Wayfinder, you know, this trial, we believe,

will address some of the methodologic limitations we believe we saw in the source trial.

The sample size is much larger.

It's a single-arm trial, sample size over 300 patients.

Patients can be on a higher dose of steroids. There can be a more rapid corticosteroid taper.

And we're looking at the effects at earlier time points.

All of these, I think, you know, give us confidence that we will see effectiveness of Tespire

in the setting of lowering oral corticosteroid use.

In addition, we presented recently at the Quad AI meeting updated data from Navigator

and other trials, you know, showing a very profound reduction in exacerbations

in patients on oral corticosteroids.

Again, I think this is going to be a really important drug for the treatment of asthma

across a range of phenotypes, and, you know,

we're quite confident in the development program going forward.

We'll take the next question.

Your next question comes from the line of Robyn Karnauskas from Truist.

Your line is open.

Yes.

Hi, thanks for taking my question.

So just a couple on Repata.

Yes.

So just your thoughts on Inquisitor and with a permanent gig coming in July and your thoughts on the impact on Repata in the second half of the year.

[music].

And then just a second, you have impressive growth with Repata.

Maybe you could give a little bit more color on script trends by doctor.

Are you seeing more scripts by cardiologists?

There's some trends that give you confidence that that growth can continue as far as who is prescribing the drug versus I think previously in the early days it was lipidologists mainly.

We also have a large effort focused on integrated delivery networks and hospital systems where we have been successful in establishing a more standardized way of treating the some 25 million high risk SCVD patients in the US that end up in an acute care facility for their MI or other event that they've been admitted for.

That's definitely helping for future growth.

We're obviously going to continue that effort and we're going to continue to expand that IDN work that we're going to do in the US, but we're also going to invest incrementally in primary care, given that we're seeing some spontaneous prescribing with primary care.

And our team in China is doing a nice job of ensuring that Repata is an option for high risk CVD patients in that country.

So, you know, really, I think we've got a large amount of headroom for growth on this product.

There's a large patient population, and we've got good momentum now in cardiology, and we need to continue to build that into primary care and around the world.

With respect to in glycerin, obviously, they're, they're a competitor in the market, but given that they don't yet have event reduction data, even with reimbursement coding, I think they're still limited in what they can promote.

But again, there's tons of patients out there that need more aggressive lipid lowering therapy and more aggressive cardiovascular risk reduction.

And we see that the market can can bear a lot of people talking about this severe disease number one killer in the world for for everybody that's concerned about patients and what we can do about it.

So, overall, we're still very bullish.

Hey, RJ, I know we've got several callers still hoping to ask questions, and I just want to give the callers a heads up that we'll probably go a few minutes over the top of the hour.

So why don't we take the next question, and we'll do our best to get to everybody.

And if we're unable to do that, then we'll, we'll obviously, Arvind and his team will be available later.

Let's take the next question.

Your next question comes from the line of Mohit Bansal from Wells Fargo.

Your line is open.

Great.

Thanks for taking my question.

Maybe a question on test fire.

So given that right now it needs to be administered by a provider,

what kind of reservation do you expect from the doctors at this point in terms of prescribing the agent,

given that UP is available for self-administration?

And the question is, is there a possibility in the future that you could come up with a

self-administration injection which could actually help it become a self-administered at-home product?

Thank you.

Thanks, Mohit.

Unfortunately, because severe asthma, especially uncontrolled severe asthma, is such an acute condition,

many of these patients are under frequent care of a pulmonologist or an allergist.

And so they're seeing their physician on a very regular basis.

And I think given our very convenient once a month dosing,

it's seen as a fairly easy product to administer.

And of course, it's early days in the launch.

Okay.

But the feedback has been that the physician administration is not a barrier to initiation of test fire.

And allergists in particular are used to physician-administered products.

What I think the benefit side of this is really playing out is that they have much less work to do on the biomarker site or the phenotypic assessment site.

And so we've simplified their workflow in that regard.

[music].

I do think over the long haul, we'll continue to evaluate what we need to do to ensure that there's convenience and maintenance for patients.

And, you know, obviously, we're looking at other indications and other lifecycle opportunities for test fire.

So we will continue to assess whether or not we want to provide a self-administered option.

I mean, clearly, the product could be developed that way, and we continue to look at that.

Thank you.

Okay, RJ, let's go to the next caller.

Your next question comes from the line of Dane Leon from Raymond James.

Your line is open.

Thank you for taking the questions, and congrats on the quarter.

One question for me.

Presuming that the dose equivalency study of LumaCRAS actually demonstrates that 240 milligram Q days is equivalent to 960,

how are you playing on managing that transition at the end of the year?

And the reason we get this question a lot from investors is, obviously,

that will coincide with the presumed launch of a competitor in the KRS-G12C space.

Maybe to frame it, you know, just from a script being given, a three-day script being given at the end of the year,

if this dose equivalency does show that the lower dose is equivalently effective,

that 30-day script turns into a 120-day script.

Just how is your team thinking of managing this,

and is there any expected change to pricing that would be enacted if the lower dose is seen as equivalent?

Thank you.

Yeah, it's a pretty detailed hypothetical.

What I would say is, first off, we remain confident that the 960 milligram dose is the right dose,

and clearly the safety and efficacy benefit of that product looks very good.

And given the long-term follow-up data, clearly it's a high bar for us to be able to see if it can be approved upon at a lower dose.

So that's the one question that remains to be answered.

The way, I guess, I can't directly answer your question because there's so many different complicated variables to it,

but what I would say is we continue to look at the best way to provide the right treatment for continuing patients.

So if you're a second-line non-small cell lung cancer patient, you've been prescribed Lumicraz at 960,

you're taking it, you've responded, and you're stable,

I'm not sure any oncologist is going to want to lower your dose if you're a continuing patient.

Now, we've seen that in other disease areas where there might have been a dose change either to go up or to go down,

where patients who are on a stable dose usually stay on that.

So that would be my one bit of additional commentary to your question,

but we'll wait and we'll see the data and we'll handle it according to what the data say and what the FDA guides us to do.

Very helpful.

Thank you.

The next question comes from the line of Evan Seigerman from BMO Capital Markets.

Your line is open.

Hi all, thank you for taking my questions and squeezing me in.

I wanted to ask one for Murdo on Tesla now that we have the full label,

kind of the full spectrum approval as of last December.

So have you seen any sort of barriers for the more mild patients?

Do these patients need to go through any sort of step edits or are they able to get it pretty freely?

Do you expect that to change over the course of the year?

Just want to get some color on how you're pushing it or marketing it in those patients.

Thank you.

Thanks for the question, Evan.

No, we're really pleased with the response from payers and PBMs to ensuring

that they expand the label now, regardless of severity of psoriasis,

that patients can have strong access and good affordability for the product.

In fact, we've actually improved access this year versus last year.

So we've been able to use some of the prior authorization criteria,

things like percentage of body surface area.

There are some medical policies and prior authorizations where that's described as a percentage.

We've had many of those removed.

So we've actually opened up access for those patients.

And I think that it's easier to prescribe Otesla for that milder patient.

I was at the American Academy of Dermatology meeting in March and spoke to many dermatologists

and asked them what their prescribing experience was like and what the reimbursement experience was.

And I think many of them played back to us that Otesla was easier than it had been

in the past to prescribe for that milder patient.

The other thing we did was we enhanced our copay assistance and our own bridging programs

to ensure that that launch would go well.

So, so far, so good, off to a good start.

But I don't anticipate access being an impediment.

Hey, RJ, in consideration to the folks on the East Coast, you know, it's past the hour.

So why don't we take two more questions, please?

Your next question comes from the line of Corey Casimov from J.P. Morgan.

Your line is open.

Hi, this is Gavin on for Corey.

Thanks for taking our question.

I just had a follow-up from a question earlier in the queue

on Lumicrast-Penbro combo data late in the summer.

I guess just like the lung cancer patients, can you remind us

if this is predominantly second-line plus, or will there be sufficient patients

in the front line to assess a pathway or a path forward?

And then, should we also look for multiple doses and or different dosing administration?

I think you've discussed in the past sequential dosing versus other, other strategies.

Thank you.

Yeah, thanks, Corey.

Most of those patients will be second-line and beyond.

Maybe there is a limited experience in first-line.

And we are looking, you know, across a range of doses

with both combination and sequential therapy.

So you can expect to see all of that when the data are presented.

Okay.

Let's take one last question, RJ, and after that Rob's just going

to make a couple of concluding comments.

Your next question comes from the line of Colin Bristow from UBS.

Your line is open.

Good evening and thank you for squeezing me in.

I'll keep this quick.

Just quickly on the tax issues, could you just talk about whether we should do this as being essentially limited to 2015 or is there a scope for this really to permeate through to effectively 2021?

And then just quickly on LumoCraft, there was a small investigator led dataset presented to the ELCC a few weeks ago. We saw some relatively high rates of LFT elevations with LumoCraft in close sequence with PD-1.

I'm just curious how this compares to your own experience with the combo versus sequential dosing and anything else you can say about the path forward there.

Thank you.

Colin, thank you.

Look, on the case, we're very confident in the position we've had and our structure and how we've allocated profits between Puerto Rico and the United States.

So we're very confident in those reserves.

If you did think about going forward, I did suggest in the press release articulated that the IRS is currently auditing 2016 through 18.

If they did propose any transfer pricing adjustments, the magnitude of those adjustments will be lessened by the change in tax rates from the 2017 Tax Act, which reduced the differences between the tax rates applicable in the United States and Puerto Rico by approximately two-thirds beginning in 2017.

But once again, we're very confident in our structure and we're very confident in the level of our reserves, and so we don't anticipate any changes going forward.

Dave, you want to catch the second piece of that?

Yeah.

In regards to the ELCC data, these were uncontrolled data from an investigator in France, patients receiving monotherapy potentially after checkpoint inhibitors.

I can tell you that the rates of hepatic toxicity were higher than we've observed in our clinical trials program and through our ongoing pharmacovigilance efforts.

So I'm not sure why that was the case, but it was a heterogeneous, unselected group of patients.

It's hard for us to comment any further on those data.

Bob, do you want to comment?

Let me just thank all of you for dialing in.

We appreciate your support and your interest in the company.

As we've tried to convey through this call, we feel we're executing well here into the 2022 calendar year, and we look forward to being back together with you after the second quarter to report on our progress through the midyear.

Thank you.

Sorry we went a few minutes over.

Thanks.

Thank you, everybody.