Q3 2022 Bristol-Myers Squibb Co Earnings Call
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Good day and welcome to the Bristol Myers Squibb with third quarter results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Tim Power Vice President Investor Relations. Please go ahead Sir.
Thanks, Dennis and good morning, everyone. Thanks for joining us this morning for our third quarter 2022 earnings call. Joining me. This morning with prepared remarks are Giovanni <unk>, Our board Chair and Chief Executive Officer, and David Elkins, Our Chief Financial Officer also participating in today's call are Chris Boerner, Our chief commercialization Officer and summit here a lot our chief medical.
And head of global drug development.
You'll note we've posted slides to BMS dot com that you can follow along with for Giovanni and David's remarks.
For we get going will read our forward looking statements.
During this call, we'll make statements about the company's future plans and prospects that constitute forward looking statements actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward looking.
Some statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date.
Specifically disclaim any obligation to update forward looking statements, even if our estimates change. We'll also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items reconciliations of certain non-GAAP financial measures to the most comparable GAAP measures are available on BNS dot com with that I'll hand, it over to Giovanni.
You, Tim and good morning, everyone starting on slide four.
Pleased to share that we delivered another good quarter and we continue to advance our strategy to position Bristol Myers Squibb for sustainable growth.
In the third quarter, our in line and new product portfolio grew by 13% adjusting for foreign exchange and we delivered non-GAAP EPS growth of 3%, while also making substantial progress advancing our promising pipeline.
Highlights for the quarter included the approval of <unk>.
Our first in class <unk> inhibitor for psoriasis and closing of our turning point acquisition, which brings another product to our portfolio with <unk> expected to launch in the second half of next year.
Overall I am very pleased that we have significantly advanced the renewal of our portfolio.
We have now launched nine new medicines with three first in class products approved this year alone.
Let me take a minute to discuss our new products on slide five.
Our strategy is to accelerate a diversified portfolio of innovative medicines to market to renew our business and grow the company during the period of Revlimid exclusivity loss and beyond.
Supporting this strategy, we delivered three key new products. This year, although like comes Iris and so take two.
Each is a first in class asset and these products have the potential to contribute meaningfully to our growth.
<unk> marks the second approved Io combination that we delivered.
<unk> strong launch continued during the quarter furthering our leadership in delivering innovative cancer treatments to patients well into the next decade.
We're also encouraged with the progress we've made towards building our foundation for it comes Iris is a specialty cardiovascular medicine.
We are seeing increasing numbers of patients initiating therapy and their feedback has been very positive David will provide more details on the launch in a moment.
So take two has been approved with a label that reflects its profile and as a normal of choice medicine for moderate to severe plaque psoriasis. We are very encouraged by the early days of this launch and see significant benefit to these patients with this important new option.
Combined with our other launch products. These approvals represent a significant milestone in the renewal of our portfolio, allowing multiple avenues for growth in the second half of the decade and beyond.
Turning to our scorecard on slide six during the quarter, we made great progress on our pipeline milestones.
Beckman is now the first <unk> to have demonstrated superiority to standard regimens in relapsed and refractory multiple myeloma based on the positive topline results of parametric.
We also presented exciting data for mill vaccine, which has exhibited an approximate 30% relative risk reduction in recurrent symptomatic ischemic strokes on top of dual anti platelet therapy.
It has also shown a safety profile that is differentiated to existing anticoagulants.
We believe this asset has great potential as a next generation antithrombotic treatment and we look forward to initiating phase III trials sooner.
Samit can provide you with the scientific details during our Q&A.
Turning to slide seven you can see several important pipeline catalysts ahead.
These include key approvals as well as important registrational data readouts, including the commands study for <unk>.
As you will recall, we've said that our early pipeline will generate multiple proof of concept data sets overtime.
Importantly, we are expecting a proof of concept data for some exciting assets from our early pipeline in the near term.
These data could support transitions of early stage assets over to full development, thereby strengthening our mid to late stage pipeline.
Examples include <unk>.
Our <unk> T cell engagement for multiple myeloma.
We believe this could be a differentiated asset and we expect to present data at ash in December .
Our second generation LPGA, one agent for pulmonary fibrosis, the unmet need in this disease is very high and should phase II data be supportive this asset could move into phase III trials next year.
Our androgen receptor degrader is generating some early promising data and we hope to transition the asset to full development next year.
These highlights the breadth of our protein homeostasis platform beyond the sale months, including in solid tumors.
These examples demonstrate the power of our R&D engine with a new wave of innovative and differentiated medicines emerging which have the potential to treat patients with high unmet medical needs.
We look forward to updating you on our portfolio or mid stage assets going forward.
With this in mind, let me move to slide eight to give you a perspective on how we are thinking about our business moving forward.
With continued strong performance of our in line business and our nine launches now in full commercial execution, our priorities have not changed.
Delivering the full commercial value of the nine launch products expanding the opportunity for these assets through new indications and advancing our mid stage pipeline.
Additionally, we will continue to leverage our financial strength and flexibility to prioritize business development opportunities.
As we deliver on renewing our portfolio and transforming our company with a younger and more diversified business I am confident in the future of Bristol Myers Squibb.
We now have a critical mass across all four of our therapeutic areas.
Each has foundational inline brands exciting new products and a broadening mid to late stage pipeline.
This is important because we believe that is more diversified business of younger products supported by constant innovation and focus in therapeutic areas, where we have real expertise best position us to navigate the changing U S environment.
Before I turn it over to David I want to thank our employees for their relentless focus on delivering for the patients we serve.
I am confident we will continue to deliver for patients and our shareholders.
I will now turn it over to David to walk you through the financials.
Avid.
Thank you Giovanni and thanks again for joining our third quarter earnings call, Let's turn to slide 10 to discuss our topline performance unless otherwise stated I'll discuss sales performance growth rates on an underlying basis, which excludes the impacts of foreign exchange.
Revenues in the third quarter were approximately $11 $2 billion consistent with prior year, our diversified in line and new product portfolio grew strongly up 13% offsetting the impact of our recent low.
Now, let me touch on our performance of our new product portfolio on Slide 11, global revenues were over $550 million up 66% versus prior year driven by continued demand.
Both over prior quarter was also strong up 16% we continue to be very pleased with the performance of our new product portfolio and its future potential with three new launch brands this year and over $2 billion of annualized revenue. So far our portfolio has been largely de risk increasing our confidence in the potential to generate greater than 20.
$5 billion of non risk adjusted revenues in 2029.
Turning to slide 12 to discuss our performance of our solid tumor portfolio Opdivo sales continue to grow globally up 13% driven by demand for our newly launched in core indications.
In the U S sales were strong we continue to grow double digits up 17% versus prior year, driven by demand of our new newer metastatic and adjuvant indications, partially offset by declining second line eligibility as well as some use from <unk> in first line melanoma.
Internationally revenues grew 8%, primarily due to growth from new indications, particularly first line lung and Gi cancers.
Looking forward, we continue to expect growth of Opdivo from our new and expanding indications in both early and late stage cancers.
Now, let's move to up do lag we cannot be more pleased with the launch of <unk>. The launch is off to a great start being the first like three inhibitor to launch <unk> fixed dose combination with our PD one inhibitor opdivo.
Sales in the quarter were $84 million growing 45% sequentially and sales of up to like already annualizing to approximately $350 million.
At this point in the launch our share in first line melanoma is in the mid to high teens and as expected. We are seeing use of up to like coming from PD, one monotherapy and opdivo year avoid combinations.
Moving onto our expanded cardiovascular portfolio on slide 13, our leading <unk> <unk> had another strong quarter up 16% year over year.
In the U S sales increased 31% versus prior year, driven primarily by demand and favorable gross to net adjustments.
As expected sequential performance was driven by the typical dynamics, we experienced each year from higher gross to net payments as patients enter the donut hole.
Internationally <unk> has become a leading <unk> across numerous countries.
Given the success of the product pricing pressures as expected and peak growth pricing measures. In addition to at risk generic entry in the UK, Netherlands affected growth in the quarter.
Now turning to <unk>, our first in class medicine to treat underlying disease of obstructive hypertrophic cardiomyopathy. We are continue to be pleased with the progress we are making to bring this life changing medicine to patients.
To date, we have over 2000, Rems certified health care professionals, which is a good indicator for intent to treat.
And we've received received extremely positive feedback from physicians and patients. We are also making progress at large HCM centers to ensure they are operationalized.
<unk> available to patients as of the end of Q3, there are over 100 patients enrolled in our hub and growing each week.
As expected new patients are generally initiating treatment as part of their regularly scheduled echocardiograms.
Just on the time to transition patients to commercially defense dispense medicine, we expect acceleration of revenue beginning in Q4 and as we move into 2023 <unk>.
Chris can provide more details on the launch during Q&A, but we're pleased with the progress we've made.
Turning to slide 14 to discuss hematology as performance starting with Revlimid sales in the quarter were approximately $2 $4 billion sales were primarily impacted by generic entry, particularly in international markets in the U S. We saw slower than anticipated entry by second wave generics in September .
We expect to see generic erosion and progressively increasing in the coming weeks and at this point, we expect revlimid sales to be at the upper end of our 9% to $9 $5 billion range for the year.
<unk> global revenues grew 8% versus prior year, primarily driven by demand for triplet based regimens in earlier lines extending the duration of treatment for patients.
Moving to <unk>, which had another strong quarter sales were $190 million in the quarter up 22% versus prior year in U S revenue growth was impacted by a onetime change in distribution model in the prior year, excluding the impact from last year sales would've been approximately 25% versus prior year.
This is being driven by continued progress in increasing patient adherence and extending treatment duration.
Outside of the U S. <unk> continues to grow driven by demand in both Mds and beta thalassemia associated anemia.
To date, we are now reimbursed in nine countries and we will continue to secure reimbursement in additional countries in the future.
Now turning to our cell therapy assets at Beckman <unk> Z <unk> generated strong revenues in the quarter of $107 million. This represents growth of 59% versus prior year or 22% sequentially in.
In the U S sales growth was driven by strong demand offset primarily by timing of patient infusions, which we expect to materialize in Q4 outside of the U S sales increased due to a onetime step up of slots in select markets, which is expected to be sustained at this level for the foreseeable future. We are very pleased with the manufacturing progress we've.
Made to ensure beckman gets to more patients while we continue to work on further expanding our capacity as we prepare to move at Beckman into earlier lines based upon the positive readout of Karma III.
Finally on <unk> sales in the quarter were $44 million up 50% versus prior year demand remains strong and we continue to work hard to expanding capacity in the next year to benefit more patients with large b cell lymphoma as we communicated in the past, we expect Q4 sales to be largely similar to Q3 sales.
Now turning to our expanded immunology portfolio on slide 15.
Starting with suppose you <unk>.
Global sales in the quarter was $69 million.
Up 83% versus prior year, largely due to the expansion suppose yet and ulcerative colitis.
Sequentially in the U S sales were impacted by last quarter's favorable gross to net and wholesaler buying patterns of approximately $20 million. We continue to see demand growth of 12% over last quarter. Our strategy remains focused on further expanding volume. So we can continue to improve access in 2023, and we made progress on improving.
Quality of access as well.
Internationally, we are continuing to make strides in securing reimbursement in additional markets to get supposedly to more patients living with Ms and ulcerative colitis.
Now turning to our most recent launch <unk>, our first in class selective <unk> inhibitor for patients with moderate to severe plaque psoriasis we're extremely.
Really pleased with the U S label based on problem. The strong data while early in the launch we are very encouraged by the feedback we're getting from physicians. Our focus is to ensure many patients as possible get to establishing.
Establishing this medicine as the oral choice, allowing us to secure broader formulary position and 2024.
Internationally. We are also pleased to have received Japanese approval in September and we look forward to European approval next year.
Let's now discuss our third group P&L on slide 16.
I've already discussed revenues, so I'll now focus on the other key non-GAAP items in the quarter.
Gross margins decreased primarily due to product mix, partially offset by foreign exchange and related hedging settlements.
Excluding acquired in process R&D operating expenses were broadly in line with prior year.
And affected by the timing of spend acquired in process R&D charges in the quarter were $30 million related to an upfront payment to <unk>.
This was offset by $73 million of licensing income benefiting OID in the quarter.
The third quarter effective tax rate was 16, 9% driven by earnings mix and overall, we delivered another quarter of earnings growth with non-GAAP earnings per share growing 3% versus prior year.
Moving to the balance sheet capitalization on slide 17 cash cash flow from operations in the quarter were $3 7 billion.
The company's balance sheet remains strong with approximately $9 billion in cash and marketable securities on hand as of September 30th.
Which also accounts for the $3 3 billion, we paid for turning point therapeutics.
Our capital allocation priorities remain unchanged business development continues to be a top priority and we continue to execute on this strategy with the closing of turning point Therapeutics acquisition.
A recent example.
We remain committed to continued debt reduction in the quarter, we repaid $2 $8 billion of debt.
And we remain committed to returning capital to shareholders, we executed a $5 billion ASR earlier this year and.
And have $9 5 billion remaining in our share authorization and we will continue to be opportunistic on share repurchases.
Now turning to our 2022 non-GAAP guidance on slide 18, we are maintaining our full year outlook.
We continue to expect revenues to be approximately $46 billion.
With our in line and new product portfolio growing in the low double digit range, a recent low guidance and Revlimid guidance remained unchanged. However, as mentioned earlier, we expect revlimid sales to be in the upper end of the 9% to $9 $5 billion range.
We continue to expect gross margin to be approximately 79%.
And our operating expenses, excluding acquired in process R&D remained unchanged, primarily driven by favorability in FX as well as cost discipline, partially offset by the inclusion of expenses from the turning point acquisition.
Putting everything I just mentioned together, we are reaffirming our full year non-GAAP EPS guidance, reflecting the strength of our underlying business and absorbing the approximate <unk> <unk> impact from turning point acquisition.
Before we move over to Q&A session I want to express my gratitude to our employees for the performance in the quarter and their continued commitment to our patients.
I'll now turn the call back over to Giovanni Tim for Q&A session.
Alright, Thanks, very much David Dennis can we go to the first question. Please.
Thank you. The first question comes from the line of Chris Schott with JP Morgan. Please go ahead.
Thanks, So much just two for me I guess first one so tick too given the favorable label can you just talk about the target patient population youre going to be going after here. So specifically are you going to be looking mostly at Tesla failures. Initially we're going to focus more I guess on first line patients starting on systemic therapy.
I know you've talked a little bit also hear about reimbursement dynamics, but is there anything you can do to accelerate this process. Prior to this kind of 2024 timeline that you've been kind of alluding to.
And then the second quick one was just on <unk> I think we've had a few quarters now where we're seeing kind of a positive price adjustment.
I was wondering if you can elaborate a little bit on the dynamics there and is this something that's more onetime in nature and will reverse or is this kind of just a new base. We should think about for the business. We think what kind of volume growth going forward. Thank you.
Thank you Grace.
Chris Byrne I'll start and then David will give you some comments on Alex's tore so let's start with <unk>. Thanks for the question, Chris first I think the launch of <unk> is off to a very good start we're extremely happy with what we're hearing back from physicians, we've seen a very nice week over week acceleration of this product.
The majority of the use right now that we're getting is coming from the community setting that's really important because Chris as you may know about 80% of the volume in this setting is going to be in the community.
And so to see that level of uptake there early on is nice to see.
Also remember that the awareness of this product in the academic community going into the launch was very high. So the fact that we've got good uptake early in the days of this launch coming from the community is a good early start in terms of the patient population that we're looking at and we're actually going to be focused on the.
The dynamic portion of this population, which includes both initial starts in the first line setting as well as on any of those failures, who were coming off of <unk>. We're also seeing some early switching though that's.
Again, very early days, but I would say that on the <unk>.
Primary focus of this launch continues to be squarely on Oh Tesla.
That would be patients who would have gone onto a tesla.
In the absence of tick too as well as for those patients who have either failed that product or physicians decide to switch given the efficacy profile that we're seeing with <unk> in terms of what we're seeing on the access side. Our focus continues to be threefold on acts as a first removing.
The market new to market blocks that face all new products in this space.
Taking advantage of where we have open access today and remember we estimate that about 10% of patients have open access at the initial stages of this launch and then obviously, it's all about building volume.
During the early phases of the launch and then leveraging that volume we're going to do everything we can to accelerate getting into a better access position in 2023, but we certainly feel like we're in a very good position.
And on track to be in a good position in 2024.
David Yes, and on the electricity rebates you remember this is a very large product over $10 billion in revenue and based upon the product mix, we forecast what the anticipated discounts will be based upon the product mix across all of the payers and each quarter, we adjust that some quarters are up and some quarters down but the last two quarters.
<unk> had some releases and Thats, what really explains it but nothing changes for the full year really.
Okay. Thanks, David Dennis can we go to the next question. Please.
Yes. Your next question is from the line of Seamus Fernandez with Guggenheim Securities. Please go ahead.
Oh, great. Thanks, guys. So a couple of quick questions. So the first one is just on the competitive landscape.
Thats evolving and ulcerative colitis can you guys just give us a sense of how the launch of symposia is tracking.
Versus.
You see and.
What percentage of patients are you see specifically at this point.
As we look at this sort of separation of scripts and how youre thinking about the competitive landscape evolving with increasing interest from physicians in IL 20, threes, perhaps even the combination of IL 20 threes with.
With Biosimilar.
Humira as a potential new breakthrough in the category just wondering what you guys were thinking coming out of the most recent meeting as well and then just the last the second question.
Is on.
The <unk> launch just trying to get a sense of when you guys anticipate being a meaningful inflection.
In prescription.
Our revenue is this something where we should anticipate seeing a meaningful uptick in the fourth quarter.
Or is that potentially with the new indication in the middle of next year. Thanks, So much.
Thanks, Seamus so Chris in summit will address your question on UC and then Chris will comment on <unk> sure. Thanks for the question Seamus with respect to.
Suppose I would say is as opposed to continues to perform well we saw nice.
Double digit demand growth in the quarter. The majority of that growth is continuing to come from ulcerative colitis. So I would say that the majority of patients. If you look at where the growth of this asset is going to occur.
Occur through the end of this year and certainly as we get into next year. The majority of that is going to be coming from.
From you see the market share that we have for as opposed to <unk> and MFS continues to remain stable.
50% of the share in <unk> is coming to as oppose yeah. We feel very good about the position that we're in there obviously as we've talked about previously the.
The oral market and MFS is under some pressure from IV, but in spite of that we're maintaining a consistent share in the MS population. The big focus that we have continues to be on UC, We believe thats, where we have the strongest position as well as the biggest opportunities for growth and I would say that there I think.
But from a competitive standpoint, so far the position for as opposed to continues to be strong. Obviously it is a very competitive marketplace. But for example, with the introduction of <unk> that the growth of <unk> is not largely come at the expense of as opposed to in fact, we've maintained our position in that market in spite of the introduction of that.
New assets clearly there are a number of dynamics that are going to continue to play out, but we feel pretty good about our competitive position as the first is <unk> in this market.
You see the only other thing that I would note is that obviously as we've said the big focus we have with suppose used to build volume and then convert that volume.
Into a stronger access position, we did get a very important early win on the access side in October with Cvs zinc now covering as opposed.
With zero step edits and Thats important because if you add that with the other plans that smaller plans that have covered as opposed to we now have about 30 million covered lives and we are well on track to be in a good position with the other pbms as we go into 2023, and maybe I'll, let summit address the other part of that question and then I'll pick up on <unk>.
IOS very briefly Seamus side the way, we think about it is that unmet medical need still remains very high in patients with ulcerative colitis, and certainly new medicines are needed as you know we have our own clinical development ongoing, but so think too and I'll.
Sort of glad as two of the trials will read out from our proof of concept perspective in 2023 for CD and Yossi Yossi would be in the second half of the year and we will continue to explore if those drive and lead to future development as well as if combinations are going to be the possibilities of the future with Scott incentive care, our novel therapies, so more to come.
But we need to foresee the data and then picking back up on your question on <unk>.
I would just say at the outset, we are very pleased with the launch of <unk>, We're seeing a really nice acceleration for this product in the second half a few.
Elements of color around that first we've talked about the importance of certified physicians. We now have over 2000 Rems certified physicians as of the end of the second quarter, we're seeing a nice healthy increase in that week over week, David referenced that as of the end of the third quarter. We had 1100 patients who had been prescribed.
Prescribed <unk> Thats also seeing nice week over week increases I think we had referenced on the previous.
Quarterly call that a big focus area has been helping some of the larger institutions to build the infrastructure to support the use of this product we've seen very significant improvement on that in recent weeks and the pace of new starts that we're seeing is consistent with those accounts in particular getting organized.
Really all of the patients that we're seeing are going through our <unk> patient hub and that's really important because that will facilitate getting patients onto therapy and staying on therapy and I think it's notable that of the patients who have had multiple dispenses. Thus far none of them have dropped out therapy, which is a nice indicator of how well that hub is working.
I think the question with respect to how fast we're going to see an acceleration of revenue kind of speaks to this question of access access as anticipated has not been a barrier with this launch we now have about 50% of plans covering.
<unk> <unk>.
All of the patients who are covering <unk> iOS are being paid to the label, which is a good indicator of our strong position and you will have seen on the slides that as of the end of the third quarter or about a third of those 1100 patients had converted to commercial drug.
In October alone, we've seen an almost doubling of the number of commercial dispense.
That we saw in Q3, so we feel very good about the pace of this launch and what we're seeing in the second half and happy obviously to provide additional color as this launch continues and we get into the fourth quarter call.
Thanks, very much Chris Dennis can we go to the next question. Please.
Our next question is from the line of Andrew Baum with Citi. Please go ahead.
Thank you you address that references of events and in your prepared comments I'm just curious.
On Iraq, given the <unk>.
<unk> is an oral alternative I'm surprised it's not doing that perhaps you could outline what are the various having some of the key catalysts.
And then secondly in relation to <unk>, the 200 milligram dose the efficacy with <unk>.
With inferior to placebo.
There was some discussion about whether COVID-19 could have impacted the at the rate of <unk>.
Bullock chairing the initiation of that particular deficit gentleman went to whether you had had tried to characterize that particular dosing arm of the trial. Thank you.
Thanks, Andrew Chris Why don't you start on <unk> and then some at all to answer the question on the vaccine sure. The question on <unk> around some of the barriers that were seeing I would say that the biggest challenge with <unk> continues to be the proportion of patients who are getting an intensive chemotherapy as you know those dynamics.
In the first line setting here are continuing to evolve we have seen a decrease in the U S. Mainly of the percentage of patients who go on to get intensive chemotherapy and remember the label is for patients who receive intensive chemotherapy and get a complete response, having said that our focus with <unk>.
Continues to be uninsured that we maximize the opportunity for maintenance the maintenance share right now is about 50% to 60%. We think there's opportunity to continue over time to expand that maintenance market and for those patients who get intensive chemotherapy get a complete response go onto maintenance the choice needs to be on your <unk> and so thats been the significant focus we have.
For the U S team and then we continue to see very early stages of launch outside of the U S in markets like Germany, and France, and the early uptake there has been good.
Andrew Thank you for the question on <unk>, certainly we looked at the <unk>.
Bob This is around Covid and the 200 milligram dose doesn't seem to be driven through there, but we're continuing to explore why the group stood out but the point to be taken home I think remains that we have about eight fold dose range that is available to us for picking the right dose for the phase III trials and we are in that place where we are.
Now looking forward to initiation of the program in the next few months on the phase III side with the three indications that we've spoken about before and Facs NSP.
Thanks, Dennis can we go to the next question. Please.
The next question is from the line of Chris <unk> with Goldman Sachs. Please go ahead.
Thank you very much if I could ask a question about how you see dynamics in multiple.
Multiple myeloma setting, particularly the interplay between car T therapies and with anticipated arrival of bi specifics as an option.
Could you, perhaps talk about where you see the dynamics playing out in 2023, secondly, do a lag.
There has been a good revenue performance there can you remind us what your strategy is for broadening those label opportunities and when we might be able to see data to help build confidence in continued growth for that asset. Thank you.
Thank you Chris Summit.
Thank you Chris for the question on multiple myeloma I think the starting point is that no matter. How many therapies have been developed and can become available. The disease remains unclear at this time. So there is an opportunity to continue to bring more transformative more effective and safe therapies to these patients and in that regard certainly cell therapies have really.
Brought in some transformation in terms of getting patients into a complete remission and hopefully those are very long lasting.
The bi specific as one has been approved today in the U S. Our yesterday in the U S and certainly in the U S.
<unk> is a new armamentarium certainly brings a good efficacy. However, as you saw from the data that have been presented there are opportunities to continue to improve on the safety profile high rates of Crs are going to be problematic. As you also saw some of the statements made by thought leaders and that's where differentiation will need to continue to occur we will be presenting our one day.
At Ash this year for T cell engagement and Youll see that I think the other way to look at it as a holistic development in multiple myeloma, where we are also developing now and initiated.
Three phase III trials with cell mods and in the future probably will look like a combination approaches of diesel engages our.
Cell therapies, and how sell months can be added to those so we have a holistic approach.
Of treating multiple myeloma and trying to get more and more patients into a very long durable complete responses and at some point someday getting to a cure.
Can I add something for sure maybe I'll just add that while bi specifics in car T bolt share in this case the targeted <unk> I think it's important to keep in mind the offer very different characteristics for patients, including the availability of the products the duration of treatment adverse event profile and I think ultimately as we've said repeatedly.
The utility of <unk> car T and bi specifics is going to be unique to each patient.
The setting that we're in and we anticipate that these various patient factors are going to become increasingly important in determining how patients are treated and then maybe before I turn it over to Simon about the expansion of <unk>. Let me just say at the outset, we continue to be very impressed with the strong performance of op do lag out of the gate our focus has.
Ben and we will continue to be to target that PD. One monotherapy population I think as David alluded to we're seeing use of conversion of both opdivo and <unk> patients as well as PD, one monotherapy to drive that used as of today, but as we think about the growth of this asset going forward or forward remember where we sit.
Today PD, one monotherapy is still about 20% of first line metastatic melanoma and Thats the target for our commercial launch and so we see continued opportunity to grow this asset through the end of this year and well into next year and I think in addition to what Chris has just spoken about there are obviously many other trials that are ongoing.
The phase III setting we've got the melanoma study in the adjuvant setting as well as the CRC trial in the second line plus setting and MSS colorectal cancer and then looking into the continued enrollment in the phase III portion of phase II portion of non small cell lung cancer randomized portion as well as the two studies ongoing in HCC and multiple other signal seeking.
<unk> is ongoing with our collaboration.
With investigators so obviously as the data emerges we can take that program forward to multiple other indications.
Thanks, Ellen Dennis can we go to the next question. Please.
Yes. The next question is from the line of Tim Anderson with Wolfe Research. Please go ahead.
Thank you, Doug going back to mill vaccine.
I'm just trying to understand why we haven't seen phase III trial start yet you've had the data for a number of months.
Something like atrial fibrillation, you didn't run phase two so there is no data specifically in that setting to analyze.
You are in a race with other companies.
Why haven't we seen anything posted yet it's almost makes me wonder is FDA.
Preventing you from advancing yet and are there concerns or something like that and then second question is just a general pipeline one firsthand.
It's been a pretty big positive news flow in 2022, I think there is the view that you go into more of a catalyst slight period in 2023.
And then what are the next two or three most important clinical catalysts coming up let's say over the next 12 months in your view.
Thank you Tim let me.
Ask summit.
To your question on both on <unk> and the pipeline I just want to say with respect to the pipeline Tim as I mentioned in my remarks, I think what's really exciting is that actually the mid stage pipeline is beginning to accelerate in a number of catalysts there.
I really important and.
That's why we highlighted that in my remarks, and we look forward to continuing to update you there.
Tim. Thank you for the question I am glad that you are as excited as us in terms of initiation of the phase III program.
Once the trial reads out we have to get in touch with their hesitant cities agree on the Doe's agree on the overall trial design and then we can initiate the plans.
By submitting the protocols to IRB ethics committees to the institutions. They have to go through before we can actually enrolled patients. So all of that is being worked through we have our partner Janssen and us we're working very diligently very closely to get the program started in the next few months, you'll get to hear the initiation of the phase III program for <unk>.
In terms of the pipeline and what's the new catalyst in the in the next year or two.
And about it before and I think our pipeline is fortunately very full.
Each of the therapeutic areas has.
Multiple opportunities beyond <unk> for example in cardiovascular space that we've spoken about I think we're looking forward to some of the readouts in the immunology space as we think about <unk> over the next couple of years for the ongoing eosinophilic Esophagitis study as well as.
I think Giovanni spoke about in his opening remarks FPA one proof of concept study if that reads out and if the data are similar to from an efficacy perspective, what we saw a couple of years ago in 2018, the chest publication that could open up the doors. If the safety profile is as well manage in a similar way.
We have re protecting them that will be.
Our registered and hopefully available in the second half of next year for patients with non small cell lung cancer that also mutations and as the data emerges. There are a few transitions that could occur in 2023 as well from early to late development such as.
Androgen receptor ligand dependent be greater or adding up to Matt and then of course, there is the readout for the commands.
While we are anticipating for <unk> as well. So there are multiple other catalysts that are coming through.
And the pipeline and great racing.
Thanks, So much Dennis can we go to the next question. Please.
Yes. The next question is from the line of Steven <unk> with Cowen. Please go ahead.
Thank you.
Revlimid continues to exceed expectations, presumably creating a tough compare for 2023. So I'm just wondering at this point are you comfortable with consensus looking for growth for Bristol Overall next year I know 2023 guidance will be issued next February but if you could tell us.
While you or whether youre comfortable or not willing to comment at this point that would be helpful. And then secondly on brand in Britain three programs were discontinued only <unk> remains one way or the other programs discontinued NRA continues if it was due to talks can you specifically tell us whether it was liver tox.
Thank you Steve.
Ask David to start on Revlimid and outlook and then summit.
We will answer your question.
Thanks, Steven on Revlimid as we said in my remarks, we still anticipate for the full year.
Revlimid to be in that 9% to $9 5 billion.
More in the upper half of that range, but as we said all along we're going to have quarter to quarter variability based upon how generic volumes enter the market and timing from quarter to quarter. So broad.
Hardly we're still in line with.
The forecast that we provided before as far as 2023 guidance.
Underlying business, we continue excluding foreign currency as we see this year, we continue to be able to grow the business and we will provide an update on 'twenty three guidance as we normally do on the Q4 call.
Thanks, David and just Steve on the <unk> side. It is certainly not the toxicity, we have set ourselves high bars for taking molecules into late stage development and we did not meet the high bar for those indications the indication for <unk>, continuing and we'll see what the data reads out and based on that data that we can make a decision whether that should continue or not.
Dennis can we go to the next two please.
Yes. Your next question is from the line of Luisa Hector with Barrington Burton. Please go ahead.
Hi, Thank you for taking my question.
Maybe just to try again on the outlook.
Seven multiple on revenue.
Two and a half billion of erosion.
Is that what youre expecting for next year, and then I wanted to try and clarify on that.
Income.
Partly connected team your statements.
On IP R&D, but also when we look at that line with it.
And in Commvault licensing comment does seem to be a step up.
I'm, just wondering if that could impact the <unk>.
Diabetes with after that.
Hey, Jeff.
The one off item within the line in Q3 or something a bit more.
Correct.
Thank you Luisa So let me just reiterate nothing really changes with respect to 2023 in terms of our outlook and that includes the fact that we continue to see.
Approximately $2 5 billion of decline for Revlimid, but David Ken Ken can give you more insights into the second question you had.
No.
It's a good question and a couple of good things that are going on there one is that our royalties on PD one in diabetes continue as those businesses grow.
The royalties that we receive on those business continue to grow a couple of other things. If you just think about interest rates with our cash balance interest income is increasing but as you know we've been stepping down and paying down our debt. So our interest expense has been declining.
And some of our licensing income that we've seen come through has also improved so you put all four of those factors together and that's.
How we see the <unk> progressing.
Better over time.
Recall, though longer term as it relates to that royalty income.
Those royalty rates will step down on our <unk> franchise in 'twenty, three and going in 'twenty four for PD. One. So we will update you on that guidance when we do guidance on the fourth quarter call.
Thanks, David Tennessee, We go to the next question. Please.
The next question is from the line of parents Lin with Morgan Stanley . Please go ahead.
Hi, Thanks for taking the questions.
Maybe two for me I was just wondering.
First on <unk>, just a clarification.
Maybe for Chris you mentioned that commercial access is improving.
This quarter relative to last quarter, I think you said something about doubling so does that mean, we should think about sales for <unk> and the $10 million range and then your T cell engaged or the data we're going to see at Ash, maybe you could just remind us I know you changed the formulation to a sub Q. There. If youre confident you now have a go forward dose and you are seeing less Crs.
Uh huh.
And then maybe you saw with the IV formulation and if you expect to be competitive with <unk>, which was just approved from J&J. Thank you.
Thank you, Chris why don't you start on <unk> and summit.
Sounds good so terence thanks for the question, let me clarify a few things first while we're not going to give.
Specific product level guidance for the fourth quarter, what I would say is that we are very happy with the conversion and increasing conversion of patients on <unk>.
To commercial drug remember as you think about this launch you need to think about it in the context of how many physicians are rems certified our ability to then translate those physicians into getting patients into clinics and getting on therapy, we're seeing a nice increase week over week in terms of patients coming in it at the top of the funnel. If you will because they are going into our hub there.
Staying on therapy, and the fact that now we're converting those patients to commercial drug at a faster clip I think it was a very good sign that this launch continues to accelerate in the fourth quarter. The only other thing to keep in mind is that because most patients will take some time to initiate therapy as well as work through the benefits there.
Vacation and any appeals process those patients are going to be on free drug for roughly seven to eight weeks at that time, we will decrease over time as we get pbms.
Coverage decisions, formerly through the end of this year and into early next year, but that's how you should think about the flow of patients and the sequence of patients. The really good news, though is that we continue to see physician interest in this product that feedback has been good we're seeing week over week increases in patients at the top and we're seeing a nice increase in conversion of patients.
Going on to commercial drug and we anticipate that continuing.
Turns for the T cell engaging <unk>, certainly will not get into the specifics of the data, but as you recall.
The IV formulation, we had very good efficacy that we had seen but their toxicity profile was not acceptable and that's why we switched the subcutaneous and the data will be presented so certainly after the presentation of the data we are happy to get into that.
Log as to what the data are and how we perceive them as we go forward.
Thanks, So much Dennis can we go to the next question. Please.
Yes. The next question is from the line of card Carter Gould with Barclays. Please go ahead.
Great. Good morning, and thanks for all the color on <unk> I have two more on that front, though for summit I guess first off we start with the non obstructive trial design.
<unk> III got posted just wondering.
But it's pretty sparse on details and how youre thinking about titration setting given the phase II work that was done here was more drug concentration dependent obviously, the rems is more echo dependent so just how youre thinking about titration in the non obstructive destructive setting and then also on two to four.
How do you think about this.
Should we be thinking about this as a backup to.
Cam's iOS or do you see this as coexisting, maybe in a different set of indications like how fast et cetera. Thank you.
Sure, let me start with <unk> first in the non obstructive and non obstructive hypertrophic cardiomyopathy. We are looking forward to initiation in terms of enrollment of patients in that phase III study.
The data that we had seen already in the phase II quite promising looking at the impact on Biomarkers and even in the longer term follow up of that trial.
<unk> got to give you the specifics on the titration at this time of uncertainty.
Discussions once we have initiated the trial, we will be able to talk more about it.
For <unk> two to four as you know that we always want to have multiple shots.
This is a new molecule that we are developing certainly the first trial that youll, probably see is going to be looking also at obstructive hypertrophic cardiomyopathy and the reason for that is because we've got <unk> data we have in house data the way, we would want to compare the trial compare the drug and see what differentiation features the DUC carries and then as we look to the future from a development perspective.
We have defined which indications we want to pursue with them might get two two for which indication we wanted to replicate with <unk>, we have not defined and decided yet on how we will develop to two four and certainly when we have that we'll get into that dialogue as well.
Thanks, Tim.
Dennis can we go to the next question. Please.
The next question is from the line of Matthew Phipps with William Blair. Please go ahead.
Good morning, Thanks for taking my question just a quick one for me there's been a couple of failures this year.
Where maybe the phase twos at 50, histological endpoint, but not the dysphasia endpoint.
Maybe you can give us any comments on why you think IL 13 that would be better suited.
<unk> had both of those endpoints.
The phase III.
Sure.
Sure we can certainly.
The one that you're probably talking about is the one that we saw yesterday or day before but remember the mechanism of action of with that as the IL five inhibition as opposed to some vacuum out where it is the IL 13 inhibition. The differentiating feature also compared to some of the other drugs that are approved or have shown data. This is a direct inhibitor profile 13 with the downstream.
Jim effect of inhibition of both are one or two receptors.
We believe that the inhibition of both is important not only for decreasing the inflammation, but also for re modeling and reversing the fibrosis. We have seen this in the phase II trial that was presented a while back <unk> document and that was the basis of taking this into a phase III trial and certainly we'll be looking at this AGM this trial as well.
And a couple of years when that trial reads out, we're hoping to be able to replicate and improve on the results of the phase II study.
Okay, Let's go to the next question please.
Next question is from the line of Colin Bristow with UBS. Please go ahead.
Hey, good morning, and thanks for taking the questions.
Maybe just a quick follow up on that to you previously talked about the strategy to build volume against established competitors sort of free drug or bridging programs could you just give us more specific detail on what you are doing that.
Just to help us think about the progression of the sales trajectory.
And then secondly on the next generation image portfolio.
Expect to see at Ash with regards to iPad demand domestic demand. Thank you.
Thanks, Kevin Chris wanted to Stefan to take till then.
Summit will take the permit sure. So as we think about the progression of so take two I think you start with a couple of things upfront. One is the profile of the drug we've talked about that at some length that the fact that we have a very clean label here. It gives us the ability to tell a very strong story about two phase III studies that show and ethics.
See improvement against the existing standard of care. So we've got a great efficacy message to tell a good safety profile. The value of these of this asset is very clear we saw that coming into this launch and all of the feedback that we've received from physicians. Thus far is consistent with that the next important point is that we've got a very.
Experienced team they know this space well, so we've been able to penetrate where the vast majority of these patients sets, which is in the community setting. So we feel very good about that the trick with this space because it is a heavily managed space is going to be that we do a few things really well initially we've got to remove new to market blocks those.
Blocks are put in place for every new product in this space.
And that's a big focus for US right. Now. We then have to take advantage of where access has opened and as I said earlier in response to the previous question, that's about 10% of patients and so we're doing everything we can there but for the majority of patients that focuses on building volume and then leveraging that volume to negotiate with pbms to get you into a more.
Favorable formulary position as soon as feasible.
Because of the timing of this launch we certainly missed the window by and large for negotiations. This year. The focus will be on negotiating for 'twenty for access though in response to Chris's earlier question, we're going to do everything we can to accelerate that so that's really the focus that we have we have a robust set of pace.
<unk> services that we can offer to patients to get them onto therapy, we give them.
Bolt of initial free trial offer as well as a bridge program and we would anticipate significant use of that bridge program to guide us into when we have a more favorable formulary position.
And just talking about ash in general one of the things that you will be seeing over there is a presentation of the data for the expansion arm of music denied.
In combination with dexamethasone in fifth line plus patient population, but in general for multiple myeloma, we will also be presenting the data for <unk>.
<unk> car T, which is <unk> targeted as well as for Carmike to one of the arms, which is looking at proof of concept in the post transplant treatment setting that data will also be presented at Ash. In addition to adding up demand, which is the T cell engagement.
Thanks, So much can we go to the next question. Please.
The next question is from the line of Evan <unk> with BMO capital.
Please go ahead.
Hey, guys. Thank you for taking the question.
One on FX can you provide just some color as to when we may see the commentary data I know that $2 70 press.
Press release later, a medical meeting and I see that Theres now Green checkmark on your.
Near term catalysts and then also more broadly speaking when you think about the evolution in the CMA car T space.
What do you how do you position at Beckman versus say the competitors, especially with.
Today, the cartoon for data on the horizon as well thank you.
Thank you.
Sure.
I'll start with that and from a karma to data presentations perspective, certainly as I said earlier those data will be that is a proof of concept with a longer follow up.
At Ash meeting and certainly we've talked about.
What the initiation of the next trial based on those data would be and that's what I think 270 <unk> talked about how we intend to initiate the trial in the earlier setting. It is a differentiated our way of looking at it and more details will be available when we actually do launch the trial in terms of trial design and how we have thought about it in.
Terms of the comparison of <unk> versus.
The data from correctly once again as Chris has spoken about earlier, we do believe that <unk> remains a very differentiated asset from a safety profile perspective, as well as the first cut.
RT that has data.
Randomized phase III trial, showing superiority to current standard of care. So that profile will continue to grow and that profile will continue to improve hopefully and thats. Why we are thinking of initiation of that early line trial in the post transplant setting.
Thanks, Amit can we go to the next question. Please Dennis.
Your next question is from the lines of de Leon with Rgs. Please go ahead.
Thank you for taking the questions congratulations on the.
Our results and progress this quarter.
<unk> easy ones for me firstly.
Launch of <unk> has been going quite well and.
Looking into 2023, I think theres still some questions about the cannibalization potentially within the melanoma setting relative to opdivo.
As the street still expecting quite robust growth of Opdivo into next year could you just comment around what you're seeing as the launch starts to mature a little bit with opdivo lag and whether your expectations are that going to have a limited impact in the utilization of opdivo in the melanoma setting and then secondly, an easy one are you.
Expecting embark.
<unk> for <unk> next year or is that being pushed to 2024. Thank you.
Thank you Chris want to start maybe I'll start with <unk>.
I'll turn it over to summit. So what we're seeing right now just to set sort of where we are with the <unk> launches.
We are sourcing roughly 50% to 60% of this business from PD, one monotherapy and about 40% to 50% from Opdivo and <unk> combination at slightly higher Opdivo youre avoid cannibalization in the third quarter, we had anticipated pre launch, but we would expect that to stabilize and we would continue to expect.
Going forward the majority of <unk> business is going to come from PD, one mono therapy remember in the market right now as I said earlier, we've got about 20% market share for PD, one monotherapy, that's roughly evenly split between Opdivo and Keytruda. So the way I would think about the progression of <unk> lag is first.
And foremost you will see some cannibalization of Opdivo and somewhat Bureau boy as well. However, the vast majority of the use of this asset in the long run should continue to come from PD, one mono therapy. Some of that will be opdivo some of that will be from the competitor.
And as I think about the growth trajectory that 20% share as the target for us of PD, one mono therapy, that's where we think we should be getting the business and the fact that we still have 20% of this market to go gives us confidence we can continue to grow this overall business going into 2023.
And just on embarked resolves those.
<unk> projected to be in 2024.
Thanks <unk> next question please Dennis.
Your next question is from the line of Mohit Bansal with Wells Fargo. Please go ahead.
Great. Thanks for taking my question.
One clarification and one question if I may on <unk>, Chris.
Chris I think you mentioned that one third of the patients.
Skype <unk>, Ireland commercially, but then you mentioned that.
But we have seen a doubling of that can you. Please clarify what is doubling the number of commercial patients.
The funnel are prescribed description overcome that.
And then the.
And then the second part of the question is regarding mill vaccine. The indications you had mentioned SSP and Acs This seems to be a little bit of acute type of indications that so yes. The patient numbers are high, but but duration of treatment may be smaller.
That is only for a month personal after a stroke. So just trying to understand how should we think about the opportunity in these acute type of settings. Thank you.
Sure maybe I'll start on the <unk> question. So.
Let me just clarify the one third of the 1100 patients roughly 1100 patients that we had as of the end of Q3, a third of those patients had dropped down to commercial drug beyond commercial drug.
And what I was referencing was in the first three weeks of October we've seen an almost doubling of the number of commercial dispenses that took place through all of the third quarter.
That illustrates an important consideration for the trajectory of commercial sales here for this product which is that we're.
We're starting to see an acceleration both in terms of the number of patients coming onto therapy, and the pace at which those patients are converting down to commercial drug and on the <unk> side, although the the words as acute coronary syndrome, but it doesn't mean that the treatment is only done in the acute setting or even for the secondary stroke prevention patients actually.
Stay on anti platelet regimens for example for a very long time on a chronic treatment period and so in a similar way <unk> is anticipated to be used in a chronic setting meaning the long duration of treatment rather than only in the acute phase.
Can we go to the next one please.
Yes.
The next question is from the line of Robyn <unk> with <unk> Securities. Please go ahead.
Great. Thank you I.
I guess Keith remains the number one on <unk> we're hearing.
Wondering about duration of therapy, we have got some anecdotal.
Some patients still fell a lot of itchy instead, they'll stop before the drug is actually working so could you comment on like what youre seeing for duration of therapy, and if you think that will change.
And then second on.
Do you have it.
Topical formulation that is being developed.
Can you talk a little bit about what your strategy might be there, obviously, the topical or be coming up.
<unk> market segment.
Maybe what different indications you might be pursuing thank you.
Thank you, Chris and then send it sure. So I think I think youre right that our big focus area for us on <unk> continues to be on duration of therapy. The way, we anticipate being able to drive that duration of therapy, though is to continue to focus focus on dose titration, what we're seeing right now.
Is about 50% of patients are dosed titrated and remember you need to have two dose titration to get the benefit that you saw.
In the clinical program in the real world setting and so about 50% of patients are dosed <unk> trading.
With the first step and that compares to about 80%, which is what we saw in the clinical study and if we can get that dose titration patients will get the full benefit of <unk> and we anticipate that that full benefit will translate into a longer duration of therapy. So I think that what you are hearing is consistent with the focus that we have for the continued growth of.
This product continue to make sure that <unk> is the standard of care in the second line on label population expand that population as much as we can by decreasing the time that patients are in <unk> and then ensuring that you get the full benefit of <unk> by focusing on.
Appropriate dose titration, which we anticipate will increase the duration of therapy.
Very briefly on <unk> two.
I think the overall potential for topical therapy is being evaluated in good up to inform you in due course, because landscape is continuing to evolve with multiple therapies coming for the milder population are mild population, we already have the approval for moderate to severe plaque psoriasis and the mild population indication will need to continue to explore.
Okay.
So thanks, everyone in closing.
<unk>, the new product launches in the last three years.
I wanted to take a moment to reflect on all of the progress. We have made we have significantly de risked our portfolio with strong clinical commercial and financial execution, and we are well underway to transform our business into a more diversified and resilient company I look forward to the coming catalysts ahead from our.
New product portfolio and our mid stage pipeline with that thanks again for taking the time to join our call today and as always our IR team will be available for any follow up questions. You may have thank you and have a good day.
Thank you that does conclude today's teleconference. We do appreciate your participation at this time you may now disconnect.
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