Q2 2022 Amgen Inc Earnings Call

You may now begin.

Good afternoon, everybody, and welcome to our Q2 call.

Okay.

Good afternoon, everybody and welcome to our Q2 call lots to cover today. So I'll go ahead and jump right in.

Some of the key themes, you'll hear about today include continued volume driven growth our strategy of seeking both internal and external innovation the ladder exemplified by our announcement this morning of acquiring chemo centric.

And lastly, navigating through a difficult macro environment.

We have posted the slides for your background and what do you use non-GAAP financial measures in our presentation today and some of the statements will be forward looking.

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

Lots to cover today, so we'll go ahead and jump right in.

Today, we'll be discussing our second quarter performance as well as our planned acquisition of chemo centric, which all of US here are very excited about.

Some of the key themes you'll hear about today include continued volume-driven growth, our strategy of seeking both internal and external innovation, the latter exemplified by our announcement this morning of acquiring chemocentrics, and lastly, navigating through a difficult macroenvironment.

Starting with our operating results, we delivered strong volume driven growth in the second quarter with unit volumes increasing 10%.

Our innovative products performed well globally for Panther, Oh, Tesla Prolia and <unk>, all delivered double digit sales growth in the quarter.

Kyprolis and plate inland silo.

Our innovative hematology oncology portfolio, all generated record quarterly sales.

Our two newest products <unk> and test supplier of both off.

Off to strong starts.

The <unk> is now being prescribed for patients with non small cell lung cancer in 25 countries around the world.

The aspire has made a big impact in a short period of time for a broad population of patients with severe asthma in the U S.

With our planned acquisition of chemo Centrex, we'll be adding another newly launched innovative product to our portfolio tab.

<unk>, which is four.

<unk> associated vasculitis, which is a serious and sometimes life threatening autoimmune disease.

<unk> is a terrific medicine, the first innovation in this space and more than 10 years and very much needed given the harsh side effects of the older treatments and the seriousness of the disease.

This product also fits right in amgen's strategic sweet spot.

Our decades of leadership in immunology, and nephrology will enable us to add value to the tab nios launch reaching them anymore, many more patients and much more quickly than would otherwise have been impossible.

We have posted the slides for your background.

You'll hear from Murdo in a moment, but let me just say that opportunities like this don't come along that often.

We're really looking forward to working with the highly skilled and committed team from chemo centrex to realize the full potential of this very innovative product.

We'll use non-GAAP financial measures in our presentation today, and some of the statements will be forward-looking.

We think we can make a difference for patients and earn an attractive return for our shareholders from this investment.

Dave will talk about the pipeline shortly.

Our innovative and Biosimilar molecules are proceeding well through the pipeline.

Our SEC filings identify factors that could cause our actual results to differ materially.

Highlights of course include the really encouraging data for our cardiovascular molecule will pass around which we expect to move into phase III testing.

So with that, I would like to turn the call over to our Chairman and CEO, Bob Bradway.

On the oncology side data from our bites or bi specifics in several solid tumors are giving us growing confidence in the role of these molecules can play in diseases, where there are still really big unmet medical needs like small cell lung cancer and prostate cancer.

Across the board our Biosimilars are advancing the plan setting us up for the growth of that business from future launches.

Bob?

Let me now turn to the current drug pricing debate in Washington.

By now it won't surprise you to hear that we're disappointed by the proposed legislation.

Okay.

For some time, we've been advocating for reforms that respect innovation and provide improved access to it.

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

The proposed bill does neither.

The bill will impose imposed price controls and price controls will stymie innovation.

At a time when our nation needs more innovation. The result of this bill will be less of it.

Adding to the problem to build those precious little to improve the affordability of medicines for patients.

So when it comes to innovation and affordability.

Still lose lose lose for patients.

Recent developments are no surprise, however, we've been positioning our business for some time for a world of compressed lifecycle and prices.

And if adopted this legislation would accelerate those trends and we will adapt accordingly.

We continue to believe that the world needs more innovation, not less and our focus will remain on advancing more of it.

Across inflammation oncology in general Medicine, we have a broad portfolio of innovative and Biosimilar products meeting the needs of patients globally, and we remain encouraged by the prospects for our long term growth.

Through the first half of the year, our team performed well meeting the needs of the patients we serve.

I'm grateful to them for their dedication to our mission.

Let me turn now over to Peter.

Thank you Bob.

The CFO organization welcomed scheme eccentrics, Amgen and we're excited to help enable the teams to serve patients.

Today we'll be discussing our second quarter performance as well as our planned acquisition of chemocentrics, which all of us here are very excited about. Starting with our operating results, we delivered strong volume-driven growth in the second quarter, with unit volumes increasing 10%. Our innovative products performed well globally. Repatha, Otesla, Prolia, and Avenity all delivered double-digit sales growth in the quarter.

We are pleased with our performance this quarter and we're on track to deliver against our long term objectives.

We continue to see the company successfully navigate through foreign exchange headwind, increasing interest rates inflation and supply chain pressures and the war in Europe , all while working through Covid.

<unk> surges.

We're grateful for the hard work of our 24000 mission driven colleagues at Amgen and serving our millions of patients around the globe.

I will present, our second quarter financial results before discussing our 2022 guidance.

The financial results are shown on slide six of the slide deck.

We effectively executed in the second quarter with year over year volume driven revenue growth of 1% and product sales growth of 3%.

Excluding the impact of foreign exchange revenue growth in product sales growth was 3% and 5% respectively.

Our EPS growth of 163% versus recast Q2, 2021 is favorably impacted by the $1 5 billion five prime in process R&D expense in 2021.

Excluding the $1 5 billion charge for five Prime non-GAAP EPS grew 6%.

Turning to product sales strong volume growth of 10% was driven by <unk> and <unk> entity.

As well as a number of other products in the portfolio.

Year over year volume growth was partially offset by declines in net selling price of 6% and foreign exchange headwinds of 2%.

Our established product portfolio generated almost $1 billion of product sales and continues to deliver strong cash flows to fund internal and external innovation.

Dislike the Cana centric deal today.

Transitioning to our Biosimilars.

<unk> remains the most prescribed adelina mab Biosimilar in Europe , and we are preparing and excited for the U S launch of this product in January 2023.

Other revenues of about $300 million decreased 24% year over year, primarily driven by lower COVID-19 antibody collaboration revenues versus Q2 2021.

non-GAAP operating expenses decreased year over year, driven primarily by the $1 5 billion five prime related expense in 2021 that I previously mentioned.

Recall from our Q1 discussion that we've updated our non-GAAP policy to no longer exclude such expenses from our non-GAAP results in accordance with guidance issued by the SEC This year.

For comparison purposes, our 2021 non-GAAP operating expenses will now include two items that were previously excluded.

First the $1 five recorded in acquired in process R&D associated with five prime in Q2 2021 and.

And next secondly, $400 million recorded in R&D related to an upfront payment to license rights to AMG $4 51 from <unk> Corporation in Q3 2021.

Excluding the impact of the five prime in process R&D billion five charge in Q2, 'twenty, one second quarter total non-GAAP operating expenses declined 5% year over year, reflecting continuous improvement driven by digitalization process simplification and automation, which.

More than offset investments to advance our pipeline and support product launches.

On a non-GAAP basis cost of sales as a percent of product sales decreased two two percentage points on a year over year basis.

In 2014, 7%, primarily due to lower COVID-19, antibody shipments and direct manufacturing costs, partially offset by evolving product mix.

non-GAAP R&D spend in the second quarter decreased 2% year over year, primarily due to lower marketed product support partially offset by higher spend in research and early pipeline.

non-GAAP SG&A expenses in the second quarter declined 2% year over year.

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

non-GAAP other income and expenses were a net $410 million expense in Q2. This was driven by net 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 retained significant financial flexibility to execute strategic business development opportunities.

We continue to execute on our capital allocation priorities.

First today's announcement of the acquisition of <unk> is a great example of investing in the best innovation, whether internal or external.

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

Third returning capital to shareholders through growing dividends, including a $1 94 per share in the quarter, representing a 10% increase.

From the prior from last year's quarter.

And fourth opportunistic share repurchases and while we had no share buybacks in the second quarter Q1, 2022 at $6 3 billion.

Let's turn to the outlook for the business for 2022.

We are pleased with our progress through the first half of 2022, and we continue to be confident in the trajectory of our growth brands.

For the full year, we now expect to absorb $500 million in foreign exchange headwinds against product sales based.

Based on recent foreign exchange rates of which we absorbed $200 million in the first half of the year.

Reflecting our effective execution to date.

While considering the challenging foreign exchange dynamics, we're narrowing our 2022 revenue guidance range to $25 5 billion to $26 4 billion.

Our non-GAAP EPS range of 17% to $18 remains unchanged.

This range encompasses foreign exchange headwinds of approximately 3%.

Or <unk> 45 for the full year based on recent foreign exchange rates of that 45, we experienced approximately 20 in the first half of the year.

So we anticipate an additional 25.

And foreign exchange headwinds against EPS in the second half of the year.

Our non-GAAP EPS range also encompasses costs associated with our acquisition of <unk>.

Both foreign exchange and Cayman Centrex will influence our performance within the range.

I'll share a few additional points to consider for the remainder of 2022 with a particular focus on how these trends are likely to impact Q3 and Q4.

First we expect foreign exchange headwinds against product sales in Q3, and Q4 of approximately $150 million in each quarter for a total of $300 million for the second half of the year.

These headwinds are most pronounced in brands with significant X U S scale, such as Prolia, Aeronef, <unk> Vectibix and ex Cheever.

Second anticipated negative pricing trends for <unk> and <unk> are expected to continue in the second half of the year.

And we expect quarter over quarter product sales declines in those products for the remainder of the year.

We expect <unk> sales for the year of roughly $300 million.

And <unk> sales for the year of roughly $850 million.

As we've noted growth in Biosimilars will be driven by the addition of new products and geographies and we look forward to being the first biosimilar to Humira the launch in the United States with <unk> in January 2023.

Third.

We expect Q3 Enbrel product sales.

To approximate Q2 enbrel product sales.

For for.

For the full year, we now expect Neulasta product sales to be between 1.0 billion to $1 1 billion.

This is a change from our previous range of <unk> 9 billion to 1.0 billion we.

We expect the negative pricing trends for Neulasta will continue in the second half of the year.

Fifth although we expect the net impact of these factors will result in Q3 revenues and EPS lower than Q2.

I would reiterate that our full year EPS guidance remains unchanged at 17 to $18.

We now expect other revenue for 2022 to be in the range of one four to $1 6 billion versus our prior range of one four to $1 7 billion.

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

We continue to expect that operating expenses will increase in the second half of the year versus the first half of this year, including important investments in our pipeline as well as both current and upcoming launches again, including <unk> in January 23, and increasing R&D spend in the third and fourth quarter.

We continue to expect 2022, non-GAAP operating margin as a percent of product sales to be roughly 50%.

We continue to expect non-GAAP cost of sales as a percent of product sales to be 15, five to 16, 5% our expectations for non-GAAP R&D in 2022 remain unchanged based on our recast 2021 results, which now include $400 million of expense in Q3 relates.

The license with K Casey for AMG, $4 51, or.

Our expected 2022, non-GAAP R&D expense now equates to a decrease of 4% to 6% year over year.

We expect non-GAAP SG&A spend to be flat to slightly down year over year as a percent of product sales.

We continue to expect other income and expenses to be in the range of one six to $1 8 billion with an increase in Q3 over the run rate of the first two quarters due to both increasing interest rates and our share of <unk> results.

And finally for the full year, we anticipate a non-GAAP tax rate range of 14.0% to 15.0% upfront.

From our prior guidance of 13, five to 14, 5%.

We will effectively execute throughout the remainder of 2022, despite the continuing headwinds we will continue investing in the best innovation we.

We look forward to the launch of <unk> in January 23, driving the launches of test fire and luma craft progressing our pipeline and successfully integrating <unk> and delivering on our 2030 objectives.

This concludes the financial update I'll turn it over to Murdo Murdo. Thanks, Pizza second quarter product sales increased 3% year over year, driven by a 10% volume increase excluding the impact of foreign exchange global product sales grew 5% with.

Alkyprolis, Endplate, and Blinsito in our innovative hematology-oncology portfolio all generated record quarterly sales.

We delivered record quarterly sales for Prolia, <unk>, Kyprolis and plate and blend sito and delivered double digit volume growth for several additional products, including <unk> and Luma Kras are ex U S business grew 5% with volume growth of 20% year over year.

In addition to the strong second quarter I'm also personally excited about our announcement to acquire <unk> centric.

And the opportunity to help patients with severe active <unk> associated vasculitis, a serious and potentially life threatening autoimmune disease and I'll say more about <unk> as I comment on the performance of our inflammation portfolio.

Our two newest products, Lumicrast and Tespire, are both off to strong starts. Lumicrast is now being prescribed for patients with non-small cell lung cancer in 25 countries around the world.

I'll start with our general Medicine business, which includes Prolia if entity for Panther <unk> overall revenue for this portfolio grew 17% year over year, driven by 24% volume growth.

In bone health Prolia sales grew 13% year over year volumes grew 12% driven by an increase in both new and repeat patients.

As entity had record sales of $191 million for the quarter, driven by 60% volume growth in the U S and 37% volume growth outside of the U S.

Enbrel sales decreased 8% year over year for the second quarter, primarily driven by declines in net selling price and volume Enbrel remains a frequently prescribed therapy due to its long track record of efficacy and safety.

Our launch of test buyers off to a very strong start with $29 million in sales in the second quarter I am encouraged to see that both allergists and pulmonologists have prescribed test across a broad range of patients with severe uncontrolled asthma.

We're also seeing initiation in both biologic naive and previously treated patients on.

On the access front test buyers, a medical benefit product for which we received permanent reimbursement coding as of July 1st.

Physicians acknowledged <unk> unique differentiated profile and has broad potential to treat the $2 5 million patients worldwide with severe asthma, who are uncontrolled or biologic eligible without any phenotypic and biomarker limitation.

Tespire has made a big impact in a short period of time for a broad population of patients with severe asthma in the U.S. With our planned acquisition of chemocentrics, we'll be adding another newly launched innovative product to our portfolio, Tavneos, which is for anka-associated vasculitis, which is a serious and sometimes life-threatening autoimmune disease. Tavneos is a terrific medicine, the first innovation in this space in more than 10 years, and very much needed given the harsh side effects of the older treatments and the seriousness of the disease.

Now our agreement to acquire Chemosensory X brings a compelling opportunity into IRA leading inflammation in nephrology portfolio with <unk>. Our recently launched first in class treatment for anchor associated vasculitis or AAV.

This product also fits right in Amgen's strategic sweet spot.

Our decades of leadership in immunology and nephrology will enable us to add value to the Tavneos launch, reaching many more patients and much more quickly than would otherwise have been possible.

Let me take a minute to talk about how important I think <unk> will be.

For patients.

AAV is a serious systemic autoimmune disease that leads to inflammation and eventual destruction of small blood vessels. In this inflammatory process can lead to permanent organ damage and in some severe cases can be life threatening.

<unk> represents a significant advance in the treatment options for the eight to 10000 U S patients a year, who developed severe active disease or experienced major relapses of AAV.

We're looking forward to meeting and working with the talented team at Cumulus Hendrix, and I'm confident that by applying amgen's deep experience in inflammation in nephrology and substantial market presence. We can help many more patients with AAV with tab meals.

Moving to our hematology and oncology business, our six innovative products grew 14% year over year with 11% volume growth. This was driven by strong volume growth for kyprolis and plates and blood cycle, which we expect to continue throughout this year.

<unk> volume declined 2% in Q1 was flat year over year in Q2.

Our launch of <unk> is progressing well with revenues of $77 million in the second quarter, representing 24% quarter over quarter growth in the U S. <unk> has been prescribed to over 3000 patients by over 1900 positions and we've seen broad adoption in the community setting where the majority of non small cell lung.

Cancer patients are treated with <unk>.

Fortunately, while 85% of patients in the U S are tested for their <unk> status.

Only 50% of the time do oncologists have these test results available to support second line treatment decisions and.

And our teams are removing barriers to ensure that the oncologist is able to review <unk> when the patient progresses beyond first line therapy, and we've seen that when the <unk> status is known in the second line setting 85% of patients received <unk>.

Outside the U S. <unk> has now been approved in over 40 countries and we're actively launching in 25 markets and rapidly pursuing reimbursement in the remaining countries.

Sales of our oncology Biosimilars declined 24% year over year, while our biosimilar certain vaccine can ginty, both hold leading shares we expect continued net selling price deterioration in volume declines driven by increased competition.

In total our Biosimilars portfolio has become an industry, leading franchise, which has contributed $5 5 billion.

<unk> sales cumulatively.

Looking forward, we're excited about the upcoming launch of the MTA visa in the United States in January of 2023, followed by the next wave of Biosimilar launches to still Lara Eylea and <unk>.

Overall, I'm very pleased with our execution and volume growth in the quarter.

Our expanding international presence and a diverse portfolio of products, including the exciting addition of <unk> position us well to deliver on our long term growth strategy and with that I'll turn it over to Dave.

You'll hear from Merto in a moment, but let me just say that opportunities like this don't come along often.

Thanks, Murdo good afternoon, everyone I'd like to start by sharing my excitement for the transaction, we announced today as you've heard anchor associated vasculitis is a serious and sometimes life threatening disorder having.

We're really looking forward to working with a highly skilled and committed team from chemocentrics to realize the full potential of this very innovative product.

We think we can make a difference for patients and earn an attractive return for our shareholders from this investment.

Having treated these patients personally I fully appreciate the challenges they face and the benefits of <unk> and addressing the significant unmet need I look forward to working with the team at chemo Centrex.

Our research and development. The second quarter was one of continued execution, where we announced new data on several programs and continued to progress our robust innovative clinical pipeline.

Dave will talk about the pipeline shortly.

Our innovative and biosimilar molecules are proceeding well through the pipeline. Highlights, of course, include the really encouraging data for our cardiovascular molecule, opaziran, which we expect to move into phase three testing.

Beginning with inflammation in July to inspire was recommended for approval in the European Union by the committee for medicinal products for human use for severe asthma and also approved in Canada.

We initiated the Sunrise phase III study designed to assess the efficacy and safety of test spire in reducing oral corticosteroid use in adults with oral corticosteroid dependent asthma.

The rocket phase III program evaluating <unk>, an innovative anti ox 40 monoclonal antibody in patients with moderate to severe atopic dermatitis was initiated in June .

Following additional discussions with regulators and our partner we are amending the studies to further improve patient convenience and investigate a range of doses no safety or efficacy issues have arisen. We continue to remain very excited about the broad potential of this program in atopic dermatitis.

On the oncology side, data from our bites or by specifics in several solid tumors are giving us, growing confidence in the role these molecules can play in diseases where there are still really big unmet medical needs like small cell lung cancer and prostate cancer.

In oncology, we will present data from two of our thoracic programs at the upcoming World Conference on lung cancer the.

Across the board, our biosimilars are advancing to plan, setting us up for the growth of that business from future launches.

Let me now turn to the current drug pricing debate in Washington.

By now, it won't surprise you to hear that we're disappointed by the proposed legislation.

Across inflammation, oncology, and general medicine, we have a broad portfolio of innovative and biosimilar products meeting the needs of patients globally, and we remain encouraged by the prospects for our long-term growth.

For some time, we've been advocating for reforms that respect innovation and provide improved access to it.

The first is <unk>.

Through the first half of the year, our team performed well, meeting the needs of the patients we serve. I'm grateful to them for their dedication to our mission.

The proposed bill does neither.

And let me turn now over to Peter.

The bill will impose price controls, and price controls will, stymie innovation.

<unk> three targeting HOA bite molecule being studied in heavily pretreated patients with small cell lung cancer, a population with few treatment options in this setting carlotta mab demonstrated promising anti tumor activity with notable response durability.

At a time when our nation needs more innovation, the result of this bill will be less of it.

Adding to the problem, the bill does precious little to improve the affordability of medicines for patients.

So when it comes to innovation and affordability, this bill is lose-lose for patients.

Thank you, Bob.

Recent developments are no surprise, however. We've been positioning our business for some time for a world of compressed life cycles and prices.

The CFO organization welcomes chemocentric Samgen, and we're excited to help, enable the teams to serve patients.

And if adopted, this legislation would accelerate those trends, and we'll adapt accordingly.

We continue to believe that the world needs more innovation, not less, and our focus will remain, on advancing more of it.

Look forward to presenting an updated dataset at World Conference and continue to enroll patients in a potentially registrational phase II trial in this study.

This setting.

We're also investigating <unk> in combination with standard of care in first line small cell lung cancer in combination with AMG 404, our PD one inhibitor.

In patients with second line or later small cell lung cancer and in neuroendocrine prostate cancer.

I will also present data from our <unk> checkpoint inhibitor and shipped two combination studies.

Data from the former are embargoed until August 7th So we can't discuss the results today, but we can say is that PD ones have been challenging to combine with other targeted agents due to tolerability issues, we will present, a comprehensive dataset from this study.

As a reminder.

We are investigating multiple potential paths to first line treatment of non small cell lung cancer with luma kras potentially segmented segmented by PD lone expression levels.

Where the non small cell lung cancer population breaks down into roughly thirds across PD lone high expresses low expresses and PDL one negative expression we've.

We've seen promising early data in the PD lone negative population and based on discussions with regulators. We are planning to initiate a phase three study of <unk> plus chemotherapy in first line advanced or metastatic non small cell lung cancer.

While a smaller dataset, we're very encouraged by both the efficacy and safety of the <unk> combination with Revolution medicines ship, two inhibitor RMC $46 30 and.

In patients without prior <unk> inhibitor treatment.

Three of four patients with non small cell lung cancer, who received the highest two doses of RMC 46, 30 in combination with <unk> at a confirmed partial response in all four had disease control.

And gastrointestinal cancer. We're also pleased to announce that data from the full dose expansion phase <unk> study of <unk> in combination with Vectibix and refractory <unk> mutated colorectal cancer were accepted for presentation at the European Society for medical oncology Com.

<unk> taking place in September .

The final analysis of the fight study a phase II randomized double blind controlled trial evaluating <unk> <unk>.

<unk> growth factor receptor two b F GFR to be targeting monoclonal antibody and modified <unk> six in patients with previously untreated advanced gastric and Gastroesophageal junction cancer was completed these results continue to demonstrate that <unk> plus modified <unk>.

Six improves the clinical outcome of patients with <unk> expressing tumors with no new safety concerns are greater survival benefit was observed with increasing levels of <unk> expression.

In General Medicine, we announced top line data from our phase II study of <unk>, our small interfering RNA targeting LP little a these data demonstrated a significant reduction from baseline and LP little a of up to or greater than 90% at week 36 primary endpoint and.

Week 48 at the end of treatment period for the majority of doses, which range from once every 12 weeks to once every 24 weeks and dosing frequency.

New safety concerns were identified during the treatment period presence.

Presentation of these results is expected at a medical Congress second half of this year.

We're very excited about this innovative molecule and are moving to rapidly initiate a phase III outcome study.

AMG 133 are multi specific that inhibits the gastric inhibitory polypeptide receptor gipper.

And activates the glucagon like peptide one clip one receptor has completed enrollment.

We're planning to submit data from the initial cohorts of this phase one study for medical Congress occurring late this year and are actively planning the phase II program for this molecule.

In conclusion with an innovative portfolio, where approximately three quarters of our clinical stage programs have first in class potential and a growing portfolio of Biosimilars. We are well positioned to continue to deliver important new medicines for patients and growth for shareholders over the near and long term and with that I'll turn it back to Bob.

We are pleased with our performance this quarter, and we're on track to deliver against our long-term objectives.

We continue to see the company successfully navigate through foreign exchange headwinds, increasing interest rates, inflation, supply chain pressures, and a war in Europe, all while working through COVID variant surges.

We're grateful for the hard work of our 24,000 mission-driven colleagues at Amgen in serving our millions of patients around the globe.

<unk> for questions and answers okay. Thank you Dave could.

I will present our second quarter financial results before discussing our 2022 guidance. The financial results are shown on slide six of the slide deck. We effectively executed in the second quarter with year-over-year volume-driven revenue growth of 1% and product sales growth of 3%, excluding the impact of foreign exchange revenue growth and product sales growth for 3% and 5%, respectively.

Could you remind our callers of the process for asking a question.

Yes, if you would like to ask a question. Please press star followed by one on your telephone keypad if for any reason you'd like to remove that question. Please press star followed by two again to ask a question press Star one.

Our EPS growth of 163% versus our recast Q2 2021 is favorably impacted by the $1.5 billion, five-prime in-process R&D expense in 2021. Excluding the $1.5 billion charge for 5 Prime, non-GAAP EPS grew 6%.

Turning to product sales, strong volume growth of 10% was driven by Repatha, Prolea, Lumicrass, and Avenity, as well as a number of other products in the portfolio. Year-over-year volume growth was partially offset by declines in net selling price of, 6% and foreign exchange headwinds of 2%.

Our established product portfolio generated almost $1 billion of product sales and continues, to deliver strong cash flows to fund internal and external innovation, just like the chemocentrics deal today.

Our first question comes from Jay Olson with Oppenheimer. Your line is now open.

Transitioning to our biosimilars, Amgivita remains the most prescribed adalimumab biosimilar, in Europe, and we are preparing and excited for the U.S. launch of this product in January, 2023.

Other revenues of about $300 million decreased 24% year-over-year, primarily driven by lower, COVID-19 antibody collaboration revenues versus Q2 2021.

Non-GAAP operating expenses decreased year-over-year, driven primarily by the $1.5 billion 5 Prime, related expense in 2021 that I previously mentioned.

Recall from our Q1 discussion that we've updated our non-GAAP policy to no longer exclude such, expenses from our non-GAAP results in accordance with guidance issued by the SEC this year. For comparison purposes, our 2021 non-GAAP operating expenses will now include two items, that were previously excluded. First, the $1.5 billion recorded and acquired in-process R&D associated with 5 Prime in, Q2 2021, and next, secondly, $400 million recorded in R&D related to an upfront payment to license rights to AMG 451 from Kiowa Care Incorporation in Q3 2021.

Excluding the impact of the 5 Prime in-process R&D, $1.5 billion charge in Q2 2021, second, quarter total non-GAAP operating expenses declined 5% year-over-year, reflecting continuous improvement driven by digitalization, process simplification, and automation, which more than offset investments to advance our pipeline and support product launches. On a non-GAAP basis, cost of sales as a percent of product sales decreased 2.2 percentage, points on a year-over-year basis to 14.7%, primarily due to lower COVID-19 antibody shipments and direct manufacturing costs, partially offset by evolving product mix.

Oh, Hey, thanks for taking the question and congrats on the Cumulus centric deal it looks like Youre really.

Exciting opportunity to treat patients with high unmet medical need in AAV can you just talk about.

Synergies in particular.

Sure.

Revenue synergy potential and then.

Strategic fit for chemo centric within your organization. Thank you.

Thanks Jay.

As you can tell we're excited about the fit.

We expect our teams in implant inflammation and in Nephrology will.

We will be excited to have this product inside of Amgen and in terms of synergies.

Obviously, it was a very good fit but we're focused on investing and growing.

This opportunity we think we see some opportunities to help the team at chemo centric to reach even more patients and they have so far so our focus will be on that and.

So I don't think we really have much more to say.

At this point other than reiterating that we're excited about because it addresses an important need in the marketplace that makes a big difference for patients who otherwise don't have great alternatives available to them.

Our next question comes from Chris Raymond with Piper Sandler.

Your line is now open.

Thanks, very much maybe just on.

Also another question maybe digging in.

And also if I can touch on Bob your comments on the drug pricing legislation as it relates to this deal so.

I think you guys pointed out having a nephrology and flamm presence.

Nick for you guys on the commercial side, maybe just give a bit more color. How you intend to leverage these two forces in the specific roles so half.

And then maybe.

The second part.

This drug pricing language, there's a decent amount of angst specifically around provisions.

Targeting small molecules and allowing CMS to negotiate in year nine so cumulus centric is predominantly a small molecule company.

Just maybe square those.

Those two issues there if you will thanks.

Murdo why don't you start on the first question, yes. Thanks for the question Chris.

We are obviously pleased with the very nice strategic fit of tap nios in our portfolio.

The chemo centric seem have been mostly focused on rheumatology and and there are sub specialties of Rheumatologists, who treat a lot of these AAV patients. So they have been quite focused in their commercial efforts. So far we can scale that much more broadly we have a national footprint on rheumatology given our current.

In line inflammation business and we can also add nephrology.

Third of these patients end up getting diagnosed by a nephrologist given that one of the presentations.

AAV is renal impairment or renal inflammation I should say.

So that's the immediate benefit but we've also got resources like our.

Patient support programming our medical teams are.

<unk> institutional key account managers.

Our ability to work with payers to ensure that medical policies and prior authorizations are seamless for providers and patients. So there is there's a lot we can bring to the table.

Beyond just stop a very focused but very effective so far chemo centric effort.

And with respect to <unk>.

Washington, Chris Obviously, we evaluated this in the context of the legislation and the potential legislation, making its way through incentives at the moment.

And well as you pointed out this is a small molecule product. We don't expect that there is any particular risk for this product as compared to other small molecules that could become subject to the <unk>.

<unk> controls.

Client or pluses in the legislation so.

Again, we think this is an attractive product clinical profile looks really well suited to the needs of the marketplace and we're excited to be joining the team with them.

Our next question comes from Southeast Richter with Goldman Sachs. Your line is now open.

Good afternoon. Thanks for taking my question, maybe just a follow up here I'd love to dig a little deeper on Q.

He said in the prepared remarks that the passage of this legislation accelerating trends can't reposition the business and manage lifecycle do you.

Zinc thanks increases the urgency for M&A, given your financial strength.

So what types of targets.

Makes sense, given the debate about non orphan products versus orphan products.

And just a second question here on M Davita.

Being first to market.

Maybe you can just give us a sense of how that positions you in and.

Early payer discussions here. Thank you.

You would catch the second pieces Murdo and I'll address the first which is.

With respect to Washington, again, Savi and as you know this is still potential legislation.

So we will watch carefully to see.

If it gets passed and if it goes exactly what gets passed so.

Non-GAAP R&D spend in the second quarter decreased 2% year-over-year, primarily due to lower, marketed product support, partially offset by higher spend in research and early pipeline. Non-GAAP SG&A expenses in the second quarter declined 2% year-over-year.

I don't think at this point.

Anything more specific than what I said in my opening remarks, which was that we've been advocating for.

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

Non-GAAP other income and expenses were a net $410 million expense in Q2. This was driven by net 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, generate significant cash flow, and retain significant financial, flexibility to execute strategic business development opportunities.

Sure.

Reform that would promote innovation and.

Improved patient access to it and we will be concerned to the extent of the legislation passes doesn't do those two things.

And solving and Davita, obviously, we're pleased that we're.

First the gateway to the <unk> to launch in the U S. At the end of January next year.

We were pleased with our performance outside the U S with <unk>, where we've established market leadership with the highest share and we've been able to hold that despite competition. Obviously the U S market is a different market given payer and reimbursement structure, but we feel confident that we'll be able to establish.

Good access and coverage for MTO Vita.

Early in the launch lifecycle, and we think that Pbms and payers are interested in ensuring that their patients and members have biosimilar availability and options. So.

All going well and according to plan.

Our next question comes from Omar Saad with Evercore.

ISI Your line is now open.

We continue to execute on our capital allocation priorities. First, today's announcement of the acquisition of Chemocentrics is a great example of investing in the best innovation, whether internal or external.

Hi, guys I'll ask two today, if I may one on your deal and one on the quarter, maybe starting with the quarterly update I saw your partner as well as your press release talked about the safety issue and <unk> talked about the lack of safety issue on the 40 program. However, the need to perhaps change the dosing regimen. I guess my question is if there is no safety issue that service is it fair.

To assume there's a biomarker change maybe a severe th drop in a subset of patients which could be prompting this regulatory feedback and if you could remind us what dose are you currently using every two weeks in phase III.

And then on chemo centric deal I think it is an interesting case study on sort of where the clinical data stored versus how good. The commercial receptivity has been but is it fair to assume that you wouldn't have moved forward with the deal unless they were already at perhaps 700 plus patients by now.

And there are peaks at peak patients guidance was 6000, thank you very much.

Okay.

Dave do you want me to take the first yes. So yes, thanks, Omar and regard Sox 40, yes, no safety issue no biomarker issue either no change in any kind of patient subset.

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

Third, returning capital to shareholders through growing dividends, including $1.94 per share in the quarter, representing a 10% increase from last year's quarter.

And fourth, opportunistic share repurchases.

As I said in my prepared.

And while we had no share buybacks in the second quarter, Q1 2022 had $6.3 billion.

Mark's beginning.

This is really driven by ongoing discussions with the FDA to explore broader range of doses and we took that opportunity to we think improve patient convenience I wouldn't over think it a read anything more into it than that and we don't think that this will affect overall program timelines.

Let's turn to the outlook for the business for 2022.

We are pleased with our progress through the first half of 2022, and we continue to be confident in the trajectories of our growth plans. For the full year, we now expect to absorb $500 million in foreign exchange headwinds against product sales, based on recent foreign exchange rates, of which we absorbed $200 million in the first half of the year.

Reflecting our effective execution to date, while considering the challenging foreign exchange dynamics, we're narrowing our 2022 revenue guidance range to $25.5 billion to $26.4 billion. Our non-GAAP EPS range of $17 to $18 remains unchanged. This range encompasses foreign exchange headwinds of approximately 3% or 45 cents for the full year, based on recent foreign exchange rates. Of that 45 cents, we experienced approximately 20 cents in the first half of the year, so we anticipate an additional 25 cents in foreign exchange headwinds against EPS in the second half of the year.

Our non-GAAP EPS range also encompasses costs associated with our acquisition of chemocentrics. Both foreign exchange and chemocentrics will influence our performance within the range.

I'll share a few additional points to consider for the remainder of 2022, with a particular focus on how these trends are likely to impact Q3 and Q4. First, we expect foreign exchange headwinds against product sales in Q3 and Q4 of approximately $150 million in each quarter, for a total of $300 million for the second half of the year.

These headwinds are most pronounced in brands with significant ex-U.S. scale, such as Prolia, Araneth, Amgevita, Vectabix, and Xchiva.

Second, anticipated negative pricing trends for Ambossi and Congente are expected to continue in the second half of the year, and we expect quarter-over-quarter product sales declines in those products for the remainder of the year. We expect Congente sales for the year of roughly $300 million, and Ambossi sales for the year of roughly $850 million.

Four.

As we've noted, growth in biosimilars will be driven by the addition of new products and geographies, and we look forward to being the first biosimilar to Humira to launch in the United States, with Amgevita in January 2023.

For the full year, we now expect new LASTA product sales to be between $1.0 billion to $1.1 billion. This is a change from our previous range of $0.9 billion to $1.0 billion.

We expect Q3 emerald product sales to approximate Q2 emerald product sales.

We expect the negative pricing trends for new LASTA will continue in the second half of the year.

Fifth.

I'm not exactly sure what Youre looking for on your specific question, but Murdo go ahead Peter.

Although we expect the net impact of these factors will result in Q3 revenues and EPS lower than Q2, I would reiterate that our full year EPS guidance remains unchanged at $17 to $18.

We now expect other revenue for 2022 to be in the range of $1.4 to $1.6 billion versus our prior range of $1.4 to $1.7 billion.

Our expectations for total non-GAAP operating expenses for 2022 are unchanged from the last time we spoke. We continue to expect that operating expenses will increase in the second half of the year versus the first half of this year, including important investments in our pipeline as well as both current and upcoming launches, again, including AmgeVita in January 23 and increasing R&D spend in the third and fourth quarter.

We continue to expect 2022 non-GAAP operating margin as a percent of product sales to be roughly 50%.

We continue to expect non-GAAP cost of sales as a percent of product sales to be 15.5 to 16.5%.

Our expectations for non-GAAP R&D in 2022 remain unchanged. Based on our recast 2021 results, which now include $400 million of expense in Q3 related to license with KKC for AMG 451, our expected 2022 non-GAAP R&D expense now equates to a decrease of 4% to 6% year-over-year.

Jonathan Yes, whomever we've been following.

We expect non-GAAP SG&A spend to be flat to slightly down year-over-year as a percent of product sales.

I'll turn it over to Murdo.

We continue to expect other income and expenses to be in the range of $1.6 to $1.8 billion, with an increase in Q3 over the run rate of the first two quarters due to both increasing interest rates and our share of Beijing's results.

Murdo?

And finally, for the full year, we anticipate a non-GAAP tax rate range of 14.0 to 15.0%, up from our prior guidance of 13.5 to 14.5%.

We will effectively execute throughout the remainder of 2022, despite the continuing headwinds.

Tap nios journey for a while and.

We will continue investing in the best innovation.

We look forward to the launch of Amgevita in January 23, driving the launches of Tespire and Lumicrass, progressing our pipeline, successfully integrating chemocentrics, and delivering on our 2030 objectives.

This concludes the financial update.

I think what everybody has to remember here is that the nature of this disease. I mean this is a three year.

<unk>.

Auto immune inflammation that involves the lungs kidneys.

Sometimes skin and other organs and can cause permanent and organ damage, if not treated effectively and efficiently and quickly and the current standards of care are difficult treatments for patients to tolerate.

And if you can intervene.

And improve that patients potential to remain.

<unk> III.

Over the first 52 weeks.

As a rheumatologist or nephrologist.

All you have to do is add tap needles to their base regimen, you are going to do that so I think the behavioral change here is one that many physicians are choosing to do in that as you alluded to that's been.

Encouraging to see in the early phase of this launch, but the reason we like tab news as it helps.

Juice that potential.

Relapse for patients.

By adding <unk> to the current standard of care and potentially reducing glucocorticoid use. So this is a.

Disease area that that if we were doing the development on our own it would fit squarely in our strategy and so it comes in into a strong <unk>.

Inflammation portfolio and it's one that we think our scale in commercial and medical capabilities.

Will allow us to.

To accelerate what has already been a good launch.

I would say that.

We are obviously attracted in fact and it's still at an early stage of its launch and we think we can add value to that and the feedback from the marketplace has been encouraging.

The prescriber and patient base marketplace noted.

Okay, let's move on next question.

Thanks, Peter.

Second quarter product sales increased 3% year-over-year, driven by a 10% volume increase. Excluding the impact of foreign exchange, global product sales grew 5%.

We delivered record quarterly sales for Prolia, Avenity, Amgevita, Kyprolis, Endplate, and Blensito, and delivered double-digit volume growth for several additional products, including Repatha and Lumicrass.

The next question comes from Michael Yee with Jefferies.

Line is now open.

Hey, great. Thank you for the question not maybe.

David I know.

The upcoming data you've talked about a challenge in combination with PD. One so maybe you could just right size your expectations as the bar fairly high there to move forward due to talks and does your focus on frontline really entity.

Combination with chemo can you maybe just make a comment there and if you could just sneak in a second one you actually talked about AMG 133 on your slide deck I know theres a lot of focus obviously in obesity can you just comment on what we're supposed to know they're advancing that forward. Thank you.

Yes, sure. So in terms of <unk> PD, one combination, obviously I can't say much because of the.

Embargo.

We're presenting these data Sunday afternoon in Vienna.

As you as we think about development in first line.

I'd like to think of kind of three buckets.

Patients are those whose tumors are PD lone negative those who are PD lone low to intermediate and those that are PD lone high expresses.

As I mentioned and as you picked up on in the PD Lone negative population, we're moving forward with a <unk> plus chemotherapy phase III trial, and then we will.

Close the results of the checkpoint inhibitor data.

In Vienna, and outline our plans for further development in this space I think thats, probably all I can say right now, but I would really think about this as different groups of patients where the.

<unk> therapy will be tailored.

Two there are particular tumor based on PD lone expression.

133.

<unk> hundred three.

Im very pleased with our progress there as I mentioned, we completed enrollment in the phase one we hope to present that were submitted in the process of submitting that.

To our medical Congress and were very actively planning what the phase III program will look like and we'll have more to say about that.

Our plans are finalized.

Over the coming months.

Thank you.

Our Ex-U.S. business grew 5%, with volume growth of 20% year-over-year.

Our next question comes from Matthew Harrison with Morgan Stanley Your.

Your line is now open.

In addition to this strong second quarter, I'm also personally excited about our announcement, to acquire Chemocentrics and the opportunity to help patients with severe active ankylo-associated baculitis, a serious and potentially life-threatening autoimmune disease.

And I'll say more about Tavneos as I comment on the performance of our implanation portfolio.

Great. Good afternoon. Thanks for taking the question Bob if I could just ask your sort of outlook on BD and M&A, we see due to modestly sized deals for for assets with a bit of a pipeline over the course of the last year.

How do you think about continuing to do more deals of that size versus something larger and more transformational and just how do you think about where you are in terms of adding assets versus.

Where you'd like to date.

Matt I don't think anything has changed we continue to look for ways to invest in the business.

Our focus is on trying to find the best innovation.

I'll start with our general medicine business, which includes Prolia, Eventi, Repatha, and, Imavig. Overall revenue for this portfolio grew 17% year-over-year, driven by 24% volume growth. In bone health, Prolia sales grew 13% year-over-year. Volumes grew 12%, driven by an increase in both new and repeat patients.

To try to advance that particularly in the areas, where we've been clear about our stated interest so in oncology.

<unk> and then the general Motors scenario. So we continue to look there are obviously, many more opportunities in the small and medium sized and there are in the large size but.

I've said consistently through my tenure, we feel responsibility to look at all the options to add value for our shareholders and we will continue to do that.

Jason next question.

Eventi had record sales of $191 million for the quarter, driven by 60% volume growth in, the U.S. and 37% volume growth outside of the U.S. Embrel sales decreased 8% year-over-year for the second quarter, primarily driven by declines, in net selling price and volume.

Our next question comes from David Risinger with SBB Securities. Your line is now open.

Yes, thanks very much. So my question is related to understanding.

Interchangeable Biosimilars and there are two parts. Please so first.

Obviously, <unk> and <unk>.

Great position in the first half of next year, but could you talk about that.

<unk> ability to compete with interchangeable biosimilars that are launching in the second half of 'twenty three since Andrew Davita won't have that designation.

Then.

The other part is.

News just hit a couple of days ago that the FDA approved biosimilar lucentis as interchangeable even though there was never a switching study conducted so I'm wondering if that's a sign that your ABP 938, or Biosimilar Eylea is.

Likely to also be approved.

Interchangeable thank you.

Embrel remains a frequently prescribed therapy due to its long track record of efficacy and, safety.

Our launch of test buyers off to a very strong start, with $29 million in sales in the second, quarter.

I'm encouraged to see that both allergists and pulmonologists have prescribed test buyer, across a broad range of patients with severe uncontrolled asthma.

Thanks, David for the question.

We're also seeing initiation in both biologic naive and previously treated patients.

I would say right now in our conversations with payers and insurers and for that matter are physicians interchange ability has not been.

On the access front, test buyer is a medical benefit product for which we received permanent, reimbursement coding as of July 1st. Physicians acknowledge test buyer's unique differentiated profile 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 limitation.

Now, our agreement to acquire Chemocentrics brings a compelling opportunity into our leading, inflammation and nephrology portfolio with Tavneos, a recently launched first-in-class treatment for anka-associated vasculitis, or AAV. Let me take a minute to talk about how important I think Tavneos will be for patients. AAV is a serious systemic autoimmune disease. It leads to inflammation and eventual destruction of small blood vessels. This inflammatory process can lead to permanent organ damage and in some severe cases can, be life-threatening.

Tavneos represents a significant advance in the treatment options for the 8,000 to 10,000, U.S. patients a year who develop severe active disease or experience major relapses of AAV.

We're looking forward to meeting and working with a talented team at Chemocentrics, and, I'm confident that by applying Amgen's deep experience in inflammation and nephrology and substantial market presence, we can help many more patients with AAV with Tavneos.

According to our hematology and oncology business, our six innovative products grew 14% year, over year with 11% volume growth. This was driven by strong volume growth for Coprolis, Endplate, and Blancito, which we, expect to continue throughout this year.

Its GIBA volume declined 2 percent in Q1 and was flat year over year in Q2.

Our launch of Lumicraz is progressing well with revenues of $77 million in the second, quarter, representing 24 percent quarter-over-quarter growth. In the U.S., Lumicraz has been prescribed to over 3,000 patients by over 1,900 physicians, and we've seen broad adoption in the community setting, where the majority of non-small-cell lung cancer patients are treated.

Barrier to have them consider.

<unk> Vita as an option and an alternative to the innovator.

We are pursuing interchange ability with Amgen beta and we will expect those data to readout.

Later on in the launch so I think our incumbent position being first to launch will help whether additional competition as they enter if they have interchange ability and our expectation is at least a couple of wells.

But we'll follow up quickly with our own interchange ability data. So it will be a short period in time, where that competitive advantage may exist or persist in the market.

As for ABP 993, eight I won't speculate on what the FDA might say at that time.

Thank you.

Our next question comes from Mohit Bansal with Wells Fargo. Your line is now open.

Great. Thanks for taking my question and maybe a question on <unk>.

Sorry.

Dave.

What do you think could be clinically meaningful benefit or docetaxel in this particular study.

And the other question.

The other part of the question is basically if you think about.

Ah Chemo Io.

Chemo tends to do well do you think placebo response could.

Could be better than historical in this particular trial. Thank you.

So yes in terms of the phase III study is on track to report out this quarter, it's an event driven trial.

If we see behavior of <unk> consistent with what we've observed really across the program to date.

<unk> lung cancer.

We will be well positioned there to the trial has 90% power to detect a significant difference in progression free survival. So it's very well powered I'm sure it'll be a well conducted study.

So we'll look forward to having those data soon.

In terms of the placebo.

Response that.

I think it's hard to speculate on that.

The trial that.

We are conducting in the PD lone negatives as chemotherapy plus <unk> against what would be considered a standard of therapy arm, where the addition of checkpoint inhibitors has a relatively modest start additive benefit so based on preliminary data that we've seen it looking at <unk>.

In combination with chemotherapy.

Given us the confidence to move into phase III, and we've had productive discussions with regulators about that trial design.

Our next question comes from Geoff Meacham with Bank of America.

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

I had one on <unk> I guess Murdo for you commercially when you look at the U S trends over the past say three quarters or so maybe just help us with kind of our year, reaching peak sort of saturation for <unk> testing. How do you think about that in terms of the timing of getting to that same level outside the U S.

And then maybe a lot of people have asked about kind of the.

The phase III combo studies, maybe if there is a at a high level kind of an incremental opportunity that you would envision.

<unk>.

As you look to the combination study data. Thank you.

Yeah. Thanks for the question, Jeff I would say.

It's less about peak testing in the U S, where we've already got about 85% of frontline patients being tested and receiving a <unk> status.

Unfortunately, while 85 percent of patients in the U.S. are tested for their KRAS G12C, status, only 50 percent of the time do oncologists have these test results available to support second-line treatment decisions.

Right now what we know is only half of the tested patient population in second line has the test result available when they are progressing.

And our teams are removing barriers to ensure that the oncologist is able to review KRAS, G12C status when the patient progresses beyond first-line therapy. And we've seen that when the KRAS G12C status is known in the second-line setting, 85 percent, of patients receive Lumicraz.

So that's really what we're focused on we're focused on.

Where is that test result for that progressing patients.

That treating oncologist can give the patient the benefit of <unk> and when they have that tech is again half the time.

85% of those patients get <unk>. So we're getting a very high percentage penetration of those second line patients when the prescribing physician knows their test results. So we are not peaking yet we've got headroom for more improvement. There currently about half of those patients are not getting there.

<unk> test result reviewed upon progression. So that's an important thing that teams are focused on and Thats. What we think we can do to continue to drive some <unk>.

Revenue growth in the U S outside the U S. What we're seeing is really again, a tale of two types of markets in markets, like Germany, Switzerland, and France, where.

Outside the U.S., Lumicraz has now been approved in over 40 countries, and we're actively launching, in 25 markets and rapidly pursuing reimbursement in the remaining countries.

Sales of our oncology biosimilars declined 24 percent year over year.

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

In total, our biosimilars portfolio has become an industry-leading franchise, which has contributed, $5.5 billion of product sales cumulatively.

Looking forward, we're excited about the upcoming launch of Emgevita in the United States in, January of 2023, followed by the next wave of biosimilar launches to Stelara, ILEA, and, Solaris.

<unk> testing is very well developed and there.

Clinical information systems are also very well developed so that that test is available and retrievable upon progression and secondly, we're seeing very rapid lift and uptake.

In places, where that's not quite as well developed and I think Spain, Italy to some extent the U K.

Uptake resembles more what we've seen in the U S. So and just to clarify this is in our expanded access programs.

Overall, I'm very pleased with our execution and volume growth in the quarter.

Our expanding international presence and diverse portfolio of products, including the exciting, addition of Tavneos, position us well to deliver on our long-term growth strategy.

And with that, I'll turn it over to Dave.

Thanks, Murdo.

And our expanded access programs, where we're seeing clinical utilization, but I'm also talking about other experiences with other targeted therapies.

Good afternoon, everyone.

Going to see a slower uptake in some markets than you will in others because of that testing infrastructure.

So where.

We're working on that with those markets were changing that behavior with clinicians and I think we will be able to successfully grow this product in second line and then of course, if we get confirmatory data.

In phase III, what that does is it makes it easier to promote because we are no longer on an accelerated.

Approval and and hopefully the the data set are compelling and continue to reinforce the value of <unk>.

Yes next question.

I'd like to start by sharing my excitement for the transaction we announced today.

The next question comes from Jan Weber with Cowen.

It is now open great.

Great. Thanks for taking my question, David It's for you with respect to company B.

As you've heard, Anka-associated vasculitis is a serious and sometimes life-threatening disorder.

Having treated these patients personally, I fully appreciate the challenges they face and the, benefits of Tavneos in addressing this significant unmet need.

I look forward to working with the team at Chemocentrics.

For research and development, the second quarter was one of continued execution, where we, announced new data on several programs and continued to progress our robust, innovative clinical pipeline.

Beginning with inflammation, in July, TESPIRE was recommended for approval in the European, Union by the Committee for Medicinal Products for Human Use for Severe Asthma, and also approved in Canada. We initiated the SUNRISE Phase 3 study, designed to assess the efficacy and safety of TESPIRE, in reducing oral corticosteroid use in adults with oral corticosteroid-dependent asthma.

The ROCKIT Phase 3 program, evaluating rocatinlamab, an innovative anti-OX40 monoclonal antibody, in patients with moderate to severe atopic dermatitis, was initiated in June. Following additional discussions with regulators and our partner, we are amending the studies, to further improve patient convenience and investigate a range of doses. No safety or efficacy issues have arisen.

Drug was tested in Q3, <unk> and also severe Hs and accolade of Noah and that data was a bit mixed.

We continue to remain very excited about the broad potential of this program in atopic, dermatitis.

In oncology, we will present data from two of our thoracic programs at the upcoming World, Conference on Lung Cancer. The first is Tarlatumab, a DLL3 targeting HLE bite molecule being studied in heavily, pretreated patients with small cell lung cancer, a population with few treatment options. In this setting, Tarlatumab demonstrated promising antitumor activity with notable response durability.

We're looking for FDA feedback in Q3, G and theyre thinking about lupus nephritis as well potentially starting another study any thoughts is that these indications that you're supporting roles. Thank you.

Yes, Thanks Sharon.

We look forward to presenting an updated data set at World Conference and continue to enroll, patients in a potentially registrational Phase 2 trial in this setting.

So there are other disorders, as you're indicating in which <unk> has been investigated where activation of this limb of the complement Cascade may play a role in the inflammatory disease process, such as <unk> <unk>.

<unk> <unk> and hidradenitis Suppurativa.

We will look at all of those data look at the programs with our new colleagues from chemo centric saw and determine what the best path forward is to.

Potentially address again diseases, where there is currently very little effective therapy.

Next question.

Our next question comes from Carter Gould with Barclays. Your line is now open.

Great. Good afternoon. Thanks for taking the question. So I wanted to come to your HELOC franchise, you still have one final kyprolis, but we saw the discontinuation of the latest kind of bite you had in myeloma amgen's had a multi year effort to try to extend its myeloma franchise is that still where does that rank in terms of in terms of priorities and I guess just speaking more.

Broadly.

What does that say about the.

The innovation jumps required to compete and mark going forward. Thank you.

We're going to take this in two parts I think with respect to <unk>.

So obviously, we're encouraged by the ongoing performance of that and more generally the hemo portfolio as you referred to.

Talk about ongoing successful bone. So again, we're very encouraged by what we see and what we think we can continue to do for patients in the relapsed refractory AML.

Thank you also raised the important point, which is that.

Multiple myeloma is a very crowded space.

Our decision with respect with 701 and had a lot to do with.

Our ability to get to market.

It has the competition or not so we're prioritizing on those medicines, where we think we can be best in class and first in class.

And we have other programs underway that may be useful in multiple myeloma and Dave on for Jeff.

As an area.

Guided by the science and the biology that we uncover.

<unk> 701.

Strategic decision multiple agents targeting <unk>.

And we chose to.

Yes.

Focus our efforts on for example, Carlotta map DLL three program, where we've got a substantial lead we've got a molecule that is extremely active same platform is AMG 701, and so I think youll see this kind of prioritization going forward.

Okay.

Next question.

Our next question comes from Evan <unk> with BMO.

Your line is now open hey, guys.

Hey, guys. Thank you so much for taking my question and congrats on the deal earlier today I actually wanted to touch on your prostate cancer efforts can.

Can you just walk me through some of the details around do you prioritizing $1 60 for the lower affinity T cell bite and just given the recent data we've seen in this space with maybe newer technologies.

Targeting CD 20, A&P SMA, how do you think your efforts can remain competitive here. Thank you.

Yeah. Thanks, Thanks for the question so we've got.

We're also investigating Tarlatumab in combination with standard of care and first-line small, cell lung cancer in combination with AMG-404, a PD-1 inhibitor in patients with second-line or later small cell lung cancer and in neuroendocrine prostate cancer.

Now a pair of molecules targeting prostate cancer actually three if you include neuroendocrine prostate cancer, where we're conducting a latter ma'am.

I'll also present data from our Lumicrast checkpoint inhibitor and SHIP-2 combination, studies.

Data from the former are embargoed until August 7th, so we can't discuss the results today.

What we can say is that PD-1s have been challenging to combine with other targeted agents due, to tolerability issues.

We will present a comprehensive data set from this study.

As a reminder, we are investigating multiple potential paths to first-line treatment of, non-small cell lung cancer with Lumicrast, potentially segmented by PD-L1 expression levels where the non-small cell lung cancer population breaks down into roughly thirds across PD-L1 high expressors, low expressors, and PD-L1 negative expression. We've seen promising early data in the PD-L1 negative population, and based on discussions, with regulators, we are planning to initiate a phase three study of Lumicrast plus chemotherapy in first-line advanced or metastatic non-small cell lung cancer.

Study, where <unk> three expression is quite frequent in neuroendocrine.

Tumors, but first AMG 509 targeting steep one continue to be impressed with the data were generating in that trial and we are moving ahead with all deliberate speed to advance that program, we hope to be able to share data either late this year or sometime into next year.

From that dose escalation in first in human study.

Then.

As we as I had indicated all along we would take a look at the accumulating data from AMG 160 acre pad, a map and AMG 340, which came to us through the <unk> bio acquisition and based on what we saw we elected to prioritize AMG 340 targeting PSM.

Going forward the data Youre alluding to from a few days ago was a handful of patients.

We've seen similar things in early phases, I think what you need is.

More patients and in particular prolonged follow up especially in this disease.

And in that regard.

Encourage with what I'm seeing from AMG 509 for example, so that portfolio of three medicines is advancing I feel actually.

Very.

Optimistic about what we may be able to do in prostate cancer.

Next question.

Our next question comes from Michael Schmidt with Guggenheim.

Is now open.

Hey, Thanks for taking my questions.

One on <unk>, just wondering if you could sort of market dynamics here, just given the 11% volume decline.

Is that a function of competitive dynamics, so doesn't absent with pricing and how should we think about peak potential given those trends. Thank you.

Yes. Thanks for the question, Michael I think our focus on a mosaic has been.

One where we're making sure that we address.

Patient population to prevention patient population.

Way in which we provide good access but at a reasonable net price and I think strategically we have been able to do that well we did lose one major pbms.

To be at the end of last year into this year and Thats affected the volume evolution, but we also have been able to improve our net pricing year on year. So from a profitability standpoint, <unk> is doing better and I think longer term. It's early in the marketplace <unk> class should be growing faster than it is.

Given that the the.

The antibodies are much much better than what's available in the market and the older non <unk> class and of course, we've got the advent of the oral <unk>.

So it's early days, we're still watching it play out we continue to focus on promoting.

Promoting for the preventive patients that have high frequency migraine and we continue to do well there so longer term I think there's just a lot to wait and see.

Next question.

Our next question comes from Robyn our analysis with choice.

Great. Thank you I just have one question.

Follow up question on the <unk> platform. So for example, let's just talk a little bit out given the lower price topical and some of the data.

New drugs.

September .

Thoughts on pricing and how we should think about that over the next year.

I know you need more volume on those new drugs, but they can put some pricing pressure and then on the right.

<unk> in general just a follow up to <unk> question.

So at what point do you see the new buys back data coming out across the board from other companies at the coast stemming from Regeneron as well.

At what point do you prioritize bite versus say the new <unk> that are out there and put the money toward other thing.

So thanks for the question Robyn I'll start with the Tesla question on.

Hi.

<unk> topical entry into the market is affecting our business I think overall, we've been really pleased with the.

The expansion of our own label to include the mild patient population and what I am encouraged by us in our conversations with payers and Pbms. We were able to have that that label expansion include those patients in our current contracted coverage without adding any value to our deals with them.

So we didn't have to increase our rebate right to have the myeloid patient population.

And in fact, what we've seen is.

More and more Pbms and plans are removing.

Prior authorization requests for Oh, Tesla. So overall I'd say, our access is improving quite a bit with a deterioration in the rates having to pay for it where I think where I think youll see continued price pressure net price pressures in our co pay assistance that we provide to patients and affordability.

<unk>.

That's really what we see is a dynamic on the net price of <unk> in the U S. What we're not seeing though is pressure on the net price because of the topical interest the challenge with the topical entrances. They don't have broad payer coverage, yet and so.

Until that happens I think Oh, Tesla will continue to do well on the on the access coverage and rate that we pay for it longer term I think it remains to be seen whether these are in direct competition or complementary to the patient types that we treat.

If you talk to dermatologists patients fall into categories, where they don't want to move into a systemic treatment and stay on top of <unk> and those that are willing to try a topical because the body surface area involvement the location of their psoriasis. Many factors come into play and Thats really where were competing as people who have already decided they want a systemic agent.

So I think they are non overlapping populations for the most part and we don't necessarily see the topic, there was a supply and pricing pressure.

Dave you want to address.

Yeah. Thanks, Robin Yes in regards to the bite platform, we've been working for some time on new generation technologies.

It will incorporate.

Things like logic gates.

Multiple targets, where either an and gate or an or gate <unk>.

Engineered into the pipe.

For activation.

The real goal here is to do two things, one try and enhance efficacy and to increase the therapeutic window.

So that you have as little normal tissue targeting as possible from the agents. So first molecules are moving towards the clinic and we'll have more to say about that as we get ready to launch.

Okay, Jason I know, we're a little bit past the top of the hour, but we've got a couple more questions in the queue. So why don't we take a couple more and then if we don't get to you Arvind and his team will be around this evening for some time.

So let's go to the next call.

Our next question from Dane Leone with Raymond James Your line is now open.

Alright, Thank you for taking the questions.

I just wanted to get at what's obviously a focus of everyone.

Estimating what what the real opportunity for Luma crosses in the U S. Here.

While a smaller data set, we are very encouraged by both the efficacy and safety of the Lumicrast, combination with Revolution Medicine's SHIP-2 inhibitor, RMC4630. In patients without prior KRAS G12C inhibitor treatment, three of four patients with non-small, cell lung cancer received the highest two doses of RMC4630 in combination with Lumicrast at a confirmed partial response, and all four had disease control.

In gastrointestinal cancer, we are also pleased to announce that data from the full dose expansion, phase 1B study of Lumicrast in combination with Vectabix in refractory KRAS G12C mutated colorectal cancer were accepted for presentation at the European Society for Medical Oncology, Congress taking place in September.

The final analysis of the FITE study, phase 2, randomized, double-blind, controlled trial, evaluating pomerituzumab, fibroblast growth factor receptor 2B, FGFR2B, targeting monoclonal antibody, and modified FulFox6 in patients with previously treated advanced gastric and gastroesophageal junction cancer was completed. These results continue to demonstrate that pomerituzumab plus modified FulFox6 improves, the clinical outcome of patients with FGFR2B expressing tumors with no new safety.

Villanueva, Steve Kami, Terrence Gruber.

We're planning to submit data from the initial cohorts of this phase one study to a medical, congress occurring late this year, and are actively planning the phase two program for this molecule.

I have been fortunate enough to be involved in the Council on the Prevention of new and, new child hoding diseases.

In conclusion, with an innovative portfolio where approximately three-quarters of our, clinical stage programs have first-in-class potential, and a growing portfolio of biosimilars, we are well-positioned to continue to deliver important new medicines for patients and growth for shareholders over the near and long term.

Could you, maybe just decline youre understanding of patient that might.

The number of Brasilian child hoding cases is one of the most directly linked to new, countries in Asia.

And with that, I'll turn it back to Bob for questions and answers.

A number of country benefits, including us managing borders, reducing health expectation, risk, providing technology to support in ICUP.

36, the primary endpoint, and week 48, the end of treatment period, for the majority, of doses, which range from once every 12 weeks to once every 24 weeks in dosing frequency. No new safety concerns were identified during this treatment period.

Presentation of these results is expected at a medical congress in the second half of, this year.

We are very excited about this innovative molecule and are moving to rapidly initiate, a phase three outcome study.

Be eligible for alumina price.

AMG133, our multi-specific that inhibits the gastric inhibitory polypeptide receptor, GIPR, and activates the glucagon-like peptide one, GLP1 receptor, has completed enrollment.

<unk> are in the current study is the current clinical studies.

Or other patients that might be in a co pay or other schemes, where they would be on drug, but just not on <unk>.

Commercial paid for a drug.

I think that would be helpful.

Obviously, the run rate is well below what the estimates would be and people are just trying to triangulate over time, what the peak sales could really be here in the U S. Thank you.

Yes, Dana I think I understand your question, but.

Please ask for clarification, if I don't address it.

The clinical trial.

Steel rate if you will patients who are not in commercial drug treatment that are enrolled in other clinical trials.

Is relatively small as a percentage of the total second line non small cell lung cancer patient I'd say less than 10% would be an estimate.

Does vary it goes up or down depending on the clinical activity of other.

Investigational drugs and trials that are happening.

As as I was answering a question earlier the major challenge.

In growing <unk> in second line is ensuring that the prescribing physician has the <unk> test result available to them when the lung cancer patient is progressing from frontline to second line.

What's the gap in the treatment patient journey.

And right now our estimate is that that happens about 50% of the time and we are working to increase that.

When that does occur when the prescribing physician has the <unk> result.

Eight five times out of 10 that patient gets <unk>.

We know that the profile of the product is conducive to that second line treatment choice. We just we just have to make sure we close down the administrative challenges of having that test result in patients in second line at the same time, we're also driving.

Awareness and usage of our liquid biopsy for retesting and reassessment of that patients as they progress to second line I hope that answers your question.

Okay.

Okay.

One last question.

Our next question comes from Tim Anderson with Wolfe Research. Your line is now open.

Thank you, Dave.

Thank you very much can I go back to Amgen Vida and Biosimilar Humira in the U S.

Could you remind our callers of the process for asking a question?

Yes.

Our sense is that payers may view, the imperative is simply being to offer the best priced product or their constituents and I am wondering whether with enough additional rebate, maybe branded humira ends up being that lowest priced product. So my question two questions really do you agree that the most important driver of what.

If you would like to ask a question, please press star followed by one on your telephone, keypad. If for any reason you'd like to remove that question, please press star followed by two.

Again, to ask a question, press star one.

Our first question comes from Jay Olson with Oppenheimer.

Your line is now open.

Product players choose to prioritize going to be net price or are there other factors at play.

Is it in the realm of possibilities that branded Humira ends up being that lowest price product.

Oh, hey.

Thank you.

Thanks for taking the question, and congrats on the chemocentrics deal.

Yeah. Thanks, it's an important driver obviously net price is definitely something that the pharmacy benefit managers are focused on as are the upstream insurers, but not the only one.

It looks like a really exciting opportunity to treat patients with high unmet medical, need in AAV.

Can you just talk about the synergies, in particular, revenue synergies, potential, and then the strategic fit for chemocentrics within your organization?

Thank you.

And I think this is where we've been able to successfully differentiate our biosimilars in the past and we are confident we'll be able to do that on a go forward basis.

What I would describe it I've described this before is that we.

We can go to a pharmacy benefit manager and say, we can make the transition from brand Humira to Amgen Vita.

As seamless as possible.

We have field force deployed that call on prescribing Rheumatologists and Gi physicians treat these patients.

We have patient programs that rivals.

The innovative compounds.

Because we're also in the marketplace with innovative compounds and we've designed these programs over many years.

We have patient support.

To help that patient understand how to administer the product and use their device, we have world class manufacturing of biologics and sustainability of supply and we have.

Really good.

Additional benefit coming with the interchange ability that I have.

Mentioned in progress so that actually does improve confidence on the part of the <unk> and the payer because they don't want to have their patients have a bad experience transitioning from brand to Biosimilar now is it possible that the biosimilar that the brand routines are substantial share.

Even with Biosimilars in the market, yes of course, that's possible.

We'll wait and see how that plays out.

Okay.

Yeah.

Closing comments, thank you Irvin and again, thank you all for joining our call.

Thanks, Jay.

We, as you can tell, we're excited about the fit.

Feel we've been executing well through the first half of the year.

Looking forward to carrying that momentum into the second half of the year.

Obviously, you're excited about.

<unk> chemo centrex announcements and what that represents for the future of our.

We expect our teams in inflammation and in nephrology will be excited to have this product, added inside Amgen.

Slamming nephrology franchises as well so thanks for joining and we'll look forward to catching up with you after the third quarter great. Thanks, everybody.

And in terms of synergies, obviously, it's a very good fit, but we're focused on investing, and growing this opportunity.

We think we see some opportunities to help the team at chemocentrics reach even more, patients than they have so far.

So our focus will be on that.

And so I don't think we really have much more to say at this point other than reiterating, that we're excited about it.

Okay.

I think it addresses an important need in the marketplace and makes a big difference, for patients who otherwise don't have great alternatives available to them.

This concludes our 2022 Q2 earnings call you may now disconnect.

Our next question comes from Chris Raymond with Piper Sandler, your line is now open.

Thanks very much.

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Maybe just on, also another question, maybe digging into Tavneos, and also if I can touch on, Bob, your comments on the drug pricing legislation as it relates to this deal.

Sure.

So, I think you guys pointed out having a nephrology and inflam presence is kind of unique for you guys on the commercial side.

Maybe just give a bit more color, how you intend to leverage these two forces and the specific roles they'll have.

And then maybe, the second part, this drug pricing language, there's a decent amount of angst, specifically around provisions, targeting small molecules and allowing CMS to negotiate in year 9. So, Chemocentrics is predominantly a small molecule company.

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Murdo, why don't you start on the first question?

Yeah, thanks for the question, Chris.

Okay.

We are obviously pleased with the very nice strategic fit of Tavneos in our portfolio.

We can take this in two parts.

The Chemocentrics team have been mostly focused on rheumatology, and there are subspecialties of rheumatologists who treat a lot of these AAV patients. So, they've been quite focused in their commercial efforts so far.

I think with respect to Kyprolis, obviously, we're encouraged by the ongoing performance, of that and, you know, more generally, the Hemag portfolio, as you referred to.

The Goldman Sachs Tatoo was one of the most regular Starbucks Tattoos that are taught, in the United States through the best of Arvind's drawings, and she drew stressful skepticism with its unusual details while telling a lot more to the frolic of two men with clueless admirers.

<unk>.

We can scale that much more broadly.

And when we talk about the ongoing success of Bluencito, again, we're very encouraged, by what we see and what we think we can continue to do for patients in relapsed refractory ALL.

We have a national footprint on rheumatology, given our current inline inflammation business.

But I think you also raised, you know, an important point, which is that multiple myeloma, is a very crowded space.

And we can also add nephrology.

And our decision with respect to 701 had a lot to do with our ability to get the market, ahead of the competition or not.

About a third of these patients end up getting diagnosed by a nephrologist, given that one of the presentations of AAV is renal impairment or renal inflammation, I should say.

So, you know, we're prioritizing on those medicines where we think we can be best in, class and first in class.

So, that's the immediate benefit, but we've also got resources like our patient support programming, our medical teams, our institutional key account managers, our ability to work with payers to ensure that medical policies and prior authorizations are seamless for providers and patients.

And, you know, we have other programs underway that may be useful in multiple myeloma.

So, there's a lot we can bring to the table beyond just a very focused, but very effective so far, Chemocentrics effort.

And Dave, why don't you jump in?

Yes.

And with respect to Washington, Chris, you know, obviously we evaluated this in the context of the legislation, the potential legislation that's making its way through the Senate at the moment.

Yeah.

And while, as you point out, this is a small molecule product, we don't expect that there's any particular risk for this product as compared to other small molecules that could become subject to the price controls implied or implicit in the legislation.

So, you know, so as an area, you know, look, we're guided by the science and the biology, that we uncover.

So, again, we think this is an attractive product.

You know, AMG 701, you know, that was a strategic decision of multiple agents targeting BCMA.

The clinical profile looks really well suited to the needs of the marketplace, and we're excited to be joining the team with them.

And, you know, we chose to, you know, focus our, you know, our efforts on, for example, our LATAMAP, the DLL3 program, where, you know, we've got a substantial lead.

Our next question comes from Salveen Richter with Goldman Sachs.

We've got a molecule that's extremely active, same platform as AMG 701.

Your line is now open.

And so, you know, I think you'll see this kind of prioritization going forward.

Good afternoon.

Next question.

Thanks for taking my question.

Our next question comes from Evan Segerman with BMO.

Maybe just a follow-up here.

The line is now open.

I'd love to dig a little deeper into what you said in the prepared remarks about the passage of this legislation, accelerating trends to reposition the business and manage life cycles.

Hey, guys.

Do you think this increases the urgency for M&A given your financial strengths?

Thank you so much for taking my question, and congrats on the deal earlier today.

And if so, what types of targets probably would make sense given the debate about, you know, non-orphan products versus orphan products?

I actually want to touch on your prostate cancer efforts.

And just a second question here on Amgevita, you know, being first to market, maybe you could just give us a sense of how that positions you and early payer discussions here.

Can you just walk me through some of the details around deprioritizing 160 for the lower affinity, T cell bite?

Thank you.

And just given the recent data we've seen in this space with maybe newer technologies, bi-specific targeting CD28 and PSMA, how do you think your efforts can remain competitive here?

Yeah, you want to catch the second piece of that, Murdo, and I'll address the first, which is with respect to Washington, again, Salveen, as you know, this is still potential legislation.

Thank you.

So we'll watch carefully to see if it gets passed and if it does exactly what gets passed.

Yeah.

So I don't think at this point we'll say anything more specific than what I said in my opening, remarks, which is that we've been advocating for reform that would promote innovation and improve patient access to it, and we'll be concerned to the extent that the legislation that passes doesn't do those two things.

Thanks.

And Salveen, on Amgevita, obviously we're pleased that we're first out of the gate with, the Amgevita launch in the U.S. at the end of January next year. We were pleased with our performance outside the U.S. with Amgevita where we've established, market leadership at the highest share, and we've been able to hold that despite competition.

You know, thanks for the question.

Obviously the U.S. market is a different market given payer and reimbursement structure, but, we feel confident that we'll be able to establish good access and coverage for Amgevita early in the launch lifecycle, and we think that PBMs and payers are interested in ensuring that their patients and members have biosimilar availability and options, so all going well and according to plan.

So we've got, you know, now a pair of molecules targeting prostate cancer, actually three, if you include neuroendocrine prostate cancer, where we're conducting a tarlatumab study where, you know, DLL3 expression is quite frequent in neuroendocrine tumors.

Thanks.

But, you know, first, AMG 509 targeting STEEP1, I continue to be, you know, impressed with, what the data we're generating in that trial, and we are moving ahead with all deliberate speed to advance that program.

Our next question comes from Umar Rafat with Evercore ISI.

We hope to be able to share data, you know, either late this year or sometime into next, year from that dose escalation and first in human study.

Your line is now open.

And then, you know, as I'd indicated all along, you know, we would take a look at the accumulating, data from AMG 160, ACAPATIMAB, and AMG 340, which came to us through the Teneo Bio acquisition.

Hi, guys.

And based on what we saw, we elected to prioritize AMG 340 targeting PSMA going forward.

I'll ask two today, if I may, one on your deal and one on the quarter.

You know, the data you're alluding to from a few days ago is a handful of patients.

Maybe starting with the quarterly update, I saw your partner as well as your press release, talked about the lack of safety issue on the Ox40 program, however, the need to perhaps change the dosing regimen.

You know, we've seen, you know, similar things in early phases.

I guess my question is if there's no safety issue, is it fair to assume there's a biomarker, change, maybe a severe TH drop in a subset of patients which could be prompting this regulatory feedback, and if you could remind us what dose were you currently using every two weeks in phase three?

You know, I think what you need is, you know, more patients and, in particular, prolonged, follow-up, especially in this disease.

And then on chemocentrics deal, I think it's an interesting case study on sort of where, the clinical data stood versus how good the commercial receptivity has been, but is it fair to assume that you wouldn't have moved forward with the deal unless they were already at perhaps 700-plus patients by now and their peak patient guidance was 6,000?

And, you know, in that regards, I'm quite encouraged with what I'm seeing from AMG 509, for example.

Thank you very much.

So that portfolio of three medicines is advancing, you know, I feel, actually, you know, very, optimistic about what we may be able to do in prostate cancer.

Okay.

Next question.

Dave, do you want to take the first?

Our next question comes from Michael Schmidt with Union 9.

Yeah.

And the line is now open.

So, yeah, thanks, Umar.

Hey, thanks for taking my questions.

In regards to Ox40, yeah, no safety issue, no biomarker issue either, you know, no change, in any kind of patient subset.

I had one on Amovic.

You know, as I said in my, you know, prepared remarks beginning, you know, this is really, driven by ongoing discussions with the FDA to explore, you know, broader range of doses, and, you know, we took that opportunity to, we think, improve patient convenience.

I'm just wondering if you could, know the market dynamics here, just given the 11% volume decline?

I wouldn't overthink it or read anything more into it than that, and we don't think that, this will affect overall program timelines.

You know, is that a function of competitive dynamics?

Yeah.

Or does it have to do with pricing?

Umar, I'm not exactly sure what you're looking for in your specific question, but, Umar, go ahead and feel free to jump in.

And how should we think about peak potential, given those trends?

Yeah.

Thank you.

Umar, we've been following the tapneos journey for a while, and, you know, I think what everybody, has to remember here is that the nature of this disease, I mean, this is a severe, you know, disease, and it's a very, you know, it's a very, you know, it's a very, you know, acute autoimmune inflammation that involves the lungs, the kidneys, and sometimes skin and other organs, and can cause permanent end organ damage if not treated effectively and efficiently and quickly.

Yeah, thanks for the question, Michael.

And the current standards of care are difficult treatments for patients to tolerate.

I think our focus on Amovic has been one where we're making sure that we address the patient population, the prevention patient population in a way in which we provide good access, but at a reasonable net price.

And if you can intervene and improve that patient's potential to remain relapse free, over the first 52 weeks, as a rheumatologist or a nephrologist, if all you have to do is add tabneos to their base regimen, you're going to do that.

And I think, strategically, we've been able to do that.

So I think the behavioral change here is one that many physicians are choosing to do.

Well, we did lose one major PBM to be at the end of last year into this year.

And as you allude to, that's been encouraging to see in the early phase of this launch.

And that's affected volume evolution.

But the reason we like tabneos is it helps reduce the potential relapse for patients by adding tabneos to the current standard of care, and potentially reducing glucocorticoid use.

But we've also been able to improve our net pricing year on year. So from a profitability standpoint, Amovic is doing better.

So this is a disease area that if we were doing the development on our own, it would fit squarely in our strategy.

And I think longer term, it's early in the marketplace, CGRP class, should be growing faster than it is given that, you know, the antibodies are much, much better than what's available in the market in the older non-CGRP class.

And so it comes in into a strong inflammation portfolio.

And of course, we've got the advent of the orals.

And it's one that we think our scale and commercial and medical capabilities will allow us to accelerate what has already been a good launch.

So it's early days, we're still watching it play out.

And I'd say, Omer, you know, that we're obviously attracted to the fact that it's still at an early, stage of its launch. And we think we can add value to that.

We continue to focus on promoting for the preventive patients that have high frequency migraine, and we continue to do well there.

And the feedback from the marketplace has been encouraging, the prescriber and patient-based marketplace, that is.

So longer term, I think there's just a lot to wait and see.

Okay, let's move on.

Next question.

Next question.

Our next question comes from Robin Karnasas with Truist.

The next question comes from Michael Yee with Jefferies.

Great, thank you.

Your line is now open.

I just had one question on Tesla and a follow up question on the platform.

Hey, great.

So for Tesla, just talk a little bit about given the lower price topicals and some of the data, new drugs that are going to be approved in September, your thoughts on pricing and how we should think about that over the next year or two, because I know you need more volume on those new drugs, but they could put some pricing pressure.

Thanks for the question.

And then on the Byte platform in general, just to follow up to Evan's question.

Maybe for David, I know in the upcoming data, you've talked, about a challenge in combination with PD-1.

I mean, so at what point do you, seeing the new bi-spec data coming out across the board from other companies, as the co-stem from Regeneron as well, like at what point do you deprioritize Byte versus say the new bi-specs that are out there and put the money toward other things?

So maybe you could just right-size your expectations.

Thanks.

Is the bar fairly high there to move forward due to TOCS?

So thanks for the question, Robin.

And is your focus on frontline really, into the combination with chemo?

I'll start with the Tesla question on how the topical entry into the market is affecting our business.

So maybe just make a comment there.

I think overall, we've been really pleased with the expansion of our own label to include the mild patient population.

And if you could just sneak in a second one.

And what I'm encouraged by is in our conversations with payers and PBMs, we were able to have that label expansion include those patients in our current contracted coverage without adding any value to our deals with the payers.

You actually talk about AMG-133 on your slide deck.

So we didn't have to increase our rebate rate to have the mild patient population included.

I know there's a lot of focus, obviously, on obesity.

And in fact, what we've seen is more and more PBMs and plans are removing prior authorization requests for Otesla.

Can you just comment on what we're supposed to know there to advance that forward?

So overall, I'd say our access is improving quite a bit without a deterioration in the rates we're, having to pay for it.

Thank you.

Where I think you'll see continued price pressure, net price pressure is in our co-pay assistance that we provide to patients in affordability.

Yeah, sure.

That's really what we see as a dynamic on the net price of Otesla in the U.S. What we're not seeing though is pressure on the net price because of the topical entrants.

So in terms of the Lumicrass, PD-1 combination, obviously, I can't say much because of the embargo, you know, what we're, presenting these data Sunday afternoon in Vienna.

The challenge with the topical entrants is they don't have broad payer coverage yet.

As we think about development in first line, you know, I like to think of kind of three buckets of patients, those whose tumors are PD-1 negative, those who are PD-1 low to intermediate, and those that are PD-1 high expressors.

And so, you know, until that happens, I think, Otesla will continue to do well on the access coverage and rate that we pay for it.

As I mentioned, and as you picked up on, in the PD-1 negative population, we're moving forward with a Lumicrass plus chemotherapy phase three trial.

Longer term, I think it remains to be seen whether these are in direct competition or, complementary to the patient types that we treat.

And then, you know, we will, you know, disclose the results of the checkpoint inhibitor data in Vienna and outline, you know, our plans for further development in this space.

You know, if you talk to dermatologists, patients fall into categories where they don't want to move into a systemic treatment and stay on topicals and those that are willing to try a topical because the body surface area involvement, the location of their psoriasis, many factors come into play.

I think that's probably all I can say right now.

And that's really where we're competing is people who have already decided they want a systemic agent.

But I would really think about this as different groups of patients where the therapy will be tailored to their particular tumor based on PD-1 expression.

So I think they're non-overlapping populations for the most part and we don't necessarily see the topicals as a buying price.

Oh, and on AMG 133, yeah, very pleased with our progress there, as I mentioned, we completed, enrollment in the Phase 1, we hope to present that, we're submitting the process of submitting that to a medical congress, and we're very actively planning what the Phase 2 program will look like, and we'll have more to say about that as our plans are finalized over the coming months.

Any of you want to address Robyn's question?

Thank you.

Yeah, thanks Robyn.

Our next question comes from Matthew Harrison with Morgan Stanley.

Yeah, in regards to the Byte platform, we've been working for some time on new generation, technologies that will incorporate things like logic gates with multiple targets where either an AND gate or an OR gate is engineered into the Byte for activation.

Your line is now open.

The real goal here is to do two things, one, try and enhance efficacy, and two, increase, the therapeutic window so that you have as little normal tissue targeting as possible from the agent.

Great.

So first molecules are moving towards the clinic and we'll have more to say about that, as we get ready to launch.

Good afternoon.

Okay, Jason, I know we're a little bit past the top of the hour, but we've got a couple, more questions in the queue, so why don't we take a couple more and then if we don't get to you, Arvind and his team will be around this evening for some time.

Thanks for taking the question.

Go ahead, Jason.

Bob, if I could just ask your sort of outlook on BD and M&A, we see you do two modestly, sized deals for assets with a bit of a pipeline over the course of the last year.

Let's go to the next caller.

How do you think about continuing to do more deals of that size versus something larger, and more transformational, and just how do you think about where you are in terms of adding assets versus where you'd like to be?

Our next question is from Dane Leone with Raymond James.

Matt, I don't think anything's changed.

Your line is now open.

We continue to look for ways to invest in the business, and our focus is on trying to, find the best innovation and to try to advance that, particularly in the areas where we've been clear about our stated interests, so in phlegm, oncology, and in the general medicine area. So we continue to look.

All right, thank you for taking the questions.

There are obviously many more opportunities in the small and medium size than there are, in the large size, but as I've said consistently through my tenure, Matt, we feel a responsibility to look at all the options to add value for our shareholders, and we'll continue to do that.

I just wanted to get at what's obviously a focus of everyone of estimating what the real, opportunity for Lumicrost is in the U.S. here.

Jason, next question.

Could you maybe just define your understanding of patients that might be eligible for Lumicrost, that are in the current studies, the current clinical studies, or other patients that might be in assistance co-pay or other schemes where they would be on drug but just not on commercial paid-for drug?

Our next question comes from David Resinger with SVB Securities.

I think that would be helpful is, again, obviously the run rate is well below what the estimates, would be, and people are just trying to triangulate over time what the peak sales could really be here in the U.S.

Your line is now open.

Thank you.

Yes, thanks very much.

Yeah, Dane, I think I understand your question, but please ask for clarification if I don't, address it.

So my question is related to understanding interchangeable biosimilars, and there are, two parts, please.

The clinical trial steal rate, if you will, patients who are not in commercial drug treatment, but are enrolled in other clinical trials, is relatively small as a percentage of the total second-line non-small cell lung cancer patient. I'd say less than 10 percent would be an estimate.

So first, obviously Amgevita is in a great position in the first half of next year, but, could you talk about that product's ability to compete with interchangeable biosimilars that are launching in the second half of 23, since Amgevita won't have that designation?

It does vary.

And then the other part is news just hit a couple of days ago that the FDA approved biosimilar, lucentis as interchangeable, even though there was never a switching study conducted.

It goes up and down depending on the clinical activity of other investigational drugs and, trials that are happening.

So I'm wondering if that's a sign that your ABP 938 or biosimilar ILEA is likely to also, be approved as an interchangeable.

As I was answering a question earlier, the major challenge in growing Lumicraz in second-line, is ensuring that the prescribing physician has the KRAS G12C test result available to them when the lung cancer patient is progressing from front-line to second-line.

Thank you.

That's the gap in the treatment patient journey, and right now our estimate is that that happens, about 50 percent of the time, and we are working to increase that.

Thanks, David, for the question.

When that does occur, when the prescribing physician has the KRAS G12C result, 8.5 times, out of 10 that patient gets Lumicraz.

I would say right now that in our conversations with payers and insurers, and for that matter, physicians, interchangeability has not been a barrier to have them consider Amgevita as an option and an alternative to the Innovator.

So we know that the profile of the product is conducive to that second-line treatment, choice.

We are pursuing interchangeability with Amgevita, and we'll expect those data to read out later, on in the launch.

We just have to make sure we close down the administrative challenges of having that test, result and patient in second-line meet at the same time.

So I think our incumbent position being first to launch will help weather additional competition, as they enter, if they have interchangeability, and our expectation is at least a couple will.

We're also driving awareness and usage of our liquid biopsy for retail.

But we'll follow quickly with our own interchangeability data, so it'll be a short period in time where, that competitive advantage may exist or persist in the market.

Rafferty.

As for ABP 938, I won't speculate on what the FDA might say.

Our next question comes from Tim Anderson with Wolfe Research.

Our next question comes from Mohit Bansal with Wells Fargo.

Your line is now open.

Your line is now open.

Thank you very much.

Great, thanks for taking my question and maybe a question on LumaCross phase 3 study.

Can I go back to Amgevita and biosimilar Humira in the U.S.?

So Dave, what do you think could be clinically meaningful benefit over a docetaxel in this particular study?

Our sense is that payers may view the imperative as simply being to offer the best-priced product, to their constituents.

And the other part of the question is basically, if you think about a chemo post I.O., chemo tends, to do well.

And I'm wondering whether with enough additional rebate, you know, maybe branded Humira ends, up being that lowest-priced product.

Do you think placebo response could be better than historical in this particular trial?

So my question, two questions really, do you agree that the most important driver of what, product payers choose to prioritize is going to be net price or are there other factors at play?

Thank you.

And then is it in the realm of possibilities that branded Humira ends up being that lowest-priced, product?

So, yeah, in terms of the phase 3 study, it's on track to report out this quarter. It's an event-driven trial. You know, if we see behavior of LumaCross consistent with what we've observed really across the program to, date in advanced lung cancer, I think we'll be well positioned there.

Thank you.

The trial has 90% power to detect a significant difference in progression-free survival, so it's very well-powered.

Yeah, thanks.

I'm sure it'll be a well-conducted study.

It's an important driver, obviously.

And so, you know, we'll look forward to having those data soon.

Net price is definitely something that the pharmacy benefit managers are focused on, as are the upstream insurers, but not the only one.

You know, in terms of the, you know, the placebo response, you know, that, I think it's hard to speculate on that.

And I think this is where we've been able to successfully differentiate our biosimilars, in the past, and we are confident we'll be able to do that on a go-forward basis.

You know, the trial that, you know, we're conducting in the PD-L1 negatives is chemotherapy plus LumaCross against what would be considered a standard therapy arm, where the addition of checkpoint inhibitors has a relatively modest additive benefit.

And what I would describe, and I've described this before, is that we can go to a pharmacy, benefit manager and say, we can make the transition from brand Humira to Amgevita as seamless as possible.

So, you know, based on preliminary data that we've seen, looking at LumaCross in combination with chemotherapy, that's what's given us the confidence to move into phase 3, and we've had productive discussions with regulators about that trial design.

We have field force deployed that call on prescribing rheumatologists and GI physicians, that treat these patients.

Our next question comes from Jeff Mitchum with Bank of America.

We have patient programs that rival the innovative compound, because we're also in the marketplace, with innovative compounds, and we've designed these programs over many years. We have patient support to help that patient understand how to administer the product and, use their device.

Hey, guys.

We have world-class manufacturing of biologics and sustainability of supply.

Thanks so much for the question.

And we have a really good additional benefit coming with the interchangeability that I, mentioned in progress. So that actually does improve confidence on the part of the PBM and the payer, because, they don't want to have their patients have a bad experience transitioning from brand to biosimilar.

I have one on LumaCross.

Now, is it possible that the brand retains a substantial share, even with biosimilars, in the market? Yes, of course, that's possible.

I guess, Merto, for you commercially, when, you look at the, you know, U.S. trends over the past, say, three quarters or so, maybe just help us with kind of are you reaching peak, you know, sort of saturation for G12C testing?

But we'll wait and see how that plays out.

How do you think about that in terms of the timing of getting to that same level outside the U.S.?

Bob?

And then maybe a lot of people have asked about, you know, kind of the phase 3 combo studies that maybe if there's a, at a high level, kind of an incremental opportunity that you would envision, you know, as you look to the combination study data.

Okay.

Thank you.

Yeah.

Yeah, thanks for the question, Jeff.

Closing comments?

I would say it's less about peak testing in the U.S., where we've already got, about 85% of frontline patients being tested and receiving a KRAS G12C status.

Yeah.

Right now, what we know is only half of the tested patient population in second line has the test result available when they're progressing.

Thank you, Arvind.

So that's really what we're focused on.

And again, thank you all for joining our call.

We're focused on.

We feel that we've been executing well through the first half of the year, and we're looking, forward to carrying that momentum into the second half of the year, and obviously excited about the chemocentrics announcements and what that represents for the future of our inflammatory nephrology franchises as well.

Where is that test result for that progressing patient so that that treating oncologist can, give the patient the benefit of lumicrafts?

So thanks for joining.

And when they have that test, because again, half the time, 85% of those patients get lumicrafts.

We'll look forward to catching up with you after the third quarter.

So we're getting a very high percentage penetration of those second line patients when the prescribing, physician knows their test result.

Great.

So we are not peaking yet.

Thanks, everybody.

We've got headroom for more improvement there.

This concludes our 2022 Q2 earnings call.

Currently, about half of those patients are not getting their KRAS G12C test result reviewed, upon progression.

You may now disconnect.

So that's an important thing that teams are focused on.

Nathanael Hickman, Matt Phipps, Gary Nachman, David Reese, Srikripa Devarakonda, Arvind Sood, Terence Flynn, Robert Bradway, Kripa Devarakonda, Amgen, Nathanael Hickman, Gary Nachman, Robert Bradway, Kripa Devarakonda, Amgen [inaudible] Nathanael Hickman, Gary Nachman, Robert Bradway, Kripa Devarakonda, Amgen Nathanael Hickman, Matt Phipps, Gary Nachman, David Reese, Srikripa Devarakonda, Arvind Sood, Terence Flynn, Robert Bradway, Kripa Devarakonda, Amgen, Nathanael Hickman, Gary Nations, Robert D Bardy, Amgen, Tonightweek's item of the Day is a Goldman Sachs Tattoo.

That's what we think we can do to continue to drive some revenue growth in the U.S.

It climaxes with immediate distress of a young woman Kayana Schmith died in a car accident, after the crash.

Now outside the U.S., what we're seeing is really, again, a tale of two types of markets.

In markets like Germany, Switzerland, and France, where biomarker testing is very well, developed and their clinical information systems are also very well developed so that that test is available and retrievable upon progression in second line, we're seeing very rapid lift and uptake.

In places where that's not quite as well developed, you know, I think Spain, Italy, to some extent, the U.K., the uptake resembles more what we've seen in the U.S.

So...

And just to clarify, this is in our expanded access programs?

Yeah.

In our expanded access programs where we've seen clinical utilization, but I'm also talking, about other experience with other targeted therapies, you're going to see a slower uptake in some markets than you will in others because of that testing infrastructure.

So we're working on that with those markets.

We're changing that behavior with clinicians.

And I think we'll be able to successfully grow this product in second line.

And then, of course, if we get confirmatory data in phase three, what that does is it, makes it easier to promote because we're no longer on an accelerated approval. And hopefully, the data set are compelling and continue to reinforce the value of Lumicraz.

Jason, next question.

The next question comes from Yaron Weber with Cohen.

Your line is now open.

Great.

Thanks for taking my question.

David, it's for you.

With respect to Tavneos, the drug was tested in C3 glomerulopathy and also severe HS, in, acolyte and aurora, and that data was a bit mixed.

I think they were looking for FDA feedback on C3G, and they were thinking about lupus, nephritis as well, potentially starting another study.

Any thoughts?

Is that these indications that you're supportive of?

Thank you.

Yeah.

Thanks, Yaron.

Yeah.

So there are other disorders, as you're indicating, in which Tavneos has been investigated where, activation of this limb of the complement cascade may have played a role in the inflammatory disease process, such as C3 glomerulopathy and hydradenitis separativa.

We'll look at all of those data, look at the programs, you know, with our new colleagues, from chemocentrics, you know, and determine what the best path forward is, you know, to potentially address, again, diseases where there's currently very little effective therapy.

Our next question comes from Carter Gould with Barclays.

Your line is now open.

Great.

Good afternoon.

Thanks for taking the question.

So, I wanted to come to your Hemag franchise.

You still have Bluencito and Kyprolis, but we saw the discontinuation of the latest kind, of bite you had in myeloma.

You know, Amgen's had a multi-year effort to try to extend its myeloma franchise.

Is that still, you know, where does that rank in terms of priorities?

And I guess just speaking more broadly, what does this say about the, you know, sort of, the innovation jumps required to compete in Hemag going forward?

Thank you.