Q2 2023 Amgen Inc Earnings Call
Amended LDL levels.
This is a clear call to action that lowering LDL cholesterol as much and as early as possible with Rip Hopper will reduce cardiovascular risk for patients.
So to meet this need Amgen is committed to improving patients' ease of access and affordability to date, we have best in class formulary coverage for Rhopressa, helping 90% of eligible U S patients gain access to this important medicine improved access is enabling broad adoption of <unk> by cardiologists and increase.
<unk> adoption by primary care providers.
So this has set the stage for growth for route path of sales, which increased 30% year over year to a record $424 million in the second quarter.
In the U S volume growth of 34% was driven by a record number of new patients starting treatment outside the U S. We saw 37% volume growth with momentum across our regions.
We recognize there are still many more patients around the world, who can benefit from our Panther and to meet that challenge, we are increasing investment to intensify our engagement with health care providers.
Bring our message directly to patients through direct to consumer media and drive urgency around ldlc testing and adherence to treatment guidelines.
Transitioning to bone health <unk> sales grew 11% year over year to a record $1 billion in the second quarter, driven by an 11% volume growth.
Dave will discuss in more detail new real world evidence data presented at the World Congress of osteoporosis and May demonstrates the prolia significantly reduces fracture risk across multiple endpoints when compared to alendronate.
Our sales teams are now equipped with these data and are actively helping physicians understand the superior ability of prolia to reduce the risk of fracture for their osteoporosis patients.
If entity, which complements prolia and our bond portfolio had record sales of $281 million for the quarter driven by strong volume growth across markets in.
In Japan, if entities achieved a 42% share of the growing bone builder market steadily increasing performance versus competitors and increasing initiation for naive patients.
<unk> sales are now annualizing at over $1 billion and given the severe impact of fractures on the lives of women, who are post menopausal our success in Japan. The first launch market four of entity enhances our confidence in the significant growth potential through this decade.
Oh, Tesla sales increased 1% year over year, driven by 2% volume growth.
<unk> remains the only approved oral systemic therapy with a broad indication and is well positioned to help them more than $1 5 million systemic naive U S patients with milder psoriasis that cannot be optimally addressed by a topical treatment and can benefit from a systemic drug like Oh Tesla.
Our U S with Tesla business has been impacted by free drug programs for newly launched topical and systemic competitors and we expect new patient demand will continue to be affected by these programs for the remainder of 2023.
Despite this we see a compelling opportunity to invest in growth of Tesla and to drive increased awareness amongst physicians and patients.
We're confident in the growth potential of the Tesla given his unique combination of established efficacy and safety profile broad payer coverage with limited prior authorization requirements and a lack of testing required for initiation and of course ease of administration.
Enbrel sales grew 84% quarter over quarter following the seasonal impact on price and large drawdown of inventory during the first quarter in the U S year over year Enbrel sales increased 2% driven by favorable changes to estimated sales deductions and higher net selling price, partially offset by lower inventory levels.
<unk>.
Although year over year volume was flat in the second quarter, the number of new patients in the U S. Starting treatment increased by 6% driven by improved payer coverage for the remainder of 2023. We expect this improved coverage will lead to continued growth in new patients.
We also expect declining net selling price on a full year basis.
Test buyer continues to show robust growth with $133 million in sales in the second quarter sales increased 13, 9% sequentially driven by 37% volume growth benefited from the introduction of our self administered pre filled single use 10 approved by the U S food and drug administration in the first quarter.
The Penn offers patients a convenient option to administer test fire at home, which improves accessibility and provides more flexibility in treatment options for all patients in the U S with severe uncontrolled asthma.
Sales of <unk> were $30 million in the second quarter U S volumes grew 28% quarter over quarter, driven by an increase in new patients starting treatment in the U S. Approximately 2000 patients have now been treated with <unk> by over 1300 health care providers looking forward Amgen.
<unk> experience in inflammation, and nephrology and substantial market presence will allow us to bring <unk> to even more patients with <unk> associated vasculitis.
<unk> sales increased 29% year over year for the second quarter, driven by 60% volume growth, partially offset by lower inventory levels and net selling price.
Sales decreased 63% sequentially driven by inventory drawdowns after stocking to support the launch in the first quarter, partially offset by volume growth.
Moving to our hematology and oncology business, which includes <unk> kyprolis ex Java, Vectibix and Nplate and blend Saito.
Strong commercial execution and exciting new clinical data drove 12% volume growth year over year for the six innovative products.
<unk> sales grew 48% year over year with adoption across academic community and pediatric centers. Following positive data from the registration enabling E. 1910 study presented in December of 2022, and updated <unk> guidelines that were issued in May.
Both the positive data and the updated guidelines support our confidence in the continued growth potential for billing cycle.
<unk> sales increased 20% year over year for the second quarter, driven by 20% volume growth supported by promotion of positive data from the phase III paradigm trial, demonstrating the superiority of vectibix over bevacizumab in combination with chemotherapy for patients with wild type Ras colorectal cancer.
Kyprolis grew 9% year over year, driven by 15% volume growth, partially offset by lower net selling price and <unk> reported $77 million of sales for the second quarter year over year sales were flat in the quarter is 20% volume growth was offset by lower net selling price and inventory levels.
We see future growth opportunity for <unk>, driven by launches in new markets and our comprehensive global clinical development program.
Our execution is strong across the business driving growth and exemplifying our dedication to serving patients our business is performing at a very high level.
And with the announced acquisition of Horizon Therapeutics, we have the potential to serve many more patients who can benefit from our decades of leadership in inflammation, and nephrology and with that I'll turn it over to Dave Reese.
Thanks, Murdo good afternoon, everyone for R&D, the second quarter was one of high quality execution as we progressed, our innovative pipeline with two important data readouts multiple registration, enabling study is on track and additional exciting data coming later this year.
Beginning with oncology, we are exceptionally pleased to announced positive topline results from the global AIDS to Delphi 301 trial evaluating <unk>, our first in class DLL three targeting bite molecule in patients with relapsed or refractory small cell lung cancer progressed after two or more.
Prior lines of treatment.
<unk> demonstrated an objective response rate as the primary endpoint that substantially exceeds what was previously reported in the phase one study sponsor.
Our sponsors were durable and longer and what is expected with standard of care chemotherapy.
Safety and Tolerability are also more favorable compared to the phase one study.
This is the first time the Dubai.
T cell engaged as shown unequivocal activity and a common solid tumor a real milestone in the field.
Look forward to discussing these data as soon as the FDA and other regulatory agencies and presenting detailed results of this potentially registrational phase II study at an upcoming medical Congress.
Based on the data we have observed we're moving <unk> into earlier lines of therapy with Delphi thrilled for our phase III study underway comparing <unk> with standard of care chemotherapy in second line small cell lung cancer. We are also planning to initiate two additional phase III studies of <unk> in early.
Airlines of small cell lung cancer for my personal vantage point as an oncologist I believe the small molecule can be transformative and can't wait to share these data with the field.
Turning to alumina craft, we continue to execute on our comprehensive clinical program designed to generate the breadth of data necessary to understand K rasp biology, and the role <unk> can play in non small cell lung cancer colorectal cancer and other solid tumors.
We are delighted to announce that the global phase III code break 300 trial evaluating luma craft combined with Vectibix and chemo refractory metastatic <unk> mutated colorectal cancer met its primary endpoint of progression free survival for both the 240 milligram and 900.
60 milligram doses.
At comparable doses efficacy results were consistent with what was previously observed in this setting with no new safety signals.
Look forward to sharing these results with global health authorities and presenting the detailed results at an upcoming medical Congress.
FTA recently granted breakthrough therapy designation for <unk> in combination with <unk> for the treatment of patients with metastatic <unk> 12, <unk> mutated colorectal cancer as determined by an FDA approved test who have received prior chemotherapy based on data from the prior code break 101 study.
Beyond these data we continue to explore novel combinations as we seek to move <unk> into the first line setting.
Recently presented data from the Scarlet study provided the rationale to initiate a phase III trial of <unk> combined with chemotherapy in first line non small cell lung cancer patients with PDL, one negative tumors and phase <unk> data in combination with Vectibix and chemotherapy support the initiation of a phase III.
<unk> Luma cross with Vectibix and full theory.
First line G <unk> mutated colorectal cancer.
In June the FDA approved the supplemental biologics license application for <unk> for the treatment of adult and pediatric patients with CD 19 positive b cell precursor acute lymphoblastic leukemia in first or second complete remission with minimal residual disease greater than or equal to Z.
<unk>, 1%.
Approval converts plain sightings accelerated approval to a full approval.
Global regulatory submissions are on track for $19 10, a phase III trial conducted by the National Cancer Institute Eastern Cooperative Oncology group and the American College of Radiology imaging network cancer Research group demonstrated superior overall survival with Glenn <unk> treatment added to.
<unk> chemotherapy standard of care consolidation chemotherapy in newly diagnosed adult patients with Philadelphia negative ALLL, who are <unk> negative following induction and intensification chemotherapy.
Three important updates were made to the national comprehensive cancer network clinical practice guidelines in oncology in B cell ALLL. These.
These included listing the blend sito 1910 regimen as the only preferred regimen for the first line treatment of Philadelphia negative adult patients, adding blend fido to multi agent chemotherapy as consolidation in MRV negative disease, and lastly, moving <unk> in combination with a tyrosine kinase inhibitor.
<unk> to the top of the treatment algorithm for MRV negative Philadelphia positive disease.
Finally in April data were published in the New England Journal of Medicine, demonstrating that <unk> added to chemotherapy improved two year survival in Kmt <unk> rearranged.
Well in infants compared to historical data with <unk>, two year survival was 93% versus 66% for chemotherapy alone.
If you look at the totality of the data. It is clear that <unk> is changing the paradigm for the treatment of B cell ALLL and late stage disease and early disease in young patients and in older patients.
We remain excited about its future potential and are focused on further investigating <unk> in earlier lines of treatment and improving patient convenience through subcutaneous administration.
As the first bite when fighter also provides a roadmap for the development of molecules such as Carlotta map, which could have an enhanced activity in settings of lower tumor burden.
Two additional early oncology programs to watch our <unk> and AMG 193 <unk>.
<unk> is a first in class deep one targeting by specific being studied in advanced prostate cancer are steep one is expressed on almost all tumor cells.
We are observing significant anti tumor activity with this molecule and are rapidly enrolling dose expansion cohorts value.
<unk> provides another example of our bi specific T cell engagement demonstrating activity in a solid tumor setting.
AMG 193 is a first in class small molecule MTA cooperative <unk> inhibitor being studied in patients with advanced <unk> tap null solid tumors. The overexpression of <unk> five and the absence of <unk> leads to the accumulation of MTA and we lever.
<unk>. This biology in the unique design of AMG 193, which requires the presence of MTA to effectively inhibit <unk> five.
Alterations in this pathway of current approximately 15% of solid tumors are often associated with a poor prognosis and historically have been very hard to draw it.
We are currently enrolling a phase one b class II study of AMG 193, and while it is early we are encouraged by the anti tumor responses, we've observed in multiple tumor types.
Look forward to sharing data from both value rhythm Mig and AMG 193. This fall.
In General Medicine, we are advancing our cardiovascular franchise, an emerging portfolio of obesity molecules with a focus on clinical trial execution.
The phase III outcome study of El Paso or in our potentially best in class LP Little a targeting small interfering RNA molecule and <unk> cardiovascular disease is enrolling well as a phase II study of <unk> Caf for Glu tide, formerly known as AMG 133 and <unk>.
<unk> with obesity with or without diabetes and related co morbidities.
Youll have the phase III study is to generate data that will provide broad optionality to design a phase III program leveraging the unique properties of <unk> <unk>.
We will deliver strong sustainable weight loss.
In May as mentioned, we presented data from a real world study of nearly half of a million postmenopausal women with osteoporosis in the United States Medicare program, showing prolia substantially reduced fraction risks in patients versus oral alendronate and.
In addition, the same study showed that longer duration of Prolia treatment was associated with a greater reduction in major osteoporotic fracture risks.
These data are a great demonstration of the importance of Prolia and treating post menopausal osteoporosis and the ability to study treatment effects in large patient populations using real world evidence.
In inflammation beyond severe asthma, we are investigating multiple additional indications with 10 spire, including separate phase III studies in chronic rhinosinusitis with nasal polyps and eosinophilic esophagitis.
We also have two phase II studies, one in chronic spontaneous urticaria and the other in COPD.
<unk> study is complete with top line data anticipated imminently.
Trial is fully enrolled and has recruited a broad population of COPD patients, including patients with both high and low eosinophil counts.
We look forward to the readout of this study in the first half of 2024.
Ah Rocha <unk>, a first in class anti ox 40, monoclonal antibody being investigated in patients with moderate to severe atopic dermatitis recruitment is off to a strong start on the rocket phase III clinical development program. We are also planning to initiate a phase II study in moderate to severe uncontrolled.
Asthma as we explore rocha 10, la Mab in this additional indication.
Rounding out the clinical summary, we've continued to execute on time and on budget with our Biosimilars portfolio, including the recent initiation of a pivotal study evaluating the pharmacokinetic similarity of ABP 206, compared with Opdivo one of six plans of new Biosimilars.
In closing I'd like to highlight our recently announced collaboration with T. Scan Therapeutics. This is a multi year collaboration that will use T scans proprietary target discovery platform target scan to identify the antigens recognized by T cells in patients with Crohn's disease and represents a novel approach.
<unk> to investigating this tough to treat illness.
I'd like to thank Amgen staff around the world for their relentless focus on execution as we work hard to meet the needs of the patients we serve I'll now turn it over to Peter.
Thank you Dave.
We're pleased with our strong second quarter performance growing volumes by 11% increasing investment in research and development and delivering 8% year over year non-GAAP EPS growth. This drives our confidence in delivering against our 2023 objectives and keeps us in position to meet or beat our longer term commitments I'll read.
View, our second quarter results before discussing our 2023 guidance.
As a reminder, these results and outlook reflect amgen on a standalone basis without any adjustments for the announced horizon acquisition.
Turning to our second quarter financial results, which are shown on slide 41 total revenues of 7.0 billion grew 6% year over year and represent the highest quarterly revenues in amgen's history.
Product sales increased 8%, while total revenues increased 7% year over year, excluding the negative impact of foreign exchange rates.
Second quarter total non-GAAP operating expenses increased 7% year over year, we invested in and advanced our pipeline and accelerated growth across our priority marketed products, while delivering a non-GAAP operating margin as a percent of product sales of 52, 6% demonstrating expense.
One.
non-GAAP R&D spend in the quarter increased 7% year over year, reflecting growing investments in our pipeline driven by higher spending on late stage programs and marketed product support.
non-GAAP cost of sales as a percent of product sales increased two four percentage points on a year over year basis to 17, 1%, primarily driven by higher profit shares and changes in product mix.
non-GAAP SG&A expenses in the second quarter decreased 6% year over year, we continue to focus on our continuous improvement operating model prioritizing investments digitalization and driving productivity and beginning and in other cases, continuing what we have already started historically to.
Executing in any number of uses of artificial intelligence.
non-GAAP other income and expenses were a net $307 million expense in the second quarter. This year over year favorability was driven primarily by the change in Beijing in accounting from equity method to a mark to market investment with the impact included only in our GAAP results.
As expected our second quarter non-GAAP tax rate increased one seven percentage points to 16, 4% primarily due to the 2022, Puerto Rico tax law change that replace the excise tax with an income tax beginning in 2023.
We continue to execute on our capital allocation priorities.
First we continue our priority investments and the best innovation, both internal and external innovation.
In Q2, we drove higher spend in late stage program, such as AMG 133, and I'll pass around as well as support for our marketed products including to Avenue.
Second we continue investing in our business capital expenditures are at near peak levels, driven by simultaneous construction of our state of the art manufacturing facilities in Ohio, and North Carolina, We expect our annual capital expenditures to begin to decline starting in 2024 with the completion and licensing of our Ohio.
And capital expenditures will then begin to return closer to historical leverage level.
Over the coming years.
And third we plan to continue to return capital to our shareholders. We paid dividends of $2 13 per share in the second quarter, representing a 10% increase over the second quarter of 2022.
The company generated $3 $8 billion of free cash flow in the second quarter of 2023 versus $1 7 billion in the second quarter of 2022, primarily driven by the timing of tax payments and includes higher interest income and higher operating income.
We expect strong cash flow for the remainder of the year consistent with our full year 2023 financial outlook that includes a non-GAAP operating margin of roughly 50%.
Now turning to the outlook for the business for 2023 on slide 43.
Our guidance is currently provided on the Amgen Standalone business and does not include any horizon projections as.
As the horizon transaction is expected to close by mid December resulting contributions from horizon would be included after that period.
Given our strong performance, we are raising our 2023 revenue guidance to $26 6 billion to 27 4 billion.
Versus previous guidance of $26 2 billion to 27 3 billion.
Although our results give us confidence to raise our full year guidance, we expect third quarter sales may be lower compared to the second quarter due to the impact of the Medicare Donut hole, which is more pronounced in the second half of the year and also to certain favorable changes to estimated sales deductions in the second quarter.
Regarding our non-GAAP earnings per share guidance, we intend to increase investments in our internal innovation and priority marketed products from a position of strength given the acceleration in our business and our pipeline.
Reflecting our improved revenue outlook, along with our investment plans, we are revising our non-GAAP EPS guidance to $17 88 to $18 80.
Versus previous guidance of $17 60.
The $18 75.
Again, although our results give us confidence to raise our full year non-GAAP EPS, we expect third quarter non-GAAP EPS to be lower compared to the second quarter, resulting from the expected Q3 sales and our investments in the business.
Important additional points to consider as you model the remainder of 2023.
We now project full year Neulasta sales of approximately $800 million and full year combined <unk> and <unk> sales of approximately $900 million.
We now expect other revenue for 2023 to be in the range of one one to $1 3 billion versus our prior range of one two to $1 5 billion.
Note that our third quarter 2022 results included about $90 million of other revenue related to our Covid antibody manufacturing agreement and the milestone we earned that we do not expect to repeat in the third quarter of 2023.
We anticipate full year non-GAAP operating expense for 2023 to increase by closer to 3% versus last year compared to our previous estimate of a 1% increase with higher cost of sales from projected increased sales additional investments driving our innovative pipeline and increased support for our growing priority marketed product.
Including our path to Endo Tesla.
We continue to expect our full year 2023 operating margin as a percentage of product sales to be roughly 50%. Although it will vary in each of the remaining two quarters.
We continue to expect non-GAAP cost of sales as a percentage of product sales to be between 16 and 17%. We now expect our non-GAAP R&D expenses in 2023 to increase about 5% year over year, which is higher than our prior guidance of 3% to 4%. We continue to expect non-GAAP SG&A.
And to be slightly down year over year as a percentage of product sales.
We now expect non-GAAP other income and expenses to be in the range of one one to one 2 billion down from the prior guidance of one two to $1 3 billion.
For the full year, we anticipate our non-GAAP tax rate of 17, five to 18, 5% down from prior guidance of 18.0% to 19.0%. We expect Q3 tax rate to be near the upper end of the revised range of 17, 5% 18, 5%.
Our capital expenditure guidance remains unchanged at approximately $925 million in 2023.
Our confidence is strong in the long term outlook and long term growth for Amgen and we look forward to completing the announced acquisition of horizon by mid December as Bob indicated I am incredibly grateful to our 24000 plus colleagues for successfully executing on our mission of serving patients in the second quarter and beyond this concludes the <unk>.
And actual update I'll turn it over to Bob for Q&A.
Okay. Thank you Peter and now we will open the line for colors. So they can ask questions and answers.
Ask our operator to remind you of the procedures for doing that please.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.
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Our first question comes from Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.
Great. Thank you very much for taking my question and congrats on the quarter.
Maybe one question on one question on part D.
There are some concerns and people are talking about the safety of ox 40.
Okay.
When companies regarding the autoimmune phenomena and I'm reading some literature suggest that.
In fact, the lacking a party animal models. There is a there is an impediment those independent on gamma. So just trying to understand how are you managing that risk in this particular drug.
And how is it autoimmune phenomena.
Thank you.
Yes. Thanks.
This is Dave.
So we're aware of those conversations when I can tell you is.
Let me approach your question in two parts here one Mechanistically Ox 40 is primarily expressed on activated T cells are activated pathogenic T cells in the setting of atopic dermatitis.
In the phase two program.
We did not observe autoimmune phenomenon. Obviously this is something we are tracking but.
We have no clinical signal or indication of such concerns at this time.
<unk> your question regarding our interferon gamma.
Imply risk for example for infections. That's also something that we do not see.
At a greater rate in treated patients than placebo in the phase two program. These are things that.
We will follow their followed routinely for almost all cytokine inhibition programs, Bob but to date, we have not had a signal.
Thank you Mohit <unk>. Our next question comes from Michael Yee from Jefferies. Please go ahead. Your line is open.
Hey, guys. Thanks for the question.
Bob commented about the enthusiasm for the horizon deal I know in general there is a lot of uncertainty in the market going on which sales can you maybe just describe your ongoing confidence with what you think is going on in the tech market why you're excited about this and your confidence around the re growing this.
Business and have you been in discussions or at least aware of the ongoing dynamics currently still ongoing dialogue with the company about.
The market.
Ted Thank you, yes sure Mike.
Two parts, maybe I'll kick over to murder in a moment, but let me just reiterate that we remain very excited and of course, we're watching carefully developments in the marketplace I'm talking as appropriate with our friends at horizon.
About that.
Yes.
Based on our view of the.
Clinical data and our view of the international opportunities and availability to expand.
The reach of the product.
We're very excited about what we think we can do there, but murdo frontier leverage yes.
Yes from our vantage point, Mike what we see as strong execution by the by the Horizon team in the U S and there are several catalysts for growth here, they've already expanded their commercial footprint.
So that should start to take traction they have the data now for the low cash pay.
Patient population with the positive results from that trial in public domain, not yet published but in public domain, having been presented.
And in hand with their sales forces. So that's very recent.
Not reflected necessarily in their historical performance Bob.
Bob mentioned the international market launches.
We continue to believe post close we will be able to help accelerate the work being done there.
We're also seeing some improved medical policies being issued.
Prior to the new calendar year, and so thats very encouraging to see payers improve or remove restrictions I should say on the use of <unk> for the lower cash patient population. So there are many good catalysts and what I see as horizon systematically unlocking.
Those additional opportunities for growth and we remain quite bullish on to pass those utility across a very large population of thyroid eye disease patients, who would benefit from that treatment given the clinical data.
The last thing I should mention on top as as they also were able to replicate the low Cas population results in optic Jay.
In the optic trial, sorry, they are not the low cost of the Registrational data for thyroid eye disease and optic Jay so that sets them up well for future potential launch in Japan, So really good.
Data flow really good execution in.
In investment and focus here and look beyond <unk>. We also remain very very excited about.
There are other two large inline brands with <unk>.
KRYSTEXXA and.
Obviously it <unk>. So overall, we remain excited and confident that the two companies working together on this really strong portfolio will be a good a good parent.
Thank you Michael our next question comes from Salvino Victor from Goldman Sachs. Please go ahead. Your line is open.
Good afternoon. Thanks for taking my question could you put that top line phase two data for <unk> in small cell lung cancer into context for us in any more detail on the profile in particular, how does this compare to the phase one data where you had a confirmed objective response rate of 23% and a median.
<unk> of response of 13 months I think you've noted it substantially exceed the feedstocks.
Yeah.
Yes, so I mean.
Thanks for the question and very very excited about this molecule if you step back I think.
It represents.
What we had hoped to see in the bite platform.
And.
Substantial clinical effects in a major solid tumor to put the data in the context in comparison to our phase one.
Sure.
As noted we substantially exceeded the 23% response rate.
We reported in phase one.
We are planning to present these data at a fall.
Conference Embargoed and of course in terms of providing more specifics but.
I can tell you that I couldnt be more pleased with the respawn.
Response rate data the duration of response and overall survival for context in patients with small small cell lung cancer in the third line.
Response rates are typically.
Well under 50%, but importantly, they are vanishingly brief in most instances often.
<unk> of weeks or a few months and so based on what we're observing I think we really have a chance to change the natural history of this disease, particularly as we march towards earlier lines of therapy, or where the activity of the bite in a lower tumor disease burden setting or should be at hand.
As we have observed.
<unk>. So all of our efforts now are focused on executing our earlier line trials. So this is one two I think pay attention to.
As we go forward and we're really looking forward to presenting these results this fall.
To say anything about safety, obviously, I'm, sorry, and in terms of the safety.
I think we have learned a lot in the development program about the clinical management here we are.
Quite pleased with the rates of volume principle side effects like cytokine release syndrome.
And we're we'll look forward to.
Tearing those details as well when we present the data this fall, but Tom.
Exceptionally happy with the Tolerability and safety profile as well.
Okay.
Thank you. Our next question comes from Jay Olson from Oppenheimer. Please go ahead. Your line is open.
Oh, Hey, congrats on the quarter, and especially the <unk> and Luma Cross results and happy birthday to Arvind.
Albert.
Yeah.
For Kras.
Absolutely.
Cross phase three in colorectal cancer can you just talk about the filing strategy and time line and maybe a little bit about the market opportunity in CRC for alumina kras. Thank you.
Yes.
And regards this is obviously a smaller patient population of about 4% of colorectal cancers Harbor the <unk> mutation.
In terms of next steps here our plans are to.
Discussions with the FDA and other regulatory authorities on these phase III data.
And as those conversations unfold I'll provide guidance.
The potential regulatory pathway and then as I mentioned.
Based on the strength of these data and phase <unk> data.
In the first line setting using a vectibix chemotherapy <unk> combination. We are also advancing a phase III trial in <unk>.
First line disease. So I think it's full steam ahead in colorectal cancer as well and again I'll give guidance about next steps since we have the appropriate conversations.
Thank you J. Our next question comes from Chris Raymond from Piper Sandler. Please go ahead. Your line is open.
Thanks.
Warm birthday wishes to arvin from from US here at Piper as well.
Just a question on an M. Davita. So obviously the uptake in the U S is not then maybe what was originally contemplated when you guys were first start talking about that opportunity, but maybe a couple of questions can you maybe talk about first maybe the split in scripts between the high and low price desk.
Are you.
And then second maybe there's been a lot of talk around what Abbvie has done.
But uptake biosimilars to date.
What does anything on their on their part has surprised you guys may be the most in terms of what they've done.
What's the plan maybe going forward.
Sure.
Talking about Murdo sure. Thank you for the question Chris.
Sure.
We're obviously very early innings still and this biosimilar.
Market with <unk>, and we're seeing clearly what.
As new.
<unk>.
Payer behavior in light of such a large product having biosimilar competition.
With respect to the high versus the low.
It's kind of a different mix, we see mostly the hi Inn PVM utilization in the low and the Ida and utilization were the low cost low net cost is attractive to them.
But again, it's very early in the product mix I don't think has settled out yet between those two skus.
I would also say that.
We're still waiting to see what happens in the next pair.
Negotiation cycle going into 2024 as you've seen many of the Pbms are on record as saying that they haven't done a whole lot in terms of driving utilization of.
Biosimilars in 2023, but plan to do more of that in 2024, So I think theres a lot more to follow here.
And with respect to Abbvie strategy look we compete against them in the innovative side and we now compete against them with our Biosimilar and we know their practices as well so not a lot of surprises there, but I think the.
I think that the clarity of how pharmacy benefit works with Biosimilar uptake or lack thereof is becoming clear to us and to other biosimilar manufacturers and other onlookers. So more to follow there I would say, though we remain very excited about the growth of Biosimilars in.
Longer term, we continue as Dave mentioned, we continue to commit.
Research investment in the development of additional Biosimilars with most recently with the.
The initiation of ABP 200, <unk>, a biosimilar to Opdivo.
Also we're continuing to look at.
Being able to launch other biosimilars in the medical benefit reimbursement system in the U S and that's that's where we were successful obviously with Tianjin <unk>.
Our previous launches so going forward the majority of our Biosimilar growth will come from ex U S and U S medical benefit Biosimilars and we continue to believe we will be able to generate strong growth. Having previously said that we would more than double our 2021 annual sales of roughly 2 billion.
<unk>.
Thank you Chris Our next question comes from Omar <unk> from Evercore ISI. Please go ahead. Your line is open.
Hi, guys. Thanks for taking my question and Dave I felt like you were on a roll on Arvin's birthday today. So congrats on all the data.
My.
<unk>.
Three and a half month was the PFS in the prior data I think it was 20 plus percent response rate and <unk>.
Judging by the way you were describing it as transformative is it fair to say PFS also improved in a meaningful way and the deal three study.
And secondly back on the Horizon deal I feel like two things are clear.
Are you committed to the deal, but also that depends on falling dramatically short at least so far and <unk>.
Question, that's coming up from investors is there any way to renegotiate the purchase price. Thank you very much.
Yes, what I can say without without getting into specifics on the number being under embargo is that I'm very happy with the.
The efficacy package overall response rate progression free survival duration of response and overall survival.
And we will have presentation of all of those data.
At an upcoming medical Congress, but to me, it's a very very compelling efficacy package.
Okay and on Horizon, where you are right we remain enthusiastic about proceeding on the basis of the deal that we announced.
I would take issue with our perspective is different from what was implicit in your question, but we'll leave that for another day.
Thank you Omar our next question comes from your own Barber from TD Cowen. Please go ahead. Your line is open.
Great. Thanks for taking the question.
I have a question on the puzzler and sort of as relating to enbrel to specifically enbrel sort of bouncing back which is good to see.
It looks like Thats really a net benefiting from the contracting that you've put in place given them to bid on generic <unk>.
Humira.
Well Tesla, though its faith in particular, which is actually doing pretty well in terms of uptick it's got a benign label and obviously, it's a drug program.
A lot of confidence in the outlook ahead. Thank you.
Thanks, Rob for the question.
Yes, you are right Enbrel has.
Did have a strong quarter and is benefiting from.
Quite frankly, the best access we've ever had on Enbrel, where we're covered across all the major pbms now so we're seeing really nice.
New patient growth on Enbrel, so more new patients coming onto treatment with Enbrel, and we think that that will support.
Sustained volume through the course of the year, we did give up a bit of price to do that so that's also flowing through enbrel, but but overall I think there was some concerns perhaps last quarter.
The biosimilar activity in this category with somehow impacting enbrel in and I was pretty clear last quarter that that wasn't what we were seeing and its definitely not a clear in the second quarter. The biosimilar competition for Humira is not negatively impacting enbrel.
So where we see stability in enbrel going forward.
For four or Tesla, we're actually seeing some strength I know Tesla.
We are pleased with what new patient acquisition looks like we think we can do better and we as I mentioned in my prepared remarks are investing more in Tesla through the back end of this year and Peter also mentioned that.
And the reason we're optimistic is we are gaining momentum in helping those.
Post topical first systemic patients in the <unk> here is pretty significant as there is $1 5 million of these patients in the U S that persist with topical treatment.
That would be better being initiated on a systemic agent and Tesla is really the ideal for systemic agents, we have great commercial coverage with Tesla with very little prior authorization requirement, we have no testing requirement for initiation.
And the affordability in out of pocket is very good. So at Tesla is an attractive option for pbms and payers to maintain on their formularies.
And it's an easy option for dermatologists as the first systemic agent that they would choose for a patient coming off the topical and being treated and again this milder form of disease and no. One else has indicated for that mild population from a systemic perspective. So overall the thesis is good no I think so take two coming into the market clearly.
Pressure on us where there are patients who are probably on our oral and didn't have full resolution of their psoriasis symptoms and they would have switched.
<unk> to what we're seeing is that that has slowed we're losing less two so take too in our current.
Mix of patients that we have on Oh, Tesla and we think that the other the other dynamic that put pressure on us in the first part of the year was the topical treatments also have free goods programs out there and they were getting trial and that has abated. They flattened out so we're getting less pressure from topical and much less patient.
Movement away from Tesla to sort of take two.
So I think we really have to see into 'twenty four.
The access will evolve for the novel agents, but we're very confident with our current access and the current perception of the safety and efficacy of a Tesla. We can further penetrate that population of patients. So going forward, we're feeling good about it.
Thank you your own our next question comes from Gregory <unk> from RBC Capital markets. Please go ahead. Your line is open.
Great. Thanks, Thanks, guys congrats on the quarter and thanks for taking my question.
Bob We certainly appreciate you framing up the case for the horizon deal before <unk>.
Regulators in the call.
And maybe just to build on the conviction that that you've laid out I just wanted to ask on your thoughts on the implication to potentially a negative outcome.
On the Biopharma value creation ecosystem and essentially the ability for companies like Amgen to bring medicines to patients. So if we just call. It that this novel legal theory like bundling does prevail what impact would that have in maybe two that how far would you in the amgen team and really be willing to take this to preserve that opportune.
To close the deal thanks, so much.
John I think I would reiterate what I said in my prepared remarks, right, which is good.
Don't believe their cases based on any establishing antitrust law.
We think it's based on hypotheticals speculative notions and we look forward to having a chance to assert that in court.
We expect to to prevail in court.
I think what's implicit in your question is a recognition that we live in a very fragmented industry and that there are a lot of innovators in particular that herbicides.
It makes it difficult for them to capitalize on the full potential of their innovation, especially globally and so there is a role for companies like ours to play in bringing value to companies like horizon, we've talked about it repeatedly but we think the.
The capabilities, we have with our global commercial organization the demonstrated expertise we have in manufacturing.
Research and development for products like this I think will enable us to reach far more patients then the company would be able to on its own so.
This is an industry.
Has flourished by being able to capitalize on the innovation ecosystem that exists for biotechnology companies for the most part in the United States.
And again, we expect that that will continue.
Thank you.
We're not possible for companies to combine to benefit from each other's strengths. The result would be fewer innovation, reaching fewer patients so that would be an unfortunate outcome.
Thank you Gregory our next question comes from Evan <unk> from BMO. Please go ahead. Your line is open.
Hi, guys. Thank you so much for taking my question, maybe one for you Dave can you just expand on the biologic rationale to target steep one versus dominion prostate cancer and I'm asking this in context of an update we had from a competitor today, whereas therapy SMA program different than yours.
Modified significantly due to safety issues. Thank you very much.
Yes.
Thanks, Kevin.
Sure.
So a couple of reasons to our target Steve number one it's almost universally expressed on advanced <unk> cancer cells.
There is not extensive high level on normal tissue expression. So that allows you to generate the therapeutic window that we're always looking for with bi specific T cell engages.
<unk> has been a challenging target there appear to be unique properties all with that target.
I think youre aware multiple molecules, including some of our own have gone into and then fallen out of clinical development.
And I've come to the belief that that may be in part.
Target related so.
Steep one is a relatively novel target.
<unk> in the clinic I think far advanced.
Compared to anyone else.
And based on the clinical data that we're seeing now this is a program we really want to accelerate all of this is another one of our programs, where we will we will be presenting data. This fall and urge you to put those algorithm onto the radar screen and pay attention to those data.
But.
This one I think is a real opportunity.
Okay.
Thank you Evan our next question comes from Colin Bristow from UBS. Please go ahead. Your line is open.
Hey, good afternoon, and thanks for taking my question, maybe just a quick one on <unk>.
The upcoming COPD data in the first half of <unk>.
24, I was just curious to get your expectations here, what's the threshold for success, especially in light of the recent sort of very positive boreas data. Thank you.
Yes, I think in light of what we've seen in the field, we would look to see something.
That is competitive with that.
Just to level set everyone. The rationale for this study is that the target of <unk>.
As expressed in bronchial mucosa.
Sputum can be detected in Banca alveolar lavage fluid in patients with COPD.
<unk> may be a contributor or driver of exacerbations and Thats really the hypothesis that we are testing here. So we will look at the totality of the clinical data, but I think some of the things you've seen recently published give us benchmark as to what we hope to see.
Thank you Colin our next question comes from Dane Leone from Raymond James. Please go ahead. Your line is open.
Thank you.
Maybe just two quick ones for me firstly in terms of the rebound in Tesla and the goods trend that seems to be coming out of some of the trailing periods for for competitive products on the topical side and also oral side.
Can you just maybe provide whatever response makes sense to you or.
Your competitors analysis on the oral side, suggesting they've achieved over 40% <unk> share.
And whether you think back share could go back in favor of Oh Tesla.
During the back half of this year or is that something you would see.
Steady state from.
From here on out.
And then secondly, just regarding the phase II <unk>.
Is there anything we need to be aware of that maybe the patient population in this phase two.
<unk> cell lung cancer study was maybe less heavier.
Heavily pre treated as opposed to what was.
Seen in the Phase one study, which is sometimes the case. Thank you.
When were taken in two parts, yes Dana.
I'll attempt to answer your Euro Tessa a question as I said, we are we are encouraged by what we're seeing in the market here, It's really hard for me to comment on market share claims from other companies, particularly when they are adding what we can see versus what we can see in their free drug programs. So they're giving a lot of product away and I think they are.
Alluding that in their denominator when theyre providing share.
Actually don't think that's going to be reflective of what their ultimate end market performance will look like because we've seen that in many categories, where free programs or bridging programs are not representative ultimately of the final access picture in the final effect that that new access picture, we will have on demand. So.
I think that given our very good access coverage with little to no. Prior authorization requirements across many of those plans. We are definitely in a position should some of those free drug patients end up getting rejected for sustained actual insurance coverage.
Because of the broad coverage, we have we have not factored that into our go forward, but it could happen.
Regarding <unk> no substantive.
Differences very heavily pretreated population, we will provide detailed.
Yes.
Thank you Dan. Our next question comes from David Risinger from Leerink Partners. Please go ahead. Your line is open.
Yes, thanks very much could you. Please provide an update on your oral obesity phase one trial and also discuss your evaluation of backup candidates. Thanks very much.
Yes in terms of the oral obesity program, it's moving through its soft phase one which includes some.
Single dose and short term multiple dose we expect probably now to have data in the first half of next year behind that we have multiple programs looking at orthogonal mechanisms of action many of them non <unk> based and as some of those progress towards the clinic.
Start to talk about them and give you insights into our portfolio approach here. Thank you.
Hey, Julien why don't we take one last question as we're over our allotted time.
Certainly our final question will come from Robin <unk> from <unk> Securities. Please go ahead. Your line is open.
Great. Thank you.
So congratulations on <unk> I'm going to call T map make my life easier.
But can you opine a little bit usually first the first innovator expand our market like small cell to be much bigger than what people think of today.
Walk us through the cadence of the phase one trial in particular, I think the checkpoint inhibitor combination.
Like when could we see data from that and how do you view like even harpoon the competitive landscape.
And how you are differentiated from that thanks, so much.
Let me start with the latter.
Im extremely enthusiastic about this molecule as always I'll, let others talk about their molecules.
This one.
Is one that we're really putting muscle behind can sort of level set everyone. Here as you start to think about the unmet medical need there are roughly 240000 cases of lung cancer in the United States each year, roughly 15% of them are small cell lung cancer comparable numbers in western Europe .
For example, so that.
Gives you a sense of the patient numbers the clinical development program.
Over time is going to be designed to look at really that broad swath of patients. So of course, we're starting in third line therapy, but our goal here is to quickly advance in the second into earlier lines of treatment.
We'll talk more about those clinical studies as we get through later in the year.
But this is one again, where I think when we get into settings of lower tumor burden as.
As we've observed with <unk>, we can really affect the natural history of the disease recall that upon initial diagnosis only 7% of patients with small cell lung cancer will be alive five years later and that saw.
The opportunity to change that I think is in front of us now.
Okay well. Thank you for your question Robin and thank you all for joining.
So we know we're a couple of minutes over there are a lot of time, so I want to be respectful of your calendars, but I also just want to make one more statement. If I may which is before we break I wanted to announce that after nearly 19 years and the.
The role Arvind Sood will be transitioning his head of IR responsibilities to our trucks, our treasurer Justin clays.
And Arvind will remain a VP in finance and will help Justin.
Transition seamlessly into this new role.
He is not leaving this is nonetheless, a big moment and I wanted to acknowledge that because I know Arvind is something of a legend in our fixture in the Investor Relations World.
On a personal note I wanted to just add that I've worked with arvin now for more than 20 years. So we began working together even before we both joined the Amgen. So I want to publicly congratulate him on his accomplishments and the IR profession, and I want to again publicly state that I am delighted that he is going to remain part of the finance group working with me and Peter.
The rest of the team so on his birthday, we have a second thing to celebrate which is the culmination of nearly 19 years and.
In his role at Amgen and those of you who haven't met Justin will enjoy getting to know him. He has been with Amgen for more than 20 years and served as our treasurer for most of the past four years. So.
I know, you'll all join me in wishing Charleston, well as he begins his transition into this role and I know, you'll all join me in.
Wishing arvin of goods celebration here with US later this evening. Thank you we will talk to you after the next quarter.
Great. Thank you everybody and we'll keep in touch.
This concludes our 2023 Q2 earnings call you may now disconnect.
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