Q4 2023 Bristol Myers Squibb Co Earnings Call
Operator: Welcome to the Bristol-Myers Squibb fourth quarter 2023 earnings conference call. All participants will be in listen-only mode.
Welcome to the Bristol Myers Squibb first quarter 2023 earnings conference call.
All participants will be in listen only mode.
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Operator: To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Tim Power, Vice President and Head of Investor Relations. Please go ahead.
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Speaker Change: I would now like to turn the conference over to to empower Vice President and head of Investor Relations. Please go ahead.
Speaker Change: Well, thank you and good morning, everyone. Thanks for joining us this morning for our fourth quarter 2023 earnings call. Joining me. This morning with prepared remarks are Chris burner, Our Chief Executive Officer, and David Elkins, Our Chief Financial Officer also participating in today's call are Adam like Husky, our chief commercialization Officer and summit here with our Chief Medical Officer and head of Globe.
Timothy Minton Anderson: Thank you and good morning, everyone. Thanks for joining us this morning for our fourth quarter 2023 earnings call. Joining me this morning with prepared remarks are Chris Boerner, our Chief Executive Officer, and David Elkins, our Chief Financial Officer. Also participating in today's call are Adam Lankowski, our Chief Commercialization Officer, and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can use to follow along with Chris and David's remarks.
Speaker Change: <unk> drug development.
Speaker Change: As you'll note we've posted slides to BMS dot com that you can use to follow along with for Christian David's remarks, before we get started I'll read our forward looking statements. During this call we'll make statements about the company's future plans and prospects that constitute forward looking statements.
Timothy Minton Anderson: Before we get started, I'll read our forward-looking statement. During this call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements. However, actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's SEC filing.
Results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date, we specifically disclaim any obligation to update forward looking statements, even if our estimates change we'll also forward.
Timothy Minton Anderson: These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date. We specifically disclaim any obligation to update forward-looking statements even if our estimates change. We also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of certain non-gap financial measures to the most comparable gap measures are available at BMS.com, and with that, I'll hand it over to you. Thanks, Tim. And good morning to all of you.
Speaker Change: Our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items.
Reconciliations of certain non-GAAP financial measures to the most comparable GAAP measures are available that'd be M. S dot com and with that I'll hand, it over to Chris.
Chris Schott: Thanks, Tim and good morning to all of you I'm very pleased to be speaking to you on our earnings call for the first time as CEO.
Chris Boerner: I'm very pleased to be speaking to you on our earnings call for the first time as CEO, and I'm excited about the opportunity for our company to continue to deliver transformational medicines for patients. Please turn to slide 4. Q4 2023 was a good quarter, including strong sales momentum in our inline and new product portfolio with 9% growth and nearly $10 billion in revenue, with growth across multiple key brands, including Eloquus, Updevo, Reblozil, Opti-Lag, Brianzi, Chemzaios, and Sotik. We also continue to generate significant cash flows from operations of $4.3 billion. And as you'll hear from David in During the fourth quarter, we also achieved important pipeline milestones and several key business development transactions to strengthen our growth profile. This is an important time for BMS.
Chris Schott: And I'm excited about the opportunity for our company to continue to deliver transformational medicines for patients. Please.
Chris Schott: Please turn to slide four.
Chris Schott: Q4, 2023 was a good quarter, including strong sales momentum in our in line and new product portfolio with 9% growth and nearly $10 billion in revenue with growth across multiple key brands, including <unk> Opdivo Rub, Brazil, op do lag Briana Z.
Chris Schott: <unk> iOS and so take two.
Chris Schott: We also continued to generate significant cash flows from operations are $4.3 billion in the quarter.
Chris Schott: And as you'll hear from David in a few minutes, we expect to grow our business this year.
David V. Elkins: During the fourth quarter. We also achieved important pipeline milestones in several key business development transactions to strengthen our growth profile.
David V. Elkins: This is an important time for BMS I know that many of you are focused on our strategy to navigate the decade and on the importance of disciplined execution at the company.
Chris Boerner: I know that many of you are focused on our strategy to navigate the decade and on the importance of disciplined execution at the company. We are writing the next chapter for BMS, and with that comes an opportunity for change. So let me take a few minutes to tell you about our strategy to navigate our LOEs and be very clear about my focus on execution. Let's go to slide 5 and how we see the company today. When we look at our business, it's comprised of two portfolios.
David V. Elkins: We are writing the next chapter for BMS and with that comes an opportunity for change. So let me take a few minutes to tell you about our strategy to navigate our eloise and be very clear about my focus on execution.
David V. Elkins: Let's go to slide five and how we see the company today.
When we look at our business is comprised of two portfolios first we see a legacy portfolio of well established products facing headwinds such as I R. A.
Chris Boerner: First, we see a legacy portfolio of well-established products facing headwinds such as IRA. Though this portfolio is declining, it is expected to continue to generate strong cash flows to enable investment in our future growth. Second, we see an expanding portfolio of growth products, many of which are relatively newer to the market and have significant expansion potential. When you look at these portfolios combined with our exciting pipeline, you can see how it all comes together, as depicted on slide six. As we think about this decade, we see three distinct periods.
David V. Elkins: So this portfolio is declining it is expected to continue to generate strong cash flows to enable investment in our future growth drivers sector.
Second we.
We see an expanding portfolio of growth products, many of which are relatively newer to the market and have significant expansion potential.
David V. Elkins: When you look at these portfolios combined with our exciting pipeline you can see how it all comes together as depicted on slide six.
David V. Elkins: As we think about this decade, we see three distinct periods and near term growth period.
Chris Boerner: A Near-Term Growth Period, Transition Period, and Potential for Sustainable Top-Tier Growth, which we plan to drive at the back end of the decade. Between now and the middle of the decade, our focus will be on maximizing the opportunity we have with our growth portfolio. This, along with pipeline execution, can best position the company into the transition period.
David V. Elkins: Transition period and potential for sustainable top tier growth, which we plan to drive in the backend of the decade.
David V. Elkins: Between now and the middle of the decade, our focus will be on maximizing the opportunity we have with our growth portfolio. This along with pipeline execution can best position the company into the transition period.
Chris Boerner: Then, starting around 2026, our exposure is most acute, and our focus will be on shortening the transition period as much as possible by accelerating our R&D programs, executing on product approvals and launches, while maintaining P&L disability. Finally, in the latter part of the decade, around 2028 and beyond, we plan to deliver sustainable top-tier growth, and we have the portfolio, pipeline, and financial flexibility to support this opportunity. Many of you will recognize the first two periods.
David V. Elkins: Then starting around 2026, our exposure is most acute in our focus will be on shortening the transition period as much as possible by accelerating our R&D programs executing on product approvals and launches while maintaining P&L discipline.
David V. Elkins: Finally in the latter part of the decade around 2028 and beyond we plan to deliver sustainable top tier growth and we have the portfolio pipeline and financial flexibility to support this opportunity. Many of you recognize the first two periods. However, the late decade returned to growth phase is less appreciated externally, including a number.
Chris Boerner: However, the late-decade return-to-growth phase is less appreciated externally, including a number of important products that are not fully appreciated in consensus models today. What supports our confidence is our expanding pipeline, recent deals, and newly launched products. Our strategy is to minimize the transition period coming in a few years while maximizing our growth in the back part of the cycle. Turning to slide seven. My confidence in our strategy is supported by the fact that, compared with other companies that successfully navigated similar periods, we have some clear strengths. An expanding growth portfolio across multiple therapeutic areas, an exciting pipeline, differentiated platforms, and continued financial strength to further invest in growth through business development. And the momentum from our most recent quarter to capitalize on these strengths is clear on slide 8.
David V. Elkins: Of important products that are not fully appreciated in consensus models today.
David V. Elkins: What supports our confidence is our expanding pipeline recent deals and newly launched products.
David V. Elkins: Our strategy is to minimize the transition period coming in a few years, while maximizing our growth in the back part of the decade.
David V. Elkins: Turning to slide seven.
David V. Elkins: My confidence in our strategy is supported by the fact that compared with other companies that successfully navigated similar periods, we have some clear strengths.
David V. Elkins: And expanding growth portfolio across multiple therapeutic areas and exciting pipeline differentiated platforms and continued financial strength to further invest for growth with business development.
David V. Elkins: And the momentum from our most recent quarter to capitalize on these strengths is clear from slide eight in October. We told you we would strengthen commercial performance and during Q4, we've been making progress.
Chris Boerner: In October, we told you we would strengthen commercial performance, and during Q4, we've been making progress. We have increased investment behind key growth brands such as Kamzaios and Sotik. We are reaccelerating growth for Reblazil by capitalizing on the launch of the Commands Indication in Firstline MDF. Our efforts to further establish OptiLAG as the standard of care in first-line melanoma are driving further growth.
David V. Elkins: We have increased investment behind key growth brands, such as games iOS and so take two.
David V. Elkins: We are re accelerating growth where rebels zelle by capitalizing on the launch of the commands indication in first line Mds.
David V. Elkins: Our efforts to further establish <unk> as the standard of care in first line melanoma are driving further growth.
Chris Boerner: And we have made progress expanding capacity for cell therapies, particularly setting up Brianzi for significant expansion this year. In R&D, we delivered important milestones, including recharging our early stage pipeline with 10 INDs, as we told you we would do at our R&D day, delivering the approval of Octiro in first-line RAS-positive lung cancer, and advancing our key platforms, including initiating our CD19 Next-T study in multiple sclerosis for our cell therapy program and showing early but important phase one data for the AR-LDD prostate asset from our targeted protein degradation. Importantly, we've been active in business development. Specifically, we've further diversified our oncology portfolio with targeted oncology assets such as CRIZATI and PRMT-5 from the recently completed MARATI acquisition. The planned addition of a differentiated, bi-specific ADC from cyst-immune, with exciting Phase I data across tumors, including lung and breast cancers, and the planned acquisition of RaysBio, bringing important radiopharmaceutical assets, pipeline, and manufacturing capabilities, And we announced the planned acquisition of Caruna Therapeutics, bringing CAR-XT, which we believe will be a transformational medicine for patients with schizophrenia, Alzheimer's, psychosis, and potentially other indications with multi-billion dollar sales potential.
David V. Elkins: And we have made progress expanding capacity for cell therapies, particularly setting up brianti for significant expansion this year.
David V. Elkins: In R&D, we delivered important milestones, including recharging, our early stage pipeline with 10 I N DS as we told you we would do at our R&D day.
David V. Elkins: Delivering the approval of an tyro in first line Ros positive lung cancer.
David V. Elkins: And advancing our key platforms, including initiating our CD 19 next T study in multiple sclerosis for our cell therapy program and showing early but important phase one data for the E. R. L. D D prostate asset from our targeted protein degradation platform.
David V. Elkins: Importantly, we have been active in business development, specifically, we further diversified our oncology portfolio with targeted oncology assets, such as croissant T and P. R. M T. Five from the recently completed Marathi acquisition the.
David V. Elkins: The planned addition of a differentiated bispecific ADC from system, you with exciting phase one data across tumors, including lung and breast cancers, and the planned acquisition of rays, bio, bringing important radiopharmaceutical assets pipeline and manufacturing capabilities.
David V. Elkins: And we announced the planned acquisition of Corona Therapeutics, bringing car X T, which we believe will be a transformational medicine for patients with schizophrenia, Alzheimers psychosis and potentially other indications with multibillion dollar sales potential.
Chris Boerner: We are looking forward to launching this medicine after closing the transaction later this year. These deals add important growth substrate to our company and diversify our portfolio for the long-term. Let's turn to slide 9.
David V. Elkins: We are looking forward to launching this medicine after closing the transaction later this year.
David V. Elkins: These deals at important growth substrate to a company and diversify our portfolio for the long term, let's turn to slide nine.
Chris Boerner: Execution, for me, is a top priority, starting with commercial. The focus is on continuing to accelerate performance for key growth drivers. This means ensuring the right resourcing and investment levels across our most important areas, and it means having the best people and driving accountability for delivering and R&D. Building on the momentum I described coming out of last quarter, as we highlighted at our R&D day, we have a strong pipeline with the potential to deliver over 16 NMEs through the late 2020s. And here we need to accelerate and deliver top-tier products. We are also taking a hard look at our pipeline to prioritize investments for Project, Higher Return Opportunities, and Discontinuing Lower Priority and our OPEC. As we told you, we're going to absorb the OPEX from Karuna.
David V. Elkins: Execution for me is a top priority.
Starting with commercial.
David V. Elkins: The focus is on continuing to accelerate performance for key growth drivers. This means ensuring the right resourcing and investment levels across our most important brands and it means having the best people and driving accountability for delivering results.
David V. Elkins: And R&D.
David V. Elkins: Building on the momentum I described coming out of last quarter as we highlighted at our R&D day, we have a strong pipeline with the potential to deliver over 16 enemies through the late 'twenty twenties, and here, we need to accelerate and deliver top tier productivity.
David V. Elkins: We are also taking a hard look at our pipeline to prioritize investments for projects with higher return opportunities and discontinuing lower priority programs.
David V. Elkins: And our Opex base.
David V. Elkins: As we told you we're going to absorb the opex from Corona. This means we need to make room for these assets by focusing our opex base to increase efficiency and productivity.
Chris Boerner: This means we need to make room for these assets by focusing our OPEX base to increase efficiency and productivity. We have begun executing across all three fronts, and look forward to updating you on our progress in the future. We plan to grow our business this year, as shown on slide 10. David will provide much more detail on our guidance in a few minutes. But what's important from my perspective is that getting our long-term plan to work requires us to deliver well in the short term. A few weeks ago, I reaffirmed our long-term targets as of that time. I also said we were going back to our historical practice of providing mainly annual guidance with total company revenue rather than product level revenue. Therefore, we will not be updating those long-term targets moving forward.
David V. Elkins: We have begun executing across all three fronts and look forward to updating you on our progress in future quarters.
We plan to grow our business this year as shown on slide 10.
David V. Elkins: David will provide much more detail on our guidance in a few minutes, but what's important from my perspective is that getting our long term plan to work requires us to deliver well in the short term a few weeks ago I reaffirmed our long term targets as of that date at that time I also said, we were going back to our historical.
David V. Elkins: Practice of providing mainly annual guidance with total company rather than product level revenue targets. Therefore, we will not be updating those long term targets moving forward.
Chris Boerner: With that in mind, you can see that our growth portfolio is strengthening, and our guidance reflects expected top-line growth. Before I hand the call over to David, I would like to thank my BMS colleagues for their efforts in serving patients during 2023 and for their enthusiasm for embarking on our next chapter.
David V. Elkins: With that in mind, you can see that our growth portfolio is strengthening and our guidance reflects expected topline growth this year.
Speaker Change: Before I hand, the call over to David I would like to thank my BMS colleagues for their efforts in serving patients during 2023 and four their enthusiasm for embarking on our next chapter as a company David.
David V. Elkins: Thank you, Chris, and thank you all again for joining our call today. As Chris mentioned, this is an important time for BMS as we embark on our next chapter, Transforming Our Portfolio. Our performance in 2023 will reflect the continued strong growth of our in-line and new product portfolio and the ongoing erosion of revenue. Let's get started with our top-line performance on slide 12.
David V. Elkins: Thank you Chris and thank you all again for joining our call. Today is Chris mentioned this is an important time for BMS as we embark on our next chapter transforming our portfolio. Our performance in 2023 reflect a continued strong growth of our in line and new product portfolio and the ongoing erosion of Revlimid.
David V. Elkins: Let's get started with our top line performance on slide 12.
David V. Elkins: Unless otherwise stated, all comparisons are made versus the same period in 2022, and sales performance growth rates will be discussed on an underlying basis. Including the impact of pharmache, we delivered sales of approximately $45 billion in 2020, which reflected 8% growth from our inline and new product portfolio, offset by the unfavorable impact of generics. During the year, we saw continued strong demand for key inline products such as Eliquis and Opdivo, while new products gained traction in their respective markets. If you turn to slide 13, you see our 2023 sales split between the legacy and growth portfolio that Chris spoke about earlier. This is how we will report our business as we move forward. What I can tell you is that the transition of the business is already well underway from our legacy to our growth portfolio. For 2023, our growth portfolio delivered approximately 15% growth.
David V. Elkins: Less otherwise stated all comparisons are made versus the same period in 2022 and sales performance growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange.
David V. Elkins: We delivered sales of approximately $45 billion in 2023, which reflected 8% growth from our in line and new product portfolio offset by unfavorable impact of generic entries.
David V. Elkins: During the year, we saw continued strong demand for our key inline products, such as Ala Christian Opdivo, while new products getting traction in their respective markets.
David V. Elkins: If you turn to slide 13, you see our 2023 sales split between legacy and growth portfolio that Chris spoke about earlier. This is how we report our business as we move forward.
David V. Elkins: What I can tell you is the transition of the business is already well underway from our legacy to our growth portfolio for 2023 our growth portfolio delivered approximately 15% growth. This supports our strategy that Chris discussed earlier.
David V. Elkins: This supports our strategy that Chris discussed earlier. We see our legacy portfolio providing a solid foundation for cash flow generation in the near term, while the products within our growth portfolio grow in significance. Let me dive deeper into our fourth quarter and four-year sales performance, starting with our oncology portfolio on slide 14. We are pleased with the robust demand for Updevo, which achieved strong global sales growth for the year. In the fourth quarter, U.S. sales grew 12%, primarily driven by increased volume and core indications, including first-line lung, upper GI, and adjuvant bladder cancer, partially offset by optimized growth in first-line melanoma. During the quarter, U.S. and international markets each benefited from approximately $50 million of favorable stock.
David V. Elkins: We see our legacy portfolio, providing a solid foundation for cash flow generation and near term one of the products within our growth portfolio grow in significance.
Speaker Change: Let me dive deeper into our fourth quarter and for year sales performance, starting with our oncology portfolio on slide 14.
Speaker Change: We're pleased with the robust demand for Opdivo, which achieved strong global sales growth for the year in.
Speaker Change: In the fourth quarter U S sales grew 12%, primarily driven by increased volume in core indications, including first line lung upper Gi and adjuvant bladder cancer, partially offset by <unk> growth in first line melanoma.
Speaker Change: During the quarter U S and international markets, each benefited from approximately $50 million of favorable stocking.
David V. Elkins: Internationally, sales grew 4%, led by increased demand for lung and gastric cancer indications and from expanded reimbursement. Turning to OptiLag, which more than doubled its full-year sales in 2023 and is now a standard-of-care treatment in first-line melanoma. In the fourth quarter, U.S. sales grew 80% versus the prior year and 15% sequentially, benefiting from its strong market share position
Speaker Change: Nationally sales grew 4% led by increased demand for lung and gastric cancer indications and from expanded reimbursement.
Speaker Change: Turning to off the lag which more than doubled its full year sales in 2023 and is now a standard of care treatment in first line melanoma in the fourth quarter U S sales grew 80% versus the prior year and 15% sequentially benefiting from its strong market share position.
David V. Elkins: With respect to sales of Octyro in the fourth quarter, we launched in late November, and upon U.S. approval and Q4 sales reflect the initial wholesaler stock. During 2024, we look forward to bringing this important medicine to more patients. Let's turn to our cardiovasculars on slide 15. Eloquist generated over $12 billion in sales in 2023 and continues to be the number one oral anticoagulant globally. And fourth quarter sales grew, primarily driven by demand in the U.S. as we continue to gain market share from competitors. Internationally, sales in Q4 were broadly flat, driven by generic entry into several European markets.
Speaker Change: With respect to sales of a tyro and the fourth quarter, we launched in late November and upon U S approval in Q4 sales reflect the initial wholesaler stocking during 'twenty 'twenty four we look forward to bringing this important medicine to more patients.
Let's turn to our cardiovascular on slide 15.
Speaker Change: Krish generated over $12 billion in sales in 2023 and continues to be the number one oral anticoagulants globally.
And fourth quarter sales grew primarily driven by demand in the U S. As we continue to gain market share from competitors internationally sales in Q4 were broadly flat driven by generic entry in several European markets.
David V. Elkins: Sales of Kenzias in the fourth quarter and full year were strong, including $88 million in Q4. As of December 31st, we had roughly 4,500 patients on commercial drugs. And on average, we've been adding roughly 1,000 patients to commercial drug per quarter. Momentum in the U.S. for ChemSci is expected to continue in 2024, and internationally, we expect modest near-term sales contribution based on timing of reimbursement in newly launched markets. Turning to our hematology portfolio performance on Flight 16, starting with Revlimid, global sales for the full year were approximately $6 billion. Looking forward, we anticipate continued variability in Revlimid sales quarter-to-quarter based upon historic patterns, especially pharmacy dispensing. Additionally, we anticipate an additional volume of U.S. generics to enter the market in March.
Speaker Change: Sales of Ken's I as in the fourth quarter and full year were strong including $88 million in Q4.
Speaker Change: As of December 31st we had roughly 4500 patients on commercial drug and on average we have been adding roughly 1000 patients to commercial drug per quarter to.
Speaker Change: The momentum in the U S for Kimco as expected to continue in 2024 and internationally, we expect modest near term sales contribution based on timing of reimbursement in newly launched markets.
Speaker Change: Turning to our hematology portfolio performance on slide 16, starting with Revlimid global sales for the full year were approximately $6 billion looking forward. We anticipate continued variability in revlimid sales quarter to quarter based upon historic patterns and specialty pharmacy dispensing.
Speaker Change: We anticipate an additional volume of U S generics to enter the market in March we continue to forecast a stepped down in revlimid revenues in the range of one and a half to $2 billion. This year.
David V. Elkins: We continue to forecast a step down in Revlimid revenues in the range of $1.5 to $2 billion. Now moving to Rebozel, global sales grew 40% in 2023, surpassing $1 billion on an annualized basis for the first time. For the quarter, Rub-a-Zell generated 60% sales growth driven by strong demand and supported by a broad U.S. first-line label. Sales grew 75% in the U.S. in Q4. Internationally, Revizel continues to be launched in different markets across the globe, including recently in Japan. Turning to our self-therapy portfolio, starting with sales of Vecna in the US, we continue to experience competitive impact. While ex-U.S., demand remains strong in the court.
Speaker Change: Now moving to rebels L. Global sales grew 40% in 2023, surpassing $1 billion on an annualized basis for the first time for the quarter Rubenfeld generated 60% sales growth driven by strong demand and supported by a broad U S. First line label sales grew 75% in the U S. In Q4 internationally rebels they'll.
<unk> to be launched in different markets across the globe, including recently in Japan.
Speaker Change: Turning to our cell therapy portfolio, starting with sales of background in the U S. We continue to experience competitive impacts while ex U S demand remained strong in the quarter.
David V. Elkins: We remain focused on demonstrating the benefits of the product profile to our customers in anticipation of expanded use in the US upon the potential approval of CARMA 3 data in third-line plus settings. BECMA was recently approved in Japan in the third line setting based on CARMA 3 data, and last week we received a positive CHP opinion. Moving on to Brionzi.
Speaker Change: We remain focused on demonstrating the benefits of the product profile to our customers' anticipation of expanded use in the U S. Upon the potential approval of Karma three data in third line plus setting beckman.
Speaker Change: Beckman was recently approved in Japan in the third line setting based on partner three data and last week, we received positive CHP opinion.
Speaker Change: Moving to Brianti global sales doubled year over year, reflecting the strength of its clinical profile and our improved manufacturing capacity.
David V. Elkins: Global sales doubled year over year, reflecting the strength of its clinical profile and improved manufacturing. We are pleased to have received FDA priority review for all three of our expanded indications and look forward to the PDUFA date in March for chronic lymphocytic leukemia and additional PDUFA dates in May for follicular and mental cell lymphoma. Looking to this year, we expect to see strong sales growth starting in the second quarter, driven by improved supply capacity and the potential for these new additional industries. Moving to immunology on slide 17.
Speaker Change: We're pleased to have received F. D. A priority review for all three of our expanded indications for <unk> and look forward to the <unk> date in March for chronic lymphocytic leukemia, and additional producer date in may for Follicular and mantle cell lymphoma indications.
Speaker Change: Looking to this year, we expect to see strong sales growth starting in the second quarter, driven by improved supply capacity and the potential for these new additional indications moving to immunology on slide 17 global sales of supposedly in 2023 grew 72% to $434 million driven by increased demand and multiple sclerosis.
David V. Elkins: Global sales of Sipozy in 2023 grew 72% to $434 million, driven by increased demand in multiple sclerosis and ulcerative colitis. We remain focused on driving growth across both indications. For 2024, keep in mind the typical impact of U.S. symposia sales in the first quarter due to copay assistance for commercially insured patients whose benefits we sat on. With SITIC2, our goal continues to be driving demand and broadening out. We made good progress on both fronts in the fourth. Fourth quarter sales in the U.S. also benefited from a clinical supply purchase of $17 million.
Speaker Change: And ulcerative colitis, we remain focused on driving growth across both indications for 'twenty 'twenty four keep in mind, the typical impact of U S. Suppose the of sales in the first quarter due to co pay assistance for commercially insured patients who benefits reset.
Speaker Change: With Citic too our goal continues to be driving demand and broadening access we made good progress on both fronts in the fourth quarter fourth quarter sales in the U S. Also benefited from a clinical supply purchase of $17 million. When you strip out the one time purchases in Q4 and Q3, we showed strong underlying sequential sales growth of approximately.
David V. Elkins: When you strip out the one-time purchases in Q4 and Q3, we showed strong underlying sequential sales growth of approximately 40%, reflecting good pull-through from CVS and increased demand. Going forward, the way to look at progress in the U.S. is through commercially paid prescriptions. As we build volume and improve access, we will be subject to higher rebates, which is something to keep in mind as you model SITIC2 for 2024. Of course, Adam can talk more about this in the Q&A portion of our call. Internationally, we expect to gain additional country regulatory and reimbursement approvals over time. Switching gears to our fourth quarter P&L on slide 18, having just covered sales performance, let me walk through a few non-GAAP key lineups. Gross margin as a percentage of sales decreased approximately 150 basis points to 76.4% compared to the prior year due to product mix and lower hedge settlement.
Speaker Change: Only 40%, reflecting good pull through from Cvs and increased demand.
Speaker Change: Going forward the way to look at our progress in the U S is through commercially paid prescriptions as we build volume improve access we will be subject to higher rebates, which is something to keep in mind as you model, particularly for 2024 of course, Adam can talk more about this in the Q&A portion of our call today.
Speaker Change: Internationally respects Arctic two to gain additional country regulatory and reimbursement approvals over time.
Speaker Change: Switching gears to our fourth quarter P&L on slide 18, having just covered sales performance, let me walk through a few non-GAAP key line items.
Speaker Change: Gross margin as a percentage of sales decreased approximately 150 basis points to 76, 4% compared to prior year due to product mix and lower hedge settlement gains excluding.
David V. Elkins: Excluding acquired in-process R&D, fourth quarter and full year operating expenses decreased primarily due to timing of expenses in 2022. The fourth quarter decline was partially offset by increased investments in Kenzias, Satictu, and the timing of pipeline investments. Acquired in-process R&D in the quarter for $600 million, which is partially offset by licensing income, resulting in an unfavorable net impact of 20 cents of EPS. The fourth quarter effective tax rate was approximately 14.9%, driven primarily by earnings. Overall, earnings per share was $1.70 a quarter and $7.51 for the full year.
Speaker Change: Acquired in process R&D fourth quarter and full year operating expenses decreased primarily due to timing of expenses in 2020 to the.
Speaker Change: The fourth quarter decline was partially offset by increased investments in <unk>. So it took two and the timing of pipeline investments.
Speaker Change: Acquired in process R&D in the quarter with $600 million, which was partially offset by licensing income, resulting in an unfavorable net impact of 20 cents of EPS. The.
Speaker Change: The fourth quarter effective tax rate was approximately 14, 9% driven primarily by earnings mix overall.
Speaker Change: Overall earnings per share was $1 70 in the quarter and $7 51 for the full year.
David V. Elkins: Now moving to the balance sheet and capital allocation on slide 19. Our financial position remains strong, with approximately $12.6 billion in cash and marketable securities on hand as of December 31st, as we generate cash flow from operations of $4.3 billion in the fourth quarter. Through our strong financial discipline, we have been able to invest in our business and further expand our portfolio, maintain strong operating margins, pay down debt, and return significant cash to shareholders through share repurchases and dividends. Over the past three years, we've returned over $30 billion in shareholder distributions, including the dividend, which we have increased annually for 15 years in a row. As you know, we're going to be taking on additional debt this year to finance our planned acquisitions of Karuna and Raise Vias. However, with our strong financial position, we plan to utilize our cash flow to pay down our debt, as we've demonstrated in the past. Our plan is to repay approximately $10 billion of debt over the next two years to improve our leverage profile.
Speaker Change: Now moving to the balance sheet and capital allocation on slide 19, our financial position remains strong with approximately $12 $6 billion in cash and marketable securities on hand as of December 31st as we generate cash flow from operations of $4 $3 billion in the fourth quarter.
Speaker Change: Through our strong financial discipline, we have been able to invest in our business and further expand our portfolio maintained strong operating margins pay down debt and returned significant cash to shareholders through share repurchases and dividends.
Speaker Change: Over the past three years, we've returned over $30 billion and shareholder distributions, including the dividend, which we've increased annually for 15 years in a row.
Speaker Change: As you know we're going to be taking on additional debt. This year to finance, our planned acquisitions of Corona and raise vial. However.
Speaker Change: However, with our strong financial position, we plan to utilize our cash flow to pay down our debt as we've demonstrated in the past our plan is to repay approximately $10 billion of debt over the next two years to improve our leverage profile.
David V. Elkins: Before turning to our line-item guidance, let me close with our 2024 non-GAP guidance on slide two, which includes Maradi but excludes the future impact of pending transactions, SystemU, Karuna, and RaiseBudget. As we did in 2023, we were providing revenue guidance on a reported basis, as well as on an underlying basis, which assumes currency remains consistent with the prior year. We expect 2024 revenues to increase in a low single-digit range, reflecting our confidence in the growing momentum of our growth portfolio. Excluding foreign exchange, we expect revenues to increase in the low single digits as well.
Speaker Change: Before turning to our line item guidance, let me close with our 2024 non-GAAP guidance on slide 20, which includes Marathi, but excludes the future impact of pending transactions system, you Corona and raise via ACH.
Speaker Change: As we did in 2023, we are providing revenue guidance on a reported basis as well as on an underlying basis, which assumes currency remains consistent with prior year.
Speaker Change: We expect 2020 for revenues to increase in a low single digit range, reflecting our confidence in the growing momentum of our growth portfolio.
Speaker Change: <unk> Foreign exchange, we expect revenues to increase in low single digit as well.
David V. Elkins: Driving our momentum this year will be increasing sales in our growth portfolio from products like Updevo and our recently launched products. As we said previously, we expect a more modest pace of growth than last year for Avdiva, with the potential for acceleration in the back half of the year from new indications. And while our legacy portfolio includes assets that are maturing, we expect strong growth from Eloquist in the U.S. As it relates to quarterly progression of our sales, a few reminders. For products like Revlimid, Pomalyst, and Chemziah, keep in mind the typical impact on sales in the first quarter due to patients entering the Medicare coverage gap early in the year. And for Eloquist, the coverage gap dynamic works in the opposite direction, where we expect sales in the first half of the year to be higher than in the second. As it relates to our line item guidance for the year, we expect gross margin to be approximately 74%, which reflects an evolution of our sales mix and a non-recurrence of hedging gains from last year.
Speaker Change: Driving our momentum this year will be increasing our sales and our growth portfolio from products like Opdivo and our recently launched products.
Speaker Change: As we said previously we expect a more modest pace of growth than last year for Opdivo.
Speaker Change: With the potential for acceleration in the back half of the year from new indications and while our legacy portfolio includes assets that are maturing we expect strong growth from <unk> in the U S. This year as it relates to quarterly progression of our sales.
Speaker Change: A few reminders.
Speaker Change: For products like Revlimid panelists and Kim XI is keep in mind the typical impact on sales in the first quarter to the patients entering the Medicare coverage gap early in the year.
Speaker Change: And for <unk> the coverage gap dynamic works in the opposite direction, where we expect sales in the first half of the year to be higher than in the second half.
Speaker Change: As it relates to our line item guidance for the year, we expect gross margin to be approximately 74%, which reflects an evolution of our sales mix and the non recurrence of hedging gains from last year.
David V. Elkins: Excluding in-process R&D, we expect our total operating expenses to increase in a low single-digit range, reflecting the additional costs of Maradi and the reallocation of costs and efficiency initiatives in MS&A as we continue to invest in our new product. This aligns with our previous operating margin target of at least 37%. This means we will remain focused on driving operational efficiencies across the organization, including portfolio prioritization, to enable us to invest for growth while maintaining high productivity. We expect OI&E to be approximately $250 million in income, reflecting the PD-1 rurality step-down in January from 6.5% to 2.5%, as well as the financing costs related to the Mirati acquisition. We estimate our tax rate to be approximately 17.5%, reflecting an increase due to the non-recurrence of the one-time tax benefit that occurred in the third quarter of last year, plus the anticipated impact of Pillar 2.
Speaker Change: Excluding in process R&D, we expect our total operating expenses to increase in a low single digit range, reflecting the additional costs of Marathi and the reallocation of cost and efficiency initiatives and M. S. N. A as we continue to invest in our new product launches.
Speaker Change: This aligns with our previous operating margin target of at least 37%.
Speaker Change: This means we will remain focused on driving operational efficiencies across the organization, including portfolio prioritization to enable us to invest for growth while maintaining high productivity.
Speaker Change: We expect R&D to be approximately $250 million of income, reflecting the PD one royalties stepped down in January from six 5% to two 5% as well as the financing costs related to the variety acquisition.
Speaker Change: We project our tax rate to be approximately 17, 5%, reflecting an increase due to non recurrence of onetime tax benefit that occurred in the third quarter of last year, plus the anticipated impact of pillar two.
David V. Elkins: Finally, we expect to deliver non-GAAP earnings per share within the range of $7.10 and $7.40. For clarity, our 2024 guidance excludes the three pending transactions. As a reminder, SystemUnit is expected to add about $800 million in in-process R&D. Caroon is expected to be about 30 cents dilutive to earnings relating to financing costs as we plan to absorb the op, and Ray's Bio would be approximately $0.13 relative to earnings, with half in financing and the other half in operations. When we report in Q1 in April, we will update our guidance to reflect the deals that have closed at that time. Before we move to the question and answer session, I want to thank all of our colleagues around the world for their hard work and dedication in 2023.
Finally, we expect to deliver non-GAAP earnings per share within a range of $7.10 and $7 40.
Speaker Change: For clarity our 'twenty 'twenty four guidance excludes the three pending transactions as a reminder system unit is expected to add about $800 million in in process R&D.
Corona is expected to be about 30 cents dilutive to earnings relating to financing costs as we plan to absorb the opex and raised via would be approximately 13 cents diluted to earnings with half in financing and the other half in opex.
Speaker Change: When we report in Q1 and April we will update our guidance to reflect the deals that have closed at that time before we move to the question and answer session I want to thank all of our colleagues around the world for their hard work and dedication in 2023. This is an exciting time for BMS or write a new chapter and maintain a singular focus on improving our growth profile over the course of the decade.
Speaker Change: I believe that our focus financial discipline, coupled with strong cash flow generation are key advantages that will enable us to further diversify our portfolio and invest in growth opportunities to deliver for patients and our investors.
David V. Elkins: This is an exciting time for BMS as we write a new chapter and maintain a singular focus on improving our growth profile over the course of the decade. I believe that our focused financial discipline, coupled with strong cash flow generation, are key advantages that will enable us to further diversify our portfolio and invest in growth opportunities to deliver for patients and our investors. I'll now turn the call back over to Tim and Chris for Q&A. First question, please. But before we do, just a reminder, it's obviously a busy morning for everybody, and to the extent you can keep to just one question so we can get to as many people as possible, we would appreciate that.
Speaker Change: I'll now turn the call back over to Tim and Chris for Q&A.
Speaker Change: Next question, please but before we do just to reminder, obviously a busy morning for everybody into the extension can keeps you. Just one question. So we can get to as many people as possible. We would appreciate that so let's go to your first question. Please.
Speaker Change: The first question will come from Luisa Hector of Baird. Please go ahead.
Luisa Hector: And good morning.
Luisa Hector: I'll start with that.
Luisa Hector: Because you have.
Luisa Hector: Yes.
Luisa Hector: So just your level of confidence.
Luisa Hector: Heading into that any comments on how the label changes impacting.
Luisa Hector: So car T.
Operator: So let's go to our first question, please, www.larryweaver.com. Your first question will come from Louisa Hector of Barenburg. Please go ahead. Good morning.
Luisa Hector: And just any pressure that youre seeing from constitute forward and how that might evolve.
Luisa Hector: In 2024, thank you.
Speaker Change: First of all have somebody to answer and then go down.
Speaker Change: Thank you Lisa for the question from my perspective garment three data we've shared updated data at Ash last year and as you saw it was very clear what is driving the overall survival curves, it's because of the crossover that the patients have allowance for the progression of their disease on the standard of care arm.
Samit Hirawat: Maybe I'll start with a BECMA because you have the FDA adcom coming up, so just your level of confidence. Heading into that, any comments on how the label changes are impacting or not for all cars? and just any pressure that you're seeing from CARTITUDE IV and how.
Samit Hirawat: First, we'll have Samit answer the question and then go to Alex. Thank you, Luisa, for the question. From a BECMA perspective, Karma 3 data, we shared updated data at ASH last year, and as you saw, it was very clear what was driving the overall survival curves.
Speaker Change: And therefore that curve doesn't benefit and therefore, you see much of a impact on that overall survival benefit that these patients are getting we are very confident and we are very.
Speaker Change: Much looking forward to having that dialogue and discussion with the regulatory authorities and are looking forward to.
Samit Hirawat: It's because of the crossover that patients have allowance for at the progression of their disease on the standard of care arm. And therefore, that curve does benefit. And therefore, you see much of an impact on that overall survival benefit that these patients are getting. We are very confident, and we are very much looking forward to having that dialogue and discussion with the regulatory authorities and looking forward to getting this product to patients as soon as possible. So, the second part that you asked about, the label updates that the FDA is seeking right now for all CAR T products around T cell delinquencies. Once again, we've treated thousands of patients. And from our perspective, as we look into our data, we do not see a causative relationship between CAR T cell therapies and Brianzi and BECMA.
Speaker Change: To getting this product to the patients as soon as possible. So the second part that you asked about the label update.
Speaker Change: The FDA is seeking right now for all car T products that are on T cell malignancies. Once again, we have treated thousands of patients and from our perspective as we look into our data we do not see a causative relationship to car T cell therapies in terms of ANZ in the backhaul. So we'll continue to have the dialogue with the regulators on that as well.
Speaker Change: As we look to the final wording to the FDA.
Speaker Change: With that let me pass it onto.
Speaker Change: Adam.
Adam Husky: Thanks for the question.
Adam Husky: We do expect growth in 2020 for Beckman.
Adam Husky: <unk> III is a key catalyst for growth this year and as Thomas said, we do look forward to the old Act to reinforce the benefit back mine a triple exposed patient population you can imagine our commercial teams have been launched ready for some time and we're also seeing continued strong international performance.
Samit Hirawat: So, we'll continue to have dialogue with the regulators on that as well as as we look to the final wording the FDA will do. With that, let me pass it on to Adam. Thanks, Lisa, for the question. So we do expect growth in 2024 for BECMA. CARMA 3 is a key catalyst for growth this year.
Adam Husky: We will launch both the beckman and beyond <unk> in a number of new countries. This year we've.
Adam Lankowski: And as Samit said, we do look forward to the ODAC to reinforce the benefits of BECMA in a triple exposed patient population. As you can imagine, our commercial teams have been launch ready for some time, and we're also seeing continued strong international performance, and we'll launch both Abecma and Brianzi in a number of new countries this year. We've stated that we've seen continued impact from additional BCMA agents.
We've stated that we have seen continued impact from additional BCA agents. This is a highly competitive market, putting some pressure on it back in our growth, but our teams are squarely focused on opening new accounts.
Adam Husky: <unk> our site footprint not just internationally, but also in the U S.
Adam Husky: In closing the gap on efficacy perception, including solidifying misconceptions around efficacy and reinforcing it back to the safety profile, particularly as it relates to it.
Adam Lankowski: This is a highly competitive market, putting some pressure on Abecma growth, but our teams are squarely focused on opening new accounts, expanding our site footprint, not just internationally but also in the U.S., and closing the gap on efficacy perceptions, including solidifying any misconceptions around Beckman's efficacy and reinforcing Beckman's safety profile, particularly as it relates to CNS neurotoxicity. So taken together, we're confident in Beckman's profile, looking forward to the ODAC, and I'm confident that we'll be more competitive this year. Thanks, Adam.
And as neurotoxicity, so taken together, we're confident in the back of his profile looking forward to the <unk> and I'm confident that we'll be more competitive this year.
Speaker Change: Thanks, Adam can we go to the next question. Please Andrea.
Andrea: The next question comes from Chris Schott of Jpmorgan. Please go ahead.
Chris Schott: Hi, great. Thanks, so much for the question. So maybe a bigger picture question on the new launches I think those new launches did about $3 6 billion in 2023, and I know, you're not giving longer term targets, but just any just rough framework of how to think about those sales in 2024, I guess is there a target you are providing if there's not a target can you maybe just talk a little bit about.
Operator: Could we go to the next question, please, Andrea? The next question comes from Chris Schott of J.P. Morgan. Please go ahead. Great, thanks so much for the question. So maybe a bigger picture question on the new launches. I think those new launches will do about $1.6 billion in 2020. And I know you're not giving longer-term targets, but just any...
Chris Schott: Any areas you see that maybe you're more or less optimistic versus work strict consensus is and others there.
Chris Schott: There is quite a bit of focus on the trajectory of those reps. Thanks, so much.
Speaker Change: Thanks for the question, Chris maybe I'll just start very quickly and then I'll turn it over to Adam as we had mentioned not going to be providing individual product level guidance.
Speaker Change: We had alluded to that when we met at J P. Morgan three weeks ago, but.
Operator: Rough framework on how to think about those sales in 2024. I guess, is there a target you're providing? If there's not a target, can you maybe just talk a little bit about any areas you see that maybe you're more or less on top of?
Speaker Change: But we did give and we will continue to get the company line item guidance as we did today and then Youll see as we reported today, we're gonna be talking Additionally, about the gross portfolio that we have which is going to be important as we think about the business going forward. Adam do you want to talk about the new launches. Yes. So thanks for the question, Chris I mean, we're coming off a good quarter.
Operator: quite a bit of Thanks for the question, Chris. Maybe I'll just start very quickly, and then I'll turn it over to Adam. As we mentioned, we're not going to be providing individual product-level guidance, and I think we alluded to that when we met at J.P. Morgan three weeks ago. But we did give, and we'll continue to give company line-item guidance as we did today. And then you'll see, as we report it today, we're also going to be talking additionally about the growth portfolio that we have, which is going to be important as we think about the business going forward. Adam, do you want to talk about the new launches? Yeah, so thanks for the question, Chris. I mean, we're coming off a good quarter, and we have a strong foundation for growth to build upon.
Adam Husky: We have a strong foundation for growth to build upon we're focused on continuing to accelerate our new product portfolio.
<unk> the 10 launches.
Adam Husky: But we had over the last four years, we're certainly prioritizing the execution of our new launches and adding investment to accelerate the performance of our growth portfolio for products like cams iOS subject to embryonic.
<unk> also seen strong performance from our rebel Hill and <unk>. We also have some bar our growth products like <unk>, and Opdivo, which will continue to contribute significant growth in 2024, and finally, we're ready for the launch of <unk> in September which were excited to launch this product, which will be the first new treatment.
Adam Lankowski: We're focused on continuing to accelerate our new product portfolio and maximizing the 10 launches that we've had over the last four years. We're certainly prioritizing the execution of our new launches and adding investment to accelerate the performance of our growth portfolio for products like Camzaios, Sotictu, and Brianzi. You've also seen strong performance from Rebolzil and Optilag.
In decades for schizophrenia, and also brings a multibillion dollar opportunity to the organization so adding it up.
Adam Husky: That's why we're excited to continue to drive commercial performance and an important 2024.
Speaker Change: Andrew can we go to the next question. Please.
Speaker Change: The next question comes from Chris Shaw Battani of Goldman Sachs. Please go ahead.
Speaker Change: Hi, Good morning, everyone. Thank you for taking our questions. This is Charlie on for Chris We had a question on the subcutaneous opdivo strategy for a potential launch there we heard from one of your competitors yesterday are there potential for a subcutaneous CPI, where they were considering.
Adam Lankowski: We also have some of our growth products like Eloquist and Opdivo, which will continue to contribute significant growth in 2024. And finally, we're readying for the launch of CARXT in September. We're excited to launch this product, which will be the first new treatment in decades for schizophrenia and also brings a multibillion-dollar opportunity to the organization. So adding it all up, that's why we're excited to continue to drive commercial performance in an important 2024. Okay, Andrew, could we go to the next question, please? The next question comes from Chris Shibutani of Goldman Sachs. Please go ahead. Good morning, everyone. Thank you for taking our questions. This is Charlie.
Charlie: It sounded like a careful pricing strategy in the context of potential intravenous biosimilars that could be on the market at the same time. So just wondering how you're thinking about pricing on the potential of subcutaneous update thank you.
Charlie: Adam.
Charlie: Yeah.
Adam Husky: Surely for the question. So we're not going to comment on the pricing of sub Q, but what I can say as you know we announced positive results of our sub Q Opdivo study.
Adam Husky: In the quarter and we anticipate a launch early next year as a result, we have the opportunity to potentially benefit.
Adam Husky: Thousands of patients well into the next decade with sub Q opdivo.
Adam Husky: I think an important thing to keep in mind remember sub Q.
Adam Lankowski: We had a question on the subcutaneous Optivo strategy for a potential launch there. We heard from one of your competitors yesterday on their potential for a subcutaneous CPI where they were considering what sounded like a careful pricing strategy in the context of potential intravenous biosimilars that could be on the market at the same time. So just wondering how you're thinking about pricing on a potential subcutaneous Optivo. Adam?
Adam Husky: The potential to address the treatment burden for both patients and physicians due to less than five minute infusion time, and we've talked about our ability to convert roughly 30% to 40% of the overall U S. Opdivo business into sub Q and that's why we would expect to see this franchise in <unk>.
Adam Husky: Door into next decade, so we certainly look forward to bringing this important formulation, both the patients and physicians.
Speaker Change: Let's go to the next question please Andrea.
Speaker Change: The next question comes from Andrew Baum of Citi. Please go ahead.
Adam Lankowski: Yeah. Thanks, Charlie, for the question. So we're not going to comment on the pricing of SubQ, but what I can say is, you know, we announced positive results from our SubQ Optivo study in the quarter, and we anticipate a launch early next year. As a result, we have the opportunity to potentially benefit thousands of patients well into the next decade. I think an important thing to keep in mind, remember, SubQ has the potential to address the treatment burden for both patients and physicians due to its less than five-minute infusion time. And, you know, we talked about our ability to convert roughly 30 to 40 percent of the overall U.S. Optivo business into SubQ, and that's why we would expect to see this franchise endure into the next decade. So we certainly look forward to bringing this important formulation both to patients and physicians. Now, let's go to the next question, please, Andrea. The next question comes from Andrew Baum of Citi. Please go ahead. Yeah, thank you. A question for Adam.
Speaker Change: Yes.
Yes. Thank you a question for Adam have you rethought the use of bridge programs for launches in the U S. Following your so take two experience and then same topic realistically how long do you think it will be before so <unk> stopped printing revenues through the combination of broad accomplishes what is just good.
Speaker Change: These patients of the bridge. Thank you.
Speaker Change: Great. Thanks, Andrew Let me just take the second.
Adam Husky: Second question first and then I'll answer as well the bridge question. So so I think there was an important brand for the organization and we are executing against our plan. We shared last year. We're focused on two areas. The first is driving demand at the top of the funnel and the second is securing access and of course as you mentioned point to those.
Adam Husky: <unk> from bridge to commercial and we're making progress against both you heard from David when you normalize sales excluding clinical trial orders net sales increased about 40% versus Q3 and access is critically important in this highly competitive market drive commercial sales. So we secured ESI and now cig.
Adam Lankowski: Have you rethought the use of bridge programs for launches in the US following your Certictu experience? And then, on the same topic, realistically, how long do you think it will be before Certictu starts printing revenues through the combination of broader coverage as well as just getting these patients off the bridge? Thank you. Great. Thanks, Andrew. Let me just take the second question first, and then I'll answer the bridge question as well.
Adam Husky: In a one step position that adds another 40 million lives approximately to complement Cvs, which wasn't a zero debt position will continue to be this year and that's approximately 25 million lives and we are actively negotiating with other payers and look forward to updating you on additional progress in due course.
Adam Husky: This year, it's really important to focus on increased paid commercial prescriptions for <unk>. We will continue to build volume in both new patients that are going to move directly onto citic too at the specialty pharmacies, which quite frankly become easier with the improved access that we have now as well as moving patients out of breath.
Adam Lankowski: So, Tictu is an important brand for the organization, and we are executing against our plan. As we shared last year, we're focused on two areas. The first is driving demand at the top of the funnel, and the second is securing access, and, of course, as you mentioned, pulling through those patients from bridge to commercial, and we're making progress on both. As you heard from David, when you normalize sales, excluding clinical trial orders, net sales increased about 40% versus Q3, and access is critically important in this highly competitive market to drive commercial sales. So, we've secured ESI and now Cigna in a one-step position. That adds another 40 million lives, approximately, to complement CVS, which was in a zero-step position, will continue to be this year, and that's approximately 25 million lives. We're actively negotiating with other payers and look forward to updating you on additional progress in due course. I think this year it's really important to focus on increased paid commercial prescriptions for Certictu.
Adam Husky: And onto commercial products Dave.
Adam Husky: David talked about where we are today, but in Q1, we expect to see around 10000 paid prescriptions for a subjective and he also mentioned there will be an increase in gross net due to a broader rebating, which was needed to secure improved access that impacts net sales in Q1, but we expect to see good momentum in growing our base.
Adam Husky: <unk> of paid prescriptions this year and we plan to get roughly double that level around 20000 prescriptions in Q4 and that volume momentum will more than offset the gross to net reset in Q1 as the year progresses.
Adam Husky: As he is he also asked around conversion conversion is going exactly as we expected we made very good progress in shifting patients from Cvs.
Adam Husky: From the bridge to commercial product.
Adam Husky: We talked about taking about two to three months for patients to move from bench to commercial and as a result, you saw that 40% sequential growth that excluded the clinical trial purchases and so we'll continue to drive demand and work to continue to improve.
Adam Lankowski: We will continue to build volume from both new patients that are going to move directly onto Certictu at the specialty pharmacies, which, quite frankly, has become easier with the improved access that we have now, as well as moving patients out of bridge and onto commercial products. David talked about where we are today, but in Q1, we expect to see around 10,000 paid prescriptions for Sutectum. And he also mentioned there will be an increase in gross net due to broader rebating, which was needed to secure improved access that impacts net sales in Q1.
Adam Husky: Moving patients from our bridge with our ESI and signal wins in 2024 and also work to <unk>.
Adam Husky: Improved access in 2025, as well, where it makes financial sense to do so.
Speaker Change: Thanks, Adam Andrea Let's go to the next question. Please.
The next question comes from Seamus Fernandez of Guggenheim Securities. Please go ahead.
Seamus Fernandez: Thanks, very much so just a quick one here on <unk> the continued.
Seamus Fernandez: Strength of the brand.
Seamus Fernandez: And the acceleration that we're starting to see can you just talk about what's driving that incrementally and maybe give us a little bit of a sense of how we should be thinking about the international opportunity for <unk> in particular thanks.
Adam Lankowski: But we expect to see good momentum in growing our base of paid prescriptions this year, and we plan to get roughly double that level, around 20,000 prescriptions in Q4. And that volume momentum will more than offset the growth to net reset in Q1 as the year progresses.
Seamus Fernandez: Adam Yes, Shannon thanks for the question.
Adam Husky: The first line Mds launch is progressing very well.
Adam Husky: In the U S with strong demand supported by our broad label and in RF agnostic patient population just take you back we launched in late August and initially after the launch we saw rapid switches from ESA two rebels zelle, but we're now seeing strength in first line use across the Rs.
Adam Lankowski: As you also asked about conversion, conversion is going exactly as we expected. We've made very good progress in shifting patients from CVS to the commercial product. We talked about taking about two to three months for patients to move from bridge to commercial.
Adam Lankowski: And as a result, you saw that 40% sequential growth that excluded clinical trial purchases. And so we'll continue to drive demand and work to continue to improve moving patients from our bridge with our ESI and Cigna WINS in 2024 and also work to secure improved access in 2025 as well, where it makes financial sense to do so. Thanks, Adam.
Adam Husky: Positive population and we're steadily building momentum in the Rs negative patient population, particularly in the community setting where the majority of patients are treated.
Adam Husky: We also have after the ash presentation, we've heard feedback from both academic and community physicians recognizing the durability of response and the ability to remain transfusion independence as key features of the brand. So we're very pleased with the launch as we're seeing strong sales performance, we expect that to continue this year.
Adam Lankowski: Andrea, let's go to the next question. The next question comes from Seamus Fernandez of Guggenheim Securities. Please go ahead. Thanks very much.
Adam Lankowski: So just a quick one here. On Revlozil, the continued strength of the brand and the acceleration that we're starting to see, can you just talk about what's driving that incrementally and maybe give us a little bit of a sense of how we should be thinking about the international opportunity for Revlozil in particular? Thanks. Adam?
Adam Husky: <unk>.
Adam Husky: And <unk> was also approved in Japan in mid January we're seeing nice uptake there and we expect European approval in the first half of this year.
Adam Husky: Alright, let's go to our next question please Andrea.
Adam Husky: The next question comes from Tim Anderson of Wolfe Research. Please go ahead.
Adam Lankowski: Yeah, Seamus, thanks for the question. The first-line MDS launch is progressing very well in the U.S. with strong demand, supported by our broad label in an RS-agnostic patient population. Just to take you back, we launched in late August, and initially after the launch, we saw rapid switches from ESAs to Reblazil, but we're now seeing strength in first-line use across the RS-positive population, and we're steadily building momentum in the RS-negative patient population, particularly in the community setting where the majority of patients are treated. We also have, after the ASH presentation, we've heard feedback from both academic So we're very pleased with the launch as we're seeing strong sales performance and expect that to continue this year. And Reblazil was also approved in Japan in mid-January.
Adam Husky: Yeah.
Tim Anderson: Thank you you want to take too I think it was at Q3, you had mentioned it would take longer to get no step edits.
Tim Anderson: So I'm wondering what the current step edits are exactly what brand.
Tim Anderson: Do patients have to step through it or Tesla, primarily or is it humira either brand or a biosimilar or what exactly.
Speaker Change: Yeah, Tim. Thank you so as I mentioned, we have secured additional access at ESI and now stigma and a one step position and so that really is.
Speaker Change: Regardless of the products, so that could be a step after oh Tesla it could be a step after IL seventeens or the IL 23 agents in the market, but what's important is that that adds another 40 million lives to complement our zero step edits and Cvs. So taken together that's 65 million lives.
Today, and we're continuing to actively negotiate with payers and we will update you on additional progress over the coming months.
Speaker Change: Next question please Andrea.
Adam Lankowski: We're seeing nice uptake there, and we expect European approval in the first half of this year. All right, let's go to our next question, please, Andrew. The next question comes from Tim Anderson of Wolfe Research. Please go ahead. Thank you. On to take two. I think it was at Q3, you mentioned it would take longer to get no step on it.
Speaker Change: The next question comes from Trung Nguyen of UBS. Please go ahead.
Trung Nguyen: Hi, guys. Thanks for taking my question just on I, Alright, I realize there's not much you can say about the negotiation, where I think CMS has just sent their initial offer.
Trung Nguyen: Was wondering about more how do you think about the impact so eloquently given the patient mix is largely skewed towards Medicare.
Trung Nguyen: Do you think that could be a potential uplift that could help offset that pricing erosion and how would you anticipate the commercial spillover from this pricing impacts.
Adam Lankowski: So I'm wondering what the current step edits are exactly. What brands do patients have to step through? Is it Otezla primarily?
Speaker Change: Yes, thanks for the question.
Adam Lankowski: Or is it Humira, either a brand or a biosimilar? Yeah, Tim, thank you. So as I mentioned, we've secured additional access at ESI and now Cigna in a one step position. And so that really is, regardless of the product.
Speaker Change: Take that so as it relates to <unk>.
Speaker Change: Array, yes, we do expect an improvement in patient affordability as the patient out of pocket changes for patients this year and into next.
Adam Lankowski: So that could be a step after Otesla, it could be a step after Aisle 17, or the Aisle 23 agents in the market. But what's important is that it adds another 40 million lives to complement our zero step edits in CVS. So taken together, that's 65 million lives today.
Speaker Change: We will see this more acutely next year and out of pocket Max is capped at.
Speaker Change: At $2000 and then patients have zero percent liability thereafter.
Speaker Change: More broadly, though we largely don't expect Medicare part D design changes to impact our portfolio because we had a largely taken effect in 2026, when branded revlimid will be fully eroded.
Adam Lankowski: And we're continuing to actively negotiate with payers, and we will update you on additional progress over the coming months. Go to the next question, please, Andrea.
Speaker Change: As it relates to commercial spillover I think it's important that we always look at multiple planning scenarios, including the risk of spillover, but also the potential opportunity as I just shared around patient affordability, so that pushes and pulls there with changes in the benefit design. We are gonna have to continue to manage potential spillover a risk to commercial with.
Adam Lankowski: The next question comes from Truong Huynh of UBS; please go ahead. Hi guys, thanks for taking my question. Just on IRA, I realize there's not much you can say about the negotiation, where I think CMS has just sent their initial offer. I was wondering about more. What impact do you think it will have? So for Eloquist, given the patient mix is largely skewed towards Medicare, do you think there could be a potential uplift that could help offset that pricing erosion? And how do you anticipate the commercial spillover from those prices? Yeah, thanks for the question. I'll take that,
Speaker Change: The transparency of the MSP price.
September 1st, but we also do that today as we manage both books of business and we will need to continue to remain disciplined across our commercial payers and at the same time, just because of the payer wants to include this in negotiating mix in commercial it certainly doesn't mean that we have to agree. There. So we expect continued strong performance this year for <unk> in the U S.
Adam Lankowski: So as it relates to IRA, you know, we do expect an improvement in patient affordability as the patient's out-of-pocket changes for patients this year and into next. We'll see this more acutely next year as the out-of-pocket max is capped at $2,000, and then patients have 0% liability thereafter. You know, more broadly, though, we largely don't expect Medicare Part D design changes to impact our portfolio because that'll largely take effect in 2026 when branded Revlimid will be fully eroded. As it relates to commercial spillover, I think it's important that we always look at multiple planning scenarios, including the risk of spillover, but also the potential opportunity, as I just shared, around patient affordability. So there are pushes and pulls there with changes in the benefit design.
Speaker Change: And expect significant growth through the end of 2025.
Speaker Change: Thanks, Adam Let's go to the next question. Please.
Speaker Change: The next question comes from Geoff Meacham of Bank of America. Please go ahead.
Geoff Meacham: Hey, guys good morning, and thanks for the question.
Geoff Meacham: Mr. David on capital allocation, you guys have some deals closing obviously in the first half of this year.
Geoff Meacham: But would you say the balance of the year is more of a pause on deals with the focus on integration or with bolt ons still be of interest and I'm just trying to get a sense with all the launches operationally and whether newer products or more products and integration could be a distraction to what youre doing commercially.
Speaker Change: Thanks for the question, Jeff I'll take that one so you know as we've discussed previously as we think about capital allocation business development continues to be a top priority for US obviously, we've just executed a number of deals.
Adam Lankowski: We are going to have to continue to manage potential spillover risk to commercial with the transparency of the MFP price on September 1st. But we also do that today as we manage both books of business, and we'll need to continue to remain disciplined across our commercial payers. And at the same time, just because a payer wants to include this in the negotiating mix for commercial contracts, it certainly doesn't mean that we have to agree there.
Speaker Change: Towards the end of last year, and we've got to stay focused on executing those deals having said that we certainly are going to continue to be interested in bringing innovation into the company that makes strategic and financial sense to do so I would characterize those a bit more as bolt on opportunities at this point. We're also of course continuing to look at it.
Adam Lankowski: So we expect continued strong performance this year for Eloquist in the US and expect significant growth through the end of 2025. Thanks Adam. Let's go to the next question. The next question comes from Geoff Meacham of Bank of America. Please go ahead.
Speaker Change: Look at a.
Speaker Change: Partnerships and licensing deals as well, but that's how I would characterize it business development is still a priority.
Speaker Change: Thanks, Chris Let's go to the next question. Please.
Speaker Change: The next question comes from Matt Phillips of William Blair. Please go ahead.
Chris Boerner: Hey guys, good morning and thanks for the question. Chris or David, on capital allocation, you guys have some deals closing, obviously, in the first half of this year, but would you say the balance of the year is more of a pause on deals with a focus on integration, or would bolt-on still be of interest? I'm just trying to get a sense with all the launches, operationally, whether newer products or more products and integration could be a distraction to what you're doing commercially. Thanks for the question, Jeff. I'll take that one.
Matthew Phipps: Hi, Thanks for taking my question I was wondering if you could give us a sense of how many SLE patients do you expect to treat with the next T car T program. This year.
Matthew Phipps: <unk> is the next step after this phase one study straight to a pivotal give us sense yet of what that looks like.
Speaker Change: Yeah. Thank you for the question, Matt look I.
We are in the dose escalation phase as you can recall, we have to go through one patient by one patient in the beginning but very soon we'll be able to treat a number of patients at the same time I can't give you a number in terms of how many patients we intend to treat at this time, but certainly the trials would remain open as we want.
Chris Boerner: So, you know, as we've discussed previously, as we think about capital allocation, business development continues to be a top priority for us. Obviously, we just executed a number of deals towards the end of last year. And we've got to stay focused on executing those deals. Having said that, we certainly are going to continue to be interested in bringing innovation into the company when it makes strategic and financial sense to do so. I would characterize those a bit more as bolt-on opportunities. At this point, we're also, of course, continuing to look at partnerships and licensing deals as well. But that's how I would characterize it.
Speaker Change: Certainly you get a good understanding of the efficacy and safety profile at the right dose for patients with SMA, who have advanced disease, we do intend to present. The data later this year are emerging from the first trial in terms of what the next steps would be we will be engaging with some data in hand, but the regulatory agencies in terms of.
Speaker Change: And even with the trials should look like in this particular case, what a single arm open label study such as had been done with Hematological malignancies will that'd be the acceptable approach or will it be regulators require a randomized approach those are yet to come but certainly looking forward to the emergence of this data and presenting that later in the year.
Chris Boerner: Business development is still a priority. Chris, let's go to the next question, please. The next question comes from Matt Phillips of William Blair. Please go ahead.
Speaker Change: Thanks, Amit let's go to the next question. Please Andrea.
The next question comes from Steve Scala of TD Cowen. Please go ahead.
Operator: Thank you for taking my question. Simon, I was wondering if you could give us a sense of how many SLE patients you expect to treat with the next CAR-T program this year? And is the next step after this phase one study straight to a pivotal? Do you have a sense yet of what that looks like, Samit?
Steve Scala: Thank you very much I believe mill vaccines Afib trial right around now is at the point, where bear stopped its factor 11, Afib trial can you reassure us that events and then they'll vaccine Afib trial are progressing as expected and summit based on everything you know.
Steve Scala: Are you very confident in no vaccine in Afib.
Samit Hirawat: Yeah, thank you for the question, Matt. Look, we are in the dose escalation phase. As you can recall, we have to go through one patient by one patient in the beginning, but very soon, we'll be able to treat a number of patients at the same time. I can't give you a number in terms of how many patients we intend to treat at this time, but certainly, the trial will remain open as we want to certainly get a good understanding of the efficacy and safety profile at the right dose for patients with SLE who We do intend to present the data emerging from the first trial later this year. In terms of what the next steps would be, we will be engaging with some data in hand with the regulatory agencies in terms of defining what the trial should look like. In this particular case, with a single-arm, open-label study such as has been done with immunological malignancies, will that be an acceptable approach, or will the regulators require a randomized approach?
Steve Scala: Trial has been underway for approaching a year or so I would imagine some sort of look has already been taken thank you.
Speaker Change: Thank you Steve for the question very thoughtful as always.
Speaker Change: What we can tell you as a child is continuously progressing all three trials F secondary stroke prevention in Acs enrollment is going very well and certainly the DMC continues to oversee the trials and we do not have any indication from the DMC other.
Otherwise, we will continue to look at the data from a perspective of safety as well as the DMC will continue to look at the data there's nothing more to report at this time I would say one thing, though that assuming just because a competitor trial fails for whatever reasons in the doses that they begged we don't have that same philosophy, we actually did.
Two very well designed studies, we big differential doses between Egypt, the relation versus SSP in Acs and those are the reasons to believe and we will certainly be looking forward to the readout of these trials in 'twenty six 'twenty seven.
Samit Hirawat: Those are yet to come, but I'm certainly looking forward to the emergence of this data and presenting that later in the year. Let's go to the next question, please, Andre. The next question comes from Steve Scala of TD Cowan. Please go ahead. Thank you very much.
Speaker Change: Andre can we go to the next question. Please.
Speaker Change: The next question comes from Terence Flynn of Morgan Stanley. Please go ahead.
Terence Flynn: Great. Thanks, so much for taking the question I was just wondering if you could elaborate on your thoughts on Brownsea commercial potential this year.
Samit Hirawat: I believe Milvexian's AFib trial right now is at the point where Bayer stopped its Factor XI AFib trial. Can you reassure us that events in the Milvexian AFib trial are progressing as expected, and Samit, based on everything you know, are you very confident in Milvexian and AFib? The trial has been underway for approaching a year, so I would imagine some sort of look has already been taken.
Terence Flynn: Particularly in the in the second line setting and how are the final OS data might might impact that and then anything you're seeing with respect to outpatient treatment for braganza here. Thank you.
Speaker Change: Adam when summit, yes, certainly thank you so I'll start off and then pass it on R&D can always comes first before commercial so I'll start off of brands is certainly looking forward to these three paducah dates that Adam had mentioned earlier as well as David in his remarks for Follicular lymphoma mantle cell lymphoma and CLO.
Samit Hirawat: Thank you, Steve, for the question. Very thoughtful, as always. What we can tell you is the trial is continuously progressing. All three trials, AF, secondary stroke prevention, and ACS, enrollment is going very well, and certainly the DMC continues to oversee the trials, and we do not have any indication from the DMC otherwise. We will continue to look at the data from a perspective of safety, as well as the DMC will continue to look at the data. There's nothing more to report.
Speaker Change: And then of course are planning to do a few more trials and these lymphoma patients because that domains.
Speaker Change: A very high unmet medical need and then of course, there are multiple other cell therapy products that are in development. So we will be talking more about that from the out of spec or are the continuation of those discussions we are continuing to engage with the regulatory authorities and we'll update at a later date.
Once we have an inkling in terms of where we're landing on that Adam.
Samit Hirawat: At this time, I would say one thing, though, that assuming just because a competitor trial failed for whatever reasons and the doses that they picked, we don't have that same philosophy. We actually did conduct two very well-designed studies. We picked differential doses at the age of fibrillation versus SSP and ACS, and those are the reasons to believe, and we will certainly be looking forward to the readout of these trials in 26 and 27. Thank you, Samit. Andre, can we go to the next question, please? The next question comes from Taryn Flynn of Morgan Stanley. Please go ahead.
Adam Husky: Yeah. Thanks for the question. So we're pleased with Brianti performance in the quarter, you saw a double digit growth quarter on quarter.
Adam Husky: We also expect to continue to make good progress beyond the end of 2024 supported by strengthening of our vector supply.
Adam Husky: In fact, we will see supply materialize, even further in Q2 and expand to support our new indications for beyond the starting with the plan C. L. L indication in March where brands will be the first and only cell therapy agent to have this indication.
Adam Husky: Somebody alluded to we're making good progress in reducing turnaround time out of spec and drug product capacity. So now.
Adam Lankowski: Great. Thanks so much for taking the question. I was just wondering if you could elaborate on your thoughts on Brionzi's commercial potential this year, particularly in the second line setting and how the final OS data might impact that. And then anything you're seeing with respect to outpatient treatment for Brionzi here. Thank you. Adam and Samit.
As we move through the course of the first half of the year with its broad label in <unk> and now with three FDA prior to reviews in the first half of the year beyond that has the potential to treat the broadest array of B cell malignancies of any car T. In these indications we believe will double the addressable patient population for Brianti. So we're very pleased with what we're seeing.
Adam Husky: The progress that we're making.
Adam Husky: We are seeing increases in outpatient use because of the best in class safety profile that Bronx, He brings and we expect strong demand growth this year.
Samit Hirawat: Yes, certainly. Thank you. So I'll start off and then pass it on. R&D always comes first before commercial.
Speaker Change: Let's go to the next question please Andrea.
Speaker Change: The next question comes from Evan Jager.
Women of BMO capital markets. Please go ahead.
Samit Hirawat: So I'll start off with Brionzi. I am certainly looking forward to these three PDUFA dates that Adam mentioned earlier, as well as David in his remarks about follicular lymphoma, mental cell lymphoma, and CLL. And then, of course, we plan to do a few more trials in these lymphoma patients because that remains a very high unmet medical need. And then, of course, there are multiple other cell therapy products that are in development, so we'll be talking more about that. From out of spec or the continuation of those discussions, we continue to engage with the regulatory authorities, and we'll update at a later date once we have an inkling in terms of where we're landing on that. Adam?
Chris Schott: Hi, guys. Thank you so much for taking my question. So last week you presented initial data from your antigen receptor ligand directed to greater I'd ask it to you then hosted an event for the sell side I'd Love for you to speak to why you think it's important for investors and analysts to pay attention to a phase one asset at a company as large as Bristol Myers I know you have a lot going on in your pipeline.
Why should we be focused on things like this thank you.
Speaker Change: Summit will start and then we'll turn it to Adam to get some feedback from Kols in this product. Okay. Thank you and I think it's a it's a good question and the reason we believe that it is important for us to be able to highlight this our multi four let me start off by saying remember last year at R&D day. We had said that there are two platforms that are very critical and we believe.
Samit Hirawat: Yes, thanks for the question. So we're pleased with Brionzi's performance in the quarter. You saw double-digit growth quarter-on-quarter. We also expect to continue to make good progress with Brionzi in 2024, supported by the strengthening of our vector supply. In fact, we will see supply materialize even further in Q2 and expand to support our new indications for Brionzi, starting with the planned CLL indication in March, where Brionzi will be the first and only cell therapy agent to have this indication. As Samit alluded to, we're making good progress in reducing turnaround time, out of spec, and drug product capacity. So now, as we move through the course of the first half of the year with this broad label and LBCL, and now with three FDA-priority reviews in the first half of the year, Brionzi has the potential to treat the broadest array of B-cell malignancies of any CAR-T, and these indications will continue to grow.
Adam Husky: Live in and we are continuing to progress on them.
L. D D. The molecule is a first protein degrader from that platform that goes into solid tumors and we wanted to absolutely be able to demonstrate that it is.
Adam Husky: We anticipated it is progressing well showing efficacy and a manageable safety profile in patients with late line prostate cancer as you saw from the data. The PSA 30 P. S. FTE reductions the durability of that and those are truly correlated if you look at the datasets as well as in literature.
Adam Husky: The correlation of that impacting the overall survival. So we are truly excited about what we've seen thus far we are.
Adam Husky: Course, enrolling more patients we had in that those optimizing optimization phase we've had interactions with regulatory regulatory authorities are now planning for initiating.
Adam Husky: Initiating the next phase of development registration trials within the next year.
Adam Lankowski: We believe we'll double the addressable patient population for Brionzi, so we're very pleased with what we're seeing, the progress that we're making. We are seeing increases in outpatient use because of the best in class safety profile that Brionzi brings.
Six to 12 months, let me just pass it over to Adam to comment further from his perspective as well yeah. Thanks, Amit and thanks for the question. So we're excited about summit at the platform of protein degradation and as it relates to <unk> in prostate cancer. This diversifies, our I O portfolio even further.
Adam Lankowski: And we expect strong demand growth this year. Let's go to the next question, please, Andrea. The next question comes from Evan Stigerman of BMO Capital Markets. Please go ahead.
Operator: Hi guys, thank you so much for taking my question. So last week you presented initial data from your antigen receptor ligand directed to Grader at ASCO-GU, then hosted an event for the stealth side. Samit, I'd love for you to speak to why you think it's important for investors and analysts to pay attention to a phase one asset at a company as large as Bristol-Myers. I know you have a lot going on in your pipeline, but why should we be focused on things like this? So Samit, we'll start and then we'll turn it over to Adam to get some feedback from KOLs on this part. Thank you, Evan. I think it's a good question.
Adam Husky: Complement some of the recent deals.
We had a number of of K O L and community feedback coming out of the <unk> presentation, and <unk> have been enthusiastic about the profile, particularly around the efficacy of the asset the durability of response.
Adam Husky: And when we ask community positions.
Adam Husky: Reassured around the safety profile as well, stating that it was a manageable safety profile.
Adam Husky: And they were enthusiastic about moving this into phase III Registrational studies and look forward to have the opportunity to treat patients with late line prostate cancer.
Samit Hirawat: And the reason we believe that it is important for us to be able to highlight this is multifold. Let me start off by saying, remember last year at R&D Day, we had said that there are two platforms that are very critical and we believe in, and we are continuing to progress on them. AR-LDD, the molecule is the first protein degrader from that platform that goes into solid tumors.
Speaker Change: Yeah, Let's go to the next question please Andrea.
Speaker Change: The next question comes from Carter Gould of Barclays. Please go ahead.
Carter Gould: Great. Thank you good morning, Thanks for taking the question.
For Adam I wanted to come back to campus I asked you sort of have shown a pretty steady kind of addition of the sort of the same number of patients during each quarter I would expect you know sort of now that you've got in your feet underneath with the launch that that number would be increasing each quarter like we see with most launches.
Samit Hirawat: And we wanted to absolutely be able to demonstrate that it is, as we anticipated, it is progressing well, showing efficacy and a manageable safety profile in patients with late-line prostate cancer. As you saw from the data, the PSA-30, and PSA-50 reductions, the durability of that, and those are truly correlated if you look at the data sets as well as in literature, the correlation of that impacting overall survival. So we are truly excited about what we've seen thus far. And we are, of course, enrolling more patients. We are in the dose optimization phase.
Carter Gould: Which I guess suggests there's some other sort of gating factor, whether that's logistics or whatnot can you maybe.
Carter Gould: Elaborate on what Youre seeing in that.
Carter Gould: Do you disagree or agree with kind of how I framed out there and.
Carter Gould: Whatever extent you can comment on the trends going forward in 'twenty four thank you.
Speaker Change: Yeah sure Carter. Thanks for the question. So we continue to make very good progress with <unk>.
Carter Gould: As we talked about we're investing further behind the brand in unbranded and branded direct to consumer we do expect to see continued steady and consistent growth as David mentioned in his opening remarks, we're averaging around 1000 patients on a quarterly basis.
Samit Hirawat: We've had interactions with regulatory authorities and are now planning for initiating the next phase of development registration trials within the next six to 12 months. Now, I just pass it over to Adam to comment further from his perspective as well. Yeah, thanks, Samit, and thanks for the question. So we're excited about, as Samit said, the platform of protein degradation, and as it relates to ARLDD in prostate cancer, this diversifies our IOH portfolio even further to complement some of the recent deals.
Carter Gould: <unk> and physician feedback continues to be very positive remember these patients are going to be on treatment for a very long time.
Carter Gould: And take me back to J P. Morgan if you recall Chris showed.
Carter Gould: In analog where <unk> is tracking it came to a very strong CV launch in this case entresto. So this is the way that cardiovascular launches.
Adam Lankowski: We had a number of KOL and community feedback coming out of the ASCO-GU presentation, and patient leaders were enthusiastic about the profile, particularly around the efficacy of the asset, and the durability of response. When we asked community physicians, they were reassured about the safety profile as well, stating that it was a manageable safety profile, and they were enthusiastic about moving this into phase three registrational studies and looking forward to having the opportunity to treat patients with Let's go to the next question, please, Andrea. The next question comes from Carter Gold of Barclays. Please go ahead. Great, thank you. Good morning. Thanks for taking the time to answer the question. For Adam, I wanted to come back to CAMS-IOS.
Carter Gould: Uptake.
Carter Gould: And we are focused on continuing to drive breadth in our tops Coes will continue to expand outside of our top coes and we're working to increase diagnosis rates by activating patients via our new DTC advertising, so that coupled with new launches internationally. We are confident that it's going to lead to continued and sustained growth for this important brand.
Carter Gould: <unk>.
Carter Gould: Okay, Let's go to the next question please Andrea.
The next question comes from Mohit Bansal of Wells Fargo. Please go ahead.
Carter Gould: Hi, This is serena on for Mohit Bansal.
Serena: A question I wanted to ask about the phase two ocular lag readout coming out early this year in first line lung cancer I was wondering how meaningful you think this data could be considering that the comparator arm and opdivo chemo versus Opdivo you have IP.
Adam Lankowski: You sort of have shown a pretty steady kind of addition of the sort of the same number of patients or each quarter. I would expect, you know, sort of now that you've gotten your feet under you with the launch, that that number would be increasing sort of, you know, each quarter, like we see with most launches, which I guess suggests there's some other sort of gating factor, whether that's logistics or whatnot. Can you maybe, you know, elaborate on what you're seeing and, you know, if you disagree or agree with kind of how I framed that there and, you know, to whatever extent you can comment on the trends going forward in 24. Adam?
Speaker Change: Benjamin Thank you.
Speaker Change: And thank you for the question obviously, we're looking.
Speaker Change: Looking forward to seeing the data for them do lag a randomized phase II study looking at the combination of Opdivo plus chemotherapy comparing to Opdivo chemo.
Speaker Change: The intent of doing this is twofold, one we wanted to get the contribution of component question out right away. So that we can show the contribution of a lateral a mab on top of Opdivo with chemotherapy and number two we also wanted to plan. This studies. So that we can when we do go to phase III the appropriate control arm that is most widely used right now.
Adam Lankowski: Sure, Carter, thanks for the question. So we're continuing to make very good progress with CAMS-IOS. As we talked about, we're investing further behind the brand in unbranded and branded direct-to-consumer. We do expect to see continued steady and consistent growth. As David mentioned in his opening remarks, we're averaging around 1000 patients on a quarterly basis, and patient and physician feedback continues to be very positive.
Speaker Change: Is pembroke chemo and therefore, we are set for that dependent of course on the data. So later.
Speaker Change: This quarter and this year, you'll be able to hear about the data and then based on the data we will be making decisions on where to go with this drug.
Adam Lankowski: Remember, these patients are going to be on treatment for a very long time. And taking you back to J.P. Morgan, if you recall, Chris showed an analog where CAMS-IOS is tracking akin to a very strong CV launch, in this case, Entresto. So this is the way that cardiovascular launches, you know, uptake, and we are focused on continuing to drive breadth in our top COEs. We're continuing to expand outside of our top COEs, and we're working to increase diagnosis rates by activating patients via our new DTC advertising. So, coupled with new launches internationally, we are confident that this is going to lead to continued and sustained growth for this important brand. Let's go to the next question, please, Andrea. The next question comes from Mohit Bansal of Wells Fargo. Please go ahead. Hi, this is Serena Ahn from Mohit Bansal.
Speaker Change: Perfect. Thanks, Amit, let's go to the next question. Please.
Speaker Change: The next question comes from Robin Karnofsky of Truth Securities. Please go ahead.
Robin Karnofsky: Hey, guys. Thank you so much for taking my question just a coupon for Robyn I have a follow up question on Caf II.
Robin Karnofsky: I'm just wondering if you can talk a little bit about.
Robin Karnofsky: How do you think the recent data from a competitor might broadly impact the landscaping.
Robin Karnofsky: Yeah, obviously, the drug is not approved yet, but do you see.
These data improving awareness and based on that do you expect to see any sort of infection coins and also can you talk a little bit more about your FX ex U S and if we should continue to see steady growth or any sort of inflection point based on the reimbursement the reimbursements that you expect thank you.
Operator: Thanks for taking our question. So I wanted to ask about the phase two Opzula lag readout coming out early this year in first-line lung cancer. I was wondering how meaningful you think this data could be considering that the comparison arm is Opdivo Chemo versus Opdivo Urovoid being the approved regimen.
Speaker Change: Yes. Thanks stomach then Adam Yeah. Thank you for the questions.
Speaker Change: The way I would look at it is that the competitor data actually further strengthens our confidence in <unk>.
Speaker Change: And within that comes Iris clinical trials, we now have three phase III trials that have read out with amazing transformational data you've seen the data for explorer you've seen the data from Bella and recently, we had the readout of our phase II trial in Japan, as well, which replicates the results that we've already seen for the first two trials.
Samit Hirawat: Thank you for the question. Obviously, we're looking forward to seeing the data for OBDU-LAG, a randomized phase 2 study looking at the combination of obdivo-relatlimab plus chemotherapy compared to obdivo-chemo. The intent of doing this is twofold.
Speaker Change: And that I would tell you we've treated now thousands of patients and that data also continues to showcase the efficacy of the drug as well as maintaining the safety of the drug.
Samit Hirawat: One, we wanted to get the contribution of the component question out right away so that we can show the contribution of relatlimab on top of obdivo with chemotherapy. And number two, we also wanted to plan this study so that when we do go to phase 3, the appropriate control arm that is most widely used right now is pembroke chemo. And therefore, we are set for that, dependent, of course, on the data. So later this quarter and this year, you'll be able to hear about the data. And then, based on the data, we will be making decisions on where to go with that. Thanks, Samit.
As you will see when the data are presented from the real world setting at ACC, while the overall safety profile of the drug is so in general what I would say that Kim's iOS lives up to its promise of a transformational potential for the patients in any patient who goes on the drug usually doesn't want to come off because of the benefit that they are achieving Adam yes.
Speaker Change: Yes. Thanks for the question so certainly when we look at the <unk>.
Speaker Change: Top line data from square is consistent with our internal expectations, we'll obviously need to see the dataset, but ultimately.
Operator: Let's go to the next question, please. The next question comes from Robin Karnoskas of Truist Securities. Please go ahead. Hey guys, thank you so much for taking my question. This is Kipon for Robin.
We don't see any clinically meaningful differences in the data impact when we spoke to many tls after those data was shared.
They have said stated that adds campton data appears similar and undifferentiated from <unk>. They also of course want to see that the broad dataset.
Adam Lankowski: I have a follow-up question on CAMS-ZIOS. I'm just wondering if you can talk a little bit about how you think the recent data from a competitor might broadly impact the landscape in HCM? Obviously, the drug is not approved yet, but do you see these data improving awareness? And based on that, do you expect to see any sort of inflection points?
Speaker Change: They also talked about the difference in PV owe to being not a clinically meaningful endpoint and likely those any differences are due to differences in patient populations across the two studies I can tell you we will certainly be prepared for Abbott Camden when it comes to market with our leading cardiovascular organization.
Adam Lankowski: And also, can you talk a little bit more about your efforts outside the US and if we should continue to see steady growth or any sort of inflection points based on the reimbursement? Yes, thank you. Yeah, thank you for the questions. The way we would look at it is that the competitor data actually further strengthens our confidence in Kemp's, And within the ChemSciOS clinical trials, we now have three phase three trials that are read out with amazing transformational data. You've seen the data for Explorer, you've seen the data for Veller, and recently we had the readout of a phase three trial in Japan as well, which replicates the results that we've already seen for the first two trials. As Adam would tell you, we've treated thousands of patients, and that data also continues to showcase the efficacy of the drug, as well as maintains the safety of the drug, as you will see when the So, in general, what I would say is that chemxylase lives up to its promise of transformational potential for patients, and any patient who goes on the drug usually doesn't want to come off it because of the benefit that they're achieving. Adam?
Speaker Change: We have maintained a consistent view that that we will remain leaders in this space I've also said, though that important thing to keep in mind with this class is we do see that another competitor could be a net positive to help drive awareness for patients with symptomatic OA and increase diagnosis rates, which is also really important.
Speaker Change: Only as it relates to.
Speaker Change: Expansion outside of the U S. We're just starting to see expansion outside of the U S. We've launched in Germany will prepare to launch in Japan and in.
Speaker Change: China in mid year, and a host of other markets. So we'll start to see that those sales manifest in the back end of the year and into 2025.
Speaker Change: Okay.
The next question please Andrea.
Speaker Change: The next question comes from James Sheehan of Deutsche Bank. Please go ahead.
James Sheehan: Good morning, guys. Thank you for taking the question just wanted to circle back on the podium Adam I think you mentioned earlier or late last year. The access was.
Samit Hirawat: Thanks for the question. So certainly, when we look at the top-line data from Sequoia, it is consistent with our internal expectations. We'll obviously need to see the data set, but ultimately, we don't see any clinically meaningful differences in the data. In fact, when we spoke to, you know, many TLs after those data were shared, they stated that AFCAMPTAN data appeared similar and undifferentiated from CAMS-IOS. They also, of course, want to see the broad data set. They also talked about the difference in PVO2 being not a clinically meaningful endpoint, and likely any differences are due to differences in patient populations across the two studies.
James Sheehan: Still prudent for you see that access point improve meaningfully this year or do you have to take a little bit more time sort of like a similar situation to substitute and psoriasis.
Adam Husky: Yes. Thanks for the question. So overall, we're seeing.
Adam Husky: Solid and continued quarterly and year on year growth as David shared we showed 66% growth versus prior year I think the public has been really tailored to launches EMS performance amongst the oral competitors are solid we expect continued share growth there and we're growing in the face of a declining oral market in favor of <unk>.
Adam Husky: Sally agents.
Adam Husky: We continue to have an opportunity for continued growth in UC, which as you know is a very competitive market, we're making progress as volume and share increasing we are focused on expanding the breadth of prescribers, we're continuing to position as opposed to up earlier in lines of treatment.
Adam Lankowski: I can assure you that we will certainly be prepared for Aficamptin when it comes to market with our leading cardiovascular organization, and we have maintained a consistent view that we will remain leaders in this space. I've also said, though, that, you know, an important thing to keep in mind with this class is that we do see that another competitor could be a net positive to help drive awareness for patients with symptomatic OHCM and increased diagnosis rates, which is also really important. Finally, as relates to expansion outside of the US, we're just starting to see expansion outside of the US. We've launched in Germany, and we will prepare to launch in Japan and in China in mid-year and a host of other markets.
Adam Husky: The opportunity for additional indications like Crohn's disease, and the data readout. Later this year will also add to the sales floor as opposed to yes. So again, we do expect to see continued growth for suppose as patients came to accumulate and physicians continue to gain experience with the product.
Speaker Change: Great and then maybe time for one or two more let me go to next question for now and then well know Andrea.
Adam Lankowski: So we'll start to see that those sales manifest in the back end of the year and into 2025. The next question, please, Andrea. The next question comes from James Shin of Deutsche Bank; please go ahead.,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Thank you for taking the question. I just wanted to circle back on the POSIA.
Andrea: Okay. The next question is from a cash to worry of Jefferies. Please go ahead.
Andrea: Hey, Thanks, so much can you comment on what drives your confidence on the Alzheimers psychosis trials reading out positively.
Speaker Change: Any color on what percent of patients you think will be able to get on the high dose to a K R. <unk> and what percent of drop out do you think will occur in the treatment arms for the adapt trial should.
Adam Lankowski: Adam, I think you mentioned earlier, or late last year, that access was still improving for UC. Is that access going to improve meaningfully this year, or is it going to take a little bit more time, sort of like a similar situation to TIC-2 and PSORI? Yeah, thanks for the question. Overall, we're seeing solid and continued quarterly and year-on-year growth. As David shared, we showed 66% growth versus the prior year, and I think the policy has been really a tale of two launches.
Speaker Change: Should it be roughly similar to what we've seen in the schizophrenia study. Thank you.
Speaker Change: Got it.
Speaker Change: Thank you. Thank you for the question that Gosh look we are our confidence in.
Speaker Change: But it remains very high and the reason for that is if you go back to the first publications if there's anomaly in trial.
Speaker Change: That was a study that was published I think in 1997 in fact, and if you look at that data that is a positive trial, which tells us that Exxon and one M for a muscarinic receptor agonist do work over there the obvious issue over there was the toxicity due to the better for our muscarinic agonism that was seen so that combination with <unk> has led to obviously a better.
Adam Lankowski: MS performance amongst the oral competitors is solid, and we expect continued share growth there. And we're growing in the face of a declining oral market in favor of B-cell ages.
Adam Lankowski: We continue to have an opportunity for continued growth in UC, which, as you know, is a very competitive market. We are making progress as volume and share are increasing. We are focused on expanding the breadth of prescribers, and we're continuing to position Ziposia earlier in lines of treatment.
Speaker Change: It comes as we saw in schizophrenia.
Speaker Change: Trial, and 80 psychosis is right now at the beginning stages. So the doses doses are being tested right now so it's hard to comment on what the doe's utilization would be where the patients will be on the highest doses.
Adam Lankowski: And the opportunity for additional indications like Crohn's disease, the data readout later this year will also add to the sales for Ziposia. So, again, we do expect to see continued growth for Ziposia as patients continue to accumulate and physicians continue to gain experience with the product. Great, and we may have time for one or two more. Maybe we go to the next question for now, and then one after that.
Speaker Change: Too early to tell we will have to get into it but of course Corona in US we continue to operate as separate companies right now and once the transaction closes then you'll be able to get deeper into it and look at what the future looks like so we will be talking about it at a later date.
Speaker Change: Thank you.
Speaker Change: Let's go to our last one please andrea.
Andrea: The next question comes from <unk> Kumar of HSBC. Please go ahead.
Samit Hirawat: Okay. The next question is from Akash Tiwari of Jeffries. Please go ahead. Hey, thanks so much. Can you comment on what drives your confidence in the Alzheimer's psychosis trials leading up positively? Any color on what percent of patients you think will be able to get on the high dose of KR-XT? And what percent of dropouts do you think will occur in the treatment arms for these ADEPT trials? Should it be roughly similar to what we've seen in the schizophrenia studies?
Yeah.
Hi, Good morning, Oh I appreciate that.
Andrea: Obviously.
Vikram Kumar: Give any color on early Chris a price negotiations, but.
Speaker Change: When we look at your margin guidance this year.
Speaker Change: I'm assuming.
Speaker Change: You have to meet an assumption and that is implicit in that guide you did.
Speaker Change:
Samit Hirawat: Thank you. Thank you. Thank you for the question, Akash. Look, we are confident that remains very high, and the reason for that is if you go back to the first publications of the xenomalene trial, that was a study that was published, I think, in 1997, actually, and if you look at that data, that was a positive trial, which tells us that M1, M4 muscarinic receptor agonists do work over there. The obvious issue over there was the toxicity due to peripheral muscarinic agonism that was seen, so that combination with trospium has led to obviously better outcomes, as we saw in schizophrenia. The trial in AD psychosis is right now at the beginning stages, so the doses are being tested right now, so it's hard to comment on what the dose utilization would be where the patients will be on the highest doses.
Speaker Change: As an outcome of this negotiation or should we expect as we get more clarity to adjust your guidance.
Speaker Change: From what you lost.
So Richard Thanks for the question I'll try to start and then I'll turn it over to David did you talk a little bit about how we're thinking about mark correct, we're not going to be able to give any additional discussion around where we sit with <unk> was we got the initial offer we're going to follow the process they have and the price will be.
Speaker Change: <unk> September and we won't be providing additional details around around that but maybe David can talk to you a bit about how.
David V. Elkins: How we think about our margins generally.
David V. Elkins: Yeah, just just overall you know as we guided we anticipate gross margins to be about 74% this year and that's really driven by.
Samit Hirawat: It's too early to tell; we'll have to get into it, but of course, Corona and us continue to operate as separate companies right now, and once the transaction closes, then we'll be able to get deeper into it and look at what the future looks like, so we'll be talking about it at a later date. Thank you. Let's go to our last one, please, Andrea. The next question comes from Rajesh Kumar of HSBC. Please go ahead. Hi, good morning.
David V. Elkins: The yellow leibrand's coming down, but as to the growth portfolio continues to.
David V. Elkins: Increase obviously that that'll help offset longer term, where those gross margins are going we also said that.
David V. Elkins: Our operating expenses will grow in the mid low single digit range and with that.
David V. Elkins: I appreciate that. I can't obviously, you know, give any color on Elicker's price negotiations, but when we look at your margin guidance this year, I'm assuming that you have made an assumption and that is implicit in that guidance. And now for the negotiation, or should we expect as we get more clarity to adjust your guidance from what you learned? So Rajesh, thanks for the question. I'll try to start and then I'll turn it over to David to just talk a little bit about how we're thinking about margins. We're not gonna be able to have any additional discussion around where we sit with IRA on Eloquus.
David V. Elkins: Really there's a lot going on there that as we said on Corona, we're gonna find savings and efficiencies in order to.
David V. Elkins: Cover those expenses, but also as Adam indicated and I said in my opening remarks, we're increasing.
David V. Elkins: <unk> and <unk> since it took too.
David V. Elkins: With that we're finding from our legacy brands refund only knows resources into that and all of that said, we will be able to deliver a margin greater than 37% for the year, which we feel very confident about.
David V. Elkins: We got the initial offer, and we're gonna follow the process they have, and the price will be public in September, and we won't be providing additional details around that. But maybe David can talk to you a bit about how we think about margins generally. Yeah, just overall, you know, as we got it, we anticipate gross margins to be about 74% this year, and that's really driven by the LOE brands coming down. But as the growth portfolio continues to increase, obviously, that'll help offset longer-term where those gross margins are going. We also said that, you know, our operating expenses grow in the mid-low single-digit range.
Speaker Change: Thanks, David.
Speaker Change: So I think that was it for the time that we have but I. Thank you all for joining the call today I know, it's a very busy day for all of you hopefully you get a sense from the discussion. This morning that we exited 2023 with good momentum to capitalize on the strategy that we have articulated about how we're going to navigate this decade and of course we.
Speaker Change: Look forward to sharing the progress against that on future calls and with that we'll close the call and as always the team is available to answer any questions. Following today's discussion and I hope all of you have a very good day and a good weekend. Thanks.
David V. Elkins: And with that, really, there's a lot going on there that, as we said with Corona, we're going to find savings and efficiencies in order to cover those expenses. But also, you know, as Adam indicated, and I said in my opening remarks, we're increasing, you know, our investments in Kemsias and Satictu. So, you know, with that, we're finding from our legacy brands and refunneling those resources into that. And all of that said, we'll be able to deliver a margin greater than 37% for the year, which we feel very confident about. Thanks, David. So I think that was it for the time that we had. But I thank you all for joining the call today. I know it's a very busy day for all of you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
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Speaker Change: [music].
David V. Elkins: Hopefully, you get a sense from the discussion this morning that we exited 2023 with good momentum to capitalize on the strategy that we have articulated about how we're going to navigate this decade. And, of course, we look forward to sharing the progress against that on future calls. And with that, we'll close the call. And as always, the team is available to answer any questions following today's discussion.
Speaker Change: Yes.
Speaker Change: Yeah.
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Timothy Minton Anderson: And I hope all of you have a very good day and a good weekend. Thanks. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Yeah.
Operator: ,,,,,,,.. The Ultimate Parody Site!... BF-WATCH TV 2021, The Ultimate Parody Site! transcript Emily Beynon, BF-WATCH TV 2021 www.larryweaver.com The Bulletproof Executive 2013,.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
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.. The Ultimate Parody Site! The Bulletproof Executive, 2013.
Speaker Change: Okay.
Speaker Change: Yeah.
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.. The Ultimate Parody Site! www.larryweaver.com,..., www.larryweaver.com 2016 University of Georgia College of Agricultural and Environmental Sciences, The Bulletproof Executive 2013 www.larryweaver.com www.youtube.com, The Bulletproof Executive 2013