Q2 2025 Bristol Myers Squibb Co Earnings Call

Chuck Triano: Good day, and welcome to the BRISTOL MYERS SQUIBB Q4 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Chuck Triano, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Good day and welcome to the Bristol Myers. Squibb second quarter, 2025 earnings conference call.

All participants will be in a listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero.

Tim Power: Thank you, and good morning, everyone. We appreciate you joining our Q4 2025 Earnings Call. Joining me this morning with prepared remarks are Chris Boerner, our Board Chair and Chief Executive Officer, and David Elkins, our Chief Financial Officer. Also participating in today's call are Adam Lenkowsky, our Chief Commercialization Officer, and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. Earlier this morning, we posted our quarterly slide presentation to BMS.com that you can use to follow along with Chris and David's remarks. Before we get started, I will remind everybody that during this call, we will make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in the company's SEC filings.

Tim Power: 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 will also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of certain non-GAAP financial measures to the most comparable GAAP measures are available at BMS.com. Finally, unless otherwise stated, all comparisons are made from the same period in 2024, and sales growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. All references to our P&L are on a non-GAAP basis. With that, I will hand it over to Chris.

Thank you and good morning, everyone. We appreciate you joining. Our second quarter 2025 earnings call joining me this morning with prepared remarks, our Chris burner, our board chair, and chief executive officer and David, Elkins our Chief Financial Officer also participating in today's call are Adam lankowski. Our chief, commercialization officer and Schmitt hirawat, our chief medical officer and head of Global Drug development. Earlier this morning, we posted our quarterly slide presentation to bms.com that you can use to follow along with Chris and David's remarks. Before we get started, I'll remind everybody that during this call, we will make statements about the company's future plans and Prospects that constitute forward-looking statements actual results. May differ materially from those indicated by those forward-looking statements as a result of various important factors including those discussed in the company's SEC. Filings.

Chuck Triano: Thanks, Chuck. Welcome, and thank you for joining our Q4 Earnings Call. In Q2, we continue to make good progress, reshaping the company for long-term sustainable growth. I am pleased with our performance, and our financial results speak to that. Building on the momentum from the first quarter, we saw strong demand across our growth portfolio and continue to optimize our cost structure to match the needs of our business. Let's double-click on our quarterly performance on slide four. Our growth portfolio delivered another strong quarter, with sales increasing 17% year-over-year, primarily driven by demand across all key brands. David will provide more color on our portfolio's performance in his remarks. In addition to strong performance in our growth portfolio, we continue to make regulatory progress across the globe. In Europe, we secured approval for both Opdivo and neoadjuvant lung cancer and for Quvantic across multiple solid tumor indications.

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 and we specifically disclaim any obligation to update forward-looking statements, even if our estimates change, we'll also focus our comments on our non-gaap financial measures, which are adjusted to exclude, certain specified items, reconciliations of certain non-gaap Financial measures to the most comparable. Gaap measures are available at bms.com finally unless otherwise stated all comparisons are made from the same period in 2024 and sales. Growth rates will be discussed on an underlying basis, which excludes the impact of Foreign Exchange all references. To our p&l are on a non-gaap basis. And with that, I'll hand it over to Chris.

Thanks, Chuck. Welcome and thank you for joining our second quarter earnings call. In Q2, we continued to make good progress reshaping the company for long-term sustainable growth. I'm pleased with our performance and our financial results, which build on the momentum from the first quarter. We saw strong demand across our growth portfolio and continued to optimize our cost structure to match the needs of our business. Let's double-click on our quarterly performance on slide 4. Our growth portfolio delivered another strong quarter with sales increasing 17% year-over-year, primarily driven by demand across all key brands. David will provide more color on our portfolio's performance in his remarks. In addition to strong performance in our growth portfolio, we continue to make regulatory progress.

Chuck Triano: Additionally, in the U.S., we appreciate recent actions by the FDA that have resulted in streamlined patient monitoring requirements and the removal of RIMS programs for all cell therapies. This is expected to enable more patients to benefit from these transformative therapies over time. With respect to capital deployment, we announced strategic partnerships with BioNTech to expand and extend our immuno-oncology leadership, as well as with PhyloChem to strengthen our radiopharmaceutical business and expand our focus in prostate cancer. I will discuss these deals in a moment. With the results achieved in the quarter, we are again raising our top-line guidance, as well as our bottom-line guidance, before considering acquired IP R&D charges in the quarter. Our recent launches of Cobenfi and Quvantic are progressing well. Cobenfi has delivered strong performance since launch, and we have consistently received positive feedback from physicians.

Address across the globe in Europe, we secured approval for both opdivo and Neo adiman, lung cancer and for Cub antique across multiple solid tumor indications. Additionally in the US, we appreciate recent actions by the FDA that have resulted in streamline, patient, monitoring requirements, and the removal of rims programs for all cell therapies. This is expected to enable more patients to benefit from these transformative therapies over time with respect to Capital deployment, we announced strategic Partnerships with buying Tech to expand and extend our immuno-oncology leadership as well as with phloem to strengthen our radio pharmaceutical business and expand our focus in prostate cancer. I will discuss these deals in a moment with the results achieved in the quarter. We are again, raising our Topline guidance, as well as our bottom line guidance, before considering acquired IP R&D charges in the quarter, our recent launches of Coben and cuvant are progressing. Well, kobenia has delivered strong performance since launch and we have consistently received positive.

Chuck Triano: They are seeing firsthand the medicine's differentiated profile with robust efficacy on both positive and negative symptoms and improved cognition. Regarding the U.S. launch of Quvantic, early feedback is encouraging, with strong uptake. Delivering treatment in just three minutes saves time for patients, caregivers, and providers, while also improving clinic efficiency, increasing patient comfort, and reducing treatment complexity. Additionally, fewer port procedures streamline care, allowing physicians to treat more patients. Moving to recent business development initiatives on slide five. First, we entered into a global strategic partnership with BioNTech to co-develop and commercialize BNT327, a potentially transformative PD-L1 VEGF bispecific that could set a new standard of care across multiple tumor types. We are excited to bring together BMS's deep scientific and clinical expertise, development and regulatory capabilities, and commercial infrastructure in the IO space with BioNTech's innovation on BNT327.

The feedback from Physicians, they are seeing firsthand the medicines differentiate, a profile with robust efficacy on both positive and negative symptoms and improved cognition regarding the US launch of juvant early. Feedback is encouraging with strong uptake, delivering treatment in just 3 minutes saves time for patients caregivers and providers while also improving Clinic efficiency, increasing patient comfort and reducing treatment complexity.

Chuck Triano: With a strong partner, we are well-positioned to accelerate existing clinical trials, expedite time to market, and expand the number of indications. The combined capabilities of BMS and BioNTech give us the opportunity to place BNT327 within the first wave of launches in this arena, either first or second to market, a critical advantage in terms of maximizing the commercial opportunity. BNT327 has the potential to become another needle-moving IO therapy and accelerate our overall growth trajectory. The partnership is off to a great start. We are well underway in advancing a robust joint clinical development program that expands upon the initial indications by further developing BNT327 and numerous additional tumor types in combination. We look forward to sharing more information in the future. Separately, in terms of our early-stage pipeline, we entered into a license agreement with PhyloChem for exclusive worldwide rights to OncoACP3.

Excited to bring together bms's deep scientific and clinical expertise development and Regulatory capabilities and Commercial infrastructure in the io space with Beyond Tech's Innovation, on B&T 327 with a strong partner. We're well positioned to accelerate existing clinical trials, expedite, time to Market and expand the number of indications. The combined capabilities of BMS and Beyond Tech give us the opportunity to place B&T 327 within the first wave of launches in this Arena. Either first or second to Market a critical advantage in terms of maximizing the commercial opportunity DNT 327 has the potential to become another needle, moving IO therapy and accelerate. Our overall growth trajectory the partnership is off to a great start. We are well underway in advancing. Your robust joint clinical development program that expands upon the initial indications by further developing B&T 327 in numerous additional tumor types in combination. We look forward to sharing more information in the future separately.

Chuck Triano: This is a potential best-in-class radiopharmaceutical therapeutic and diagnostic agent with the opportunity to become a breakthrough treatment for prostate cancer. We believe this collaboration will further strengthen our position in the rapidly advancing radiopharmaceutical space. Earlier this week, we announced a transaction with Bain Capital to form a new company focused on advancing innovative immunology therapies. As part of this transaction, we out-licensed five assets to a newly formed company, including three clinical-stage compounds and two phase-one-ready compounds. This deal represents a compelling opportunity to accelerate the development of these promising immunology assets while also allowing BMS to participate in future value creation through royalties, milestone payments, and a roughly 20% equity stake. BMS will continue to have a strong presence in immunology. We are focusing our immunology R&D efforts in areas where the company is best positioned to lead.

In terms of our early-stage pipeline, we entered into a license agreement with Phil Kim for exclusive worldwide rights to anko ACP 3. This is a potential best-in-class radiopharmaceutical therapeutic and diagnostic agent with the opportunity to become a breakthrough treatment for prostate cancer. We believe this collaboration will further strengthen our position in the rapidly advancing radiopharmaceutical space. Earlier this week, we announced a transaction with Bain Capital to form a new company focused on advancing innovative.

Chuck Triano: These strategic BD initiatives demonstrate our ability and flexibility to continually identify opportunities to both source external innovation and also externalize pipeline assets where appropriate. This is all in support of our objectives of driving improved growth in the outer years and attractive returns for shareholders. Moving to our key data catalysts on slide six, we are entering a data-rich period. In the next 12 to 24 months alone, we expect seven registration assets and seven meaningful lifecycle management opportunities. These represent important needle-moving events that can de-risk the pipeline and help shape our trajectory through the end of the decade. Recognizing we have had a few studies read out this year where results were not as expected, we are reviewing all of our near-term studies to best ensure the timely delivery of these programs with the highest probability of success.

Immunology therapies. As part of this transaction, we out-licensed 5 assets to a newly formed company, including 3 clinical stage compounds and 2 Phase 1 ready compounds. This deal represents a compelling opportunity to accelerate the development of these promising immunology assets while also allowing BMS to participate in future value creation through royalties and milestone payments. At roughly a 20% equity stake, BMS will continue to have a strong presence in immunology. We are focusing our immunology R&D efforts in areas where the company is best positioned to lead. These strategic business development initiatives demonstrate our ability and flexibility to continually identify opportunities to both source external innovation and also externalize pipeline assets where appropriate. This is all in support of our objectives of driving improved growth in the outer years and attractive returns for shareholders. Moving to our key data catalyst on slide 6, we're entering a...

Chuck Triano: While we are encouraged by the overall breadth of our pipeline, I would highlight three new molecular entities with near-term data readouts. We expect readouts for Milvecian in acute coronary syndrome and secondary stroke prevention next year and for atrial fibrillation in 2027. Data for Admoparent in idiopathic pulmonary fibrosis is expected next year, and we are also expecting to see MRD negativity data in-house later this year and PFS data next year from the phase three Excalibur study of iberdomide. This could provide additional validation of our CellMod platform as a next-generation potential standard of care in multiple myeloma. In terms of lifecycle management, we now have several ongoing registrational trials for Cobenfi in Alzheimer's disease patients. These include studies in Alzheimer's psychosis, agitation, and cognition impairment. In addition, we are also enrolling a phase three study in bipolar I disorder.

Data-rich period. In the next 12 to 24 months alone, we expect 7 registrations, assets, and 7 meaningful life cycle management opportunities. These represent important needle-moving events that can de-risk the pipeline and help shape our trajectory through the end of the decade. Recognizing we've had a few studies read out this year where results were not as expected, we are reviewing all of our near-term studies to best ensure the timely delivery of these programs with the highest probability of success while we.

Chuck Triano: In addition, we have attractive opportunities to invest in numerous oncology pivotal trials. BNT327 is enrolling in first-line non-small cell lung cancer and small cell lung cancer, and a study in first-line triple-negative breast cancer is expected to begin later this year. We are also advancing next-generation platforms that could redefine their respective categories. We are initiating two registrational studies for our PRNT5 inhibitor, one in non-small cell lung cancer and another in pancreatic cancer, based on encouraging early data with additional longer-term non-small cell lung cancer results to be presented at World Lung. Additionally, we are now recruiting a pivotal study for our EGFR HER3 targeting ADC, Isoprene, in first-line triple-negative breast cancer and expect early data in non-small cell lung cancer and other solid tumors later this year.

Are the overall breadth of our pipeline. I would highlight 3, new molecular entities with near-term data readouts. We expect readouts for milvexian and acute coronary syndrome and secondary stroke prevention next year and for atrial fibrillation in 2027 data for Admiral parent and idiopathic pulmonary fibrosis is expected next year. And we're also expecting to see mrd negativity data in house later this year. And PFS data. Next year from the phase 3, Excalibur study of ibera, this could provide additional validation of our cell mod platform, as a Next Generation, potential standard of care in multiple myeloma. In terms of life cycle management, we now have several ongoing registrational trials for copen and Alzheimer's disease patients. These include studies in Alzheimer's psychosis agitation and cognition impairment. In addition, we are also enrolling a phase 3 study in bipolar 1 disorder. In addition we have attractive opportunities to invest in numerous oncology pivotal trials. D&T,

327 is enrolling in first line, non small cell lung cancer and small cell, lung cancer. And a study in first line triple negative breast cancer is expected to begin later. This year. We're also advancing Next Generation platforms that could redefine their respective categories. We are initiating 2, registrational studies for our prmt5 inhibitor 1 in non small cell, lung cancer and another in pancreatic cancer based on encouraging early data with additional longer term, non small cell lung cancer results to be presented.

Chuck Triano: Lastly, in immunology, we are also now enrolling patients in a pivotal phase two study for our CD19 NextT cell therapy in severe refractory lupus. Data readouts are expected to continue next year and throughout the end of the decade, providing an increasing line of sight into the strength of our pipeline. We are investing in and prioritizing areas where we see the strongest potential for high-value assets. We are doing what we said we would do, driving focused execution across the business and delivering solid results as we advance our multi-year plan to emerge as a top-tier sustainable growth company by the end of the decade. Finally, I want to welcome Dr.

Data readouts, are expected to continue next year and throughout the end of the decade providing an increasing line of sight into the strength of our pipeline. We are investing in and prioritizing areas where we see the strongest potential for high value assets.

Chuck Triano: Samit Hirawat to Bristol Myers Squibb Co., who will be joining us starting tomorrow as Executive Vice President, Chief Medical Officer, and Head of Development. It is a pivotal time to lead our development organization, given the number of key pipeline advancements we are making in the months and years ahead, and I look forward to the impact that he will be bringing to our pipeline and the team. I also want to thank Samit for all of his contributions and leadership during his six years at Bristol Myers Squibb Co. and his commitment to groundbreaking science on behalf of our patients worldwide. With that, I will turn it over to David Elkins.

David Elkins: Thank you, Chris, and good morning, everyone. We continue to deliver strong performance in 2025. Our growth portfolio remains a key focus, and we are executing on driving top-line growth and prioritizing investments to ensure we are positioned in the company for long-term sustainable growth. Turning to the second quarter sales performance on slide eight, total company revenues were approximately $12.3 billion, reflecting strong demand across our business. Global sales of the growth portfolio increased approximately 17%, driven primarily by demand for our IO portfolio, Breyanzi, Reblozyl, and Camzyos. Let's start a review with the oncology portfolio on slide nine. Opdivo global sales are approximately $2.6 billion, up 7%, driven primarily by demand. In the U.S., revenues are approximately $1.5 billion, largely driven by a strong launch in MSI-high colorectal cancer and continued growth in first-line non-small cell lung cancer.

We are doing what we said. We would do driving focused execution across the business and delivering solid results as we advance. Our multi-year plan to emerge as a top tier sustainable Growth Company by the end of the decade. Finally, I want to welcome Dr. Christian Massey to be BMS, who will be joining us starting tomorrow as Executive Vice President, Chief medical officer and head of development. It's a pivotal time to lead our development organization. Given the number of key pipeline advancements. We are making in the months and years ahead and I look forward to the impact that he will be bringing to our Pipeline and the team. I also want to thank Schmitt for all of his contributions in leadership. During his 6 years at BMS and his commitment to groundbreaking science on behalf of our patients worldwide with that, I'll turn it over to David. Thank you, Chris, and good morning everyone. We continue to deliver strong performance in 2025, our growth, portfolio remains a key focus and we are executing on driving Topline growth and prioritizing Investments to ensure we are POS

David Elkins: Outside of the U.S., revenues grew 7%, driven primarily by volume growth and one-time favorable adjustments in the quarter. Turning to Augtyro, we are pleased with the performance in the quarter. Sales were approximately $30 million. The launch in the U.S. is going well, with the use across all indicated tumor types. We received a permanent J-code on July 1st, which will support additional conversion as reimbursement improves. Due to the strong performance year to date, we now expect global Opdivo sales, together with Augtyro, to deliver stronger growth in the mid to high single-digit range for the full year. Turning to our hematology performance on slide ten, Reblozyl global sales were $568 million in the quarter and over a billion dollars year to date, reflecting continued strength across our MDS-associated anemia indications.

Positioning company for long-term sustainable growth. Now turning to the second quarter sales performance on slide. 8 total company revenues were approximately 12.3 billion reflecting strong demand across our business, Global sales of the growth portfolio, increased approximately, 17% driven primarily by demand for our IO portfolio, Bonzi reloj and kenzas. Let's start a review with the oncology portfolio on slide. 9 opdivo Global sales for approximately 2.6 billion up 7% driven primarily by demand in the US revenues, approximately 1.5 billion were largely driven by a strong launch in MSI. High colorectal cancer and continued growth in first line, non small cell lung cancer outside of the US. Revenues grew 7% driven primarily by volume growth and 1-time favorable adjustments in the quarter. Turning to kanantik, we are pleased with the performance in the quarter sales were approximately 30 million, the launch in us is going well with the use across all indicated tumor types.

David Elkins: In the U.S., revenue growth was up 30% versus the prior year, primarily due to demand growth in first-line RS-positive and RS-negative MDS-associated anemia. Outside of the U.S., Reblozyl sales grew 46%, driven by continued demand across newly launched markets. Turning to Breyanzi, revenues were $344 million in the quarter. Global revenues grew 122%, reflecting strong demand across all indications and higher than expected infusions that benefited the second quarter. We expect a strong second half, with sales skewed more towards the fourth quarter as the third quarter normalizes. In the U.S., sales were $255 million, more than doubling again this quarter, which reflects growth in large B-cell lymphoma, expansion from new indications approved last year, and improved manufacturing success rate. Outside of the U.S., sales were $88 million, nearly tripling due to strong demand and launches in new markets.

Received a permanent J code on July 1st, which will support additional conversion as reimbursement. Improves due to the strong performance year to date. We now expect a global update of sales together with convincing evidence to deliver stronger growth in the mid to high single-digit range for the full year. Now turning to our hematology performance on slide 10, Rebels, all global sales for $568 million in the quarter and over $1 billion year to date, reflecting continued strength across our MDS and associated anemia indications in the U.S. revenue.

David Elkins: Moving to our cardiovascular performance on slide 11, starting with Camzyos, global sales were $260 million, growing 86% due to robust demand. In the U.S., sales were $214 million, up 65%, driven primarily by increasing new patient starts. Sequentially, revenues grew 70%, driven by demand as well as a typical second-quarter inventory build. Outside the U.S., sales were $46 million, reflecting launch momentum in over 20 markets. Eliquis global sales were $3.7 billion, growing 6%, primarily due to strong demand. U.S. sales grew 4%, and ex-U.S. sales grew 12%. Moving to immunology on slide 12, Sotyktu sales grew 29% globally. In the U.S., sales increased 5%, primarily due to higher demand and an inventory build, which was partially offset by higher rebates associated with increased commercial coverage. We remain focused on driving further demand growth with our improved access decision to help offset the impact of higher rebates.

New Growth was up 30% versus the prior year. Primarily due to demand growth in first-line RS, positive and rs, negative MDS, Associated anemia, outside of the Us. Reblue sales grew 46%, driven by continued demand across newly launched markets. Turning to Bonzi revenues were 344 million in the quarter. Global revenues grew, 122% reflecting, strong demand across all indications and higher than expected. Infusions that benefited the second quarter. We expect strong second half with sales skewed more towards the fourth quarter, as the third quarter normalizes in the US sales for 2555 million more than doubling. Again this quarter which reflects growth in large B cell lymphoma expansion from new indications approved last year and improved manufacturing. Success rate outside of the Us. Sales are 88 million nearly tripling due to strong demand and launches a new markets moving to our cardiovascular performance on slide. 11, starting with Kim,

Global sales for $260 million grew 86% due to robust demand. In the U.S., sales were $214 million, up 65%, driven primarily by increasing new patient starts. Sequential revenues grew 70%, driven by demand, as well as a typical second quarter inventory build. Outside the U.S., sales were $46 million, reflecting launch momentum in over 20 markets. Overall, global sales are $3.7 billion, growing 6%.

David Elkins: Now, moving to discuss Inrebic on slide 13. Inrebic sales were $35 million in the quarter and $62 million year to date. The launch of Inrebic is tracking as we expected. Weekly total prescriptions continue to grow, and we expect continued steady growth, with sales in the second half of the year higher than the first half. Now, let's move to the P&L on slide 14. Gross margin was approximately 73%, primarily due to product mix. As expected, operating expenses were approximately $260 million lower compared to the same period last year, primarily reflecting the results of our ongoing strategic productivity initiative. Our effective tax rate in the quarter was 16.1%, including the impact of the upfront charge for the BioNTech partnership.

% primarily due to strong demand and Us. Sales group 4%, and xus sales, grew 12%. Moving to Immunology on slide 12. So tick to sales grew 29% globally. In the US sales. Increased 5% primarily due to higher demand and an inventory build, which was partially upset by higher rebates. Associated with increased commercial coverage. We remain focused on driving further. Demand growth with our improved access position to help offset the impact of higher rebates.

David Elkins: Overall, diluted earnings per share was $1.46 due to the strong performance in the quarter and includes approximately $1.5 billion, or a $0.57 charge, related to the BioNTech strategic partnership, which is reflected in acquired in-process R&D. Turning to the balance sheet and capital allocation highlights on slide 15. Our financial position remains strong, with roughly $13.9 billion in cash, cash equivalents, and marketable securities as of June 30th. We generate cash flow from operations of about $3.9 billion in the second quarter. Our capital allocation priorities remain unchanged as we continue to take a strategic and balanced approach. Investing in our growth portfolio brands, along with business development, are our top priorities. We are on track with our plan to further delever our balance sheet and pay down $10 billion of debt by the first half of 2026 relative to our March 31, 2024 balance.

Continued to grow. And we expect continued steady growth with sales in the second half of the Year higher than the first half. Now, let's move to the p&l on slide. 14, gross margin was approximately 73%, primarily due to product mix as expected. Operating expenses were approximately 260 million lower compared to the same period last year, primarily reflecting the results of our ongoing strategic productivity initiative, our effective tax rate in the quarter was 16.1%, including the impact of The Upfront charge for the biotech partnership. Overall diluted earnings per share was a 1.46 due to the strong performance in the quarter and includes approximately 1.5 billion, or a 57 Cent charge related to the buy and Tech strategic partnership, which is reflected in acquired in process R&D turning to the balance sheet and capital allocation highlights on slide 15. Our financial position remains strong with roughly 13.9 billion dollars in cash, cash equivalents and marketable securities as of June 30th.

David Elkins: We remain committed to returning capital to shareholders through our dividend. Now, turning to our guidance on slide 16. We are increasing our full-year reported revenue guidance by $700 million at the midpoint to a range of $46.5 billion to $47.5 billion, reflecting continued strong performance of our growth portfolio, better than expected legacy sales in the second quarter, and a favorable impact of approximately $200 million related to foreign exchange rates. Additionally, we now expect the legacy portfolio to decline approximately 15% to 17% for the year, a more moderate rate than previously anticipated, due primarily to Revlimid's strong year-to-date performance. We now project full-year Revlimid sales of approximately $3 billion.

We generate cash flow from operations of about 3.9 billion in the second quarter. Our Capital allocation priorities remain unchanged as we continue to take a strategic and balanced approach. Investing our growth portfolio Brands. Along with business development are a top priority. We are on track with our plan to further, de-lever our balance sheet and pay down 10 billion dollars of debt. By the first half of 2026, relative to our March, 31st 2024 balance, and we remain committed to returning Capital to share.

David Elkins: We maintain our gross margin guidance at approximately 72%, as some of our high-margin legacy brands are expected to continue to decline through the second half of the year and Eliquis revenues to be more evenly phased throughout the year. We are adjusting our operating expense guidance to increase slightly to approximately $16.5 billion, reflecting investment behind recent business development deals and additional investment opportunities within our growth portfolio. As previously guided, our operating expenses are anticipated to be higher in the second half of the year compared to the first half, reflecting timing of investments, including the recently signed BD deals. Our operating margin target of approximately 37% for the full year remains unchanged. For OINE, we now expect annual income of approximately $250 million due to higher than anticipated royalties and favorable interest income, and we are maintaining our full-year tax rate guidance of approximately 18%.

Shareholders through our dividend. Now, turning to our guidance on slide 16. We're in our full year reported revenue guidance by $700 million at the midpoint to a range of $46.5 billion to $47.5 billion, reflecting continued strong performance of our growth portfolio, better than expected Legacy sales in the second quarter, and a favorable impact of approximately $200 million related to foreign exchange rates. Additionally, we now expect the Legacy portfolio to decline approximately 15% to 17% for the year, a more moderate rate than previously anticipated due primarily to Revelate's strong year-to-date performance. We now project full year revenue at sales of approximately $3 billion. We maintain our gross margin guidance at approximately 72%, as some of our high-margin Legacy brands are expected to continue to decline through the second half of the year, and Eloquest revenues are to be more evenly phased throughout the year. We are adjusting our operating expense guidance to increase slightly to approximately $16.5 billion, reflecting investments.

Behind recent business, development deals, and additional investment opportunities within our growth portfolio.

As previously, guided our operating expenses are anticipated to be higher in the second half of the year compared to the first half reflecting timing of Investments including the recently signed BD deals. Our operating margin Target of approximately 37% for the full year, remains unchanged for oine. We now expect any annual income of approximately 250 million due to higher than anticipated royalties and favorable, interesting.

David Elkins: As a result of the strong performance year to date, when excluding acquired in-process R&D charges, the midpoint of our 2025 non-GAAP EPS guidance would have increased approximately $0.20 per share. After including these charges of $0.57 per share, primarily related to the BioNTech partnership, our expected EPS for 2025 is now projected to be between $6.35 and $6.65. This increase reflects a strong performance of our growth portfolio, as well as better than anticipated sales from our legacy portfolio, and accommodates recent business development and other growth-oriented investments. All in all, I'm pleased with the performance of the business year to date. I'd like to thank our colleagues around the world for their continued focus and execution. With that, I'll turn it back to Chuck Triano to start Q&A.

Operator: Thanks, David. Operator, can we please start the polling for the Q&A session? Thank you.

And we're maintaining our full year. Tax rate, guidance of approximately 18% as a result of the strong performance year to date, when excluding Acquired and process R&D charges. The midpoint of our 2025 non-gaap EPS, guidance would have increased approximately 20 cents per share after, including these charges of 57 cents per share, primarily related to the buy and Tech partnership are expected. EPS for 2025 is now projected to be between $6.35 and $6.65 this increase reflects a strong performance of our growth portfolio, as well as better than anticipated sales from our Legacy portfolio and accommodates, recent business development and other growth-oriented Investments. All in all, I'm pleased with the performance of the business year to date. I'd like to thank our colleagues around the world for their continued, focus and execution with that. I'll turn it back to Chuck to start the Q&A.

Chuck Triano: Yes, sir. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Jeff Meacham with Citibank. Please go ahead.

Thanks David, uh operator. Can we please start the polling for the Q&A session? Thank you.

Yes, sir. We will now begin the question-and-answer session.

To ask a question, you may press star, then 1 on your touchtone phone.

If you're using a speaker-phone, please pick up your handset before pressing the keys.

And withdraw your question, please press star then 2 and at the time we'll pause momentarily to assemble our roster.

In the first question will come from Jeff Meacham with Citi Bank. Please go ahead.

Jeff Meacham: Morning, guys. Thanks for the question. Chris, you mentioned the upcoming period, which is very data-heavy. I am just looking at the Phase 3 results this year. Are there any that you would call out where maybe you can still achieve the objective of either line extensions or label expansion? I know you probably have to have an FDA discussion, but I am just curious if there maybe is a faster path to achieving some of the line extensions that you intended to achieve. Thanks.

Chris Boerner: Thanks for the question, Jeff. Let me just say a few things about the studies that have run out so far, and then maybe I will turn it over to Samit to answer your question directly. First, as we look back at the studies that have not gone the way we had anticipated, there are two things I think are important to keep in mind. The first is that when you look at those studies in totality, while they were meant to answer important scientific questions or clinical practice questions, they collectively have relatively limited impact on the long-term growth of the company. What is more important is whether or not those studies have any implications going forward. We do not see any read forward from those studies to future opportunities.

To achieve some of the line extensions that you intended to, to, uh, to achieve. Thanks.

Chris Boerner: So, we feel good about where we are in the growth potential, as well as the importance of those studies that we will be reading out over the next 12 to 24 months in order to shape that growth trajectory. Samit, maybe you can comment on the studies that have run out this year.

Samit Hirawat: Yeah, thank you, Chris, and thank you, Jeff. I think one of the examples of how we think about deeper review of the data would be, let's say, independence trials for Reblozyl, for example. As we've communicated, we look deep into the data, and there is clinically meaningful impact that we do see not only on the primary endpoint of transfusion independence, but also as we think about the other endpoints. Based on that, we are right now planning to interact with the health agencies around the world to ensure that we give the best chance for the drug to be able to show its activity and provide a much-needed therapy for unmet medical needs in anemia-associated myelofibrosis. We will continue to watch out if there are other opportunities for other molecules as we go through the rest of the year.

Thanks for the question Jeff. Um, let me just say a few things about the studies that I've read out so far and then maybe I'll turn it over to Sama to answer your question directly first is we look back at the studies, um, that haven't gone the way we had anticipated. Uh, there are 2 things, I think are important to keep in mind. The first is that, when you look at those studies in totality, while they were meant to answer, important scientific, uh, questions or clinical practice questions, they collectively have relatively limited impact on the long-term growth of the company, what is more important is whether or not those studies, um, have any implications going forward? And we don't see any read forward from those studies to Future opportunities. Um, and so, um, we feel good about where we are and the growth potential as well as the importance of those studies. That will be reading out over the next 12 to 24 months in order to shape that growth trajectory. But some that maybe you can comment on the studies that I've read out this year. Yeah. Thank you. Um, Chris and thank you, Jeff. Um, I think 1 of the examples of uh, how

We think about deeper review of the data would be, let's say independent child for a bloser. For example, as we've communicated and we look deep into the data and there is clinically meaningful impact that we do. See, not only on the primary endpoint of transfusion Independence, but also, as we think about the other endpoints. And So, based on that, uh, we are that right now planning to interact with

Chris Boerner: Thanks, Jeff.

Jeff Meacham: Great. Thanks, guys.

Health agency around the world to ensure that we give the the biggest best chance for the drug to be able to show its activity and provide a much-needed therapy for unmet. Medical needs in anemia Associated manner fibrosis and we'll continue to watch out if there are other opportunities for other molecules as we go through uh the rest of the year.

Operator: Yep, sure. Next question, please, operator.

Thanks Jeff. Great. Thanks guys.

Chuck Triano: Your next question will come from Courtney Breen with Bernstein. Please go ahead.

Yep. Sure, our next question, please, operator.

Your next question will come from Courtney Breen with Bernstein. Please go ahead.

Courtney Breen: Hi, guys. Thanks so much for taking the call this morning. We really wanted to focus a little bit on the macro pressures or the industry pressures that you guys are facing. You announced recently the direct-to-consumer offering in conjunction with Pfizer. Can you give us a bit more context on why this felt like it was the right time to announce this deal? Was this a direct mandate or agreement with this administration? Is this potentially a platform that you may look to utilize with any of your other products over time? What kinds of products might be the right ones to fit into a platform like this?

Hi guys, thanks so much for taking the call.

bit on kind of the the macro pressures or the industry pressures that that you guys are facing and you announced recently

Chris Boerner: Yeah, thanks for the question, Courtney. Maybe I'll start, and then I'll turn it over to Adam. Look, we're pleased that we were able to implement this program with Pfizer. I think this administration has actually done a nice job highlighting the need to cut out the middleman from the U.S. healthcare system. Remember, roughly about half of every dollar spent on a branded medicine goes to someone who took absolutely no R&D risk in the creation of that product. The Eliquis direct-to-patient offering is a way for us to offer meaningful decreases in out-of-pocket costs for patients, increase transparency, and take a step, as the President has suggested, in cutting out traditional middlemen. But maybe I'll have Adam speak to the program more specifically.

The direct to Consumer offering uh, in conjunction with fizer. Um, can you give us a a bit more context on kind of why this felt like it was the right time to announce this deal? Was this a direct kind of mandate or agreement with this Administration and is this potentially a platform that you may look to uh, utilize with any of your other products over time. And and and what kinds of products might be the right ones to fit into a, a platform like this.

Adam Lenkowsky: Yeah, thanks, Chris, and thanks, Courtney, for the question. As part of our commitment to increasing patient access to our medicines, following some of the conversations we've had with the administration, we announced with our Pfizer counterparts a few weeks ago that beginning September 8th, uninsured, underinsured, cash-paying U.S. patients could purchase Eliquis directly through Eliquis 360 support. Patients will be able to pay a discounted rate of over 50% less than the list price. As Chris was alluding to, we've heard from patients, policymakers, prescribers have all called for simpler, more affordable, more transparent access. Now patients will have full transparency into their costs, and it cuts out the middleman there. We're launching this new direct-to-patient option as part of our commitment to increasing patient access and affordability.

Yeah, thanks for the question Court in. Maybe I'll start and then I'll turn it over to Adam. Look, we're pleased that we were able to implement this program. Uh, with fiser. I think this Administration has actually done a nice job highlighting, the need to cut out the middleman from the US Healthcare System. Remember roughly about half of every dollar spent on a branded medicine. Goes to someone who took, absolutely, no R&D risk in the creation of that product. Um, and the eloquest direct to Patient offering is a way for us to offer, meaningful decrease in out of pocket, costs for patients, increase transparency, um, and take a step as the president has suggested in cutting out, traditional middlemen, but maybe I'll have Adam speak to, uh, the program, more specifically.

Yeah. Thanks Chris and thanks Courtney for the question. So as part of our commitment to increasing patient access to our medicines,

Following some of the conversations we've had with the administration, we announced with our, uh, Pfizer counterparts a few weeks ago that beginning September 8th, uninsured and underinsured cash-paying patients could purchase Adalimumab directly through Eloquest 360 support. So patients will be able to pay a discounted rate of over 50% less than the list price.

Chris Boerner: The only other thing, Courtney, just to your question about whether there may be other opportunities, we're obviously going to continue to look within our own portfolio to see if there are opportunities where that makes sense. We'll also continue to be looking across the industry for other potential opportunities, so more to come on that.

Operator: Thanks, Chris. Let's move to our next question, please.

And as Chris was alluding to, we've heard from patients policy, makers prescribers of all called for a simpler more affordable uh more transparent access and now patients will have full transparency into their costs and it cuts out the middleman there. So we're launching this new direct to Patient option as part of our commitment to increasing patient access and affordability. The only other thing Courtney just to your question about whether there may be other opportunities. We're obviously going to continue to look within our own portfolio and see if there are opportunities where that makes sense. And I think we'll also continue to be looking at the industry for other potential opportunities. So um more to come on that. Thanks Chris uh let's move to our next question, please.

Chuck Triano: Your next question will come from Chris Shah with JPMorgan. Please go ahead.

Chris Shah: Great. Thanks so much. Just a two-parter on Cobenfi. Maybe just first on the launch dynamics. I would love to hear what you see as the primary hurdles to adoption for physicians at this point, given reimbursement, et cetera, in place. The second part was, as we look forward to the Alzheimer's psychosis results coming later this year, maybe just help frame out expectations in terms of the type and magnitude of benefit you feel you need to show to see adoption here. Would the study alone be enough to support a filing? Thanks so much.

The next question will come from Chris shot with JP Morgan. Please go ahead.

Chris Boerner: Thanks for the question, Chris. Maybe I'll ask Adam Lenkowsky to start on the first part and maybe hit on what the commercial threshold is for ADP. Then, Samit Hirawat, you can give an update on where we are.

In place. And then the second part was, as we look forward to the Alzheimer's psychosis results coming later this year, maybe just help frame out expectations in terms of the type and magnitude of benefit you feel you need to show to see adoption here. And with the study alone, will that be enough to support a filing? Thanks so much.

Adam Lenkowsky: No, thanks, Chris. Cobenfi is performing in line with expectations, and we're now tracking over 2,000 TRXs on a weekly basis. We expect to see steady TRX growth as we continue to execute our plan. We're still in the early stages of launch. As we previously communicated, we knew it was going to take time to change what's been decades of entrenched prescribing behavior. Indeed, I think that's been the case. Physician feedback continues to be very positive regarding Cobenfi's differentiated profile. What's encouraging is that the vast majority of physicians have indicated an intent to prescribe Cobenfi. So we're making steady progress with adding a number of new trial lists as we're growing trial lists each week. We definitely have an opportunity to continue to accelerate breadth and depth of prescribing. Let me talk a little bit about what we're doing and also some of what we're hearing.

Thanks for the question. Chris, maybe I'll ask Adam to start on the first part and maybe hit on what the commercial threshold is for ADP. Then, some of you can give an update on where we are.

Adam Lenkowsky: First, we're increasing the size of our community field force to increase the reach and frequency, as we know it takes multiple calls to change physician behavior. For your question, the most common question that we receive from physicians is how to switch. We're focused on clarifying switching approaches from D2s to Cobenfi through peer-to-peer initiatives, introducing real-world data. We also have a Phase 4 switch study that we read out at the end of the year, I think all of which will help build physician confidence. Finally, we're expanding into the hospital setting. This is a planned sequence launch, first into the community, then into the hospital, and that opportunity to drive new patient starts. Patients are typically maintained on treatment from the hospital and then moved into the community. In the hospital, it's around 20% to 25% of NRXs initiated there.

No thanks Chris. Go back to performing in line with expectations and we're now tracking over 2,000 trxs on a weekly basis. You know, we expect to see steady TRX growth as we continue to execute our plan and, you know, we're still in the early stages of the launch. And as we previously communicated, we knew it was going to take time to change. What's been Decades of entrenched prescribing behavior. And indeed I think that's been the case. You know physician feedback continues to be very positive regarding coben's differentiated profile and what's encouraging is that the vast majority of Physicians have indicated an intent to prescribe Coben fees. So we're making steady progress with adding number of neutral lists. As we're growing trialists each week, but we've been, we definitely have an opportunity to continue to accelerate breadth and depth of prescribing. So let me talk a little bit about what we're doing and also some of what we're hearing first. You know, we're increasing the size of our community Field Force to increase the reach and frequency. As we know, it takes multiple calls to change position Behavior.

Adam Lenkowsky: Based on all the leading indicators we're seeing, we're confident that Cobenfi is going to be a big drug in schizophrenia, and longer term will be fueled by additional indications such as our Alzheimer's program. I'll turn it over to Samit to talk about the Alzheimer's program.

Samit Hirawat: Yeah, thanks, Adam, and thank you, Chris, for the question as well. Cobenfi, from an Alzheimer's disease perspective, we remain confident in the product and certainly are conducting all our clinical trials with that mindset, not only in the psychosis program, but also for agitation as well as cognition. For ADAPT2, we are certainly looking forward to the database lock, and we remain blinded to that data at this time. As Chris mentioned earlier during his prepared remarks, we are also reviewing our case studies to make sure that internally we give the highest probability of success to all of our programs. Specifically, as it relates to ADAPT2, in preparation of that database lock, we are conducting the clinical trial site reviews. That could impact the timelines a bit, but with that said, we are still targeting the top-line data by the end of the year for ADAPT2.

For your question, you know, the most common question that we receive from Physicians is how to switch. And we're focused on clarifying, switching, approaches from d2s, to Coen fee, through peer-to-peer initiatives, introducing real world data and we also have a phase 4 switch study that reads out at the end of the year. I think, all of which will help build position confidence and then finally, we're expanding into the hospital setting. So this is a plan sequence, launch first into the community, then into the hospital and that opportunity to drive. New patients starts, patients are typically maintained on treatment from the hospital and then moved into the community. So in the hospitals around 20 to 25% of anorexia an initiated there. So based on all the leading indicators, we're seeing we're confident that Coen Fe is going to be a big drug and schizophrenia and longer term will be fueled by additional indicators such as our Alzheimer's program. So I'll turn over to Summit to talk about the Alzheimer's program. Yeah, thanks. Uh, Adam and thank you Chris, for the question as well. The

Uh from Alzheimer's disease perspective. We remain confident in the product and certainly have conducting all our clinical trials with that mindset. Uh not only in The psychosis program but also for agitation as well as cognition uh for adapt to uh we are certainly looking forward to the database lock and we remain blinded to that data at this time. As Chris mentioned earlier during his prepared remarks. We are also reviewing our case studies to make sure that internally we give the the highest probability of success to all of our programs and specifically

Samit Hirawat: As far as the filing is concerned, as I think has been mentioned already, we are conducting three studies in Alzheimer's disease psychosis: ADAPT2, ADAPT4, ADAPT1. ADAPT4 and ADAPT1 will read out in 2026. Two of the three studies need to be positive for us to be engaging the health authorities for a filing and registration purposes. We are glad where we are in terms of our enrollments and looking forward to the data readouts.

As it relates to adapt to uh in preparation of that database log, we are conducting, the clinical trial, site reviews, and that could impact the timelines a bit. But uh, with that said, we are still targeting the Topline data by the end of the year for adapt to

Operator: Great. Thanks, Samit. Next question, please.

As far as the filing is concerned, as I think, as we mentioned already, we are conducting three studies in Alzheimer's disease: ADAPT 2, ADAPT 4, and ADAPT 1. ADAPT 4 and ADAPT 1 will read out in 2026. Two of the three studies need to be positive for us to engage with the health authorities for filing and registration purposes. We are glad where we are in terms of our enrollments and are looking forward to the data readouts.

Chuck Triano: Your next question will come from Evan Sigerman with BMO. Please go ahead.

Great. Thank you. Uh, next question, please.

Speaker 11: Hi, guys. Thank you so much for taking my question. I wanted to touch on some of the rationale for partnering with BioNTech and specifically what you saw in their PD-L1 VEGF specific. There are a lot of assets out there. What attracted you to the partnership with them? Maybe walk me through some of the differentiation and how you can work with them to accelerate this to potentially be early kind of in the class of assets. Thank you.

The next question will come from Evan sermon with BMO please. Go ahead.

Chris Boerner: Sure. Maybe I'll just say one word, then I'll turn it over to both Adam and Samit. First, as I mentioned in the prepared remarks, we're excited about the opportunity that we have with BioNTech. We think this is going to be a really value-added partnership for us going forward. One of the things that was particularly attractive was this is an asset that is in a position to be either first or second as this technology evolves. We know from our experience in immuno-oncology with Opdivo that that positioning in the marketplace is really important. That was one of the factors among many that attracted us to the BioNTech partnership. Maybe Adam and you and Samit can pick it up from there.

Okay, thank you so much for taking my question. I wanted to touch on some of the rationale for partnering with BioNTech and specifically what you saw in their PD-L1 video. By specific, there's a lot of assets out there. What attracts you to the partnership with them? Maybe walk me through some of the differentiation and how you can work with them to accelerate this to potentially an early kind of in the class of assets. Thank you.

Sure, maybe, um, I'll just say one word and then I'll turn it over to both, um, Adam and Someday at first. Um, as I mentioned in the prepared remarks, we're excited about the opportunity that we have with Bay. Uh, we think this is going to be a really, um, value-added, uh, partnership for us going forward. Uh, one of the things that was particularly attractive was this is an asset that is in a position to be either first or second as this technology evolves, and we know from our experience in immuno-oncology with.

Adam Lenkowsky: Yeah, thanks for the question, Evan. So our partnership with BioNTech, I think, has the potential to enhance our growth profile in the back end of the decade into the 2030s while strengthening and diversifying our oncology portfolio. As you know, we've been a leader in IO now for well over a decade, and we do believe that BNT327 has the potential to become a new standard of care for many patients and could transform the current landscape as a backbone of cancer treatment. Christopher Boerner talked about the importance and certainly learning from Opdivo. Coming to the market and being the leapfrog to go into a first or second position across tumors is critical. Our focus, and Samit Hirawat will touch on this, is around speed to market. We also have the infrastructure in place.

Adam Lenkowsky: We can leverage our capabilities that we've built over years, commercializing out three IO agents. By leveraging our leading commercial and operational capabilities with BioNTech's scientific expertise, we can help accelerate and broaden the development of the program and explore new indications to maximize the potential.

Samit Hirawat: Yeah, just to build on what Adam Lenkowsky just said, look, with two validated targets on a bispecific PD-L1 and VEGF, the specificity of delivering the drug to the tumor because of expression of PD-L1, that brings a differentiation compared to the PD-1 VEGF inhibitors. Of course, we'll need to continue to watch out the evolution of the data across the tumor types that these drugs are being explored in, but certainly very excited to provide our help as well as support in the collaboration because of our footprint in 50-plus countries to conduct clinical trials. Initiation of the clinical trial, certainly, as Chris Boerner mentioned earlier, is in small cell lung cancer, non-small cell lung cancer, and triple-negative breast cancer. But there's a large CDP that is being built right now, and we'll be able to share that later in the year.

Enhance our growth profile in the back. End of the decade into the 2030s while strengthening and diversifying our oncology portfolio. As, you know, we've been a leader in IO now for well, over a decade. And we do believe that BNT 327 has the potential to become a new standard of care for many patients, and could transform the current landscape as a backbone of cancer treatment. So Chris talked about the importance and certainly a learning from optivo, you know coming to the market and being able to LeapFrog, going to a first or second position across tumors is critical. So our focus and some will touch on. This is around speed to Market. We also have the infrastructure in place. We can leverage our capabilities that we built over years commercializing now, 3 IO agents and so by leveraging our leading commercial and operational capabilities with bionex scientific expertise we can help accelerate and broaden the development of the program and explore new indications to maximize the potential.

Yeah, and, uh, just to build on what Adam just said, look with the 2 targets on a by specific BDL1 and VEGF.

The specificity of delivering the drug to the tumor because of expression of pdl1, uh, that brings the differentiation compared to the pd1 vegf Inhibitors, of course. Uh, we'll need to continue to watch out the evolution of the data across the tumor types that we, that these drugs that are being explored in uh, but certainly very excited to provide our uh uh, help as well as support and the collaboration because of our footprint.

Operator: Great. Thanks for the background. Next question, please.

Chuck Triano: Your next question will come from Louisa Hector with Berenberg. Please go ahead.

50 plus countries to conduct clinical trials. The initiation of the clinical trial, certainly, as Chris mentioned earlier, is in small cell lung cancer, non-small cell lung cancer, and triple negative breast cancer. But there's a large CDP that is being built right now, and we'll be able to share that later in the year, right? Thanks for the background. Um, next question, please.

The next question will come from, Louisa ha with Baron Berg. Please go ahead.

Courtney Breen: Hello. Thank you for taking my questions. Maybe a quick thank you to Samit Hirawat for all the insightful dialogue over the years, and good luck. I wonder if you could quantify the stocking and any growth to net impact. Quite a few mentions, but I do not know if you have the numbers for year on year as well as the Q2 sequential. Perhaps on the immunology collaboration with Bristol Myers Squibb Co., the spin-off, just a little bit more color on the rationale for those particular assets going out. Will you have opt-in rights? Are there any other therapy areas where this externalization approach might be useful? Thank you.

Chris Boerner: Thanks for the question, Louisa. I will ask David to take the stocking in the first part of the immunology question. Then maybe Samit, you can chime in as well.

Hello. Thank you, um, for taking my questions and maybe a quick, thank you to Summit for all the insightful, dialogue over the years and and good luck. Um, so I wonder if you could quantify the stocking and any growth to impact quite a few mentions. Um, but I don't know if you have the number sort of year on year as well as the the Q2 sequential. And then, um, perhaps on the Immunology um, collaboration with Bane that the spin-off um, just a little bit more color on the rationale for those particular assets going out, will you have opt-in rights and are there any other therapy areas where this externalization approach might be useful? Thank you.

Thanks for the question, Louisa I'll ask.

Operator: Yeah, on the you are raising our guidance by $700 million. Most of that is driven by demand. As we take a look at it, a little less than $200 million was related to FX, and the majority of that is in our legacy portfolio and in our IO portfolio, which is where more of that business is relative to our growth portfolio outside the U.S. The remaining $500 million is pretty much evenly split between the growth portfolio, the pervasive strength that we saw across many of the brands that I talked about in the prepared remarks. As I talked about also, we raised the Revlimid guidance by $500 million, but a good portion of that will be offset by more erosion we are seeing with Abraxane, Sprycel, and Pomalyst.

First part of the Immunology question, then maybe some of you can chime in as well.

Operator: Overall, it is a strong raise. We are really pleased with the performance of the growth portfolio and seeing that going into the remainder of the year. Your last question, there was very little stocking that we saw within the quarter. So this is good underlying demand growth.

Yeah, on the um, you know, raising our guidance by 700 million um most of that's driven by demand and um you know, as we take a look at it about um a little less than 200 million was related to to FX and the majority of that is uh in our Legacy portfolio and and our IO portfolio which is um we're more of that businesses relative to our growth portfolio is outside the US and the remaining 500 million is pretty much evenly split between, you know, the growth portfolio. The, the pervasive, um, strength that we saw across many of the brands that I talked about in prepare remarks. And then, as I talked about, also, we raised the revvl med guidance, um, by, um, 500 million dollars, but that will be all set. Um, good portion of that will be offset by, you know, more erosion. We're seeing with the practicing price sale in palmless, but overall, you know, as a strong raise, we're really pleased with the performance of the growth portfolio and seeing that, um, going into uh, the remainder of the year. The your last question there was very little stocking. Um, you know, that we saw

Samit Hirawat: To add to what you asked and what David Elkins just said, from an immunology perspective, we've always talked about three elements of targeting the immunological diseases: inflammation, resetting the immune system, and then creating a homeostasis. Within the inflammation part, we do have Sotyktu, which is already approved in psoriasis. We recently submitted around the world applications for psoriatic arthritis, and we are pursuing additional indications in SLE and Sjögren's syndrome. We have LPA-1 in IPF and TPF, as we heard before. IPF will read out next year. What we are truly excited about is the resetting of the immune system through the use of cell therapies, and that's where the emerging data is quite exciting as we think about SLE and more data that will be emerging in systemic sclerosis, myositis, MS, as well as myasthenia gravis.

Within the quarter. So this is good, underlying demand growth and just to add to what, uh, you asked. And and what David just said from a emancipator, we've always talked about 3, elements of, uh, targeting the Immunology, immunological diseases, inflammation, resetting, the immune system, and then creating a homeostasis.

Samit Hirawat: With the initiation of the pivotal trial now, we have to enroll that as quickly as possible and in a couple of years start to see how we can impact that disease in a positive way.

Chris Boerner: To sort of dovetail back on the rationale for this particular agreement with Bain and how we would think about this going forward, the creation of the new company centers around five assets. Three of those assets are clinical stage; two are phase one ready. We have been discussing, as you know, for the better part of the last 18 months, being diligent, to Samit's point, around portfolio prioritization, focusing on those areas where we have a right to win. As you do that, there are naturally projects that may not make the pay line for us but still have compelling science or commercial opportunity. This agreement is a nice way for us to continue to progress those assets while retaining the ability to benefit from any upside. Of course, we will continue to look at innovative ways to do precisely that as we go forward.

And within the inflammation part, we do have so tick 2 which is already approved. In psoriasis. We recently submitted uh, around the world applications for society arthritis and we are pursuing additional indications in SLE Insurance syndrome. We have LPA 1 in ipf and ppf as we heard before ipf will read out next year. But what we truly really excited about is the resetting of the immune system through the use of cell therapies and that's where the emerging data is quite exciting. As we think about SLE and more data, there will be emerging in systemic sclerosis, Myositis and Ms as well as my senior gravis and with the initiation of the pivotal trial. Now where we have to enroll that as quickly as possible. And in a couple of years, start to see how we can impact that disease in a positive way.

Chris Boerner: Whether or not we will be able to leverage a mechanism like this remains to be seen, but we really like this particular structure for these assets, and we are happy to have kicked this off with Bain.

Operator: Great. Thank you. Operator, next question, please.

Chuck Triano: Your next question will come from David Elkins with Piper Sandler. Please go ahead.

Creation of the new company centers around 5 S. 3 of those assets are clinical stage 2 or Phase 1 ready. Um, we have been discussing as, you know, for the better part of the last 18 months uh being diligent uh to some of its Point around portfolio. Prioritization focusing on those areas where we have a right to win um and as you do that there are naturally projects that uh may not make the pay line for us but still have compelling science or commercial opportunity and and disagreement is a nice way for us to continue to progress those assets while retaining the ability to benefit from any upside. Um, and of course, we'll continue to look at, uh, innovative ways to do, uh, precisely that as we go forward, whether or not, we'll be able to leverage a mechanism like this remains to be seen, but we really like this particular structure for these assets and we're happy to have kicked this off with Bane. Great, thank you. Uh operator the next question please. Your next question will come from David Salam with

Piper Sandler. Please go ahead.

Speaker 11: Thanks. I wanted to ask about Camzyos and particularly competitive dynamics with a second myosin inhibitor potentially entering the market by the end of the year, early next year. My question here is, how are you thinking about your ability to drive a steady cadence of new starts with the additional competition, particularly to the extent that Aficamten's REMS potentially is less onerous in terms of echo monitoring? Just how are you thinking about that and your ability to grow the asset, not really this year, but longer term as competitive dynamics intensify? Thank you.

Um, thanks. I wanted to ask about cam Zio and particularly competitive Dynamics with a second myosin inhibitor, um, potentially entering, um, the market, uh, by the end of the year, early next year, I guess, my question here is, how are you thinking about your ability to drive, a steady, Cadence of of new starts with, uh, the additional competition, particularly to the extent that, um, a

Chris Boerner: Thanks for the question, David. We'll ask Adam Lenkowsky to handle that one.

Camptons, uh Rams. Um, potentially is less owner in terms of echo monitoring. Just, how are you thinking about that in your ability to grow the asset? Not really this year? But, um, longer term, um, as competitive Dynamics intensify, thank you.

Adam Lenkowsky: Yes, David. We have continued to deliver strong growth with Camzyos. We are very pleased with performance as we have continued to increase new patient starts. We have established a strong revenue base, and we expect that to continue from the expansion of our prescriber base, coupled with high persistency. The feedback on our REMS label change has been very positive. That eases the burden of echo requirements for both patients and physicians. Though it is still early days post the label change, we have seen physicians treat more patients at the COEs, and we are also making very good progress expanding in the community. As far as Aficampten, we do not see any meaningful clinical differentiation there. Camzyos has set a very high bar for efficacy and safety. We have compelling real-world data across now thousands of patients, and we are continuing to grow that every week.

Thanks for the question, David. We'll ask Adam to handle that 1. Yes, David. So we've continued to deliver strong growth with Cam Dio. We're very pleased with performance. As we've continued to increase new patients starts, and we've established a strong Revenue base and we expect that to continue from the expansion of our prescriber base. Coupled with high persistency, the feedback on our RMS label change has been very positive that eases the burden of echo requirements for both patients and Physicians. And you know, although it's still early days, post, the label change. We've seen Physicians treat more patients at the coe's, and we're also making very good progress expanding in the community.

Adam Lenkowsky: It is going to be important to see what their label looks like. We remain focused on driving growth by broadening our prescriber base from the COEs into the community. We will be prepared for Aficampten when it comes to market, and we will maintain a consistent view that we will remain leaders in this space.

As far as epic Campton, you know, we don't see any meaningful clinical differentiation their camps. I also set a very high bar for efficacy and safety. We have compelling, real world data across now, thousands of patients and we're continuing to grow that every week.

Operator: Great. Thanks, Adam. Let's move to the next question.

And it's going to be important to see what that label looks like. But we remain focused on driving growth by broadening our prescriber base from the coas into the community. And we will be prepared for applicant and when it comes to Market and we remain paying a consistent view that we will remain leaders in this space.

Chuck Triano: Your next question will come from David Elkins with Leerink Partners. Please go ahead.

Great. Thanks, Adam. Um, let's move to the next question.

The next question will come from Dave ringer with Ling Partners, please go ahead.

Speaker 11: Thanks very much, and congrats on the strong financial performance. Chris, you had highlighted Milvecian first when you discussed major pipeline candidates to watch in coming years. Since the street consensus only models 2032 sales of $2.3 billion, that reflects a lot of skepticism. If you and maybe Samit could just help us better understand what you think investors underappreciate about Milvecian's likelihood of success in secondary stroke, ACS, and AF. Thanks so much.

Thanks very much and uh, congrats on the strong financial performance. So Chris you had highlighted Mill Vexy in first, when you discussed major pipeline, uh, candidates to watch in coming years,

And since the street consensus only models 2032 sales of $2.3 billion, that reflects a lot of skepticism. So,

Chris Boerner: Yeah, thanks for the question, David Elkins. Why don't we have Samit Hirawat, you start, and then Adam Lenkowsky, maybe you can speak to commercial opportunity.

Um if if you and maybe sonnet could just help us better understand what you think. Investors underappreciated about milvexian likelihood of success in secondary stroke, ACS and AF. Thanks so much.

Samit Hirawat: Yeah, thank you for the question, David. We've spoken before about the way we have thought about the development plan. There were two well-conducted studies to define the doses, and the doses we differentiated as a single agent versus a combination with a background of dual antiplatelet therapy. For atrial fibrillation, we chose a dose of 100 milligrams b.i.d., and you saw the results from the competitor program where the doses did not hit. The overall event rate was much higher. We have the DMC that continues to observe our data sets. We've enrolled the 20,000 patients in the AF trial. We look forward to the outcomes, but certainly, the overall event rate remains low in that program at this time. For secondary stroke prevention and ACS, again, those trials are enrolling really well, and we have chosen the doses of 25 milligrams b.i.d.

Yeah thanks for the question. Dave. Um why don't we have some of you start? And then Adam uh maybe you can speak to a commercial opportunity. Yeah, thank you for the question David. Okay. And we've spoken before about the way we have thought about the development plan.

There were 2, uh, well-conducted studies to define the doses and the doses, we differentiated as a single agent versus combination with a background of dual anti-platelet therapy.

For atrial of relation. We chose the dose of a 100 milligrams bid. And you saw the results from the competitor program, where they where the doses did not hit. The overall event rate was much higher

We have the DMC that continues to observe our data sets, we've enrolled the 20,00 patients in the AF trial we look forward to the outcomes but certainly the overall event rate remains low in that program at this time.

Samit Hirawat: to be able to give a safe region of dosing these patients because of the background of dual antiplatelet therapy. Again, DMC continues to look at the data, and the studies continue, and next year, we'll be reading out. So I think there is an underappreciation of the differential dosing patterns that we've chosen for the two and what we observed in the phase two programs in TKR as well as SSP that supported these studies.

Adam Lenkowsky: Yeah, from a commercial perspective, Dave, this is a significant commercial opportunity across all three indications. We think this has multiple multi-blockbuster potential. In atrial fibrillation, the fear of bleeding continues to be the main reason why clinicians hold back from using factor X in more patients. Approximately 40% of patients still remain untreated or undertreated, leaving them at risk for a stroke, and we know that is due to safety. We believe that a differentiated bleeding profile can drive demand in this untreated, undertreated patient population. In ACS, also a high unmet need remains. One in three ACS patients are going to experience a second cardiac event within a year, and we know there has been very limited success in combining factor X with antiplatelet therapies due to bleeding profile. So we expect to show meaningful improvements on top of antiplatelet therapy.

Closing these patients, because of the background of dual antiplatelet therapy. Again, the MC continues to look at the data and the studies continue, and next year, we'll be reading out. So, I think there is an underappreciated of that differential dozing patterns that we've chosen for the 2, and what we observed in the phase 2 programs in tkr as as well as SSP that supported these studies.

Yeah, from a commercial perspective dates, this is a significant commercial opportunity across all 3 indications and we think this has multiple mostly Blockbuster potential. So in atrial fibrillation, the fear of bleeding continues to be the main reason. Why cognitions hold back from using Factor 10s in more patients, approximately 40% of patients. Still remain untreated or undertreated leaving them at risk for a stroke and we know that's due to safety. We believe that a differentiated bleeding profile can drive demand in this, you know, untreated untreated patient population.

Adam Lenkowsky: Finally, in secondary stroke prevention, similarly, around 25% of stroke survivors experience additional preventable strokes. You saw the data, the phase two data that reinforced Milvecian's differentiated profile that showed a clinically meaningful reduction in recurrent strokes. So we believe there is a significant opportunity to combine antiplatelets with these new agents like Milvecian and are not indicated due to the risk of bleeding. Taken together, we are very excited about this program.

In ACS also a high unmet need remains 1. In 3, as patients are going to experience a second cardiac event within a year and we know there's been very limited success in combining Factor 10's with anti-s due to bleeding profiles. So we expect to show meaningful improvements on top of anti-platelet therapy. And finally, in secondary stroke prevention, similarly, around 25% of stroke survivors experience.

Operator: Great. Thanks so much.

Samit Hirawat: Thanks very much.

Additional preventable strokes. And so you saw the data, The Phase 2 data that reinforced, the vaccines differentiated profile that showed a clinically meaningful reduction in recurrent stroke. So, you know, we believe there is a significant opportunity to combine antiplatelets with, um, these new, uh, agents like moxen and are not indicated to the risk of bleeding. So, you know, taken together. We're very excited about this program.

Right, thank you very much.

Operator: Next question, please.

Chuck Triano: Your next question will come from Asad Haider with Goldman Sachs. Please go ahead.

Uh, next question, please.

Samit Hirawat: Great. Thanks for taking the question, and congratulations on the results. Two quick ones. First, with respect to the cost optimization program, can you elaborate on how you're thinking about the pushes and pulls related to capital needs, given that you also have to support expenditures like the $40 billion announced CapEx, as well as large and potentially costly development programs related to expediting the PD-L1 VEGF Phase 3 clinical trials in the wake of the BioNTech deal? You also have the debt pay down in BD. Any updated thoughts on costs and margins as it relates to your goals of shortening the depth of earnings, the earnings stuff relative to these new investments and the ultimate return to growth would be helpful.

The next question will come from Assad hater with Goldman Sachs. Please go ahead.

Samit Hirawat: Second, just very quickly on the DEPT2, given that's imminent, remind us on how we should be thinking about the read across from that trial to a DEPT1 and a DEPT4 in 2026. Thank you.

Chris Boerner: Thanks for the question, Asad. Maybe I will ask David Elkins to start, and then Samit Hirawat, you can quickly hit on Q2.

Great. Thanks for taking the question and congratulations on the results. Um, to to quick ones. First, just with respect to the cost of optimization program. Can you just elaborate on how you're thinking about the pushes and pulls related to Capital needs? Uh, given that you also have to support expenditures. Like the 40 billion, announced capex as well as large and potentially costly development programs related to Expediting the pdl1 V clinical trials, uh, in the wake of the biontech deal. And then you also have The Debt Pay down in BD. So any updated thoughts on costs and margins? As it relates to your goals of shortening, the depth of earnings, uh, the earnings stuff, but relative to these new Investments and the ultimate, uh, return to growth would be helpful. Um, and then to just, uh, perhaps just very quickly on the depth to, um, just given that, you know, imminent. Uh, just remind us on how we should be thinking about the beauty of cross from that trial to a depth 1.

Is that before in 2026? Thank you.

Operator: Asad, thanks for the question. A couple of things. I think you hit on multiple points there, cash allocation, capital allocation, but as well as margins as it relates to our productivity initiatives. Just as a reminder, we initiated a $1.5 billion initiative back at the end of 2023, knowing that we had several business development deals that we had to fund. That was $1.5 billion. We completed finding those funds last year and reallocated that to the programs that we talked about, particularly around Cobenfi with the multiple clinical programs that we have in place there, but as well as RageBio and funding those types of investments. Also, don't forget SystemImune, a very important program that we have there that we're funding that clinical program. This year, we announced the $2 billion strategic productivity initiative, which a lot of confidence in being able to deliver that.

Thanks for the question aside. Maybe I'll ask David to start and then finally, you can quickly head on adapt to. Yeah, so thank you for the question. A couple things. I think you hit on multiple points there. Um, cash allocation Capital allocation but as well as margins as it relates to our productivity initiatives and just as you know a reminder we initiated a 1 and a half billion dollar um initiative back at the end of 23. Um, knowing that we had several business development deals that we had at the fund and that was 1 and a half billion and we completed it. Um, finding those funds, um, last year and, um, reallocated that to the programs that we talked about, particularly around copen fee with the multiple clinical programs that we have in place there, but as well as raise bio, um, and and funding those, uh, types of Investments. And also, don't forget system immune very important program that we have there. Um, that we're funding that, that clinical program

Operator: We're going to deliver a billion of that this year, which we said that $2 billion by 2027 will drop to the bottom line. What that also does is that helps our cash flow position. It gives us more capital to allocate towards business development, as well as enables us to up invest. I think this quarter is a great example of that, where we saw some opportunities, the number one BioNTech deal funding those clinical studies, as you heard from Samit around, particularly around lung and breast. Also, what that enabled us to do is Adam had some up investment opportunities in the growth portfolio, and we were able to invest behind those.

Then this year we announced a 2 billion dollar, um, strategic productivity initiative, which, you know, a lot of confidence in being able to deliver that. We're going to deliver a billion of that this year. Which, um, you know, we said that 2 billion by 2027 will drop to the bottom line, but what that also does is that helps our cash flow position. It gives us more Capital allocate towards Business Development, um, as well as uh, enables us to do up invest and I think this quarter is a great example of that where we saw some opportunities, the number 1 buy and Tech deal funding. Those clinical studies as you heard um from Summit around particularly around lung,

Operator: So we feel really good about the capability that we're building here and the ability to reallocate resources that are going to drive growth and strengthen the long-term growth profile of the company at the end of the decade. The last thing I'd say is we have a significant number of phase three programs that are ongoing right now. As Chris talked about, over the next 18 to 24 months, we have ibrutamide and mesigamide phase three programs coming down. We also talked about Milvecian phase three programs that are reading out at the end of next year and AFib reading out. So we have a lot of phase three programs that are coming down, which enables us to reallocate those to the multiple phase three programs we'll be doing with Cobenfi and with the BioNTech partnership.

Operator: So I'm just really proud of the entire team and the amount of effort and these productivity initiatives in order to fund growth.

Samit Hirawat: Yeah, just to take on the second question on DEPT2, ADAPT1, ADAPT4, remember ADAPT1 is a study for relapse prevention, which is now a 36-week study because 12 weeks of open label period, and then the responders are randomized to then look for placebo versus the continuation of Cobenfi to see when the relapse occurs. ADAPT4 is similar to ADAPT2, except in ADAPT4, we are paying more attention to enrollment of biomarker positive patients as well. Overall, as I said earlier, two of the three trials are required in terms of positivity to be able to engage the health authorities and discuss the approvals. We are truly excited about that, looking forward to the top line at the end of the year for ADAPT2, and then next year will be ADAPT1 and ADAPT4.

Coming down. We also talked about noxian phase 3, programs that are reading out at the end of next year and 8 FIB, reading out. So we have a lot of phase 3 programs that are coming down, which enables us to reallocate those to, like, the multiple phase 3 programs. We'll be doing with Coben and with, um, the biotech partnership. So, um, I'm just really proud of the entire team and the amount of effort and these productivity initiatives in order to fund growth.

Operator: Great. Thanks, Samit. Let's move to the next question, please.

Chuck Triano: Your next question will come from Seamus Fernandez with Guggenheim Securities. Please go ahead.

Yeah, and just to uh, take on the second question around adapt to adapt corn. Adapt for remember, adapt 1 is a study for relapse prevention, which is now 36 week study because 12 weeks of open label period and then patients that the responders are randomized to then look for Placebo versus the continuation of, uh, of Coben fee to see when the relapse occurs and then adapt 4 is similar to adapt, 2, except and adapt 4. We are paying more attention to enrollment of biomarker positive patients as well. So overall, uh, as I said earlier, 2 of the 3 trials, that required in terms of positivity, to be able to engage the authorities and discuss the the approvals. So we are truly excited about that. Looking forward to the Top Line at the end of the year uh for that too. And then next year, will be adapt, 1 and adapt 4. Great thanks so much. Uh let's move to the next question, please.

The next question will come from Sheamus, Fernandez, with Guggenheim Securities. Please go ahead.

Speaker 11: Thanks so much for the question. I just wanted to get a better sense. It sounds like the trajectory for Camzyos continues to be quite robust from your perspective. Historically, you have talked about other relative launches like the launch of cariprazine as a good relative marker. I just wanted to get a sense of if that relative comp continues to be a focus point for Bristol Myers Squibb Co. right now and where you see the incremental meaningful opportunities to accelerate those scripts. Is it more in gaining access to the Medicare population, or is it in additional indications as the next meaningful leg of growth to really drive towards that relative comp of cariprazine? Then just a quick second question, really just hoping to better understand how sustainable the spend is here relative to sales.

Oh, thanks so much for the question. So, just wanted to get a better sense, you know, it sounds like the trajectory for kaben fee continues to be quite um, you know, robust from your perspective. Historically, you've talked about other relative launches, um, like the the launch of career Pine is a good, uh, relative marker. Just wanted to get a sense of, you know, if that, uh, you know, uh, relative comp continues to be sort of a focus Point. Um, you know, for Bristol right now and where you see the, you know, incremental meaningful, uh, opportunities to accelerate those scripts is it more in gaining access to the Medicare population? Um, or is it in additional indications? As kind of the next, uh, meaningful leg of growth, uh, to really drive towards that relative comp of of care representing? Um, and then just a quick second question. Um, really. Just

Speaker 11: It seems more like you are modeling the spend relative to future sales to then be consistent with where the sales are likely to trot. Is that the right way to think about it, or do you actually think that this is a sustainable margin threshold within the context of Bristol Myers Squibb Co.? Thanks so much.

Kind of hoping to better understand how sustainable the um spend is here relative to uh sales. It seems more like you're you're kind of modeling the spend relative to future sales um to then be consistent with, you know, where the the uh sales are likely to kind of

Chris Boerner: Thanks for the question, Seamus. Maybe I will have Adam Lenkowsky start and then David Elkins from there.

A trough, is that the right way to think about it? Or um, do you actually think that this is a sustainable? Uh, sort of margin threshold within the context of Bristol, Myers Squibb. Thanks so much.

Adam Lenkowsky: Yeah, Seamus, thanks for the question. We expect to see continued steady TRX growth as we execute the plan that I outlined. Cobenfi is tracking far ahead of all branded schizophrenia launch benchmarks. We have now achieved over 45,000 TRXs since launch. I think the big opportunity is to continue to change the treatment paradigm and unlock this entrenched prescribing behavior that has existed now for decades. That is why we are, in fact, focusing on driving the increasing number of trial lists, depth, and breadth of prescribing. What I look at on a weekly basis is how are we doing in adding a number of writers? What is our depth and breadth of prescribing? What is the intent to prescribe?

Uh, thanks for the question, James. Maybe I'll have Adam start, and then David, uh, from there.

Yeah shamon. Thanks for the question. And you know as I said previously we expect to see continued steady TRX growth um as we execute the plan that I outlined coent is tracking, you know, far ahead of all branded schizophrenia launch benchmarks. So we've now achieved over 45,000 trxs since launch and I think, you know, the big opportunity is to continue to

Adam Lenkowsky: All those leading indicators we see are very, very positive. There is not a great analog, to be frank, since there has been nothing in this space for so long, but we are very pleased with what we are seeing thus far. Based on everything that we continue to see and hear from physicians, we are confident that Cobenfi is going to be a big drug in schizophrenia. The last thing that I will mention is just every week, we get feedback from physicians and patients. Just last week, we received feedback from a physician that said he stopped the medicine for the patient and started him on Cobenfi. Now the patient is thinking about his future. He is including signing up for a class with improvements in attention, judgment, and insight. That is just a small sample of what we hear every single week from physicians and patients.

change the treatment Paradigm and unlock this un, you know, this entrenched prescribing behavior that has existed now, for decades. And so, that's why we are in fact, focusing on driving number of increasing number of Trials, depth and breadth of prescribing, you know what I look at on, you know, a weekly basis is, how are we doing in adding number of writers? What's our depth and breadth of prescribing? What's the intent to prescribe all those leading indicators? We see are very, very positive. There's not a great analog uh to be frank since there's been nothing in this space for for so long. But we're very pleased with what we're seeing thus far and you know based on everything that we continue to see and hear from Physicians. We're confident that comment is going to be a big drug in schizophrenia. The last thing that I'll mention is you know, just every

Adam Lenkowsky: Again, increasing our confidence that this is going to be a big job in schizophrenia. As you heard from Chris Boerner, Samit Hirawat, David Elkins, and myself, longer term, this product is going to be multibillion dollars fueled by additional indications.

Speaker 11: Great. And Seamus, thanks for the question on margins. Just a couple of things to keep in mind. One, when we think about operating margins, we have a tremendous amount of financial flexibility. A big part of that is driven by our strategic productivity initiatives that we demonstrated, not only the $1.5 billion that we reallocated to our growth drivers last year, but the additional $2 billion of savings we are driving by 2027. Also, let us not forget gross margins. We are going through a period right now of gross margin declines as some of our higher legacy margin products like Revlimid and Pomalyst come down, have provided gross margin pressures. Then on the other side, as time progresses over the next few years, you are going to see gross margins will begin to improve, driven by two things.

And Sheamus. Thanks for the question on on margins. A couple things just to keep in mind 1, uh, when we think about operating margins, we have a, a tremendous amount of financial flexibility, you know.

Speaker 11: One is our growth portfolio now is over 54% of our total business. That portfolio, the average gross margin of that is higher than our company average today. So that is going to be accretive. Obviously, with the significant growth we are seeing in that portfolio, that is going to be accretive to our gross margins. Also recall, we have guided Eliquis, and if that comes down and goes generic in 2028, that is another factor that will really help our gross margins improve as we go towards the back half of the decade. So we feel really good about being able to manage the productivity of this company. The other thing I would say, though, is what Chris Boerner and I have consistently said, is we are going to continue to invest in the long-term growth drivers of the company.

Big part of that is driven by our strategic productivity initiatives. Have we demonstrated not only the 1 that have billion that we reallocated to our growth drivers last year but the additional 2 billion dollars of savings were driven by 27 but also let's not forget gross margins. You know we're going through a period right now of gross margin declines as some of our higher Legacy margin products like Revel met and pomelo. Come down have provide gross margin pressures but then on the other side as time progresses over the next few years, you're going to see gross margins. We'll begin to improve driven by 2. Things 1 is our growth portfolio. Now is over 54% of our total business. That portfolio, the average gross margin of that is higher than our company average today. So that's going to be a creative. And obviously, what the uh significant growth we're seeing in that portfolio, that's going to be a creative to our gross margins but also recall um, you know, we've got it. Um, eloquence and as that comes down and goes generic in 28, that's another factor that will really help our gross margins improve as we go towards the back, half of the decade. So

Speaker 11: I think you saw that this quarter, and we will continue to do that as we see opportunities. Also, as I just said earlier, if you just look at the natural progression of our development spend, we have many programs that are coming off as we are up investing in Cobenfi and BioNTech. So what Samit Hirawat and Adam Lenkowsky have been able to do is reallocate resources from older brands to new brands. Look, Eliquis is a great example on the commercial side of that. We were able to move resources from Eliquis to Camzyos and eventually to Milvecian. I think Opdivo is another example of that, where as BioNTech, as we bring 327 to the marketplace, we will be able to reallocate resources from Opdivo to that.

Speaker 11: So strategically, we are being really smart about where we are driving growth and being able to reallocate resources to those growth opportunities.

Operator: Great. Thanks, David. Let's move to our next question, please.

We feel really good about being able to manage the productivity of this company. The other thing I would say though is what Chris and I have consistently said is we're going to continue to uh you know, invest in the long-term growth drivers of the company. And I think you saw that um you know this quarter and we'll continue to do that as we see opportunities and also as I just said earlier, if you just look at the natural progression of our development spend, we have many programs that are coming off as we're up investing in Kenya and biotech. So what Summit and Adam have been able to do is reallocate resources, from older brands, to new brands. And look, elquist is a great example, in the commercial side of that, we were able to move resources from eloquest to kamias and eventually to moxion I think Oppo is another example of that. Where as biotech um, you know, as we bring 327 to the marketplace, we'll be able to reallocate resources from our Diva to that. So strategically, we're being really smart about where we're driving growth and being able to reallocate resources to those growth opportunities, right? Thanks David. Um,

Chuck Triano: Our next question will come from Carter Gould with Barclays. Please go ahead.

let's move to our next question, please.

Our next question will, come from carter gold with barklay please. Go ahead.

Chris Shah: Hi. Good morning. Thanks for taking the question. A little bit of a change of pace here, but if you will indulge me, I always appreciate your view on the policy side, Chris. IP is under attack across the industry from multiple sources, but most notably compounding. While Bristol Myers Squibb Co. is not directly impacted today, it is not unreasonable if left unchecked that Bristol Myers Squibb Co. could be impacted in the future. Does Bristol Myers Squibb Co. share this view, and are there efforts you have taken either independently with peers, pharma, or in consultation with the administration to more staunchly advocate defensive IP in this space?

Hi, good morning. Thanks for taking the question a little bit of a change of pace here but if you'll indulge me indulge me, I always appreciate your view on the policy side. Chris,

It is under attack across the industry from multiple sources. But most notably compounding while the Bristols not directly impacted today, it's not unreasonable. If left unchecked. Uh, the Bristol could be impacted in the future. Those Bristol, share this View and are there efforts you've taken either independently with peers Pharma or in consultation with the administration and more staunchly to Advocate defensive it in the space.

Chris Boerner: Thanks, Carter, and I appreciate the change of pace. Always happy to talk policy. I think one of the things that we've consistently said about the policy environment we operate in is that it's an ecosystem. It's an ecosystem that has multiple parts and components. Obviously, we spend a lot of time talking about changes at FDA and NIH and potentially the impact of policy proposals like MFN. But I think the point you're raising is one that's critically important, is underpinning all of this ecosystem is intellectual property and the protection of intellectual property. What I would say is, generally speaking, we've continued to see a lot of pressure on IP coming from multiple fronts. Internationally, that's been the case. We've seen it in the example that you cited. There are obviously differences with perspective on IP coming from different sectors of the economy.

Chris Boerner: The nice thing that we have done as a company is we've got a very strong IP team. The leadership of that IP team at the company has, in turn, become leaders of IP for the industry. We feel that as a company, we've been front and center in helping to shape a positive environment around IP. There are a lot of efforts across both bio and pharma to continue to maintain a strong IP environment. IP is one of those things that you never take your eye off of the ball on, just given it is so central to the ecosystem that we have and underpins really the success that we've had as a country in leading in the biopharmaceutical space. So it's a great question and something that we continue to stay focused on.

Thanks, Carter, and appreciate the change of pace. Um, always happy to talk policy. Um, so I I think 1 of the things that we've consistently said about the policy environment we operate in is that it's an ecosystem. It's an ecosystem that has multiple parts and components. And obviously, we spend a lot of time, uh, talking about, uh, changes at FDA and NIH, and potential the, the impact of, uh, policy proposals like in, but I think the point you're raising is 1, uh, that's critically important is underpinning. All of this ecosystem is intellectual property and the protection of intellectual property, what I would say is, um, generally speaking, we've continued to see a lot of pressure on IP coming from multiple fronts, uh, internationally. That's been the case. We've seen it in the example that you cited. There are obviously differences with respective on IP coming from different, uh, sectors of the economy. Um, the nice thing that we have done as a company is we've got a very strong IP team. Um, the

Operator: Great. Thanks, Chris. Next question, please.

Chuck Triano: Your next question will come from Akash Tawari with Jefferies. Please go ahead.

Leadership of that, it team at the company has in turn become leaders of Ip um uh for the industry. Um, and so we feel that um as a company we've been front and center in helping to shape a positive uh environment around IP. There are a lot of efforts across both bio and Pharma to continue to maintain a strong IP environment but IP is 1 of those things that you never take your eye off of the ball on. Um, just giving it is so Central uh to the ecosystem that we have. And underpins really the success that we've had as a country in leading in the bio pharmaceutical space. So it's a great question and uh something that we continue to stay focused on great. Thanks, Chris. Uh, next question, please.

Chris Boerner: Hey, thanks so much. For Cobenfi and the emergent schizophrenia trial, you had about 80% of patients get to the high dose. Given there is a clear issue with dropouts in the original Zenomaline study and there is a clear dose response, what percentage of patients do you think for your upcoming 80 seconds?

The next question will come from a cost to worry with Jeffrey's, please go ahead.

Chuck Triano: study and get to that 150 or 200-minute dose. What dropout rate have you powered for this upcoming study? Then maybe stepping back, is Bristol Myers Squibb Co. still as bullish on the probability of success in the study as when the original Q1 deal was announced? Was there something about site conduct in the adjunct trial that made you concerned about it for the upcoming AD psychosis study? Thank you.

What percentage of patients do you think for your upcoming 80 psychosis study, get to that 150 or 200 mg dose? What dropout rate have you powered for for this upcoming study? And then maybe stepping back is Bristol still as bullish on the probability of success in the study as when the original Corona deal was announced and was there something about site conduct in the adjunct trial that made you concerned about it for the upcoming ad psychosis study, thank you.

Tim Power: will start off. There are a lot of questions in there. I will try and address as much as I can. Keeping in mind, we are at a place where we are totally blinded to the data, so I cannot comment on the specificities. As you know, the trial is designed with four dose escalations on week 1, 2, 3, and 4. Of course, the fourth one, the 200 milligram of Quvonfi, or CAR-XT, with 20 of Trospium, is an optionality, but of course, dependent on the tolerability. Remember, there is a huge difference between AD psychosis trial that we are conducting versus a 30-year ago Zynomaline-only study that was conducted because it was a tolerability issue where patients did go off treatment much more, and the number of completers was limited because of the toxicity. So I would not necessarily draw true conclusions directly from that trial.

Tim Power: Also, over there, when we talk about the impact on some of the endpoints, much attention was paid to the cognition endpoint, ADAS-COG, where the analysis was conducted and the significance was seen only in the ADAS-COG highest dose level. For the psychosis-related symptomatology, we did see dose-dependent improvements, but of course, the pairwise analysis was not conducted. We did see hallucinations, delusions, aggression, suspiciousness, all of those endpoints quite meaningfully impacted. So overall, we are really looking forward to the data from ADAPT2, and that will help us guide in terms of the future discussions around this once the data are available.

Got it. I, I'll start off and there's a lot of questions in there. I'll try and address it as much as I can. Uh, keeping in mind. Uh, we are at a place where we are totally blinded to the data so cannot comment on the specificities. Uh, as you know, the trial is designed with 4, uh, those escalations on week, 1, 2, 3 and 4. Of course, the fourth 1, the 200 mg of, uh, uh, Coen for your car XT with 20 of TPM, uh, is an optionality, but, of course, dependent on the tolerability. Remember, there's a huge difference between 80 psyche, uh, try that. We are conducting versus the 30 year ago. So normally in only studies, it was conducted because it was a tolerability issue where patients did go off treatment, much more and the number of completers was was limited because of the toxicity. So I would not necessarily draw true conclusions, uh, directly from that trial. Also over there, when we talk about uh uh, the impact on some of the end points, uh, much attention was paid to the cognition endpoint.

Chuck Triano: What I would say just in general is just to close out that is that the company remains very excited about the potential for Quvonfi in Alzheimer's disease psychosis, as well as the underlying science behind that indication.

David Elkins: Great. Thanks, Chris and Samit. Next question, please.

Paid us card where the analysis was conducted and the significance was seen, only in the uh, Adas Cog, highest dose levels for The psychosis related symptomatology. We did see uh, dose dependent improvements, uh, but of course, the paired wise analysis was not conducted. We did see hallucinations delusions aggressions suspiciousness, all of those end points quite, uh, meaningfully impacted. So overall, we are really looking forward to the data from adapt to and that will help us guide in terms of the future, uh, discussions around this once the data are available and what I would say just in general is just, um, to close out that is that the company remains, um, very excited about the the potential for cozy in Alzheimer's disease psychosis, uh, as well as the underlying science behind that indication

Operator: The next question will come from James Shin with Deutsche Bank. Please go ahead.

Right. Thanks, Chris and Summit. Uh, next question, please.

The next question will come from James Shin, with Deutsche Bank, please go ahead.

Jeff Meacham: Good morning. Thank you for the question. One for Chris. Chris, you followed through with picking winners and calling losers from Bristol's pipeline. Once Chris settled into his seat, what sort of changes can we expect from the early-stage pipeline or the business development strategy? Maybe should investors expect a shift in Bristol's trough? Thank you.

Good morning, thank you for the question, 1 for Chris.

Um Chris you follow through, with picking winners and calling losers from Bristol's pipeline. So once Christian settles into his seat, what sort of changes can we expect from the early stage pipeline or the did Business Development strategy?

And maybe should investors expect a shift in Bristol Stroh. Thank you.

Chuck Triano: Thanks for the question. Look, I think that we are doing everything we can as a management team today to do two things. One is shorten the time period that we are in a trough and make sure that we are driving sales as quickly as possible so that we can exit the decade with the strongest growth profile that we can. You see that across the board, both with respect to the strength of the business and our existing growth portfolio, the fact that we have a robust pipeline of mid to late-stage assets that can continue to progress nicely, and the fact that we are continuing to be very disciplined so that we have the financial flexibility to where it makes sense for the company to continue to source innovation externally.

Um, thanks for the, thanks for the question. Um look I I think that we're doing everything we can as a management team today. Uh, to, uh, do 2 things 1 is um, uh,

Chuck Triano: With respect to the impact that Chris Boerner will bring, look, I think in many respects, not just with respect to the early pipeline, but really across drug development, there is going to be a focus that we have on execution. As we have talked about, our pipeline and delivering on that pipeline is very important. We have to be acutely focused on strong execution. Chris Boerner has a very strong background in that respect across his career, particularly with respect to his last company. Also, when you think about executing at scale, ensuring that you have the strongest, highest-performing teams with the best people that you can find is going to be important. Again, he has a very strong track record there.

Shorten the time period that we're in a drop and make sure that we're driving sales as quickly as possible. Uh so that we can exit the decade with the strongest growth uh, profile that that we can. And you see that across the board, both, with respect to the strength of the business, and our existing growth portfolio. Uh, the fact that we've got a robust pipeline of the delayed stage assets, that can continue to progress nicely, um, and the fact that we're continuing to be very disciplined. So that we have the financial flexibility to where it makes sense, for the company continued to Source Innovation, externally with respect to, um, uh, the impact that Christian will bring look. I think in many respects, um, not just with respect to the early pipeline, uh, but really AC cross drug development. There's going to be a um focus that we have on execution. The as we've talked about our Pipeline and delivering on that pipeline is very important um and so we have to be acutely focused on strong execution Christian.

Chuck Triano: The last two things I would say that we expect him to bring to the table are, first, a continuation of some of the work that Samit Hirawat and his team have already started. Samit Hirawat has really led an effort to rethink how we are thinking about drug development, everything from where and how we have our teams working to the employment of AI and technology. We need to see that work continue and in some places accelerate. The last thing I would say is any time you bring somebody in from outside the company, you would expect that they would bring a different approach, a different level of energy, a different way of thinking. I think there is an opportunity for a refresh there as well. Overall, Samit Hirawat's team has put together a very nice foundation that Chris Boerner will benefit from.

Chuck Triano: We look forward to seeing him join the company starting tomorrow.

David Elkins: Thanks, Chris. We know you all have a busy day with other companies reporting and other calls. So, operator, if we could take our last question, please.

Uh, different approach, a different level of energy, a different way of thinking. And so I think there's an opportunity for a refresh there as well. But overall Simon's team has put together a very nice Foundation that uh Christian uh will uh benefit from. And uh, we look forward to seeing join the company starting tomorrow.

Operator: Our last question today will come from Steven Scala with TD Cowan. Please go ahead.

Thanks Chris. And we we know you all have a busy day with other companies reporting and other calls. Um, so operator if we could take our last question, please,

Chris Boerner: Oh, thank you so much. On the Q1 call, Bristol Myers Squibb Co. said that they were exploring a path forward for Quvonfi ARISE data, but that they needed to review all the data and talk with regulators. I am wondering, has this additional analysis occurred and have the discussions already taken place? If so, is there a path forward? Secondly, on Sotyktu, can you clarify whether it has been filed in psoriatic arthritis? What is your level of confidence in success for lupus and Sjogren's? Thank you.

Our last question today will come from Steven Scala with PD Cohen, please. Go ahead. Oh, thank you so much. Um on the q1 call, Bristol said that they were exploring a path forward for Co beny arise data but that they needed to review all the data and talk with Regulators. I'm wondering has this additional analysis occurred and have the discussions already taken place and if so is there a path forward and then secondly, on site to can you clarify whether it's been filed in psoriatic arthritis?

Chuck Triano: Thanks for the question, Steve. I will ask Samit to take both of those.

And what is your level of confidence and success for lupus and Shoguns, thank you.

For the question, Steve.

Tim Power: Yeah, so thank you, Steve. Always great questions from you for ARISE. No conversations have occurred from the health authority perspective. We are continuing to look deeper into the data, also understand the distribution of patients to the various cohorts within the study. Certainly, when and as new data becomes available from an analyst's perspective, we will be able to share it in the future conferences and future conversations as well. For Sotyktu, certainly very happy that the submissions have occurred for psoriatic arthritis. Looking forward to those engagements and that to fruition. For SLE, remember what the phase three trials were based on the outcomes of the phase two study that was very well conducted. We have learned from those studies that this heterogeneous population, hands-on data cleaning, as well as data activities are very important.

so thank you, s always uh

Great questions from you for a rise. Uh, no conversations have occurred from the health authority perspective. We are continuing to look deeper into the data also understand uh, the distribution of uh, patients to the various cohorts within the study. So certainly when and uh as new data become available from an analysis perspective,

Uh, we'll be able to share it in the future conferences and future conversations as well.

Tim Power: We are very carefully continuing to clean the data in real time as we continue to enroll the patients. Of course, Sjogren's is the other one. The good news is these studies are enrolling really well. We look forward to the readouts towards the back end of next year onwards.

Chuck Triano: Thanks, everyone. As Chuck Triano mentioned, we know it's a very busy morning. I want to thank you all for joining. As always, the team will be available. Let me just say in closing that we continue to make very good progress, reshaping Bristol Myers Squibb Co. for long-term growth. Importantly, hopefully, you are seeing that we are driving execution across the business. That is yielding the results that we saw in the quarter. The second half is going to be a very busy time at the company, but we feel very good about the momentum coming into the second half of the year. Before I sign off, I just want to again say a big thank you to Samit Hirawat for all of the contributions and the leadership that he has had at the company over the last six years.

For so tick to certainly uh very happy that the submissions have occurred for society arthritis, looking forward to those engagements and see uh that to uh fruition for SLE remember what the data, the phase 3 trials were based on the outcomes of the phase 2 study, that was very well conducted. And we have learned from those studies that, these heterogeneous population, uh, Hands-On, um, data cleaning as well, as data activities are very important. So we have very carefully, uh, continuing to clean the data as we, uh, in real time as we continue to enroll the patients and then of course, Shoguns is the other 1. The good news is these studies are enrolling really well, and we look forward to the readouts, uh, towards the back. End of next year, onwards.

Chuck Triano: With that, I wish you all a good rest of the day and rest of the week. As always, reach out if you have questions. Thanks.

So, uh, thanks everyone. As Chuck mentioned, we know it's a very busy morning. So I want to thank you all for joining. And as always, the team will be available. Uh, let me just say in closing, that we continue to make very good progress. Reshaping the company for long term growth importantly, uh, hopefully you're seeing that we're driving execution, really across the business and that's, uh, yielding, the results that we saw in the quarter second half is going to be a very busy, uh, time at the company. Um, but we feel very good about the momentum, uh, coming into the second half of the year. And then again, before I, I sign off, I just want to again, say, a big thank you to Sama for all of the contributions and the leadership that he's uh, had at the company over the last 6 years. Um, and with that, I wish you all a good rest of the day and rest of the week. And

Uh, as always reach out if you have questions, thanks.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect