Amgen Inc.

My name is Ian, and I will be your conference facilitator today for Amgen's first quarter 2019 financial results conference call. All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speaker's prepared remarks. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session. To ask a question, please press star and then the number one on your telephone keypad. To withdraw your question, please press the pound key. I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Okay, thanks, Ian. Good afternoon, everybody. Thanks for joining us today on our first quarter call. Special welcome to those who are new in their coverage of our company, including Jay Olson of Oppenheimer, Jeroen Werber of Cowan, and Bill Kim of BMO. So we go into 2019 having put in place a strong track record of execution, and we are well prepared for the challenges and opportunities ahead. I'm joined today by our chairman and CEO, Bob Bradway, who will provide a strategic overview of our business and the environment we operate in. After Bob's comments, our CFO, David Moline, will review our financial results for the first quarter. Our head of global commercial operations, Murdo Gordon, will then review our product performance, followed by our head of R&D, Dave Reese, who will provide a pipeline update. We will use slides to guide our discussion today, and you should have received the link separately. Just a reminder that we will use non-GAAP financial measures in today's presentation, and some of the statements will be forward-looking statements. Our 10-K and subsequent filings identify factors that could cause our actual results to differ materially. So with that, I would like to turn the call over to Bob.

Okay. Thank you, Arvind, and let me add to Arvind's welcome to all of you joining the call today. We entered 2019 with a strong track record of execution and an improved ability to innovate, compete, and grow over the long term. We feel now well-positioned to capitalize on the growth opportunities presented by our newer products and our pipeline, even as we effectively defend our mature products against emerging and expected new competition. As you know, drug prices are being challenged around the world, and we therefore have said for some time that we expect volume-driven growth to be important to our long-term success. And in Q1, we once again demonstrated our ability to grow unit volumes, especially for our newer products like Prolia, Repatha, and Amavig, as well as for our six hematology oncology products that are in early phases of their life cycle. I believe our performance outside of the U.S., where we have faced biosimilar competition for over a decade, is instructive. There, our business generated 15% unit volume growth in the first quarter as growth of our newer products more than offset the erosion of our mature brands from biosimilar competition. We remain confident in the lifecycle management strategies we have in place to defend our mature brands, and we believe there is considerable upside potential with our newer products that will drive attractive long-term growth. As a leader in bone health with Prolia, we know that there's a need for an additional innovative therapy for women who are at high risk for fracture from postmenopausal osteoporosis. In Q1, we added Avenity to our portfolio of first-in-class innovative medicines with approvals in Japan and earlier this month in the U.S. Postmenopausal osteoporosis remains a highly underdiagnosed and undertreated disease with potentially devastating consequences from fractures, many of which are predictable and preventable. And we're excited to be at the forefront of offering innovative products to the millions of women worldwide who may benefit from them. I want to take a moment to highlight our biosimilars business, which we think represents a compelling opportunity to leverage our world-class biologics capabilities. This business is now annualizing at more than $200 million this year. with CanGenti and Amgivita off to strong starts in Europe and select other international markets. We expect other launches this year, and we see biosimilars making important contributions to our revenue profile moving forward, especially as pressure on drug pricing creates increased demand for lower-cost treatment options. Myrtle will discuss our full product portfolio in some detail shortly. Looking to the future, We are rapidly advancing a robust pipeline of innovative medicines, many of which have the potential to be first-in-class or best-in-class therapies. In oncology alone, we're capitalizing on our industry-leading bite portfolio and targeted therapies across a number of important disease areas, including multiple myeloma, AML, as well as various solid tumors. As you know, oncology programs can move very rapidly from proof of concept to registration, and we're excited about what we're seeing. You'll hear more from Dave Reese on our pipeline in a moment. Our strong balance sheet and cash flows enable us to provide significant returns to our shareholders through buybacks and dividends, even as we invest in long-term, volume-driven growth opportunities around the world. Our financial strength also gives us the ability to consider a wide range of business development opportunities, consistent with our areas of strategic focus, while remaining disciplined to ensure we earn a solid return for shareholders. Let me just say a few words also about healthcare reform and drug pricing. Simply stated, we're in favor of policies that provide more patients with greater access to better healthcare. And we continue to work with the administration and Congress to advance policies that harness the competitive power of the marketplace, encourage innovation, and improve access to new therapies for patients. For example, we're supportive of the administration's proposal to move from back-end rebates to upfront discounts in order to lower out-of-pocket costs for patients. Even in the face of net price declines, as we experienced last year, patients are not seeing the benefits of rebates. In fact, out-of-pocket costs for patients have been rising in recent years, which underscores the need for the administration to move forward with its final rule. I want to just close with one final message, which is that we will build on our recent transformation successes and have the resources and determination to take advantage of the many opportunities in front of us to meet our competitive challenges and to deliver long-term growth. Now let me invite David to share his remarks from the first quarter.