Amgen Inc.

My name is Ian, and I will be your conference facilitator today for Amgen's second 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, 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, and thanks for joining us to discuss our second quarter results. As I've done in the past, I would like to extend a special welcome to those who are new in their coverage of our company. In this quarter, it's Mohit Bansal of Citi. Welcome, Mohit. I think our performance in the second quarter can be best characterized as continued execution while staying focused on sustained long-term growth. Leading the discussion today will be our chairman and CEO, Bob Bradway, who will provide a strategic perspective on our business, particularly within the backdrop of a fast-changing business environment. Our CFO, David Milleen, will then review our financial results for the second quarter and provide updated guidance. Our head of global commercial operations, Murda Gordon, will review our product performance followed by our head of R&D, Dave Reese, who will provide a pipeline update. As we have done in the past, we will use slides to guide our discussion today, and you should have received a link separately. Just a reminder that we'll 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 thank all of you for joining us. Halfway through the year, we're making clear progress in delivering on our strategy for long-term growth, and at the core of this strategy, of course, are innovative, first-in-class medicines addressing serious diseases globally. While our strategy embraces medicines like Lin-Syto, which is our bispecific T-cell engager, for example, with its large effect size in a specialty market, Our strategy also explicitly addresses diseases where the unmet need is measured in many millions of patients. Over time, we think this balance is going to be essential and expect that increasing global price pressures will highlight the importance of products that can deliver sustained growth through volume gains rather than annual price increases. Prolia is a great example of this. Now more than 10 years after launch, it once again posted double-digit volume growth this quarter and its long-term prospects remain bright, as there are still millions of women at high risk of fracture who are not yet on a preventative therapy like Prolia. The recent launch of Avenity will enable us to extend our industry leadership in bone health and bring more options to physicians seeking to address the global epidemic of osteoporosis. More generally, Prolia points the way for other products in our portfolio, like Repatha, Aimavig, and potentially Tezopelumab. Let me touch briefly on Repatha. I think all of us know that cardiovascular disease is a leading health problem globally. The numbers are so large that some seem to have been numbed or lulled into a sense of complacency about them. But that's changing, partly because after decades of decreasing morbidity and mortality, the trends have worsened and the death rate from heart attack and stroke is now actually increasing in the U.S. and internationally. We know one of the reasons for this is that LDL levels are too high in too many people. We believe her path offers a solution to that problem for many people. And given demographics, health systems cannot continue to ignore the meaningful uptick in cardiovascular events and deaths. It will only get worse without more widespread use of innovative medicines that address atherosclerotic disease. We see increasing recognition of this here and abroad. And, of course, we're seeking to do our part, including taking actions as we did last year in a competitive context to lower the out-of-pocket costs for patients to use this therapy. We will continue to advocate for high-risk patients and those who recognize the urgency of getting in front of the growing problem of heart disease in our society. With Amavig, our first-in-class CGRP medicine, we're transforming the treatment of migraines. Like Prolia and Repatha, it addresses a chronic debilitating disease afflicting millions of people worldwide. We recently presented important new data at the American Headache Society meeting, demonstrating that Aimavig's efficacy improves over time. We expect this medicine to be of increasing importance to migraine sufferers and a key growth driver for years to come. Turning to our growing hematology and oncology products, We posted 10% growth for Coprolis, Exgeva, EndPlate, Vectivix, Imligic, and Blinsido, which together are annualizing at more than $5 billion in revenues. We see more growth ahead from these medicines. Our confidence in Blinsido was bolstered by the compelling five-year survival data we reported in MRD-positive ALL patients. Based on this and other data, emerging from our BITE platform, our confidence in that therapy is high. The demand for innovative medicines is growing rapidly outside the US and the larger European markets. Looking at demographic trends, we expect this to continue for some time. That's why we've made international expansion an important part of our strategy. We're beginning to see measurable returns from our efforts. Internationally, our volumes were up 18% in the second quarter. And if you look at markets where we were historically absent, like Japan and China, you can also see the benefits of our strategy coming to light. Japan was the first country to approve Avenity globally and was our first market launch. We're very pleased with the uptake there. Similarly, Blinzido is performing well in Japan. And overall, we're encouraged by the performance of our Amgen-Astellis biopharma partnership. China, though it is still early days for Amgen, represents another attractive long-term growth opportunity for us, and we're encouraged by the progress in advancing our medicines for that market with the early launches of Repatha and Xgeva. At Amgen, whenever we talk about delivering in the long term, we're always clear that you only get to deliver in the long term if you succeed in the short and medium term. Our results in Q2 show that we're doing that. With pressure following patent expirations across a number of our products, we maintained strong operating margins, attractive returns on our capital, and ongoing steady return of cash to our shareholders in dividends and buybacks. Our stewardship of the business is also reflected in our competitive market share performance across our mature and recently launched portfolio of products. We'll be staying closely focused on execution and productivity as we seek to invest in the long-term opportunities that will enable us to reestablish our long-term track record of growth. Our long-term opportunities include many novel first-in-class therapies across all phases of our pipeline. One of these, of course, is AMG510, our KRAS G12C inhibitor, which has generated significant interest and continues to move very rapidly through the clinic. We anticipate many important data readouts across the portfolio over the next 12 months as we advance therapies against cancer, cardiovascular disease, respiratory disease, and other inflammatory disorders. Additionally, I'd like to note in Q2 we bolstered our industry-leading human genetics capability with our collaboration with Intermountain Healthcare, and we added a new important research platform to our acquisition of new evolution. Dave Reese will share more information about our pipeline as well as these collaborations when he talks about research and development in a moment. Now let me share a couple of thoughts with you on the drug pricing debate here in the United States, noting first that the environment remains fluid. The administration and Congress, as you know, are considering various proposals, but it's too early to speculate on whether there'll be any changes, and if there are any, what the impact of them might be, given that the process is still playing out. I know the Senate Finance Committee bill in particular has attracted attention and is an important example of this focus, but many provisions in the bill remain controversial and will likely be modified before advancing. Amgen is particularly focused on ensuring that patients benefit more directly from any savings that are generated by legislation that's advancing, and we think that in general more can be done to help patients who bear at present anyway, a disproportionate share of drug costs through out-of-pocket expenses. And we'll continue to engage in a thoughtful dialogue with the administration and Congress on drug pricing issues, and we're committed to find ways to drive change that still promotes innovation and respects market-based initiatives that will help address the financial and societal burden of some of the world's most serious diseases. One solution to alleviate some of the financial and societal burden is through the introduction of biosimilars. Last year, we launched our first biosimilars in Europe. Kenjinti are biosimilar to Herceptin, and Amgivita are biosimilar to Humira. A couple of weeks ago, we launched Kenjinti and Imvasi are biosimilar to Avastin in the U.S. We believe biosimilars will play an increasingly important role in helping to address issues of access and affordability in the US and around the world, and we're excited to be a leader in this emerging space. I'll end by highlighting that we continue to generate strong cash flow, continue to invest in R&D aggressively, and to prudently return excess capital to shareholders. We're in a strong position to grow our business organically and externally, but we'll remain disciplined in business development opportunities. As I stated earlier, Amgen is executing well. and we remain excited about our long-term outlook. I'll turn the call over now to David Moline, who will review our financial performance.