Amgen Inc.

All right. Good morning, everyone. My name is Corey Kasimov. I'm the senior large-cap biotech analyst at JPMorgan, and it's my pleasure to introduce our next company, which is Amgen. Here to present is the company's chairman and CEO, Bob Bradway. And please note that following Bob's presentation, there is a breakout across the hall in the Borgia room. Okay.

Thank you, Corey, and good morning, everyone. Thank you for being here. Heading into 2020, we're feeling confident at Amgen and excited about accepting the challenges of the future. Speaking of the future, my remarks this morning are qualified by the elements of this Safe Harbor Statement. As we think about 2019, we feel we made significant progress on executing our strategy for long-term growth. And in each of our therapeutic areas, we have growth drivers that will be based on growth and volume demand for our products, as well as innovative pipeline opportunities that give us hope that those are franchises that will grow long into the future. So we feel we have a strong hand and we're excited to play it. You know, in real estate, it's location, location, location. And at Amgen these days, we have a lot of people that are Superstition research and development pipeline. In addition, and what is, I think, a hallmark, or I hope is now a hallmark of our execution, we will continue to be focused on returning capital to our shareholders in the form of growing dividend and buyback program as well. Now I said at the beginning of my remarks that we were feeling confident about the future, and one of the reasons that we're feeling confident about the future is the strong progress that we're seeing in international markets in particular. I hope that you recognize this as an example of our having done what we said we were going to do. We committed to expand, for example, in the Asia-Pacific region, and we're really excited about the partnership that we entered into, or the collaboration we entered into in 2019 with Beijing and China, and of course very pleased as well with the performance of our collaboration with Astellas, and looking forward to having responsibility for that partnership returning to us in 2020. So we look at the next decade. For the first time in our history, we expect that the Asia-Pacific region will be a growth driver for Amgen, and in fact as much as a quarter of our growth is expected to come from that region over the next 10 years. Our research and development investment is the core of our strategy, and in particular, our focus on innovative medicines that have the potential to be first in class and have a large effect size in serious disease is what we focus on, and when it comes to trying to help patients suffering from serious illness, we feel their sense of urgency. We are focused and made significant progress on expanding our commitment to human genetics. We consider that we are the industry leading company when it comes to integrating human genetics into our discovery research, and we significantly expanded those efforts through collaborations completed in 2019. In addition, we're very focused on using next generation proteomics technologies to enable us to combine information with our genetics portfolio to characterize the pathways in biology that we think are relevant for disease, and then of course, we look forward to continuing to apply what we believe are world-class molecular engineering capabilities as we discover new pathways of relevance. 2020 should be a data-rich year for us with our innovative portfolio of new medicines. There's a fair amount of interest in our project AMG510, which is a molecule that we're exploring in non-small cell lung cancer. We have a phase two trial underway, as many of our investors are aware in that setting, and I'm pleased to report that the interest in that trial was considerable, and we completed enrollment of the trial very quickly in the fourth quarter. So we have completed that study, and would expect to have data from it later this year. In addition, we're expecting to generate combination data, as you know, from a variety of different trials that we also now have underway related to 510. Tezapellumab is our innovative phase three molecule that we're studying together with our partners at AstraZeneca for uncontrolled asthma. We expect to have data on that this year. Omecaptive is our innovative first in class, I suppose only in class molecule for heart failure. And again, we expect to have data from the outcomes trial there in 2020. We expect to have data from our O-Tesla mild to moderate psoriasis study as well this year. And finally, we would expect to be reporting first in human data from our long acting by specific against BCMA AMG 701 during the course of the year. So oncology is going to be one of the data rich areas for us this year, and it's obviously an important franchise for Amgen. Our recently launched hematology and oncology products are annualizing revenues greater than $5 billion. We expect to generate more than 5 billion from these products in 2020. And they continue to grow at near double digit rates. While there's a lot of focus on AMG 510, that is not the only egg and not the only basket. When we look at our oncology portfolio, we think we have a lot of eggs in a lot of different baskets. And in particular, we are excited about continuing to focus on a range of first in class molecules that include our by specific T cell engaging programs, as well as some differentiated precision medicines that we're advancing into the clinic during the course of the year. We think when we look at our by specific platform in particular, we think that we're well positioned to compete against cell-based therapies. And we look to extend the record that we've begun to create with our approved product, Blincyto, a product which has established overall survival advantage versus standard of care for patients suffering from relapsed refractory acute lymphoblastic leukemia. So again, we're excited about the progress that we're making in the area of by specific T cell engaging therapies. And we expect we'll have a lot to talk about in that area during 2020. Caprolis, we expect will remain a mainstay in the treatment of multiple myeloma. And we're enthusiastic about the data that we generated in our most recent study, the CANDOR study, which showed the efficacy of caprolis when used in combination with Darzalex. We think these data, which were reported as a late breaker at ASH have the potential to be practice changing in the field of multiple myeloma. Cardiovascular disease, as you know, is another focus area for us at Amgen. And it is a focus area for us because it is the leading problem facing society today. It's the number one killer of people on the planet. And it's also the number one item when it comes to healthcare costs in the developing world. Our product, Repatha, has proven its ability to reduce the risk of heart attack and stroke. We've made considerable progress during the course of the year on improving access to Repatha. We've made considerable progress in both the commercial patients, as well as prospectively for the Medicare Part D eligible patients. When it comes to reducing the risk of heart attack and stroke, LDL is the issue. And during the course of the year, I think it was more clear than ever that when it comes to LDL, lower is better and perhaps lowest is best. And we're encouraged by the recently released guidelines from the European Society of Cardiology, which advocate for patients who are at risk having their LDLs below 55 milligrams per deciliter. And in the case of those who are at very high risk, having those levels below 40 milligrams per deciliter. And I would point out that what that means effectively is everybody who's at risk or high risk should be on a PCSK9 therapy like Repatha. And in fact, when you look at our clinical data from our outcome study, fewer than 5% of the people who were treated in the standard therapy arm were able to achieve the European Society of Cardiology guideline target without the benefit of a PCSK9 therapy like Repatha. And a further fewer than 1% of those who were at very high risk were able to achieve below 40% without the addition of Repatha. So the European Society of Cardiology guidelines make it clear that lower is better. And today the right answer for patients who are high risk is clearly a product like Repatha. Heart disease is the 800 pound gorilla. And we think the answer to deal with the challenge of this 800 pound gorilla is more innovation and more innovation more broadly available to patients who need it. We think we have good ideas. In atherosclerosis, we're excited about the work that we're doing with AMG890, which is an siRNA product designed to inhibit lower levels of Lp little a in those who have genetically high levels of that lipoprotein making them at risk of cardiovascular disease. This is a risk that is not modified with other existing therapies today. It's not modifiable with diet and exercise. And so we look forward to rapidly advancing this product through clinical development. And we expect to advance this into phase two shortly. Heart failure is a devastating condition still in the United States and around the world. We look forward to having our phase three data from Omecamptive. And in addition, we're looking forward to advancing a novel phase one molecule, which is a troponin activator during the course of the year. Moving to inflammation, where we've been an industry leader for nearly two decades now. We think the star is really aligned for us in 2019 when we were able to acquire Otesla. Otesla is a great medicine. It has a great fit with our established experience in the inflammation area. And it came for us at a perfect time. So we look forward to building on the great work that our colleagues at Celgene did in launching this product. We expect to have opportunities to launch it in markets around the world where it hasn't yet been launched. And we're looking forward to receiving phase three data this year on the product in mild to moderate psoriasis patients. We have other studies underway and expect that there are other opportunities to expand this label, again, in the United States and international markets. With respect to Enbrel, we will continue to invest in Enbrel. And we enjoyed improved performance in 2019 as a result of those investments reflected in improved share performance versus prior year trends, as well as improved pricing for Enbrel related to our progress on contracting. Beyond Enbrel and Otesla, we have a cascade of opportunity and inflammation. In phase three, I've already talked about our innovative approach to treating uncontrolled asthma with tezapellumab. In addition, we have a phase two program designed to address lupus and a phase one program, which is an -2-mutein being explored in a variety of different inflammatory conditions. In bone health, we are a world leader with two very important innovative products, Prolia, which prevents the resorption of bone, and Aventide, which promotes the building of bone. Osteoporosis is a global epidemic, and this is an area where it feels like we have every mega trend working with us, aging, growth of opportunity in Asia, and our products, Prolia and Aventide, are very well suited to addressing the needs reflected in these mega trends. We're excited about the early performance of Aventide, and look forward to having the opportunity to report on that product during the course of 2020. Shifting to migraine, our first in class product, Amovig, which is an antibody to CGRP, has changed the game in the treatment of migraine. And the feedback that we receive every day from patients is a reminder of just what a game changer this is for those who suffer from the disease of migraine. And so we're excited about not just the patients that we've already reached with this product, but by the many more that we expect to begin to reach in 2020. Part of the reason for our excitement is the benefit of the four year data now, the clinical data that shows us the durable safety and efficacy without any evidence of attenuation that comes with long-term use of the product. As our investors are aware, we committed to developing a portfolio of biosimilar molecules in 2012. And in 2019, we began to see the fruits of our labors with a portfolio of products that as of the third quarter was annualizing at about $750 million. So we're off to a strong start with biosimilars that reflects the success we've had in executing on time on budget and then delivering high quality, reliable products to the marketplace. We're able to achieve our performance so far with a very efficient operating expense structure, reflecting the fact that we're commercializing our oncology and inflammation biosimilars through the business units that we have established globally for the benefit of our innovative brands in those areas. So we expect that as we've said in years past, that this business will become a multi-billion dollar growth opportunity for Amgen and our shareholders. I said earlier that capital allocation, I hope in the minds of our investors, has become a hallmark of our execution at Amgen. And I have said many times before, and we'll repeat this morning, that at Amgen capital allocation is a forethought, not an afterthought. And that's reflected once again in our performance through 2019. If you look back through 2011, we invested about $64 billion in our business and research and development acquisitions and capital investment. And that $64 billion compares to $66 billion which after the benefit of tax reform, we were able to return to our shareholders, again, in the form of buyback and growing dividend. And that in part has enabled us to continue to deliver attractive total shareholder return for our investors. So again, I said at the outset that we were confident, ready to accept the challenges of the future, but I don't want you to think that we're complacent. We're not complacent. We're certainly not going to settle with what we've achieved so far. We're focused on continuing to execute. And in 2020, that means on our growth products, continue to focus on delivering growth from our recently launched growth products, as well as continuing to build out our international launches. We will continue to invest heavily, to advance rapidly our first in class programs and our innovative research and development pipeline. International growth has come to the fore is now a reality. So again, we will continue to invest in expanding our international business, particularly in regions like Japan and China. We're excited to continue to proceed with biosimilars and looking at other molecules that we might seek to bring into that bucket of business for us. We retain significant financial flexibility, even after having invested more than $16 billion last year in business development. And we think we remain poised to deliver attractive returns to our shareholders again, through buyback and dividend. And we do this. And of course, our greatest asset are the 22,000 staff members who are talented, engaged and come to work every day, hoping that they can make a difference for patients who are suffering from serious illness. So I'll end where I started, which is by saying that we remain confident, excited about the hand that we have and we're looking forward to playing it in 2020. Thank you.