Amgen Inc.

My name is Jason and I'll be your conference facilitator today for Amgen's third quarter 2022 financial results conference call. All line students please don't mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speaker's prepared remarks. 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 star two. I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Okay, thank you, Jason. Good afternoon, everybody, and welcome to our Q3 call. So we continued with our execution during the quarter with a focus on driving volume growth for our key products and advancing our innovative pipeline. Leading the discussion today will be our Chairman and CEO, Bob Bradway. We have posted some slides for your reference. And my customary reminder that we'll be making some forward-looking statements and use non-GAAP financial measures to describe our performance. So with that, I would like to turn the call over to Bob.

Okay. Thank you, all of you, for joining our call. In the face of both macroeconomic and industry-specific challenges, Amgen remains laser-focused on delivering for patients and shareholders. Benefit of that focus was evident in the third quarter, with volumes up a healthy 8%. and 16% outside the United States. These results reflect the strong underlying demand for our medicines and the value they bring to patients, even in challenging economic times like those prevailing at the moment. Revenues for the quarter were down 1%, reflecting a 5% net price decline consistent with what we communicated earlier in the year and a 2% impact from foreign exchange. All told, 11 of our products generated record sales in the quarter, and non-GAAP earnings per share increased 15%, with free cash flows reaching $2.8 billion for the quarter. Looking forward, we remain focused on several growth drivers. With the recent closing of the ChemoCentrix acquisition, we're excited to have Tavneos in our portfolio. Tavneos is the first new treatment for ANCA-associated vasculitis in more than 10 years, and we're confident that we can leverage our decades of experience in inflammation and nephrology to bring this innovative medicine to many more patients moving forward. Two recently launched products, Tespire and Lumicrast, are off to solid starts. Tespire is performing well in asthma, and we have studies underway for several other indications for that product as well. Lumicrast is performing well globally with patients, payers, and prescribers recognizing the importance of this innovation. With combination studies underway, we're exploring the many different ways this product may benefit patients through time. We have a number of key products led by Repatha, Otesla, Prolia, and Avenity that we know can benefit millions more patients globally than they do today. And let's not lose sight of the fact that these four products collectively generated $2 billion in third quarter sales with a volume growth of 17%. We've built an industry-leading biosimilars business, having now launched five products in markets around the world, and we're months away from being the first company to launch a biosimilar to Humira in the U.S. Amgivita is already the most prescribed Humira biosimilar in Europe, giving us confidence as we prepare to enter the U.S. market. Looking forward, our next wave of biosimilars to Stellara, Solaris, and ILEA are well-positioned with our having now successfully completed Phase III trials for all three of these molecules. We have many potential new medicines advancing through our innovative pipeline, including opazoram, tarlatumab, rocatinlamab, bemerituzumab, and AMG-133. These five molecules and several others that you'll hear about shortly from Dave Reese are vintage Amgen, which is first-in-class medicines that make a big difference for patients suffering from serious diseases for which there remains a real need for new and better treatments. Finally, we have a highly engaged and committed workforce, and I want to thank them, as always, for their great work. With that, let me turn over to our CFO, Peter Griffith.

Thank you, Bob. We're pleased with our execution this quarter, and we are on track to deliver against our long-term objectives, most importantly, serving patients. Our recently closed acquisition of Chemocentrics adds a newly launched innovative product to our portfolio, Tabneos, a first-in-class and best-in-class approved treatment for patients with ANCA-associated vasculitis. Let's walk through our third quarter financial results before discussing our 2022 guidance. The financial results are shown on slide six of the slide deck. In Q3, we recognized total revenue of $6.7 billion. This represents a modest decline of 1% year over year. Excluding the impact of foreign currency, total revenue and product sales grew 2% and 1% respectively. Earnings per share of $4.70 grew 15% versus our recast Q3 2021. Recall those results included $400 million recorded in R&D expense related to our upfront payment to license rights to AMG 451, Roca Tindlemap from Kiowa Kieran Corporation. Non-GAAP EPS grew 1%, excluding the $400 million expense for the KKC license. Myrtle will review product sales with you, but I would highlight that our established product portfolio generated almost $900 million in product sales and continues to deliver strong cash flows to fund both internal and external innovation. Other revenues of $415 million increased 8% year over year. Non-GAAP operating expenses decreased 8% year-over-year, primarily driven by the $400 million payment to KKC in Q3 2021. Excluding the impact of the $400 million upfront payment, third quarter total non-GAAP operating expenses increased 4% year-over-year, reflecting investments to advance our research capabilities and pipeline, while also supporting product launches. and we delivered a 52.5% operating margin as a percentage of product sales. On a non-GAAP basis, cost of sales as a percent of product sales increased 0.3 percentage points on a year-over-year basis to 16.1%, primarily due to changes in product mix, partially offset by lower manufacturing costs and lower costs associated with fewer COVID-19 antibody shipments. Excluding the 400 million upfront payment, Non-GAAP R&D spend in the third quarter increased 10% year-over-year, primarily due to higher late-stage program support and research and early pipeline spend, partially offset by lower marketed product support. Non-GAAP SG&A expenses increased 1% year-over-year. We continue to focus on prioritizing key investments and activities while driving productivity, automation, and digitalization. Non-GAAP OINE was about $370 million in expense in the third quarter. This was driven by increased net interest expense and our share of Beijing results because of our use of the equity method of accounting. Our OINE was lower than anticipated due to gains from liability management that we do not expect to the same extent in future quarters. We have a strong balance sheet, generate significant cash flow, and retain significant financial flexibility to execute strategic business development opportunities and execute on our multiple capital allocation priorities. In the third quarter, we executed on the following. First, our recent acquisition at Chemocentrics is a clear example of investing in the best innovation, in this case, external for patients. Second, investing in our business through capital expenditures, including advancing construction on our new environmentally friendly facilities in Ohio and North Carolina. Third, returning capital to shareholders through growing dividends, including $1.94 per share in the quarter, representing a 10% increase from Q3 2021. And fourth, opportunistic share repurchases, the final settlement of the accelerated share repurchase, ASR program, occurred in the third quarter, and we have repurchased about $6.3 billion of shares year-to-date, turning to the outlook for the business for 2022. We're pleased with our execution through the third quarter. For the full year, we now expect to absorb about $560 million in FX headwinds against product sales based on recent FX rates, of which we absorbed nearly $400 million through the third quarter. and this is net of our hedging activities. Reflecting our strong execution through the third quarter, and despite challenging foreign exchange dynamics, we're updating our 2022 revenue guidance range to $26.0 billion to $26.3 billion. We are updating our non-GAAP EPS range to $17.25 to $17.85. This range encompasses both FX headwinds of approximately 3% or 45 cents for the full year based on recent FX rates and cost associated with our acquisition of chemocentrics incurred between closing and year-end. I'll share a few additional points to consider for the remainder of 2022 with a particular focus on how these trends are likely to impact Q4. We expect FX headwinds to reduce product sales in Q4 by about 165 million. The US government has agreed to purchase 290 million of end plate. We will recognize about 200 million of those sales in Q4 with the remainder in 2023. We've completed the previously discussed divestiture of Jen Senta, our generics business in Turkey, and will no longer recognize product sales and operating expenses from that business effective November 2nd, 2022. Sales of that business annualized at approximately $90 million. We now expect full year other revenue for 2022 between $1.5 billion to $1.6 billion versus our prior guidance of $1.4 to $1.6 billion. When comparing against our recast 2021 results, we continue to expect full year non-GAAP operating expenses to reflect a low double-digit decrease year over year. We continue to expect 2022 non-GAAP operating margin as a percentage of product sales to be roughly 50%. We continue to expect non-GAAP cost of sales in the range of 15.5% to 16.5% as a percentage of product sales. We now expect non-GAAP R&D expenses in 2022 to decrease 5% to 8% year over year compared to our recast 2021 non-GAAP R&D expenses, which include the $400 million upfront payment we discussed above. We expect non-GAAP SG&A spend to be roughly flat year over year as a percentage of product sales. We expect OINE to be in the range of 1.6 to 1.7 billion, with fourth quarter results closer to the first and second quarter results. For the full year, we now anticipate a non-GAAP tax rate range of 13.5 to 14.5%, down from our prior guidance of 14.0 to 15.0%. As you consider your modeling for 2023, recall the tax law changes enacted by Puerto Rico in June of 2022 that replaced the Puerto Rico excise tax, the PRET, in favor of an income tax, will increase our 2023 income tax expense while reducing by roughly an equivalent amount our cost of goods sold. Note, however, there will be a one-time residual negative impact in 2023 related to the amount of the PREP currently capitalized in inventory that will be charged to cost a good soul without a corresponding tax benefit. This charge is slightly larger than the benefit previously recognized with the implementation of the PREP in 2011, which was discussed in our 2011 Form 10-K. Summing up. Since the business review in February, much has changed at the macro level with the strengthening of the U.S. dollar, persistently high inflation, higher interest rates, and the passing of the Inflation Reduction Act. Despite these headwinds, we have executed well in 2022. As we plan for 2023, we anticipate that these headwinds will continue. We're adapting our operating plans and expect to successfully execute against them. Like previous years, we expect to provide 2023 guidance on our Q4 earnings call in January. Our confidence in the long-term growth of Amgen remains strong. I thank our millions of patients for their courage and my 25,000 colleagues for their mission-driven work on behalf of those patients every day. This concludes the financial update. I'll turn it over to Murdo.

Thanks, Peter. We saw strong volume growth in the third quarter with an 8% increase year-on-year. We delivered record quarterly sales for 11 products, including Avenity, Tespire, Amgevita, Vectabix, Kyprolis, Endplate, and BlindSaito, and double-digit volume growth for several additional products, including Repatha and Lumicrast. Excluding the impact of foreign exchange, third quarter global product sales grew 1% as our volume increases were offset by a 5% decline in net selling price, consistent with our prior estimates. Including the 2% negative foreign exchange impact, product sales declined 1% year-over-year. I'll start now with our general medicine business, which includes Prolia, Avenity, Repatha, and Amovic. Overall revenue for this portfolio grew 14% year-over-year, driven by 20% volume growth. In bone health, Prolia sales grew 7% year-over-year, driven by 8% volume growth. Avenity, which complements Prolia in our bone portfolio, had record sales of $201 million for the quarter, driven by 45% volume growth in the U.S. and 30% volume growth outside of the U.S. Repatha sales increased 14% year-over-year, driven by 52% volume growth, which was partially offset by lower net selling price. In the US, we generated 32% volume growth aided by broad adoption of Repatha by cardiologists and increasing adoption by primary care providers. We also saw declining net selling prices in the US as we offered higher rebates to support broad Medicare Part D and commercial patient access. Looking ahead to 2023, we expect less year-over-year US price erosion than we saw in 2022. Outside the US, sales of Repatha grew 26% driven by 73% volume growth. Net price declines outside the US were primarily a result of Repatha's inclusion on China's national reimbursement drug list as of January 1st, 2022. Overall, we remain focused on addressing leading cause of morbidity and mortality by bringing Repatha to patients in need all around the world. Moving to our inflammation portfolio, Otesla sales increased 3% year-over-year for the quarter. Otesla saw 9% volume growth, partially offset by lower inventory and unfavorable foreign exchange impact. In the US, Otesla remains the leader in bio-naive psoriasis patient share, and we see broader adoption of Otesla among patients with mild to moderate psoriasis. Looking forward, we expect continued strong volume growth given Otesla's established safety profile strong payer coverage, and unique position as the only systemic oral that can treat a broad spectrum of patients with psoriasis regardless of the severity of their disease. Enbrel sales decreased 14% year over year for the third quarter, driven by lower net selling price, unfavorable changes to estimated sales deductions, and a 3% decline in volume. Enbrel remains an important product for patients due to its long track record of efficacy and safety. I'm very pleased with our strong US launch of TestSpire, which generated $55 million of sales in the third quarter. Allergists and pulmonologists have prescribed TestSpire across a broad range of patients with severe uncontrolled asthma. We're also seeing initiation in both biologic naive and previously treated patients. Physicians acknowledge TestSpire's unique differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled without requiring any phenotypic and biomarker testing. We recently completed our acquisition of Chemocentrics, which adds Tabneos to our portfolio. Tabneos recently launched as a first-in-class treatment for ANCA-associated vasculitis, or AAV. This is a serious systemic autoimmune disease that leads to inflammation and eventual destruction of small blood vessels. This inflammatory disease can lead to permanent organ damage and in some severe cases can be life-threatening. Tabneos represents a significant advance in treatment for the eight to 10,000 US patients a year who develop severe active disease or experience major relapses of AAV. AAV is often managed by rheumatologists and nephrologists, where Amgen has a strong market presence and successful track record. We look forward to applying our deep expertise and inflammation experience to help many more patients manage AAV with Tadmios. Moving to our hematology and oncology business, our six innovative products grew 8% year over year with 10% volume growth. For Vectabix and Endplate, strong volume growth in the quarter benefited from timing of shipments to our partners in Japan. Our launch of Lumicraz is progressing well. with revenues of $75 million in the third quarter. Quarter over quarter sales declined 3% driven by lower net selling price due to a $12 million unfavorable price adjustment resulting from our reimbursement approval in Germany. This was partially offset by 15% volume growth. In the US, Lumicraz has been prescribed to over 3,700 patients by over 2,200 clinicians in both academic and community settings. Outside the U.S., Lumicraz has now been approved in over 45 countries. We've launched in 30 markets and are rapidly pursuing reimbursement in the remaining markets. As we've noted before, near term, the market for Lumicraz is focused on the 7,000 U.S. and 20,000 ex-U.S. patients in the second line setting. Longer term, we expect Lumicraz growth to come from earlier line therapy and the potential of Lumicrast to treat other tumor types. Sales of our oncology biosimilars declined 25% year-over-year. While our biosimilars for Invasi and Kenjinti both hold leading shares, we expect continued net selling price deterioration and accelerating volume declines driven by increased competition. The most recently published average selling price for Invasi in the U.S. declined 37% year-over-year, and for Kanjinti, declined 38% year-over-year. Over time, we expect long-term growth in our biosimilars business to be driven by the addition of new molecules and additional launches. We're preparing ourselves for the upcoming launch of Amgivita, our Humira biosimilar, in the U.S. in early 2023, followed by the next wave of biosimilar launches to Stellara, ILEA, and Solaris. Overall, I'm very pleased with our execution in the quarter. Our international presence and diverse portfolio products position as well to deliver on the execution of our long-term growth strategy. And with that, I'll turn it over to Dave.

Thanks, Murdo. Good afternoon, everyone. I'd like to start by welcoming our new colleagues from Chemocentrics. We're excited that you're now part of Amgen. For research and development, the third quarter was one of continued execution where we presented new data on several programs and continued to progress our innovative clinical pipeline. Beginning with general medicine, this coming weekend at the American Heart Association meeting, we plan to present data from a phase two study of Olpaceran, a lipoprotein little a targeting small interfering RNA molecule in subjects with elevated LP little a. We also plan to present additional data from the Repatha 4A and Repatha open label extension studies highlighting the association between the significant and sustained achievement of low and very low LDL cholesterol levels and lower rates of major cardiovascular events. Data from the single and multiple-dose cohorts of a Phase I study of AMG133, a multispecific that inhibits the gastric inhibitory polypeptide receptor, or GIPR, and activates the GLP-1 receptor, will be presented at the 20th World Congress on Insulin Resistance, Diabetes, and Cardiovascular Disease Hybrid Conference in December. As a reminder, the unique aspect of AMG-133 is the inhibition of GIPR, an innovative approach that we chose to take based on human genetic data that suggests decreased expression of GIPR leads to lower body mass index and lower weight. We look forward to discussing the Repatha and Opaciran data along with an update on AMG-133 at our investor call scheduled for Monday, November 7th. Turning to inflammation, in September, we presented data from the Phase III Sprout Trial, where Otezla treatment resulted in significant improvement in measures of moderate to severe plaque psoriasis at week 16 compared to placebo in children's ages 6 to 17. We also presented data from the Otezla Phase III Discrete Trial where 16-week data demonstrated statistically significant improvements in genital psoriasis, including skin, itch, and quality of life in patients with moderate to severe disease. Based on these results, discussion with the FDA is ongoing for discrete to add clinical data to the U.S. prescribing information, and discussions with regulatory authorities globally for Sprout are forthcoming. In September, TASPIRE was approved in the European Union and in Japan, and regulatory reviews continue in other jurisdictions. In oncology, we presented data from Tarlatamab, a DLL3-targeting bite molecule being studied in patients with small cell lung cancer. These data demonstrated encouraging anti-tumor activity with notable response durability and survival. In this setting, Tarlatimab delivered a confirmed overall response rate of 23%, a median duration of response of 13 months, and a median overall survival of 13.2 months. We continue to enroll patients in a potentially registrational Phase II study in this setting. We're also investigating Tarlatimab in combination with standard of care and first-line small cell lung cancer, in combination with AMG-404, a PD-1 inhibitor, in patients with second-line or later small cell lung cancer, and in neuroendocrine prostate cancer. In August, we presented data from our Lumicras checkpoint inhibitor and SHP2 combination studies. Based on these data, we continued to explore Lumicras in both settings. In September, we presented data on Lumicras in combination with Vectabix, where this combination demonstrated encouraging efficacy and safety in patients with chemorefractory metastatic colorectal cancer. Phase III trial continues to enroll using this combination. We also presented data from the global phase III code break 200 confirmatory trial where Lumicrast treatment led to increased progression-free survival and a significantly higher objective response rate in patients with KRAS G12C mutated non-small cell lung cancer compared with docetaxel. Patient-reported outcomes were also improved with Lumicrast versus docetaxel. We've just received initial topline data from a post-marketing requirement study comparing the 960 milligram daily dose of Lumicrast with a lower dose of 240 milligrams daily in patients with KRAS G12C-mutated advanced non-small cell lung cancer. Following discussions with regulators, we are planning to submit data from this study along with Code Break 200 confirmatory Phase III data. As a reminder, we are investigating multiple potential paths to first-line treatment of non-small cell lung cancer with Lumicrast, potentially segmented by PD-L1 expression levels, where the non-small cell lung cancer population breaks down into roughly thirds across PD-L1 high expressors, intermediate or low expressors, and PD-L1 negative expression. We've seen promising early data in the PD-L1 negative population and are planning to initiate a Phase III study of Lumicrast plus chemotherapy in first-line advanced or metastatic non-small cell lung cancer. Finally, I'm pleased to announce that the primary analysis of a Phase III study evaluating the efficacy and safety of ABP938, an investigational biosimilar to ILEA, compared with ILEA, met its primary endpoint in subjects with neovascular age-related macular degeneration. With these data and previously announced Phase III data from our biosimilar candidates to Soliris and Solara, we have completed our goal of delivering positive Phase III data from three biosimilars in 2022. In conclusion, with an innovative portfolio where approximately three-quarters of our clinical stage programs have first-in-class potential, and a growing portfolio of biosimilars, we are well-positioned to continue to deliver important new medicines for patients and growth for shareholders over the near and long term. I'll now turn it back to Bob.

Okay. Thank you, David. And, Jesson, why don't we now open the line up for questions. If you would remind our callers of the procedure, we can get started.

If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. Our first question comes from Salvine Richter with Goldman Sachs. Your line is now open.

Good afternoon. Thanks for taking my question. On AMG-133 and obesity, could you just help us understand how you'll evaluate the data in the context of existing therapies make a move forward decision in how you're thinking about differentiation here? Is it just a matter of taking a piece of the market given size, or do you think there's other aspects here to the program?

Dave, why don't you take that question?

Thanks, Salveen. We know there's a lot of interest in this program, and as we mentioned, we'll be showing the data in full in the first week of December at the hybrid conference. Obesity is a large, you know, very heterogeneous disease. It's a global public health problem. You know, the things that I would look for, you know, in evaluating this molecule going forward will be, you know, the dosing, dosing interval, what are the kinetics of weight loss, you know, how rapid is that weight loss, what is the sustainability, and then finally, the overall tolerability. We do plan on using our extensive capabilities in human data to help shape our thinking and guide this development program as we move forward. Thanks.

Jason, let's take the next question.

Our next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Great. Good afternoon. Thanks for taking the question. I wanted to ask a question now that you've been through or hopefully been through most of the contracting season for next year. I think one of the key investor concerns is obviously with biosimilar to Humera coming next year, what impact that could have to Enbrel and Enbrel pricing dynamics for next year. So I'm wondering if you can just comment on how to think about the potential impact to Enbrel and its pricing next year. Thanks.

Thank you, Matthew. We're obviously excited about the opportunity to launch the first biosimilar to Humira, and so we are active in our discussions with payers and PBMs for that. We are not seeing a massive amount of change to Enbrel's access going forward, and we continue to believe we've got good regard on the part of the payers and PBMs for the efficacy and the safety of Enbrel. And if there were to be a change in NBRL pricing, it would be for volume gains. As I mentioned in my opening remarks, we're declining in volumes about 3% year on year. Our goal is to maintain that and maybe even improve upon it. But we're not quite finished in the contracting cycle.

Okay, Jason, let's go to the next question, please.

Our next question comes from Umar Rafat with Evercore. Your line is now open.

Hi, guys. Thanks for taking my question. I have a two-part question on what everybody wants to talk about, which is obesity. So Lily and Novo, the two lead players in the GLIB space, they both have early stage programs. I'm talking phase one stage programs on triple agonists, et cetera. And one thing they always emphasize is that they have certain predefined thresholds. for moving any of those programs forward. And those thresholds are off of incremental efficacy beyond the current most competitive products out there. And my question is, I imagine you're thinking about some of those thresholds too relative to Manjaro, perhaps Kagrisema, as you think about the progression of your program. And I'm curious if you could speak to that. And secondly, if you could just clarify for us, The low and the high dose data from single ascending dose you showed at your business review early in the year, was that an average of the first three and the highest three of the six cohorts in phase one? Or was it the first two out of the six cohorts? I wasn't quite sure what the low and the high meant within the single ascending dose. And I remember there were six different cohorts within single ascending. Thank you very much.

We'll get back to you on the latter half of that question. I don't remember off the top of my head what that is, but we're going to have, in a month, you'll have the full data set with all of the cohorts broken out. I think at that point it'll be very clear. In terms of thresholds, as I discussed a short while ago, there are many potential avenues to differentiation here. Of course, degree of weight loss is one of them, but also dosing interval, what the kinetics are, importantly, durability, importantly, tolerability, since a fair number of patients transition off of these agents for tolerability. So those are the sorts of things that we'll be taking a look at as we assess whether we've got a differentiated product and it's worth large-scale investment.

Our next question comes from Michael Yee with Jefferies. Your line is now open.

Thank you. I'm going to ask another follow-up on 133. David, last quarter you said you actually started the Phase 2. I actually didn't hear that here.

Can you just talk about the actual status of where you are with 133 and also the fact that I believe it's been disclosed that you dialed back the GLP-1 potency, so we should not be expecting material diabetes-type effects, and this is not what we're looking for or people should be examining or scrutinizing. Thank you.

Yeah, no, I don't believe we announced we had started phase two, Mike, but rather that we're in planning. We do expect to be initiating the phase two trial in the relative near term. And once that gets launched, of course, we'll talk about design and give guidance in terms of expected data availability. I wouldn't overthink, you know, the GLP-1 component, and I'm not sure you know, that's on point. I think, you know, again, when we share the data in a month, you'll get a look at that. Thank you.

Our next question comes from Jay Olson with Oppenheimer. Your line is now open.

Oh, hey, congrats on the quarter and closing the chemocentrics deal. You have a lot of volume growth outside the U.S. in the third quarter. And as an example, I think you said Repatha grew 73% ex-U.S. with inclusion on China's national drug reimbursement list. Can you talk about the pace of product launches outside the U.S. and volume growth and how you expect U.S. versus ex-U.S. revenue mix to evolve over time?

Thank you. I think Repatha is a good example of how now with our broadened international presence, we're able to bring new products and new launches to the market fairly quickly. What we're seeing in China is rapid expansion of Repatha. Recall we were on the market for just over a year prior to securing national reimbursement drug lists, so we did establish good understanding, education, awareness of Repatha. We were promoting it primarily for percutaneous coronary intervention patients or stent patients, where the unmet need was deemed to be highest amongst the private cash pay patient group. But I think what you're seeing is there's real demand in these markets to help millions of patients who are at very high risk of coronary vascular disease. And so we're continuing to build out our business in Japan and China. We had good volume growth in Europe, and obviously we also had good volume growth in the U.S. So we're excited about the evolution of Repafa. And we continue to feel good about how that product will drive volume and revenue growth for us in the future. With respect to other launches, the other good example that we're seeing is just the Lumicraz launch, given that we've got approval in roughly 40 markets. We've got reimbursement in roughly 30 markets, and we're pursuing reimbursement in the remaining countries. Our oncology teams around the world are doing a very nice job of identifying KRAS G12C second-line patients and making sure that they have Lumicraz as a treatment option. I'm really pleased that the international presence we've been building for many years now is in full place, is functioning at a high level, and delivering strong volume growth. Going forward, we have some partner products where we don't necessarily have the launches in every country where we have our partners to do that. But wherever Amgen has the global responsibility and rights for products, we're feeling very good about our potential and ability to launch them globally.

And, Jay, let me just add, don't forget in the slides that we shared with you this afternoon, we have the outside U.S. data available for you on all the different products. You'll see the contribution from the international business there.

Our next question comes from Jeffrey Meacham with Bank of America. Your line is now open.

Hey, this is Charlie for Jeff. Thanks for taking the question, and congrats on the results. I just have questions regarding the, I guess, the ILEA, as well as Delaware, kind of potential lunch timing. I think given, you know, you mentioned that, You already submitted the Stellera data to the FDA. I'm wondering, you know, you were expecting to see the product launch second half of next year, and whether you anticipate any pushback from J&J. And I guess, you know, similarly for ILEA, whether that launch timing is in the 2024 timeframe, and if you anticipate any pushback from Regeneron. Thank you.

Yeah, thanks for the question, Charlie. We're obviously pleased with the successful data readouts on those products and some that have been filed. We expect to be in the first wave of those biosimilar launches, and we're not disclosing specific launch timing on those for now.

Jason, let's take the next question.

Our next question comes from Evan Segerman with BMO Capital. Your line is now open.

Hi, guys. Thank you so much for taking the question. I'm not going to ask about 133, but rather on Lumicraft. So you had mentioned you had data from the dose reduction trial. Can you characterize how we should think about the relative efficacy of the lower doses versus the approved dose? And on the PEMBRO combination trial, I noticed in the slides you talked about a dose expansion with a lower dose lead-in. Are you also treating in combination with that lower dose?

Yeah. Thanks, Evan. We understand there's a lot of interest in the dose comparison data. We're just getting the top line results to the FDA and other regulatory authorities, so it's premature to share these data prior to their review and the appropriate conversations. In regards to the combination trial, I believe you're referring to with checkpoint inhibitors, a lower dose lead-in, as I've mentioned before, and then layering on top of that dosing the checkpoint inhibitor. So, they are then given concurrently going forward.

Okay, thank you.

Our next question comes from Mohi Bansal with Wells Fargo.

Great. Thanks for taking my question, and we're asking the quadrants. So I have a question regarding the 30% plus year-over-decline that we have seen with a couple of buy-similars. Is it on expected lines three or four years after launch? And how should we think about the other buy-similars you have in your portfolio? How should we think about the long-term pricing dynamic there? Because it was an expectation that the pricing would probably stabilize after a certain point, but it doesn't seem like that in buy-similar ones.

Thanks for the question, Mohit. I think what's important to remember when you're thinking about U.S. biosimilars is products in the buy-in bill or medical benefit side will continue to see price declines over time because of the way in which the average selling price calculation works. Products on the pharmacy benefit side, so think Medicare Part D products or commercial insured retail pharmacy products, they are likely to have slower declines in the slope of their net price over time. Now, both of those conditions depend on how many competitors for each molecule, so everyone's a little bit different, but I would hesitate to put a timeframe on the class of products. I think you need to look at each one of the molecules. One thing I will say is we've been very clear on where we're going to get growth in our biosimilars portfolio, and that's by launching successive new biosimilars on top of our continuing base of business. Outside the U.S., biosimilar pricing tends to come down fairly rapidly and then can hold in some of the larger what we call retail markets. In markets where it's a heavy tender business, prices will continue to decline as long as there are competitors in the market.

Okay, Jasone, let's move on. Got it.

Thank you.

Our next question comes from Yaron Werber with Cohen. Your line is now open.

Great. Thanks for taking my question. I got just a couple maybe. David, the first one on 133, can you comment? It's an antibody. Can we assume it's monthly dosing? And then secondly, for 938 against ILEA, now that there's going to be high-dose ILEA, the 8 milligrams, It's obviously the same underlying drug, just a different formulation. How does that impact what you need to do to bring in a high-dose 938 to market and how that jives versus the fiscal year 25 potential launch? Thank you.

Yeah. Let me take the first part on 133. As I said, it's a multi-specific or bi-functional molecule, meaning it's got an antibody component that inhibits the GIPR. receptor, and then there's a component that agonizes GLP-1. So, you know, as you noted, you can expect antibody-like pharmacokinetics, and we'll be sharing all of that in a month, but, you know, that's what will drive the dosing interval. You know, on 938, you know, let me ask Murdo to comment briefly on that.

Yeah, Yaron, we continue to want to be able to have a full complement of competitive biosimilar products that compete effectively with their innovative parent products. And we've, I think, done that very successfully thanks to the talented team in our formulation and process development organization. So we feel confident that we'll be able to bring various concentrations across the portfolio as needed. So we're working on that one. Jason, let's go to the next one.

Our next question comes from David Risinger with SVP Securities.

The line is now open. Great. Thanks very much. So my question is on biosimilars timing for 2023, please. Regarding Amgivita, in light of your interchangeability study, which has an estimated completion in January, assuming that succeeds, when in 2023 do you think FDA will add interchangeability to the label? And then is Amgen planning to launch biosimilar Stelara in September at risk if patent litigation remains outstanding. Thank you.

Yeah, thanks again for the question. Maybe take the second part first. We haven't made any statements about when we will launch our biosimilar to Stelara, but we're pleased that we've got strong data in hand and we're pleased that we've got the strength of the Amgen manufacturing network and commercial organization ready to go. And we'll track that space closely. We expect to be in the first wave of launches on Stelara, ILEA, and Solaris, the next wave of new biosimilar launches. And we expect to be in the market in early Feb in the new year with Amgivita. The interchangeability stat is an interesting one. I think over time that may grow in importance. But being first with Amgivita, we understand it to be of lower priority payers and PBMs, but we do expect to have interchangeability, you know, in a relevant timeframe for when the other biosimilar entrants to Humira come into the market.

Thank you.

Next question.

This question comes from Robin Garnascus with Truist. Your line is now open.

Hi. Thanks for taking my question. Just going to follow up with you on the NREL comments ahead of the biosolar Humira launch. We've heard that NREL is often used as a third or second line TNF, and so I was just curious whether, you know, you noted that you don't expect further pricing declines, but part of it is that when Humira launches, that really you're already having to blow through Humira to get to NREL in many cases, and that's why there may not be motivation to have to compete on price. That's a detailed question. Maybe help me understand the dynamics there. Thank you.

Robin, thanks for the opportunity to clarify. I didn't say that we don't expect continued price declines on Embraer. I said we don't expect the current price declines to be dramatically different going into next year. We do expect to continue to concede price on Embraer as the category is quite competitive, but we don't see the slope of that changing dramatically. And Enbrel is used across a broad range of patient types in rheumatoid arthritis as well as in psoriatic arthritis. I think what we see is we see a lot of frontline usage still, and we do see some post-TNF frontline usage. So I think that will continue. Not every patient is going to respond to a TNF inhibitor, and many clinicians prefer the well-demonstrated safety and efficacy profile of Enbrel, and we think that will continue despite biosimilar options in the market. So that hopefully clarifies your question.

Our next question comes from Colin Bristow with UBS. Your line is now open.

Hey, good afternoon and congrats on the quarter. So I'll take another one on 1.33 if I may. As we think about timelines, you know, it took Lilly and Nova around five to six years to move their clips from the sort of phase two initiation to the market. Is there any reason at all for us to think that there's any sort of abbreviated path here that you could explore? And just with those sort of aforementioned timelines in mind and the fact that this efficacy bar that we see now could be raised by one of the competitor assets who's ahead of you, does this raise the bar for progression to phase two from your side? Thank you.

Yeah, thanks for the question. The, you know, I think, you know, let me start with, again, the disease itself, obesity, which is a very heterogeneous disease. Obviously, it's one of the major public health problems globally right now. Our belief is that there are a number of diseases tucked within the label of obesity. You know, some patients have primarily cardiovascular manifestations, others type 2 diabetes, you know, others mechanical problems. And so, as I noted, we will be using our human data capabilities to further understand and potentially segment these populations to determine if there can be particular benefit in subsegments of patients. And then, you know, I would just remind you of the things that we'll look for in this program as we go forward to see whether, you know, we have a differentiated molecule or not. Dosing, again, the kinetics, you know, in particular. and sustainability of weight loss, and then overall tolerability. Those are the things that we'll be looking at as we take a look at Phase II data and determine, as the field unfolds, where we go from there.

Jason, let's take the next one.

Our next question comes from Carter Gould with Barclays. Your line is now open.

Great. Thanks for taking the question. Sorry to beat a dead horse here, but to follow up on the prior question, how important is it that you also pursued diabetes alongside any obesity, you know, any obesity indication, or do you feel like you could just go after obesity and that might be able to suffice and work out commercially? Thank you.

Yeah. You know, thanks, Carter. You know, that's a question we'll address as we go forward, but I don't feel that it's essential that this be a diabetes medication. As I said, this is, you know, obesity powers a large number of diseases and, you know, we're going to guide our development to where we think we get the most effect size.

Our next question comes from Michael Schmidt . Your line is now open.

Hi, this is CJ. I'm for Michael. Thanks for taking our question. We have one on Lumaturas coming out of World Long Conference with updated data on different combinations presented on MPD-1 and SHIP-2. How do you think these different combo regimens can be positioned relative to each other? Do you have any updated view and would you prioritize one over the other with data so far? Thank you.

Yeah, no, in terms of the combinations, SHIP-2, checkpoint inhibitor combinations, you know, we're enrolling, you know, phase two Trial now with the SHP2 combination, that will guide our development. That's a combination that could potentially be applied regardless of PD-L1 expression levels. And then, as I mentioned, we are exploring in the PD-L1 positive population a low-dose run-in of Lumacras, then followed by layering on a checkpoint inhibitor. And as those trials enroll, I'll provide guidance in terms of when we have data readouts, and those data will determine how we think about the first-line population. Finally, let me remind everyone again that in the PD-L1 negative population, we're going to be looking at a chemotherapy plus Lumicrast combination.

Jason, I see one more participant in the queue, so let's take one last question, after which Bob will make some closing comments.

Our final question is from Tim Anderson with Wolf Research. Your line is now open.

Thank you. I wanted to ask a two-part biosimilar question related just to the U.S. market, and it's what you think uptake will be like in two disease areas that are a little different than most. So in the rare disease space, where you'll have a biosimilar saliris, and then in the eye space with your biosimilar ilea, how do you think those will compare to disease areas where we already have precedents, such as in oncology? I know the eye space is buying bill, I think rare diseases is not by and by, but if you could compare those, please.

Yeah, thanks, Tim, for the question. As I mentioned before, you do have to look at each product slightly individually in the circumstances that would generate or drive uptake. If we go back to the oncology biosimilars, we had an assumption at the beginning of those products that patients may not get switched on the maintenance phase of their treatment, so mid-cycle or mid-course of treatment. And what we saw, at least in the buy and build space, for both AMBASSI and CanGenti was that oncologists were comfortable with the quality of the Amgen biosimilars and by the fact that they had access to our medical teams and our salespeople who were out there calling on them to help them understand the data behind our biosimilars. And so we did see mid-course of treatment switching to our biosimilars. So I think the threshold for what we thought would be a hesitancy on the part of the prescriber was different. And I think that we're looking closely at both ILEAS prescribers and ILEA prescribers. And we've done some in-market research with both customer types. And we feel good about our opportunity to create value for the healthcare system by offering biosimilar alternatives to those two branded products. And we feel good about our chances of having a decent uptake on both.

Okay. Well, again, let me thank all of you for joining our call. We appreciate your interest in Amgen. And let me just end by saying that we remain focused on ending the year strong and positioning ourselves for a a good 23 and beyond. We look forward to having a chance to engage with you again here in a few short weeks, or Monday, and then in a few short weeks thereafter at various conferences. So thank you, and we'll look forward to seeing you soon.

Thanks, everybody.

This concludes our 2022 Q3 earnings call. You may now disconnect.