Amgen Inc.

My name is Julianne, and I will be your conference facilitator today for Amgen's third quarter 2024 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 star 1 again. I would now like to introduce Justin Clay, Vice President of Investor Relations. Mr. Clay, you may now begin.

Thank you, Julianne. Good afternoon, everyone, and welcome to our third quarter 2024 earnings call. Bob Bradway will lead the call and be followed by a broader review of our performance by Myrto Gordon, Vikram Karnani, Jay Bradner, and Peter Griffith. Through the course of our discussion today, we will use non-GAAP financial measures to describe our performance and have provided appropriate reconciliations within the materials that accompany this call. We will also make some forward-looking statements, which are qualified by our State Harbor Statement, and please note that actual results can vary materially. Over to you, Bob.

Thank you for joining us today. Our performance this quarter reflects the strength of our business across our core therapeutic areas and geographies. Our in-market medicines performed well in the quarter, with third quarter revenues up 23% to $8.5 billion, and 10 of our products delivering double-digit or better sales growth. We're also rapidly advancing our pipeline with a significant number of potentially first-in-class or best-in-class medicines positioning us for long-term growth. Let me address Meritide directly. Our ongoing phase two study is progressing well, and we look forward to sharing results later this year. We're well advanced in preparing to launch a broad phase three program for Meritide, including obesity, obesity-related conditions, and type two diabetes. You may have noted that we recently initiated a phase two study in patients with type two diabetes. As we shared after the interim analysis, we're confident that Meritide's differentiated profile will address important unmet medical needs across a number of diseases, including type 2 diabetes. Beyond obesity, we have momentum across each of our therapeutic areas, and I'll start with oncology. In the third quarter, we saw strong in-market performance with 17% sales growth across the innovative oncology portfolio. And several products experienced double-digit growth, including Blinsito, which, of course, is our first bispecific T-cell engager or bite, which is now established as the standard of care in B-cell acute lymphoblastic leukemia. The launch of our next bite, Imdeltra, is also progressing well with strong clinical conviction and three Phase III studies underway in small-cell lung cancer. In further demonstrating the strength and promise of this platform in solid tumors, we're pleased to announce today that we will advance valuridamig into Phase III clinical development and advance prostate cancer in the fourth quarter. Let me remind you to also keep an eye out for Phase III bimerituzumab data in gastric cancer, which we should have in the next few months. Our rare disease portfolio delivered $1.2 billion of sales in the quarter, growing 21% year over year, driven by Tepeza, Christexa, Uplizna, and Tavneos. These medicines are highly innovative, are still in the early stages of their life cycles, and have significant upside potential, including expansion into new indications and geographies. For example, Tepeza was recently approved in Japan. Also in rare disease, The PLSNA demonstrated compelling data in generalized myasthenia gravis and was granted breakthrough therapy designation in IgG4-related diseases. We're excited about the promise of inebilizumab in these settings and potentially in other B-cell-mediated autoimmune diseases. In inflammation, TESPIRE continues its strong trajectory with 67% growth year-over-year in the quarter. We're further encouraged by the potential of test spire in COPD and additional indications that we're also actively exploring. And finally, in general medicine, Repatha and Avenity are each delivering strong volume growth again this quarter. These products are pivotal as we continue to serve more patients and meet the growing demand for therapies that address some of the most serious health challenges worldwide, like heart disease and osteoporosis. Looking ahead, we remain confident that Amgen is well-positioned to deliver long-term growth and innovation across each of our therapeutic areas. Our balanced portfolio combined with the strength of our pipeline, we think will continue to drive our business forward. As always, I'd like to thank my colleagues across Amgen for their unwavering commitment to patients. I want to now turn the call over to Murdo.

Thanks, Bob. Execution was strong across our core therapeutic areas in the third quarter, driving 24% year-over-year product sales growth. Each of our regions delivered double-digit volume growth. And sales of 10 products grew by double digits or better, including Repatha, Tespire, Blinsito, Avenity, and Tabneos, all brands that are important to our future growth trajectory. Starting with our general medicine portfolio, sales of Repatha, Avenity, and Prolia collectively grew 18% year-over-year in the third quarter, driven by volume growth. We serve large patient populations with these therapies. For example, we expect Repatha and Prolia alone will help over 11 million patients in 2024. Repatha sales increased 40% year-over-year to $567 million for the third quarter, now annualizing at over $2 billion in sales. In the quarter, we saw year-over-year volume growth of 41% and favorable changes to estimated sales deductions of 8%, partially offset by lower net selling price of 10%. In the U.S., our expanded primary care field force efforts drove a 50% year-over-year increase in primary care physician prescribers. U.S. volume growth was enabled by broad reimbursement and removal of prior authorization requirements by several payers. Outside the U.S., Repatha retains category leadership and continues to grow across major markets, despite increased competition in the segment. Avenity sales increased 30% year-over-year to almost $400 million for the third quarter. In the US, Avenity continues to be the segment leader with 61% of the bone builder market. Strong US volume growth was supported by an increase in prescription volume from both established and new Avenity prescribers, with a 34% quarter-over-quarter increase in new provider accounts ordering Avenity. In Japan, Avenity continues to hold a leading position with 47% of the bone builder segment. Since launching in Japan in 2019, Avenity has been prescribed to approximately 600,000 patients. Avenity sales are now annualizing at approximately $1.5 billion. We're encouraged by the growth momentum we're driving and have conviction in the potential for Avenity to help the many more women globally who remain at risk of a fracture due to their post-menopausal osteoporosis. Prolia sales increased 6% year-over-year to $1 billion for the third quarter, driven by 9% volume growth. In the U.S., we see broad prescribing base with more than 13,000 provider accounts using Prolia so far this year. In inflammation, Tespire continues a strong trajectory with $269 million in sales in the third quarter. Sales increased 67% year-over-year, supported by Tespire's uniquely differentiated profile and increased adoption by pulmonologists. We're encouraged by the growth of Tespire to date and its potential to treat the 2.5 million patients worldwide with severe uncontrolled asthma. Otezla sales decreased 1% year-over-year for the third quarter with 5% volume growth. This volume growth was offset by 7% lower net selling price. Otezla remains the only approved oral systemic therapy with a broad indication and is well positioned to help the more than 1.5 million systemic treatment-naive U.S. patients with milder psoriasis who cannot be optimally addressed by a topical treatment. Emerald sales decreased 20% year over year for the third quarter, primarily driven by 13% unfavorable changes to estimated sales deductions and 12% lower net selling price. Volumes grew 4% in the quarter. Going forward, we expect continued declining net selling price, relatively stable volume, providing strong cash flow for our business. Sales of our biosimilar products increased 9% year over year in the third quarter. We have fully deployed our team in support of the recent U.S. launch of PavBlue, a biosimilar to ILEA. Our teams moved quickly to engage retina specialists and were encouraged by the enthusiastic feedback from customers. Our teams are also ready for the upcoming U.S. launches of Weslana, a biosimilar to Stellara, and Bekemvi, a biosimilar to Solaris, expected in the first and second quarters of 2025, respectively. Overall, our biosimilars portfolio continues to deliver attractive returns driven by our efficient business model. In oncology, sales of our seven innovative products, Blencito, Lumicraz, Vectabix, Kyprolis, Endplate, Xgeva, and Imdeltra, grew 17% year-over-year for the third quarter, driven by volume growth and higher net selling price. In total, these products contributed over $2 billion of sales in the third quarter. Blencital sales grew 49% year-over-year to $327 million for the third quarter. Growth was supported by the recent expansion of the Blencital label, now approved by the U.S. Food and Drug Administration for use in patients with Philadelphia chromosome-negative B-cell ALL in the consolidation phase regardless of measurable residual disease status. Our U.S. launch of MDeltra is progressing well, generating $36 million of sales in the third quarter. There's strong clinical conviction in both academic and community settings, driven by MDeltra's breakthrough efficacy. We have a strong sense of urgency to bring MDeltra to patients living with this aggressive disease. Lumicrat sales increased 88% year-over-year to $98 million for the third quarter. Vector Big Sales increased 12% year-over-year to $282 million for the third quarter, now annualizing at over $1 billion. And Kiprolis grew 8% year-over-year to $378 million in the quarter. End plate sales increased 9% to $456 million for the third quarter. If we exclude government sales, end plate sales grew 18% year-over-year for the third quarter, driven by 14% volume growth and higher net selling price. We've made significant progress in this quarter, driving execution and accelerating performance of our most important growth brands. And with that, I'll turn it over to Vikram, who will cover our rare disease portfolio.

Thank you, Marto. I am pleased to provide an update on Rare Disease, which delivered product sales of $1.2 billion in Q3. Beginning with Tepeza for the treatment of thyroid eye disease, third-quarter sales were $488 million, reflecting growth of 8% year-over-year when compared to results from the Legacy Horizon business. Recall, there are roughly 100,000 TED patients in the U.S., and penetration is currently only in the single digits. We are excited about the growth opportunity presented by the roughly 80% of TED patients who have a lower clinical activity score, or CAS. As we have discussed previously, to more effectively reach these patients, we have recently reorganized and expanded our field force into two separate and dedicated teams. One focused on comprehensive ophthalmologists and ocular specialists, and the other focused on endocrinologists. This approach reflects an optimized footprint to continue to serve patients with high-caste disease while expanding our reach to those patients with low-caste disease who can benefit from TPEZA. We made this change in the third quarter, and over the last few weeks, these teams have been actively focused on establishing new relationships with potential new prescribers. We expect this optimized focus to gain traction over the next few quarters as physicians become more experienced identifying the right patients for treatment and navigating the reimbursement process to enable access to TPEZA. Following our 8% year-over-year growth this quarter, we remain confident in the long-term potential for TPEZA in the U.S. as we expand our reach to patients with low-caste disease and continue to work closely with payers to expand access. International expansion remains a key growth opportunity, with regulatory filings completed or in progress across multiple regions. Tepesa's approval in Japan in September marked a key milestone ahead of its launch, which is expected by early 2025. We also initiated a Phase III subcutaneous study and see this as an opportunity to increase adoption and improve the patient experience with an alternative option to our current IV formulation. Quistexa for patients with chronic refractory gout delivered $310 million in sales in Q3, representing 23% year-over-year growth driven by volume growth from strong commercial execution. Quistexa with immunomodulation has established a new standard of care for chronic refractory gout. Aplizna for patients with neuromyelitis optica spectrum disorder, or NMOSD, delivered $106 million in sales in Q3, representing 58% year-over-year growth. International expansion of Aplysna is also underway, with launches in multiple markets, including Canada, which launched earlier this year. Additionally, we're excited by the growth potential of Aplysna, driven by the striking data in both IgG4-related disease, which affects over 20,000 patients in the U.S., and generalized myasthenia gravis, or GMG, which affects nearly 80,000 to 100,000 patients in the U.S. Sales of tabneos were $80 million for the third quarter. Sales increased 116% year-over-year, driven by volume growth. In the U.S., more than 4,300 patients with ANCA-associated vasculitis have been treated with tabneos. Over 2,600 healthcare professionals have now prescribed Tavneos, a roughly 53% increase in the prescriber base so far this year. As we reflect on the past year, it's clear how far we've come in the integration and how well we're progressing. I want to take this opportunity to express my sincere gratitude to all the team members that are working tirelessly to serve the needs of patients suffering from rare diseases. Looking ahead, we're excited about the opportunities and confident in what we'll achieve in our rare disease business and beyond. Now, I'll hand it over to Jay for our R&D update.

Thank you, Vikram, and good afternoon, everyone. In the third quarter, we made significant progress advancing our broad clinical pipeline, which includes a number of potentially first-in-class or best-in-class therapies. Since our last update, we have initiated a Phase II study of Meritide in Type II diabetes and delivered positive, potentially practice-changing Phase III data with a plisna in generalized myasthenia gravis. Additionally, the FDA granted breakthrough therapy designation for aplizna in IgG4-related diseases, underscoring the important potential impact of this medicine. We also showcased promising data from several oncology programs at major medical conferences, including Imdeltra, Zaluridamig, and AMG193, while reporting positive results from the first of eight Phase III studies evaluating rocatinlamab in atopic dermatitis. Let's begin with general medicine. As previously mentioned, based upon the interim analysis of the ongoing Phase II study of Maritide in chronic weight management, we are seeing a differentiated profile and are confident Maritide will address important unmet medical needs in obesity, obesity-related conditions, and type 2 diabetes. We remain on track and look forward to top-line 52-week data from the Maritide Phase II study in late 2024. We are actively planning and expect to initiate a broad Phase III program in obesity, obesity-related conditions, and type 2 diabetes. This quarter, we initiated a dedicated Phase II trial investigating Meritide in patients with type 2 diabetes living with and without obesity. Meritide has the potential to be the first therapy in this setting with monthly or even less frequent dosing. Beyond Meritide, our Phase I trial of AMG513 is actively enrolling patients. We also continue to advance our preclinical obesity programs, which include both oral and injectable approaches, comprising both incretin and non-incretin mechanisms. Also in general medicine is Olpaceran, our potentially best-in-class LP little a targeting small interfering RNA medicine. The fully enrolled Phase III cardiovascular outcomes trial of Olpaceran continues to progress. In oncology, Mdeltra, a first-in-class bispecific T-cell engager or bite molecule targeting DLL3 for small cell lung cancer, is rapidly advancing into earlier lines of therapy with three Phase III studies underway in both extensive-stage and limited-stage disease. To further enhance the patient experience, we are evaluating reduced monitoring protocols as part of the Phase III program. and we have initiated a Phase 1B study evaluating subcutaneous tarlatumab in patients with second-line or later extensive-stage small-cell lung cancer. In September, we presented impressive follow-up data from our Delphi 301 Phase 2 study of Imdeltra in patients with extensive-stage small-cell lung cancer, demonstrating sustained anti-cancer activity and a manageable safety profile. We also presented data from Delphi 303, a Phase Ib study of Imdeltra combined with a PD-L1 inhibitor as maintenance therapy, following four cycles of chemotherapy in first-line extensive-stage small-cell lung cancer. This design is similar to our ongoing Phase III study, Delphi 305, which tests the efficacy of Imdeltra and PD-L1 inhibition versus PD-L1 inhibition alone in first-line extensive-stage small-cell lung cancer following platinum-based chemotherapy. With a median follow-up of 10 months, Infeltra has demonstrated a manageable safety profile, median duration of disease control of 9.3 months, median progression-free survival of 5.6 months, and a nine-month estimated overall survival of 89%. Moving to our first-in-class STEEP1 CD3 bispecific molecule, Zaluridamig, we are pleased to announce that following consultation with regulatory authorities, we will initiate a Phase III study in post-taxane metastatic castrate-resistant prostate cancer, or MCRPC, this quarter. The promise of Zaluridamig was recently evidenced by data presented in September from a Phase I dose exploration cohort evaluating monotherapy in patients with MCRPC. With a median follow-up of 27.9 months, the median overall survival was 17.7 months across all cohorts, a potential improvement upon the historical median survival of 12 to 15 months in this patient population. Additional data from a Phase I randomized dose expansion and optimization cohort has identified the recommended dose and schedule for Phase III clinical investigation. Additionally, we are studying xaloridomig in earlier lines of therapy, in combination, and in earlier stages of prostate cancer. Our Phase I study of xaloridomig in combination with enzalutamide and abiraterone is ongoing. Recently, we have initiated two additional Phase Ib studies investigating xaloridomig in the upfront management of more localized disease. The first study evaluates neoadjuvant xyloridomig therapy, that is prior to radical prostatectomy, in patients with newly diagnosed, localized, intermediate, or high-risk prostate cancer. The second study evaluates xyloridomig in high-risk, non-metastatic, hormone-sensitive prostate cancer after definitive therapy. We are particularly excited about the potential of xyloridomig, now our third bispecific T-cell engager, entering late-stage clinical development. Beyond our T-cell engagers, we have completed enrollment of Fortitude 102, a Phase III study of bimerituzumab, our first-in-class fibroblast growth factor receptor 2B-directed monoclonal antibody, combined with chemotherapy and nivolumab in first-line gastric cancer. In the coming months, we expect to read out the results of Fortitude 101. a Phase III study of bimerituzumab combined with M-Folfox-6 chemotherapy versus chemotherapy alone in first-line gastric cancer. This study was designed based on the successful Phase II FITE study, which reported numerically longer progression-free survival and overall survival. Lastly, we are also rapidly advancing AMG-193, our oral PRMT5 inhibitor developed for MTAP-null solid tumors. We recently initiated a Phase II study of AMG-193 in patients with MTAP-null, previously treated advanced non-small cell lung cancer. This study will help to address regulatory agency requirements for dose optimization and selection. In September, we presented encouraging data from a Phase I dose escalation and initial dose expansion study, demonstrating promising monotherapy activity and an acceptable safety profile. Turning to inflammation, Based upon encouraging Phase II data from TESPIRE in patients with COPD, we are planning to initiate Phase III studies in collaboration with AstraZeneca. These trials will target patients with moderate to very severe COPD with blood eosinophil counts greater than or equal to 150 cells per microliter. We expect to begin enrollment in the first half of 2025. TESPIRE is also being investigated in separate Phase III studies of patients with eosinophilic esophagitis and and in chronic rhinocytositis with nasal polyps, where top-line data are expected later this year. In September, we announced positive results from the Phase III Horizon study of rocatinlumab in atopic dermatitis. The study met its co-primary endpoints and all key secondary endpoints. We anticipate additional data readouts from the ROCKIT program will deepen our understanding of rocatinlumab's profile. Beyond atopic dermatitis, we continue to explore rocatinlamab in moderate to severe asthma and prurigo nodularis. To expand the impact of our CD19-directed therapeutics for even more patients suffering from serious inflammatory diseases, we have initiated Phase II studies of blinitumumab, our CD19-targeting bite molecule approved as blinsido, and inebuluzumab, our CD19-targeting monoclonal antibody approved as aplizna. These studies build on mounting evidence of therapeutic benefit for B-cell depletion in autoimmune diseases from small investigator-sponsored trials of blinitumumab and systemic sclerosis and refractory rheumatoid arthritis. Our initial focus will be on systemic lupus erythematosus with nephritis, with plans to expand into additional indications. Shifting to rare disease, we recently presented potentially practice-changing results from the Phase III MINT study, the largest placebo-controlled trial for a biologic therapy in generalized myasthenia gravis. Mint evaluated aplizna in both acetylcholine receptor autoantibody positive, ACHR positive, and muscle-specific kinase autoantibody positive, or MUSC positive, populations. At the reported 26-week time point, Aplizna demonstrated clinically meaningful and statistically significant improvements in the myasthenia gravis activities of daily living score after just two doses compared to placebo. This efficacy was observed in the combined ACHR and musk-positive populations, as well as in each population separately. Aplizna also achieved statistically significant improvements in the quantitative myasthenia gravis score compared to placebo at week 26 in the combined populations. Importantly in the MINT study, patients taking corticosteroids were tapered down starting at week 4 to a 5 mg per day dose by week 24. MINT is the first and only phase 3 placebo-controlled myasthenia gravis trial for a biologic that tapered corticosteroid use. As such, the efficacy observed with aplizna in patients with generalized myasthenia gravis offers a chance for meaningful benefit without the burden and toxicity of chronic steroid use. We look forward to 52-week data for the ACHR-positive cohort and results from both ACHR-positive and MUSC-positive patient populations in the open-label period of the MINS study, where aplizna has the potential to demonstrate durable efficacy. Moving beyond generalized myasthenia gravis, in August, the FDA granted a Plisna breakthrough therapy designation for the treatment of immunoglobulin G4-related diseases, or IgG4-related disease, based upon data from the Phase III MITIGATE study. This data will be presented at the American College of Rheumatology conference in November. We are extremely encouraged by the potential of aplizna in both myasthenia gravis and IgG4-related disease and are actively working to file these data with regulatory authorities. In closing, I want to thank my Amgen colleagues for their unwavering commitment to patients facing grievous illnesses, for the focus, and for the collaboration during this productive year. I'll now turn it over to Peter for the financial update.

Thank you, Jay. We're pleased with our strong third quarter performance and are on track with our 2024 full-year goals and long-term objectives. We have a strong long-term growth outlook with breadth and depth across each of our four therapeutic areas, including our innovative pipeline and in-market products, serving patients with serious illnesses around the globe. We will continue to allocate capital to innovation first, and with our strong cash flows, also intend to fund our other capital allocation priorities. Starting with our third quarter results, as shown on slide 28 of the slide deck, we delivered $8.5 billion in total revenues, a 23% year-over-year increase. Excluding the addition of Horizon, product sales increased 8% year-over-year, driven by 12% volume growth. In the U.S., our sales in the quarter were impacted by $173 million in unfavorable changes to estimated sales deductions. In the third quarter, we delivered a non-GAAP operating margin of 49.6% as a percentage of product sales, with total non-GAAP operating expenses increasing 27% year-over-year, largely driven by the addition of Horizon. Non-GAAP R&D spending in the third quarter increased 35% year-over-year to $1.4 billion as we invested in the rapidly advancing late-stage pipeline, including Meritide, Bima-Rituzumab, and Opaceran, as well as Horizon-acquired programs. Non-GAAP SG&A expenses increased 21% year-over-year, primarily driven by the addition of Horizon, excluding the addition of Horizon, Non-GAAP SG&A expenses were relatively flat year over year. The Horizon integration is progressing well, and we expect to reach $500 million in pre-tax cost synergies by year three post-acquisition, with more than 50% to be realized by the end of this year. The acquisition is accretive to non-GAAP EPS year-to-date, and we expect it to be for the full year as well. Our non-GAAP OINE resulted in a $554 million expense, up $329 million year-over-year, almost entirely due to increased interest expense from the Horizon acquisition. We continue to strengthen our balance sheet with $2.5 billion of debt retired in the third quarter and expect a return to our pre-Horizon acquisition capital structure by the end of 2025. Our non-GAAP tax rate decreased 2.7 percentage points year-over-year to 13.4%, primarily due to the change in earnings mix from the inclusion of Horizons. In the third quarter of 2024, the company generated $3.3 billion of free cash flow, an increase of $2.5 billion from the previous year. Our strong cash flows enable investing in our business for long-term growth, including advancing our exciting pipeline opportunities and expanding capacity in our state-of-the-art manufacturing processes and facilities. Our past investments enable us to serve a significant number of patients today. For example, with over 43 million units expected for Repatha and Prolia alone in 2024. Ongoing and future investments will support Meritize and other products across the portfolio. In addition, we returned capital to shareholders as we paid competitive dividends of $2.25 per share in the second quarter. This represented a 6% increase compared to 2023. Let's turn to the outlook for the business for 2024 on slide 30. We expect our 2024 total revenues in the range of $33.0 billion to $33.8 billion in non-GAAP EPS between $19.20 to $20. We do expect Q4 non-GAAP EPS to be lower than Q3 non-GAAP EPS because of planned investment increases in our business. including key assets in our innovative pipeline, beginning with Meritide and El Pasaran, and other strategic business investments. This sequential pattern is consistent with historical trends. Let me mention a few considerations as you model the remainder of 2024. We now project full-year new asset sales at approximately $400 million today. and other revenue at approximately $1.4 billion. We expect Tepeza sales in Q4 to be flat to slightly down versus the third quarter, resulting in full-year sales being up roughly 5% year-over-year as compared to the full year of Tepeza sales in 2023. Consistent with prior years, we expect Q4 non-GAAP operating expenses to be the highest of the year and expect approximately 28% of our full-year operating expenses to be in the fourth quarter. This includes additional investments to drive momentum into 2025, for example, in key brands like Repatha and Avenity. For the full year, our total non-GAAP operating expenses are expected to grow approximately 25% year-over-year, including from the addition of Horizon. We still expect full-year non-GAAP R&D growth of more than 25% year-over-year. We now expect OINE to be approximately $2.4 to $2.5 billion, which includes the interest expense related to the $28 billion of debt raised for the Horizon acquisition. We now expect the non-GAAP tax rate to be in the 14% to 15% range, including the full-year benefits associated with the inclusion of the Horizon Business and favorable items in the quarter identified in the return to provision process. Finally, our capital expenditures guidance remains at $1.3 billion for 2024. Our long-term growth outlook remains strong, and I'm grateful to our colleagues worldwide for their dedication to serving patients. This concludes our financial update. I'll now hand it back to Bob for our Q&A session.

Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by one. Again, to ask a question, press star one. Thank you, Julianne.

Sorry, go ahead.

Our first question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Good afternoon. Thanks for taking my question. The phase two Meritai data clearly remains the key update into year end. Can you help us understand what you will share with regard to this update in terms of actual data and also the phase three developmental plan and timelines and when we might get an update from the other obesity programs? Thank you.

Okay, it sounded like a few questions there, Salveen. As we said, we're continuing to be very excited about the prospects for Meritide, and we added the disclosure on this call that we have begun the Phase 2 study in type 2 diabetes. The conduct of the trial is continuing to progress well, and we're expecting to have the data here by the end of the year. And when we have those data, we'll obviously look forward to being able to share that with our investors. Julian, let's go to the next question, please.

Thank you, Salveen. Our next question comes from Olivia Breyer from Cantor Fitzgerald. Please go ahead. Your line is open.

Hi, good afternoon. Thank you for the question. You are getting a lot closer to kicking off a phase three Meritide program. So how do you think about the level of spend that will go into that kind of undertaking? I mean, I assume we're looking at billions as it relates to investments just around R&D, but also manufacturing. But yeah, hoping you guys can put some numbers around it or at least better characterize how you're thinking about things from here. Also hoping you can clarify whether or not you have seen those phase two data in-house.

So with respect to the Phase III trial, we would reiterate that we are expecting to pursue a broad Phase III trial in obesity, obesity-related conditions, and type 2 diabetes. It will be, we would expect, a large global trial, fully exploring the molecule. And, Jay, I'd invite you to add any color you'd like about the Phase III program. But obviously our investment in it will reflect our view that this is a differentiated molecule, and we look forward to having the full characterization of its safety and efficacy profile.

Yeah, thanks, Bob. We're fully on track, actively planning. I expect to initiate a broad Phase 3 program. This will include obesity, obesity-related conditions, and type 2 diabetes. As you've heard already, we're progressing the Phase 2 study to characterize dose response, tolerability, efficacy in patients, importantly, without obesity but having type 2 diabetes. So we're fully on track, actively planning the broad program.

And we'll, as part of our normal guidance process in the coming year, I'm sure we'll give an updated perspective then that reflects our plans for the phase three trial. And then we'll also add any perspective that may be helpful on the capital expenditure front. I think what I just would remind you is that this molecule is designed on our existing antibody platform. It fits very well with our network as currently configured. And so, again, we'll have more to say about that through time as necessary.

Maybe to suggest, Bob, Olivia, it's Peter here. I would just remind you of Amgen's long history of being a leader in the science of manufacturing and process development. That creates opportunities in terms of how we might view yield going forward. So while it might not just be bricks, mortar, and steel, yield's really important. We've got a really strong history in that. And we did raise the CapEx guide this year, as you know, to about $1.3 billion. We're very thoughtful about that. And you also heard me mention that Research and development spanned up 35% quarter over quarter to the prior year. We expect it to be up over 25% for the year. So we certainly are investing where we always say we will in innovation and meritides right at the front of that. And we look forward to investing to be a key player in this global public health crisis.

Julian, let's take the next question, please.

Thank you, Olivia. Our next question comes from Michael Yee from Jefferies. Please go ahead. Your line is open.

Great, thanks so much. Maybe for Jay, it sounds like you guys are quite confident about Meritide, and yet you are also building a greater portfolio.

I think you announced 513. and yet you also don't have an oral, I don't believe so. Can you just comment about your philosophy or thinking about the totality of the portfolio, given 133 is so far in Phase 3, but the other things are so early, and whether you believe you have the portfolio today to be competitive with everybody else who has so many things late stage? Thank you.

Thanks, Mike.

I really appreciate the question. With Meritide, we're really pleased with the execution of the study a week later this year, fully focused, as I shared, on setting up the broad phase three program.

The development of additional medicines for obesity and obesity-related conditions is a source of really active investigation here preclinically and clinically now with 513, as you nicely mentioned. We've not as yet disclosed the mechanism of action of 513, which is a very interesting program. And as you note, and this is on clinicaltrials.gov, the SADMAD ascending dose study has been announced, is enrolling, and features subcutaneous or intravenous administration. to reach smaller segments, other segments within the obesity landscape, to serve all the patients with obesity-related conditions. We, like many others, are interested in both injectable as well as oral, non-injectable medicines. We're very interested in creatine pathway as well as non-creatine pathway mechanisms of action, and our portfolio reflects each of these.

Julianne, next question, please. Thank you, Michael. Our next question comes from Courtney Breen from Bernstein. Please go ahead. Your line is open.

Thank you so much for the question today. Just anchoring on some of the conversation that you shared around the Horizon products and specifically to PESA, Can you please provide some more context on the path to growth and when you expect to see the impact of the sales team there, particularly in the context of the final comments that were shared in terms of expectations to Q4 relative to Q3?

Yeah, let's take it in a couple pieces. First, as you heard us say, the quarter grew 8%. Vikram, why don't you just remind our investors of the plan for expanding the sales force and then also perhaps speak to Japan or international more general?

Yeah, thanks, Bob. So as Bob just said and as I said in my prepared remarks, it depends on 8% year over year. And as we have also said previously, we're continuing to focus on growth coming not only from the high-caste patients but also the 80,000, roughly 80,000 patients that suffer from low-caste disease. What we have learned over our time serving these patients and these prescribers is that in order to most effectively reach these low-caste patients, we need to have a dedicated effort towards both comprehensive ophthalmologists and ocular specialists, as well as endocrinologists. And what we have found is that type of coverage is necessary in order to to serve the 80,000 or so low-caste disease patients that we have discussed previously. This approach reflects an optimized footprint. We believe that this approach will allow us to not only help the right physicians and new prescribers find the right patients for TPEZA, but also help to enable access to TPEZA in the most appropriate way. Finally, what I would say here is this is something that we've been working on for a little bit here, and this change occurred in the third quarter, so we do expect the momentum to play out here in the next several quarters. In the last few weeks, the teams have been actively focused on establishing new relationships with these new prescribers, and we look forward to updating you as we go. Final point on the global aspects of TPEZA. As you're aware, beyond the U.S., we're also looking forward to bringing Tepesa to patients around the globe, including Japan. Japan's a really important country for us in terms of our next launch. Let me remind you that we received approval in Japan for Tepesa with high-caste patients in September, and we're actively working to an early 2025 launch there as well.

Julian, next question, please.

Thank you, Courtney. Our next question comes from Umar Rafat from Evercore ISI. Please go ahead. Your line is open.

Hi, guys. Thanks for taking my question. I had a two-part question on Maritide, if I may. Perhaps first, from a vomiting profile perspective, I recall in the Phase 1 trial, specifically in Phase 1, the vomiting profile was generally fairly consistent between low and high doses, which would imply perhaps titration in and of itself may not solve for vomiting. But, Jay, I'm curious, is there anything super important in the design of phase one which wasn't incorporated that could have addressed that vomiting? That's number one. And then secondly, on the cadence of weight loss, is there any reason to expect the plateau in weight loss to not happen past month seven or so? Because we've seen other glyph trials kind of do that in six to seven months post-hydration. Thank you very much.

Yeah, thank you. I really appreciate it. You know, the phase one study published now in January has been pretty thoroughly considered. This was a standard phase one dose escalation study that did not have antecedent dose titration. So if that answers your question, I suppose there's only so much that can be learned from the phase one. We're honestly just really focused on these phase two data, where at the interim we saw the differentiated profile. And as you know, we're in phase three planning. Regarding weight loss plateau, this will be an interesting thing to observe and learn from the data, which we await later this year. All right, Julianne, next question, please.

Thank you, Umar. Our next question comes from Jay Olson from Oppenheimer. Please go ahead. Your line is open.

Oh, hey, congrats on the quarter, and thank you for taking the question. Maybe I'll shift gears to oncology. Congrats on all the progress and impressive growth, especially for Blinzido. For subcube linseido, it looks like the registrational study is now going to initiate in the second half of next year. Can you talk about what may have changed there and maybe share some color on the plans for that study? Thank you.

Yeah, thanks, Jay. This is Jay. The subcutaneous development of Blenzyto is a major priority for us.

We're very encouraged by the efficacy that we've seen with subcutaneous Blenzyto in prior studies. You'll remember perhaps that this medicine's dose three times a week. We did a phase one study back in 2022 at ASH with striking data. Among 21 valuable patients, we saw 67% CR rate within one cycle. There's been further data in the American Journal of Hematology since that time, 27 patients with an 85% CR rate, 75% of whom were MRD negative. And this is all without any grade four CRS. The subcutaneous blood site was a major priority for us. It is progressing in clinical investigation and there's really nothing to read into the timing that you allude to in your excellent question. Thank you.

All right, Julianne, next question, please.

Thank you, Jay. Our next question comes from Terrence Flynn from Morgan Stanley. Please go ahead. Your line is open.

Hi. Thanks for taking the question. Two-part on Meritide as well. Just wondering if you can confirm if the data disclosure will be a press release or it will be at a conference. I think the Phase 1 data were presented at the Insulin Resistance Conference in December. So just wondering the venue. And then for the phase three, Jay, do you think you're going to have to make any changes to the titration schedule you employed in phase two? I know Lilly had extended their terzapatide titration schedule when they moved from phase two to phase three. Do you think that's something that could be necessary here? Thank you.

In terms of the release, Terrence, and how we share that with investors, well, again, we're focused on getting the data in hand and When we have them, we'll try to do whatever's in best interest of the shareholders. So stay tuned. As soon as we have them, we'll look forward to being able to report those.

And, Jay, do you want to address the question on Phase 3?

You know, the Phase 3 planning, as we've shared, is fully on track, and we won't today give any news or insights into our approach to dosing, but we feel confident it will be well-informed by the Phase 2 study that is ongoing, and we'll read out later this year. Great. Next question, please, Julianne.

Thank you, Terrence. Our next question comes from Carter Gold from Barclays. Please go ahead. Your line is open.

All right. Good afternoon. Thanks for taking the question. I want to maybe switch it up a little bit and ask you around the PavBlue launch. You know, Amgen's biosimilars have – some have gone really well, others a little bit less so. You've historically talked about the importance of being first. but how do you think about adoption ahead of a Q code and discussions with any payers, your expectation around step edits for biosimilars ahead of some of the other newer entrants? Thank you.

Yeah, thanks, Carter. Murdo, why don't you share your thoughts in general on the biosimilar franchise? We don't often get a chance to talk about it, but please also on Pat Blue.

Thanks, Bob. We're obviously quite excited about the next wave of launches, not just PavBlue, but our other biosimilar launches that we are expecting in the not too distant future, as I mentioned in my opening remarks, with Weslana and Bekemvi. On PavBlue, as you mentioned, Carter, it's important to be first or in the first wave, and clearly we're in that position now as we're launching this product as we speak. And we expect there to be strong interest in PABLU pretty much early on in the launch phase. Obviously, having permanent queue codes in this case, given that it's about as similar, are important. But there's a lot of interest out there, even as we may have a temporary reimbursement code.

And generally, Carters, we've built what we think is industry-leading about a similar franchise. It's a franchise that is performing very well. We think it's earning attractive returns for our shareholders. Next question, please.

Thank you, Carter. Our next question comes from Chris Schott from J.P. Morgan. Please go ahead. Your line is open.

Great. Thanks so much. Can I ask a quick question on Tez Spire in COPD? Obviously, some really nice Phase II data earlier this year. But just was interested in how you think about the potential landscape here as we consider both to PICSAN, essentially the IL-33s coming to market ahead of you. It seems like you might have a broader program and some interesting data, but just tell me a little bit about how you're just commercially seeing that fitting into the landscape. Thank you.

Well, Chris, why don't I start, and this is Jay, and Murdo, hand off to you. So TESPIRE, as all here know, is our TSLP monoclonal antibody that we're developing with AstraZeneca, and recently we had a chance to read out a very compelling Phase II study in moderate to very severe COPD. This was a 337-patient study. These patients were having exacerbations despite triple therapy, and we went head-to-head against placebo over a 52-week period of time, a population actually broader even than DUPI, and Murda, I perhaps invite you to reflect on that. The data were quite positive with a numerically reduced exacerbation rate by 17%. We learned a lot from biomarker studies of bloody eosinophils as to which subsets of patients, all preplanned, stand to benefit the most. And with these learnings, we're now pleased to announce that we're planning to initiate phase three studies together with AstraZeneca. This trial is well-structured and set up to definitively answer the question around efficacy of TESPIRE. in COPD. Murdo, would you like to reflect a little bit about our competitive posture?

Yeah, thanks for the question, Chris. We're obviously really pleased with the performance of TestSpire so far in severe uncontrolled asthma. We're actually now the second most prescribed product when it comes to new to brand prescriptions in that category. So I think it's clear now that Allergists and pulmonologists appreciate the differentiated profile and the unique mechanism of action that is test-buyer. We also believe, as Jay has highlighted, that ability to address a broader population of patients because of the unique mechanism of action and the upstream way in which it intervenes in the inflammation cascade. We are hopeful that that differentiation will continue to play out in COPD, and we feel really good about the opportunity to compete there. With the combined resources of our partners at AstraZeneca and Amgen, we have a very strong share of voice currently in severe and uncontrolled asthma, and we expect to be able to affect that same strong share of voice on the successful completion of the Phase III trial. All right, Julian, let's take the next question, please.

Chris, our next question comes from Evan Siegerman from BMO Capital Market. Please go ahead. Your line is open.

Hi, guys. Thank you so much for taking my question. I want to touch on the biosimilar launch for the equivalent of biosimilar. Can we talk about some of the launch strategy and more specifically how you can stimulate demand among ophthalmologists who would otherwise choose a branded product? Are you able to offer rebates or extended invoicing for these practices? Thank you so much.

Thanks for the question. Obviously, I'm not going to talk about what we're doing commercially with respect to contracting. I will just say that we have a very broad deployed field force covering the key customers in this therapeutic area. We have a very strong institutional organization that covers the purchasing groups and the large networks that treat a large percentage of the populations here. and the receptivity has been high. This isn't our first biosimilar launch, and we've been preparing effectively, and we're excited to be in the market.

Julianne, next question, please.

Thank you, Evan. Our next question comes from Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.

Great. Thank you very much for taking my question, and congrats on the quarter. Maybe a question for Jay. Given that you have diabetes patients with obesity in the ongoing phase 2 trial, do you think we would be able to look into the A1C profile of the drug as well, or is it just two smaller trials to make any conclusion about that at this point?

Yeah, thank you, Mohit. As you know, type 2 diabetes runs, regrettably, with obesity and with overweight, and so we do hope and expect to have some insights into anti-diabetic activity from the phase two study. But we need to have an experience in a dedicated phase two study of diabetes, in particular in patients without obesity. So more to follow there towards later this year.

Next question, please, Julianne.

Thank you, Mohit. Our next question comes from Yaron Werber from TD Cowan. Please go ahead. Your line is open.

Great. Murdo, I got maybe a couple of questions for you. One, just on Enbrel, this quarter we didn't see the normal Q3 bounce back. Is this just a new normal now or is there any particular one-timers in the quarter? And then secondly, you mentioned 12,000 accounts or 13,000 accounts ordering Prolia. I presume you're mentioning that on purpose is relating to the upcoming biosimilar launches late May next year. Can you talk about maybe just that dynamic in Prolia versus Extriva, what to expect next year? Thank you.

Thanks for the question, Jerome. Yes, as you picked up, Enbrel was impacted by two negative trends in the quarter. One, of course, the regular decline in net price, and then another one, which was a 30% adjustment. in the quarter. So the quarter is a little softer than you normally see. Volume was up 4% in the quarter. So Enbrel continues to do quite well in terms of prescribers treating patients. But we are expecting continued net price declines going forward. When we look at Prolia, I mentioned that we have 13,000 provider accounts having treated patients with Prolia so far this year. This is just to give an idea of the breadth and utility of this important product. The other thing that we enjoy with Prolia is it's an important way for us to source potential patients for eventity, which we continue to see very strong growth in. So our presence in the bone community and the treating physician population that treat the many women who are trying to reduce their risk of fracture, despite the effect of their osteoporosis, we feel really good about it. And yes, it could end up becoming something that helps us in terms of market presence in the face of biosimilar competition in the future.

All right, Julianne, let's take the next question, please.

Thank you, Yaron. Our next question comes from Gregory Renza from RBC Capital Market. Please go ahead. Your line is open.

Great. Good afternoon, and thanks for taking my question. Bob, maybe just looking at the rare disease franchise, and we've always mentioned, you've mentioned that it's certainly a different approach in this space. And to that, what is Amgen's approach on pipeline replenishment when it comes to the rare disease pillar? Certainly, being still packed with parents, discontinuation in IPF, just curious how to think about specific disease areas in rare disease and also how... how you think about kind of supporting and following your current marketed products in the rare disease franchise. Thanks so much.

We take this in a couple pieces, and we're obviously very excited about rare disease and what we think we can bring to the field with respect to the molecules that are already on the market. Each of them, as you know, is in an early stage of its life cycle and involve either diseases or molecular attributes that we think we can add a lot of value to over time. So we're excited about what we think we can do with those domestically and in international markets. And we're also excited about, frankly, how our genetics resource, which you're familiar with, has enabled us to glean insights both from existing molecules in the rare disease portfolio as well as potentially others that we might be able to add to it. But I'd invite Jay to share his thoughts. He's already brought a lot of energy to this topic with our rare disease organization.

So, Jay, fire away. Thanks, Bob, and thanks, Gregory, for the question.

The acquisition of Horizon has really activated and energized our staff in R&D. I think inspired by the mechanistic repositioning of a TPEZA for thyroid eye disease, the capacity to bring rare disease medicines expertly to patients around the world has really activated the imagination of our R&D colleagues, and we've had multiple new project launches since the acquisition of Horizon. Second, I would say that the integration has gone very smoothly, and the staff who've joined us through the Horizon Acquisition have both seamlessly executed the development priorities for the rare disease portfolio and also have brought a lot of really interesting ideas. We have now a rare disease initiative with dedicated leadership. We have dedicated leadership in rare disease drug development. And we hope and expect to continue just the best-in-class external innovation that Horizon was really known for in this space. So a blend of internal and external innovation will, I think, more than replenish the rare disease mid- and early-stage pipeline in the years to come.

We're also very excited about the talent that joined us from Horizon, particularly on the research and the medical side. So we feel really well-equipped now to continue continue to invest in this area and make a difference for patients.

So, Julianne, seeing as we're getting to the half hour here, maybe we'll take two more questions.

Certainly. Thank you, Gregory. Our next question comes from Matt Phipps from William Blair. Please go ahead. Your line is open.

Good afternoon. Thanks for taking my question. Just wanted to confirm if the 420 mg dose is what's going to be taken forward into the COPD trials, and is that something that you can formulate into a single injection, given it's twice, I believe, the current size? And then just to confirm, this is two separate phase three trials. Will they be identical in design? Thank you.

Yeah, Matt, thanks for the question. They're good questions, but none that we can address here today. Together with our colleagues from AstraZeneca, we'll have a chance to describe in full the design of the Phase 3 program that will support the consideration of test-buyer and COPD soon to come.

All right, Julianne, I think we have time for one more.

Our last question today will come from Chris Raymond from Piper Sandler. Please go ahead. Your line is open.

Hey, thanks for squeezing me in. Just back on PavBlue, we've gotten some interesting doc feedback on this with a decent amount of receptivity to this option. And one thing that's kind of a new development, I think, at least in the U.S. market, has been a recent supply disruption to Avastin, which may actually provide maybe more of an opening for this launch. I'm just curious, as you looked at the market, Talk about how you looked at the role of biosimilars in this predominantly buy-and-bill market with a very inexpensive option in Avastin, but one that seems to be fading, at least in terms of suppliers wanting to provide the drug. I guess bottom line, does this Avastin supply issue make this even more interesting to you guys? Thanks.

Thanks for the question, Chris. But first and foremost, obviously, when you're treating patients serious illness, you want to have, as a provider, you want to have a reliable supply of the product that you and your staff get used to handling. And I can say we are very fortunate to have world-class manufacturing here at Amgen, and we continue to have a highly reliable supply chain and manufacturing capability. We have benefited from shortages with other biosimilars including Avastin, as I'll remind you, we have Invasi, our own biosimilar to that product. So we are seeing customers coming to us given some shortages here in the US and around the world. And, you know, again, I'm thankful for our manufacturing colleagues here at Amgen who are putting us in a very strong position to be able to speak to institutional customers, to individual providers, and obviously communicate with patients. about the ability for us to supply and the reliability of that over time. That being said, I think, you know, we're definitely looking at our own opportunity here in the market with Pat Blue. I think you mentioned that there's high interest in the customers that you've talked to. These retina specialists are sophisticated customers. They understand that if they're going to go with a manufacturer, they're going to want a relationship. That is persistent over time, and we believe we're well positioned for that. We have a great device in a pre-filled syringe. We also have vials. So we're able to supply this demand in this market, and that's what we intend to do, and that's what our teams are in the field establishing right now. But thanks for your interest.

Okay, Julian. Thanks for moderating our call, and thank you all for joining us. If there were any of you who didn't get a chance to ask your questions, Justin and his team will be around still for a few more hours. So we look forward to gathering with you when we next have relevant information. Thank you very much. Bye-bye.

This concludes our 2024 Q3 earnings call. You may now disconnect.