Amgen Inc.

My name is Julianne and I will be your conference facilitator today for the Amgen Q1 FY 2025 earnings 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 Clays, Vice President of Investor Relations. Mr. Clays, you may now begin.

Good afternoon, and welcome to our first quarter 2025 earnings call. Bob Bradley will lead the call and be followed by a broader review of our performance by Myrtle Gordon, 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 Safe Harbor Statement, and please note that actual results can vary materially. Over to you, Bob.

Okay, good afternoon, everyone, and thank you for joining us today. We're off to a strong start in 2025, and this was an exciting quarter, one with strong volume growth across the enterprise, important new product launches, and positive Phase III data. Revenue grew 9% year-over-year. Volume grew 14%, reflecting growing patient demand for our innovative medicines. Fourteen of our medicines delivered double-digit sales growth, spanning general medicine, rare disease, inflammation, and oncology. Our industry-leading biosimilars portfolio added to this performance, delivering more than $700 million in revenue this quarter, which was up 35% year-over-year. Beyond the strong financials, this quarter demonstrated the breadth and depth of our portfolio and the strength of our execution. We delivered multiple positive Phase III readouts, initiated four new Phase III studies, and launched three new products or indications. With that, let me turn to some of the key drivers of our momentum. Starting in general medicine, we're addressing large, underserved patient populations with multiple products which have significant room for growth. Heart disease remains the leading cause of death globally. Repatha, now a multibillion-dollar product, continues to grow as access improves for patients. we're also advancing the El Pazaran Clinical Program, which addresses an important residual risk factor in heart disease. It's currently being evaluated in a large Phase III cardiovascular outcomes trial. In bone health, Amgen is the global leader, and we expect continued long-term growth in this area. Avenity, which is the only bone builder which also slows bone loss, reduces fracture risk for millions of postmenopausal women. We're rapidly advancing Maritide, having initiated the first chronic weight management phase three studies of our broad clinical program in obesity and obesity-related conditions. Turning to rare disease, our four key growth drivers, Tepesa, Cristexa, Uplizna, and Tavneos, are all early in their life cycles and well-positioned for long-term growth. Uplizna is a differentiated B-cell depleting therapy. It's the leading biologic for the treatment of NMOSD and recently launched as the first and only FDA-approved treatment for IgG4-related disease, which is a serious and underserved autoimmune condition. We're encouraged by the positive reception from patients and physicians in the early stage of the launch. We've also filed Phase III data for Oplizna and generalized myasthenia gravis, with the FDA and we're exploring its potential across additional B-cell mediated diseases. In inflammation, we remain focused on difficult to treat diseases where the need for innovation is the highest. Tezspire is a first in class therapy that targets TSLP, a differentiated mechanism with broad potential across a number of diseases. In severe asthma, It continues to build strong momentum with high prescriber confidence. We've also delivered compelling Phase III data in rhinosinusitis with nasal polyps, and most recently, initiated two pivotal Phase III studies in COPD, the world's third leading cause of death. In oncology, our leading bispecific T-cell engager platform continues to develop new standards of care. Blinsido has moved into frontline treatment and continues to grow. The FDA has granted breakthrough therapy designation for Blinitumumab for subcutaneous treatment of BALL, which Jay will speak to shortly. Imdeltra provided an overwhelming survival benefit at an interim analysis in a Phase III study in second-line small-cell lung cancer, beating chemotherapy as a standard of care. These data represent a meaningful milestone for patients and will be presented at ASCO in June. Valuridamig is enrolling well in our Phase III study in advanced prostate cancer patients. Next, our industry-leading biosimilars portfolio continues to contribute meaningfully to our long-term growth. We have a proven approach in this area. Be in the first wave of launches and ensure a safe and reliable supply. We're seeing that formula deliver again this quarter with our next wave of U.S. launches underway, including PavBlue, Weslana, and Bekemvi. I recognize there's a lot of uncertainty at the moment related to tariffs and taxes. Given the long life cycle of our business, clarity on these issues is important to us, and I'm sure it's important to all of you as well. While it's premature to speculate what the outcomes of tariff and taxes might be for our business, I would remind you that we've proven our ability to adapt and we've demonstrated the operating agility necessary to navigate change and deliver long-term growth. With respect to manufacturing, I want to point out that following the 2017 tax reform, we invested nearly $5 billion in U.S. capital projects as measured through 2024 and And in addition, we've recently announced nearly $2 billion in additional expansions in the states of Ohio and North Carolina. We're actively engaged on policy matters, and we remain focused on meeting the growing demand for our medicines. And to the extent that changes in taxes or tariffs require us to adapt, we'll do so accordingly. Let's go back to where I started. This was an exciting quarter, not just because of the financial results, but because of what those results signal about our future. Inline brands are delivering. We're advancing positive phase three studies. We're launching new products. We're earning breakthrough designations, and we're initiating the next wave of late-stage programs. We're operating in a volatile environment, but what hasn't changed is the growing patient demand for our medicines and the unwavering focus of our people. Amgen is well positioned to deliver innovation and growth, not just this year, but for the long term. I want to thank our nearly 28,000 colleagues around the world for their dedication to our mission, serving patients. With that, I'll turn over to Murdo for a commercial update.

Thanks, Bob. We've entered 2025 with strong momentum, driven by strategic focus, disciplined execution, and an unwavering commitment to the patients we serve. In the first quarter, global product sales grew 11% year over year. In the U.S., our largest region, product sales grew 14%. Globally, 14 products deliver double-digit or better growth, underscoring the breadth and depth of our portfolio and ability to deliver consistently and at scale. Turning to general medicine, Repatha sales increased 27% year over year, delivering $656 million in sales in the first quarter. Repatha is a brand built on deep clinical conviction. We're making meaningful improvements in access, helping more patients benefit from Repatha. With 100 million patients globally in need of effective LDL cholesterol lowering, we see significant opportunity ahead to further broaden our impact and deliver long-term growth. In the US, Repatha sales grew 26% in the first quarter with volume up 42%. This growth reflects steady expansion in the base of primary care prescribers and enhanced depth of prescribing amongst cardiologists. We're driving increased patient activation through direct-to-consumer efforts, leading more patients living with cardiovascular disease to ask their physicians about Repatha. Access in the U.S. has never been stronger, with many payers eliminating prior authorization requirements, making Repatha more accessible and affordable for patients. Outside the U.S., Repatha continues to deliver strong growth across major markets, demonstrating sustained leadership amidst rising competition in the segment. Vanity sales increased 29% year-over-year to $442 million in the first quarter. Divinity is the only therapy that builds new bone and slows bone loss, uniquely positioning it to help reduce fracture risk in women who are post-menopausal. Despite this clear clinical value, fewer than 250,000 patients in the U.S. have been treated to date, while millions remain at risk. Today, more than 90% of very high-risk patients are not receiving appropriate therapy, and that's a significant gap and a meaningful opportunity to drive growth by ensuring more patients receive the protection they deserve from Avenity. In the U.S., Avenity delivered 36% sales growth in the first quarter, and we focused our U.S. bone and field force on Avenity and increased investment in brand awareness. These efforts are driving meaningful growth in prescription volume across established and newly activated prescriber accounts. Prolia sales grew 10% year-over-year in the first quarter with 13% volume growth, reaching almost $1.1 billion in sales. I'll move to our rare disease portfolio, which grew 3% year-over-year, delivering $1 billion in sales in the quarter. I would note that within this portfolio, sales of Tepeza and Cristexa were adversely impacted in the quarter by changes to U.S. wholesaler inventory levels. We do not expect similar reductions in inventory levels for the remainder of the year. Since launch, Tepeza has had a positive impact for thousands of patients living with thyroid eye disease. In the U.S., there are roughly 100,000 patients suffering from TED who could benefit from TPEZA, and to reach them, we've intensified our efforts to engage a broad prescriber base of oculoplastic surgeons, ophthalmologists, and endocrinologists. We're encouraged by the feedback that we're receiving from the medical community, including an increase in intent to prescribe reported by endocrinologists during the first quarter. Access is also improved for patients with more than 85% of medical plans, removing clinical activity score requirements. We're advancing our international expansion of TPEZA. In Japan, TPEZA is now the first and only approved therapy for active thyroid eye disease. And in the first full quarter since launch, we've seen strong uptake and positive physician engagement. in the European Union were preparing to launch following the recent positive opinion issued by the Committee for Medicinal Products for Human Use on the approval of Tepesa for the treatment of moderate to severe thyroid eye disease in adults. This marks a significant step forward for patients living with TDD who currently have no approved disease-modifying therapies available to them in Europe. Uplizna sales increased 14% year-over-year to $91 million in the first quarter, driven by continued growth in treating patients with neuromyelitis optica spectrum disorder. In April, Luplizna was the first approved breakthrough therapy in the U.S. for the treatment of adults with immunoglobulin G4-related disease, or IgG4, a chronic and debilitating immune-mediated inflammatory condition that can affect multiple organs. The launch is underway, and the first patient with IgG4 disease was treated shortly after approval. Amgen's many years of experience with rheumatologists have been helpful in establishing urgency to diagnose and treat patients suffering from IgG4-related disease with the Plisna. In inflammation, Tespire delivered another strong quarter, up 65% year-over-year. Adoption among pulmonologists is growing, driven by Tespire's unique profile to treat patients with multiple triggers and drivers of severe uncontrolled asthma. we see significant growth opportunity for test-buyer to treat the 2.5 million patients worldwide who suffer from this challenging disease. Our innovative oncology portfolio, including Blinsaitl, Mdeltra, Lumicrast, Vectabix, Kyprolis, Endplate, and Xtiva grew 10% year-over-year, generating over $2 billion in sales in the quarter. At the core of this growth is our industry-leading bispecific T-cell engager platform, which developed both Bonsaito and Indeltra. With these products, we're not only addressing critical unmet needs in oncology, we're helping to redefine the standard of care in difficult-to-treat cancers, creating meaningful opportunities to reach more patients and drive long-term growth. Blood Cyto sales were $370 million in the quarter, with year-over-year growth of 52% driven by broad prescribing across both academic and community segments. We see strong conviction in Blood Cyto as the standard of care for both adults and pediatric patients with Philadelphia chromosome negative B-cell ALL. Our U.S. launch of IMDeltra for the treatment of patients with extensive stage small cell lung cancer who are progressing on or after chemotherapy continues its strong momentum, generating $81 million in sales in the first quarter. To date, IMDeltra has been administered in patients in academic cancer centers, regional cancer hospitals, and community oncology clinics, indicating broad adoption and comfort with this important new cancer therapy. In April, we expanded our global reach with the launch of MDELTRA in Japan, marking an important step forward in our commitment to bringing innovative oncology therapies to patients around the world. The momentum behind MDELTRA is being reinforced by compelling new data. We recently announced new clinical data demonstrating that MDELTRA met the primary endpoint of superior overall survival in small cell lung cancer compared to standard of care chemotherapy. This is a meaningful confirmation of MDELTRA's efficacy for patients facing one of the most aggressive and difficult to treat cancers. And our field teams are acting with urgency in their educational efforts with the medical community. Biosimilar portfolio sales were $735 million in the first quarter, representing an increase of 35% year over year. Sales of PABLU, the biosimilar to ILEA, reached $99 million in the first quarter. Retina specialists are responding very positively to PapBlue, expressing appreciation for this high-quality Amgen biosimilar delivered in an easy-to-use pre-filled syringe. Importantly, on April 1st, PapBlue received its permanent reimbursement Q-code, which will facilitate easier access for patients. We're also pleased with the successful U.S. launches of Wizlana, a biosimilar to Stelara, and Bekembe, a biosimilar to Solaris. Both launches have been received well by our patient and prescriber communities. We expect these recent launches will further enhance the robust growth and attractive returns from our biosimilar portfolio. 2025 is off to a strong start with double digit growth across our broad and deep portfolio. Looking ahead, we see significant growth potential powered by disciplined execution, a high performing team, and above all, a clear and unwavering commitment to the patients we serve. I'll now hand it over to Jay.

Thank you, Murdo, and good afternoon, everyone. The first quarter has been exceptionally productive for R&D, extending our track record of high-quality on-time execution and highlighted by significant clinical and regulatory achievements. Most notably, we received FDA approval for aplizna, an IgG4-related disease, the second approval in a series of B-cell-mediated diseases we are studying with this medicine. We also announced positive data from Phase III studies of rocatinlamab, Aplizna, and Imdeltra, while initiating multiple Phase III trials of Meritide and Tespire. Let's begin with Meritide, our investigational therapy for obesity and obesity-related conditions that features a unique and differentiated profile. In March, we initiated two Phase III studies in chronic weight management as part of our comprehensive Meritime Phase III program. These trials will evaluate Maritide in two distinct populations, adults living with obesity or overweight without type 2 diabetes and adults with obesity or overweight with type 2 diabetes. Both studies will assess the safety, efficacy, and tolerability of three target dose levels of Maritide, preceded by an optimized dose escalation regimen to improve the patient experience. The primary endpoint for each study is the change from baseline body weight at 72 weeks. Beyond these first two studies, we anticipate initiating additional Maritimes Phase III studies later this year, evaluating Maritimes in specific obesity-related conditions. Last November, we presented top-line results at 52 weeks from our Phase II Chronic Weight Management Study, which highlighted Maritimes' monthly or less frequent dosing, consistent, predictable, and sustained weight loss across all doses without a weight loss plateau through 52 weeks, and Meritide's clinically meaningful impact on cardiometabolic parameters, including hemoglobin A1c. At the American Diabetes Association, or ADA, annual meeting this June, the underlying details from this Phase II study at 52 weeks will be presented. Clear from these data is the important finding that dose escalation, which was studied in two of the treatment arms, meaningfully improves tolerability, in particular, rates of nausea and vomiting. as compared with fixed-dose administration, which was used in the other seven treatment arms. This finding is consistent with the clinical experience to date with GLP-1-based therapies and was further supported by our Phase I pharmacokinetic study that tested even lower starting doses of Meritide. Details from this study will also be discussed at ADA. These learnings have informed the design of our two Phase III studies of Meritide for chronic weight management, which are open and enrolling robustly. Looking ahead to the second half of 2025, we expect key data from Maritide, including both the ongoing Phase II Type II Diabetes Study, which has completed enrollment, as well as end-of-treatment period data from Part II of the ongoing Phase II Chronic Weight Management Study. Maritide represents a promising treatment advance for people living with obesity and related conditions, especially given its monthly or less frequent dosing, predictable and sustained weight loss, and clinically meaningful impact on cardiometabolic parameters. We are committed to fully realizing its therapeutic potential. Beyond Maritide, in general medicine, we look forward to data from the Repath of Vesalius Phase III Primary Prevention Study in the second half of this year. Given the profound and sustained benefit of RPASA in the secondary prevention setting, we're optimistic about these data and the potential opportunity to reach additional patients at high risk of a first cardiovascular event. Turning to Olpaceran, our promising best-in-class small interfering RNA medicine targeting LTa, we are bringing a precision medicine approach to cardiovascular risk reduction for the many patients with LTa elevation. The fully enrolled OCEAN-A Phase III Cardiovascular Outcomes Trial of Olpacerin continues to progress. Moving on to our rare disease portfolio, we are very excited about Aplysna's expanding potential to improve the lives of those facing rare inflammatory conditions. In April, the FDA approved Aplysna as the first and only treatment for adults living with immunoglobulin G4-related disease. delivering durable disease control in this recently described chronic and debilitating immune-mediated inflammatory condition that often affects multiple organ systems. Aplysna is an innovative biologic that targets CD19 positive B cells and addresses a core driver of IgG4-related disease, significantly reducing disease flares and dependence on harmful long-term steroid treatment. Additionally, We recently presented compelling 52-week data from our pivotal Phase III MINT study evaluating aplizna in patients with generalized myasthenia gravis. These results demonstrated durable and sustained efficacy of aplizna in patients with acetylcholine receptor autoantibody positive generalized myasthenia gravis with only two doses a year following an initial loading dose. The 52-week mint results highlight a plismid's promise as a new standard of care in generalized myasthenia gravis, offering durable and sustained symptom relief with a simplified treatment regimen while minimizing steroid use. Since the publication of these data, we have met with numerous opinion leaders who are also enthusiastic about a plismid's profile, highlighting the unique mechanism of action, patient-centered every six-month dosing schedule, and durable, sustained efficacy. We are also pleased to announce that the FDA has accepted the regulatory submission of the Aplizna Mint Phase III generalized myasthenia gravis data with a BDUFA date of December 14, 2025. The recent FDA approval in IgG4-related disease and the strong clinical evidence in myasthenia gravis underscore Amgen's ongoing leadership in developing innovative treatments targeting CV19-positive B cells in cancer, inflammation, and in rare disease more generally, where only 5% of the estimated 10,000 rare diseases have available treatments. In inflammation, we and our partner AstraZeneca have initiated two Phase III studies of Tezspire in chronic obstructive pulmonary disease, targeting patients with moderate to very severe COPD, with bloody acinophil counts greater than or equal to 150 cells per microliter. COPD is the world's third leading cause of death, and we're excited about the impact TESPIRE could have in this setting. Beyond COPD, we completed the regulatory submission of TESPIRE's Phase III data for chronic rhinosinusitis with nasal polyps and look forward to a PDUFA date of October 19, 2025. In March, we announced data from three additional Phase III studies from the rocatinlamab rocket program in atopic dermatitis. notably IGNITE, which met its primary and key secondary endpoints. We look forward to additional data from the ROCKIT program in the second half of 2025. In oncology, we recently announced compelling results for INDELTRA from our DEL5304 phase 3 trial, where at a planned internal analysis, the study met its primary endpoint, demonstrating a significant and clinically meaningful overall survival benefit. DEL-5304 evaluated in DELTRA in patients with small cell lung cancer who progressed on or after initial platinum-based chemotherapy versus chemotherapy alone. These randomized data are the first to show a substantial survival improvement head-to-head against standard-of-care chemotherapy, offering new hope for patients with this difficult disease. Together with the remarkable DEL-5301 data already reported, MDELTRA has the potential to become the new standard of care for second-line small cell lung cancer. As an oncologist, I'm really encouraged by MDELTRA as a new and highly efficacious therapy for an aggressive and common solid tumor for which there has been very little progress. We look forward to sharing more detailed results at the upcoming ASCO meeting in early June. In addition to Delphi-304, we continue to investigate MDELTRA in earlier lines of small cell lung cancer. Currently, two Phase III studies are underway, and we are pleased to announce plans to initiate Delphi-312, a Phase III trial evaluating MDELTRA as induction and maintenance therapy in first-line treatment of extensive stage small cell lung cancer, here in combination with carboplatin, atoposide, and dervalumab. We also continue to investigate our CD19-directed bite medicine, BlinCyto, in earlier treatment settings while also advancing a subcutaneous formulation of Blinitumumab. In April, the FDA granted breakthrough therapy designation for subcutaneous Blinitumumab in the treatment of adults with relapsed refractory CD19-positive B-cell precursor acute lymphoblastic leukemia. Based on our experience to date, subcutaneous splenitumumab has the potential to improve both the patient experience and efficacy. Our first-in-class STEEP1 CD3 bispecific T-cell engager, Xeloridimig, is advancing in Phase III clinical development, where we are rapidly enrolling patients with metastatic castrate-resistant prostate cancer who have progressed following taxane-based therapy. We are also exploring xyloretimig in combination therapy and in earlier stages of prostate cancer with multiple phase 1B studies ongoing. Collectively, Indeltra, Blinsito, and xyloretimig exemplify the significant growth potential of our robust, bispecific T-cell engager platform and reinforce our commitment to bringing groundbreaking treatments to cancer patients worldwide. Beyond our T-cell engagers, our first-in-class fibroblast growth factor receptor 2B-directed monoclonal antibody, vomerituzumab, is advancing to frontline gastric cancer therapy. We expect data this quarter from Fortitude 101, a Phase III study of vomerituzumab combined with MFOLFOX6 chemotherapy versus chemotherapy alone. In the second half of 2025, we expect data from Fortitude 102. a Phase III study of pomerituzumab combined with chemotherapy and nivolumab versus chemotherapy and nivolumab alone. On biosimilars, we are rapidly advancing three Phase III programs, evaluating our biosimilars to Opdivo, Keytruda, and Acrevis as the next wave of Amgen biosimilar products. In closing, I want to thank my Amgen colleagues for delivering on a number of important milestones so far this year, and for their relentless focus on the patients we serve. I'll now turn it over to Peter.

Thank you, Jay. We're pleased with our strong first quarter performance and are on track with our 2025 full-year goals and long-term objectives. The financial results are shown on slides 29 to 30 of this slide deck. In the first quarter, we delivered revenues of $8.1 billion and 9% increase year-over-year. This reflects double-digit sales growth of 11%, driven by 14% volume growth from key brands, including Repathable, Insight, Otespire, and Divinity, partially offset by 6% lower net selling price. Our non-GAAP operating expenses rose 4%, led by non-GAAP R&D growth of 12% year-over-year, reflecting continued investment in our late-stage pipeline, including Meritide, Opaceran, and Rare Disease. Our Q1 non-GAAP operating margin was 45.7%. This is above the outlook we gave on the fourth quarter earnings call, in part due to the timing of R&D spend now expected primarily in the second quarter, including milestone payments and other investments. The Horizon integration has progressed well, and we expect to reach the previously announced $500 million in pre-tax cost synergies by the end of this year. Our non-GAAP OINE was down $53 million year-over-year, driven by lower interest expense through retirement of debt, including $4.5 billion in 2024 and $2.9 billion in the first quarter of 2025. In addition, we repaid $1 billion today as we continue to progress the strengthening of our balance sheet. Since the announcement of the Verizon acquisition, we have now retired $10.8 billion of debt. Our non-GAAP tax rate decreased 0.8 percentage points year over year to 14.6%, primarily due to the change in earnings mix. The company generated $1.0 billion in free cash flow in the first quarter, reflecting continued investment in growth and operational momentum across the business. We spent $400 million in the first quarter on capital expenditures, driven by investments across our manufacturing sites, including Ohio, North Carolina, and Puerto Rico. For 2025, we expect no change in our capital expenditures outlook of $2.3 billion, which will support our products across the portfolio and our innovative pipeline, including Meritide. Our commitment to innovation is also evident as we deploy artificial intelligence across the value chain, informing molecule design and discovery research, enabling faster trial enrollment and streamlining regulatory filings and clinical development, and enhancing our responsiveness to customers in commercial operations. In addition, we returned capital to shareholders as we paid competitive dividends of $2.38 per share, representing a 6% increase compared to the first quarter of 2024. Let's turn to the outlook for the business for 2025 on slide 31. We are reaffirming our 2025 total revenue guidance in the range of $34.3 billion to $35.7 billion. and also reaffirming our non-GAAP earnings per share guidance between $20 and $21.20. This guidance includes the estimated impact of implemented tariffs, but does not account for any tariffs that could be implemented in the future, including potential sector-specific tariffs. In addition, let me highlight a few updates to our outlook for the remainder of the year. We now expect non-GAAP R&D expense to grow approximately 20% in 2025 versus growing mid-teens previously, reflecting increased investments to advance key late-stage pipeline assets, including Meritide and Opaceran. We now anticipate non-GAAP OINE to be approximately $2.3 billion in 2025. we now expect a non-GAAP tax rate of 14.5% to 16%. And for Weslana in the United States, we now expect quarterly sales to fluctuate and do not expect any sales in the second quarter following a large sales order in the first quarter. And let me remind you of prior items that have not changed to our outlook for the remainder of the year. For the full year, we continue to expect other revenue to be approximately $1.4 billion. We continue to project that full-year non-GAAP operating margin as a percentage of product sales to be roughly 46%. We expect share repurchases not to exceed $500 million in 2025. We continue to expect 2025 free cash flow performance to be roughly comparable to 2023. As mentioned on our fourth quarter earnings call, this decline is primarily driven by 2024 working capital favorability and incremental capital expenditures. Free cash flow in the second quarter will be impacted by the shift in 2024 tax payments to Q2 2025 and the final $1.8 billion repatriation tax payments. I know there's a lot of interest in taxes and tariffs. We understand the impetus for increasing U.S. investment in manufacturing. Amgen has a robust manufacturing presence in the United States, including Puerto Rico, and, of course, has invested for decades in the United States-based research and development. To build on the manufacturing base in the U.S., we agree with our peers that the most effective answer is not tariffs but tax policy. In fact, for Amgen and others, Investment in manufacturing has significantly increased since President Trump's 2017 Tax Cuts and Jobs Act. In part, based on the expectation of continued pro-growth tax policy, we recently announced, among other investments in the United States, that we are more than doubling down on our investments in manufacturing capacity in North Carolina and Ohio. We are focused on delivering sustained long-term value for patients and shareholders by doing what we said we would do, growing leadership in the United States and internationally, driving innovation in areas of high unmet medical need, and maintaining rigorous financial discipline. We continue to focus on execution excellence across the enterprise and remain well-positioned for sustained growth through the long term. I'm grateful to work with all of our colleagues worldwide in serving patients. This concludes our financial update. I'll hand it back to Bob for our Q&A session.

Could you remind our callers, please, of the procedure for asking questions?

Thank you. If you would 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. Our first question comes from Terrence Flynn from Morgan Stanley. Please go ahead. Your line is open.

Hi. Thanks for taking the question. Congrats on all the progress. You know, I was just wondering, Jay, if you could help frame for us what we should be looking for at ADA with respect to Meritide. I know this is going to be the first detailed presentation of the Phase II data, but what do you think kind of the key message and key learnings coming out from that will be? And then the kind of related question is I know there's a lot of focus on the potential CVOT trial that you guys are likely planning to conduct with Meritide and the design. So just wondering if you could comment at all on the potential control arm there. Thank you.

Yeah, thanks, Terrence, for the question. Really looking forward to the ADA. You know, we've already shared the salient data from the Phase II Chronic Weight Management Study, weight loss and excellent tolerability at 52 weeks, what we call Part I on that trial, as well as data from a dedicated Phase I pharmacokinetic study. And the key insights remain unchanged. strong efficacy, no plateau to 52 weeks, monthly meritides, very well tolerated at the target dose, that the dose escalation works and comes without any compromise to weight loss. Also, strong activity on cardiometabolic parameters, including A1C. So the ADA will focus on these insights, as well as some underlying details of the two trials. It'll feature some new mechanistic data, including some recently published data in Nature Metabolism that serves to really validate the mechanism of action, the dual mechanism of action of Meritide. We're looking forward to sharing these details at ADA, hearing from the presenters who are true leaders in the field. And following the session, we intend to have an IR call after the event to take questions, reflect on the results through 52 weeks. But here at Amgen, we're on to phase three. And then on the CVOT. Oh, yes. And on the CVOT study, we won't share any details today regarding the CVOT study, but with our two phase three chronic weight management programs now open and enrolling, enrolling well, we are working to initiate a broad phase three program that includes ASCVD, heart failure studies, chronic kidney disease, obstructive sleep apnea, and other indications of interest. We'll have more to share in the fullness of time about the details of these trials.

Okay. Thanks, Julianne. Let's go to the next caller.

Thank you, Terrence. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Good afternoon. Thanks for taking my question. With regard to uplinza in in IgG4, as given the recent approval, as well as my senior Gravis. Could you just help us understand the commercial strategy, including the relevant prescribers and patient identification efforts for the former? Thank you.

Yeah, Salveen, it's Murdo. Thanks for the question on Implizno. We're obviously quite excited about the opportunity to be the first approved therapy for IgG4. It's a condition that is primarily diagnosed, and I should say recently, there's been the evolution of a diagnostic code, which really only was introduced in October of 2023. So it's been a relative recent phenomenon to actually have formal diagnostic criteria and a code for this disease, but primarily diagnosed and managed by rheumatologists. You do see on occasion gastroenterologists, sometimes neurologists, just given the way in which the disease might manifest and the organ involvement. Obviously, because of Amgen's very long history in dealing with inflammation and autoimmune diseases, we've got very good presence here with the key customer types and key prescribers. We have had a field force deployed for several months now profiling and engaging with the relevant physician community. So we're hitting the ground running, so to speak, with the approval. The epidemiology here is roughly 20,000 patients in the U.S., And we're excited to have an impact. This is a horrible disease. People really do not fare well when this flares. And Uplizna is a highly effective product as part of the clinical data generated thus far. And then on GMG, we're really thrilled with the opportunity to go into a competitive category with a very different mechanism than the drugs that are available today. Again, this is a therapeutic area where we have an installed presence with the key prescribing community, so optimistic that when we secure approval for this indication that we'll be thrilled. I don't know, Jay, would you want to add anything on GMG?

Yeah, I mean, reflecting also on IgG4, you know, we think a lot about how will this fit into the standards of care in both diseases, and IgG4-related disease has no standard of care. These are patients with chronic, inflammatory, painful, protean symptoms, recurrent flares, and we saw an 87% reduction in disease-specific flare activity. And so this hopefully becomes a powerful new standard of care. And then in GMG, this medicine stacks up really well to what physicians and patients have access to today. And we had a chance to share, you know, back in April, and it was also simultaneously published in the New England Journal, the really strong data from the Phase III MIM trial. And we put up just outstanding efficacy data against the myasthenia gravis activity of daily living score. We showed activity in, you know, both important subpopulations of patients, acetylcholine receptor positive and MUSC positive. And, you know, this medicine provides a durable benefit to patients. It's given every six months, I think, which really suits the lifestyle of people who will then feel hopefully very healthy, and it's quite convenient for them to receive. But most importantly, it targets the core biology. This is a disease caused by pathologic autoantibodies, and here we are targeting the cell that elaborates those antibodies. So we're very hopeful that aplizno will be an important new standard of care in generalized myasthenia gravis.

All right, Julian, let's go to the next question, please.

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

Thanks. Great. Good afternoon. Maybe for Jay, I often hear about two narratives on the obesity program. One is the tolerability remains high. And I know you've gone to a lower titration, so I'm curious about your confidence that we will see very competitive tolerability and very strong efficacy and that that narrative will hold up. And secondly, that there's a competitor out there who's now put up oral data, which apparently is going to have a huge market share, and so you don't have an oral. Maybe you could respond to either of those and how you're going to be competitive against these developments that have played out. Thank you.

Yeah, Mike, thanks. Why don't I start on tolerability and then Murdo ask you if you wouldn't mind to weigh in on the development of oral medicines and their importance. Mike, we feel very confident. I feel very confident about the tolerability and efficacy that we stand to observe in the phase three clinical study. It is very well informed. by the strong efficacy that we saw in Phase 2, Part 1, the 52-week data, where we observed across the range of doses significant benefits to patients with measurable weight loss as high as 20%. The tolerability, we learned, as have others in the field, that GLP-1-based mechanisms of action benefit from dose escalation, benefit from lower starting doses, We confirmed these insights in a dedicated Phase I pharmacokinetic study, and we've taken the directionality of those two trials into the design of Phase III, which, when we can share this with you, will surely underscore that the design is constructed to deliver competitive both efficacy and tolerability in patients with and without type 2 diabetes.

Murdo, about orals? Yes, thanks, Mike. We have obviously accounted for a segment of the market to be an oral market. We do anticipate, given the size of the obesity category, a relevant opportunity for orals to come in. Thus far, of course, we haven't seen necessarily the same degree of weight loss being achievable with orals as we've seen with Maritide. And of course, Maritide really, given its monthly or even less frequent dosing, we think will be less vulnerable to orals, which are certainly going to come in and display some of the weekly GLP-1s that are incumbent in the market today. I would also just say that we are pursuing other products in our early pipeline that are both large molecule, small molecule, oral and self-administered, incretin and non-incretin. So we really are looking at oral and non-oral mechanisms ourselves.

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

Thank you, Michael. Our next question comes from Truong Quynh from UBS. Please go ahead. Your line is open.

Great. Thanks for the question. Just on Repatha, which has been doing well for a number of quarters now, in our recent doc checks, some have pointed to an increasing preference for Novartis' Lecveo because of the buy and build program for that drug. Do you see increasing commercial competition from Lecveo in general? And going forward, there is going to be some late stage data for oral PCSK9s this year. What's your thoughts about the entry of those products? Thanks.

Yes, thanks for the question and thanks for noticing the growth in Repatha and the trajectory that we're on. The short answer to your question is yes, there's competition in the market and yes, Lecrio is definitely treating patients both in the U.S. and in some other markets around the world. I would say, though, that we still believe we have the best profile in the PCSK9 category given the ability to profoundly lower LDL cholesterol, the fact that we've generated cardiovascular event reduction. We have ongoing additional clinical trials to further expand the understanding of how Repatha, when added to conventional therapy, can actually further reduce cardiovascular risk in a primary prevention, high-risk population. So we do think that the class here is so underpenetrated in terms of the millions, tens of millions, quite frankly, of patients who are at risk. that really there is room for competition. And the fact that we have the momentum that we have, despite the growth of some of the other products in the category, should tell you that we continue to find ways to help new patients receive the repathotherapy that they should. The last piece of this, of course, is we have done a lot of work as Amgen to open up access and affordability for patients. And so we now have the commercial insured patients in the U.S., 50% of which have no prior authorization requirement to receive approval for their therapy. So they're really the barriers that once were there in obtaining Repatha, have largely dissipated. So we're growing nicely. We continue to promote the primary care. We've invested in direct-to-consumer advertising now, and we expect a strong growth trajectory to come. All right, Julianne, let's take the next question, please.

Thank you, Trung. Our next question comes from Evan Siegerman from BMO Capital Markets. Please go ahead. Your line is open.

Hi, guys. Thank you so much for taking my question. So with the Q code in place, can you help us think about the near-term uptake of Pablo in the field? And are you seeing any pronounced shift to the biosimilar following the defunding of the patient's assistant charities?

Thanks for the question, Evan. We're obviously pleased with our biosimilar portfolio in general. We had a strong quarter there. Pablu has been well-received by the retina specialist community. They like the high-quality biosimilar. They really like our pre-filled syringe device that we launched. And, you know, we expect to continue to be able to help many patients and serve many patients with this product. We're working on contracting with larger retina specialist groups, and we'll have more to say as the year progresses. And then, you know, Amgen is happy to support patients through the charitable donations that we make to various agencies.

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

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

Great. Thanks so much for the question. Just a question on the Inkerton pair environment. I think we've seen some concern in the market today about more aggressive pair behavior with the CVS-Wagovia announcement. I'm just interested in how you're thinking about these pair dynamics, the potential new entrants in that space over time. Thank you.

Yes, thanks for the question, Chris. Look, our focus in any payer environment, and it will be with the obesity categories, to help make our products as available as possible to a large segment of the population. I think we're still all understanding what happened with the recent decision. I believe you'll be referring to the CVS change that was announced. I do think overall, PBMs and manufacturers alike are trying to make sure that more patients have access to reimbursement for obesity medicines, and we look forward to being able to do that when we enter the market. Okay, Julianne, we'll go to the next question, please.

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

Great. Thanks so much. I have two interrelated questions about Meritide. Maybe just the first one. At ADA, is there a chance to get maybe even the 76-week data from the obesity study, from the phase two, including some of the less frequent dosing, the Q2 and Q3 monthly dosing. And then secondly, would you consider separately from doing a, would you consider doing a switch study where patients switch from prior GLPs right into Meritide and doing less frequent dosing as an additional strategy to ultimately follow with? Thank you.

Jay, go ahead, Jay. Yeah, thanks, Jeroen. First answer is no. The ADA presentation will focus on some mechanistic studies, some of the underlying details of Part 1, the first 52 weeks of the Phase 2 study, as well as additional data from the Phase 1 pharmacokinetics study and reflections from these external key opinion leaders that we can't wait to hear ourselves. So, no, I would not expect to see interim data from Part 2, which is ongoing, and we intend to share these data when we have them at the end of the year. Your second question, welcome to the Maritide development team. It's great to have you thinking about next trials. And I take from your question that we agree, actually, that patients and physicians will want to know how can they start on Maritide if they're on another weight loss medicine that It maybe is working, but is inconvenient, or maybe isn't working well enough. And we do intend to generate data to support such a consideration. There'll be more to share on that in the future. Perfect. Let's go to the next question. Thanks.

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

Hi, guys. It's a question I've been thinking about for a while on the myasthenia gravis market dynamics. Specifically, a lot of times when some of the cross-trial comparisons have been made for aplizna, they're often versus the max efficacy we see on FCRNs. And we know FCRNs have this waxing waning because as per label, you have to get off the drug. So my point being, the true commercial price would actually be 2x for FCRNs if you truly dose them through without the dosing holiday, which is apparently what a lot of clinicians are doing. So my question is, Are payers aware of this dynamic, and what do you see as a realistic market share aspiration, knowing that your competitor might potentially be 2x the price? Could you aim for like a 40% to 50% market share in MG? Thank you.

Let's try and think just in two pieces, Umar. I think on the clinical piece, Jay, if you want to add any perspective, but on the market, obviously, Murdo, you can share our perspectives on the payer environment and so forth.

Yeah, thanks, Bob. Umar, thanks for the question. The GMG space will surely be shaped by the efficacy and the target product profile of the medicines available to treat the patients primarily. And here, we think Implizna has some really favorable considerations. It's very hard to do trial by trial comparisons, you know, but suffice it to say that the significant observed efficacy by MGADL that we saw all the way out to week 52 and the durability of living in a randomized controlled trial environment through Week 52 is indeed very strong. Targeting the core biology, one might expect higher efficacy. The steroid sparing that was built into our study will be an advantage to get people onto a single medicine, at which point the durability and the convenience with every six-month dosing after a loading dose, are quite attractive, we believe, and we're receiving that feedback from prescribing physicians who've weighed in on these data in the program. Murdo, do you have any comments about the pricing dynamics?

Yes. In general, in categories and diseases like this, the medical policies from the payers will follow the indications in the label and or the inclusion criteria that we're provided for the clinical trial. So, there's likely to be fairly broad access to these products. Now, with real-world experience and our ability to generate real-world evidence in this category, I would think that the hypothesis that there might be a cost advantage to treating with the Plisna versus other agents could be borne out.

Okay, Julian, let's go to the next question.

Thank you, Umar. Our next question comes from David Amselem from Piper Sandbar. Please go ahead. Your line is open.

Good question on Tepeza. I feel like over the past couple of years, you've been talking expansively about a wider physician audience, getting in front of more prescribers, raising awareness. The product hasn't been growing. So I guess what's it going to take to see an inflection here in or maybe put differently, do you think there has to be some externality like the availability of a sub-Q form to get the product really moving again? Thanks.

Thanks for the question, David. I think we're actually making quite good progress in broadening the prescribing base for Tepeza. It is, as you mentioned, it is a progressive evolution given that the product started its journey in more serious higher cast patients treated by the oculoplastic surgeon surgical community and that's really what drove the initial uptake of the product going beyond that means that we have to activate general ophthalmologists and endocrinologists who are really two challenges that we're working on with them One, getting them to actually take the time, not just to diagnose Graves, but to diagnose thyroid eye disease. And two, to initiate treatment with an infused biologic. And then find a site of care. So all of that does take some time and some progress. But as I mentioned in prepared remarks, we're seeing a nice increase in intent to prescribe from endocrinologists, and that's the earliest leading indicator. We hope to follow that with an actual increase in prescribing. And then it will take time. between when that intent and that prescription is written to when we can get that patient started on their first infusion. Navigating the payer process, finding a site of care does take some time as well. So it's not going to be a rapid change in the trajectory of the product, but it will be a progressive one. And then last but not least, Definitely a subcutaneous administration will help here because it simplifies the site of care selection and affords more opportunities for patients to be initiated with their treatment. But I would anticipate both being able to grow prior to the availability of a subcutaneous form and then being able to accelerate that thereafter.

And Myrtle, maybe you want to touch on the international progress?

Yeah, thanks, Justin. We've been making great progress with Tepeza internationally with the recent approval in Japan. We've been approved in Saudi Arabia, Brazil. We have a positive opinion in CHMP in Europe. We anticipate launching there in the back half of the year. So the international expansion is progressing very well, and I would say ahead of schedule compared to what we thought we'd be able to do when we made the acquisition. Overall, the rare disease portfolio of products, it's a very young portfolio of products where we're really just beginning to address the severe diseases that these drugs treat. And whether it's Tepeza, Uplizna, Cristexa, or Tavneos, these are going to be key growth-driving products for us over the long haul, both in the U.S. and internationally.

Speaking of youth, David, it's Peter here. Just a reminder that the transaction closed in October 23, so you mentioned a couple of years. It's been about a year and a half, although so much has happened in the world, it might feel like more than that. So we're delighted with the progress so far, as I mentioned in my remarks. We're right on target with pre-tax cost synergies, and we're right on target with getting back to our pre-horizon capital structure by the end of this year. So thanks for the question. All right, Julian, let's go to the next question.

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

Oh, hey. Congrats on all the progress, and thank you for providing this update. Can you help us understand what to expect on the Bemerituzumab Phase 3 study readouts coming up here in the second quarter, and how are you thinking about the market opportunity for BEMA? Thank you.

Yeah, thanks, Jay, for the kind words. Bimerituzumab is our first-in-class fibroblast growth factor receptor 2B-directed monoclonal antibody. This is a protein that appears on the surface of malignant gastric cancer cells with some frequency. And as you point out, we're conducting two prospective phase 3 clinical trials, one that we call the DOUBLET study or Fortitude 101. We expect this to read out in the second quarter of this year, as I shared in the opening remarks. What to expect here? We're very hopeful that this will meaningfully contribute to improved overall survival in this patient population. We've designed an outstanding study that's fully enrolled, and we hope to have data to share in the next quarter. Fortitude 102 is the triplet study. This is where we combine BEMA with chemotherapy and checkpoint therapy, nivolumab. Both of these are frontline gastric cancer studies, and as More patients today receive or should receive chemotherapy with nivolumab in the front line of this disease. We're very hopeful that pomerituzumab can work on top of that with a data readout in the second half of this year. Pomerituzumab showed pretty strong data in phase two, especially in the target population that we selected, and so we're hopeful that this will become a component of front line standard of care for this disease. I guess more to follow next quarter. Murdo?

Yeah, the addressable population here is quite large. This is the fifth most common cancer worldwide. Over a million new cases globally, 25,000 cases in the U.S. The initial addressable patient population is about 7,000. in the U.S., much larger worldwide, and a real opportunity in Japan and Southeast Asia, just in terms of the epidemiology of gastric cancer. And I think what really helps is, as Jay outlined, the combinability of bimerituzumab with other available agents that treat this very difficult cancer.

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

Thank you, Jay. Our next question comes from Alexandria Hammond from Wolf Research. Please go ahead. Your line is open. My apologies. Our next question will come from Gregory Renza from RBC Capital Markets. Please go ahead. Your line is open.

Great. Thanks. Good afternoon, guys, and congrats on the quarter. Thanks for the question. Maybe just keeping with the oncology portfolio and maybe moving earlier down the pipeline a little bit, And as you build on the Lumicrast experience, I just wanted to ask that you elaborate a bit on the KRAS franchise strategy, just particularly with the AMG410 asset, which was recently highlighted at the AACR. We have a world with a competitive landscape for KRAS drugs. Just curious if you could just elaborate how confident you are on the potential for 410 to be best or even better in class as you learn more about this molecule. Thanks so much.

All right, Greg, thank you so much for picking up on the AMG410 presentation at the AACR this week. This is a very interesting molecule, and I think you've covered two key attributes, which is the properties of the molecule itself that make it exciting, and then the moment at which it reaches human clinical investigation. For others on the call that don't know the medicine, this is a low molecular weight, orally bioavailable, structure disclosed, a small molecule inhibitor that of KRAS. Already, we were first to develop KRAS therapy as a reality with Lumicrast targeting the G12C allele selectively through cysteine covalent chemistry. But to get the other alleles, that trick doesn't work. There's no cysteine handle. And so we worked to develop a reversible pan-KRAS inhibitor that hits wild type G12D, G12V, G12C actually as well, and G13D. It binds an allosteric pocket that is shared by other clinical stage KRAS G12C inhibitors. This one is what's called a dual-off and dual-on state inhibitor. It has outstanding selectivity for KRAS over HRAS and NRAS of more than 100-fold, which should confer excellent tolerability, a strong therapeutic index. And so we're developing this medicine in an expedited way in a number of target solid tumors, both alone and in combination in a combined phase one, two design. So it's a stunning molecule. Now, it's a competitive space, and this is great for patients. We enter this space with AMG410 being the leader in KRAS therapeutics. And so our eyes are wide open to some of the competitor programs that are more advanced in clinical study. I was very pleased to hear the reception from the leaders in the KRAS community at AACR, who on social media and in private conversations were really bullish about the properties of 410 and the need. Some of the KRAS inhibitors have shown a more narrow therapeutic index than one might have hoped for. So competitive space, but an excellent offering, and we hope to learn a lot in expedited Phase I and II clinical development. All right, Julianne, I think we've got time for two more questions.

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

Thanks for taking my question. I actually wanted to ask about the market opportunity for TESPIRE and CRS with nasal polyps, not an indication that gets talked a lot about, but particularly how much overlap there is with asthma patients and maybe your thoughts on the ability for biologists to move ahead of surgery longer term.

Yeah, thanks Matt for the question. There is indeed a real opportunity here with chronic rhinosinusitis with nasal polyps. We're looking at roughly one to two million patients in the U.S. that suffer from this. It is significantly overlapping with severe asthma. Roughly 40% of asthma patients will present with some nasal polyp, sorry, some chronic rhinosinusitis involvement, and some of them with nasal polyps. And indeed, these patients undergo some very difficult treatments, inclusive of surgery, and we were able to, in our clinical trials, show that we can reduce almost entirely the need for surgery. And so there is an opportunity, I believe, for us with test spire, which has performed exceptionally well in severe uncontrolled asthma, to go in and help these patients with this, quite frankly, a miserable condition and help their overall quality of life as we demonstrated in the clinical trial.

All right. Let's go to our last question.

Thank you, Matt. Our last question will come from Alexandria Hammond from Wolf Research. Please go ahead. Your line is open.

Thanks for taking the question. So what's your expectation for a future market split between broccolatinumab and Santa Fe's competitor, OX40? Are you thinking of 50-50 split in, let's say, the atopic dermatitis market, or how are you kind of thinking about that shaking out? Thank you.

Sure. Myrtle, why don't you fire away?

As we've said in the past, we're really looking carefully at the rocatilumab opportunity. Atopic dermatitis is clearly a condition that has opportunity for continued improvement in terms of the number of treatments that are available. There's a large refractory patient population out there. with respect to what they currently have available to them and how they respond. It's hard for me to speculate on what our market split is going to be versus agents that are still in clinical development, but we're quite confident that there's a very nice opportunity in the market for Roca Tinlama.

All right. Well, thank you all for joining our call. We appreciate your interest. Justin and his team will be around for the balance of the day if you have any questions that you didn't get a chance to ask. And as you can tell, we're excited about the momentum of the business. Excited about the current performance as well as what we see coming down the pike. So, look forward to seeing you later in the year. Thank you.

This concludes our AMGEN Q1 FY 2025 earnings call.