Bristol-Myers Squibb Company

Good day and welcome to the Bristol-Myers Squibb 2019 first quarter results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. John Elicker, Senior Vice President, Public Affairs and Investor Relations. Please go ahead, sir.

Thank you, Sandy, and good morning, everybody. And thanks for joining the call to discuss our first quarter earnings. With me this morning is Giovanni Cafforio, our Chairman, Chief Executive Officer Charlie Bancroft, our Chief Financial Officer Chris Berner, our Chief Commercial Officer, and Tom Lynch, our Chief Scientific Officer. Giovanni and Charlie will have prepared remarks, and Chris and Tom are available for Q&A. First, the safe harbor language. During the call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements. as a result of various important factors, including those discussed in our SEC filings. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date. We specifically disclaim any obligation to update forward-looking statements, even if our estimates change. Today we'll also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items, reconciliations of these non-GAAP financial measures, to the most comparable gap measures are available at our website. Giovanni?

Thank you, John, and good morning, everyone. I'm pleased to speak with you today about our strong performance in the first quarter and the progress we have made on our pending acquisition of Cellgene. I am very proud of our team's focus and execution in the quarter to drive our business forward. Let me start with some highlights from the quarter and a brief discussion of our key growth franchises Obdivo and Eliquis. Our results this quarter were driven by strong commercial execution across the portfolio. Obdivo delivered a solid quarter and continues to perform well. As we look into the future, we recognize we are working in a very competitive space. However, we continue to see Obdivo as a growth franchise, given the breadth and depth of our clinical program. Given the rapid uptake of new indications in IO, The growth of Opdivo going forward will be driven by new indications over time. Specifically, I think about our growth opportunities in three areas. First is the opportunity in adjuvant, where we have a robust program beginning to read out in 2020. We've already seen the potential in adjuvant melanoma, where treatment rates have gone from 20% to nearly 80%. The second area of opportunity is in the metastatic setting across a range of tumors, including upcoming readouts in renal and gastric cancers. And importantly, the third area is the near-term readouts in non-small cell lung cancer beginning this summer and into next year with 9LA. Eliquis continues to drive significant growth to strong execution and a best-in-class profile. We are encouraged that the strength of the Eliquis profile continues to be reinforced by numerous new data sets and additional studies. For example, during the quarter, the AUGUSTUS study was presented at ACC and published in the New England Journal of Medicine, demonstrating favorable safety results of Eliquis versus vitamin K antagonists in patients with both atrial fibrillation and ACS, and or PCI. The study offers clarity for a patient population with high unmet medical needs, for which the ideal treatment strategy is not well understood. We are confident that Eliquis will continue to be a strong growth franchise going forward. Charlie will discuss details of operating performance and the P&L in more detail. Turning now to our acquisition of Celgene, our entire team is enthusiastic about the transaction. We are creating a stronger, more diversified company that is poised for growth and value creation. Let me step back and provide my perspective on why this is important. We've been very successful establishing Eliquis and Obdivo as growth drivers for the company. We're conscious of the fact that in our industry, science is always evolving. Product development cycles are long, and these products will eventually face loss of exclusivity. Eloquence in 2026 and Opdivo beginning in 2028. By combining with Celgene, we've taken the right actions to ensure that we continue to have a robust pipeline for future growth. The combined company positions us well to do this from day one. We will have nine marketed products, each with over $1 billion in annual sales. six product launch opportunities, and over 50 phase one and phase two clinical programs. With a broader and deeper pipeline, we will have more registrational opportunities across our key therapeutic areas. And importantly, the acquisition of Celgene provides us with a more diversified portfolio of marketed products that has a more balanced payer mix. expanded treatment modalities and earlier life cycle. We believe this breadth will be important as we navigate an evolving and an increasingly complex reimbursement environment. Our confidence in the transaction was enhanced by the milestones achieved by Celgene this quarter. First, the FDA accepted Celgene's NDA for Fedratinib and granted priority review. In addition, Ozanimod and Luspatercept were both submitted to the FDA for review. We also saw three important developments regarding Revlimid IP. The U.S. Patent Office's dismissal of two key patent challenges combined with the Celgene settlement with Alvogen have provided further clarity and security around the patent estate for Revlimid. These milestones are consistent with our due diligence and support our conviction in the transaction. Now, let me touch briefly on our long-term outlook post-acquisition. This transaction allows us to stay ahead of the curve and strengthens our future position. The combined company is expected to have sales and earnings growth every year through 2025, despite the erosion of red limits. This growth will be fueled by Bristol-Myers Squibb's strong foundation of products, Celgene's current product portfolio, our lifecycle management programs, and our six potential launch opportunities. Looking to the second half of the next decade, our marketed portfolio has the potential to be earlier in its lifecycle and more diverse within our areas of focus. Our early pipeline will have matured, giving us the next set of registration opportunities. We expect to have a strong balance sheet with continued flexibility to invest in innovation, valuable and expanded technology capabilities and complementary platforms such as cell therapy and protein homeostasis. We are working on securing the required regulatory approvals for the transaction and we remain on track to close in the third quarter of 2019. I fully recognize the importance and work required for a successful integration. We are putting the right resources in place to plan and manage this process, including Charlie's appointment as the executive lead for integration. And we are building in accountability for success with senior management compensation metrics adjusted to reflect the importance of this outcome. One of our guiding principles is to manage this integration with minimal disruption to our ongoing business and future value drivers. We have a head start in this because of the complementarity of our businesses. I am confident that we are appropriately planning for the integration, and Charlie will provide more details. To conclude my remarks, I'd like to reiterate I am pleased with our strong performance this quarter. and excited about our opportunity to create a leading biopharma company. We are at the beginning of an exciting new chapter for Bristol-Myers Squibb, as we work to create significant value for our patients and shareholders. And with that, I'll hand it over to Charlie.