Bristol-Myers Squibb Company

Good day and welcome to the Bristol-Myers Squares Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Tim Power, Vice President, Investor Relations. Please go ahead.

Thanks, Chloe, and good morning, everyone. Thanks for joining us this morning for our first quarter. With me this morning with prepared remarks are Chief Executive Officer and David Elkins, our Chief Financial Officer, also participating in today's call for the Q&A. session are Chris Berner and Sumit Hirawat, our Chief Medical Officer and Global Drug Development. As you'll note, we've posted slides to BNS.org, David and Giovanni's remarks. Before we get started, I'll read our forward-looking statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by those forward-looking truths, including those discussed in the company's SEC filings. These forward-looking truths, as of today, should not be relied upon as representing our estimates as of any future date. We specifically explain any obligation to update forward-looking statements, even if our estimates change, or non-GAAP financial measures which were adjusted to exclude certain specified items. Reconciliations of those non-GAAP financial measures to the Most comparable gap measures are available at bms.com.

Thank you, Tim, and good morning, everyone. I hope that you and your families are healthy and managing safely through these unprecedented times. The COVID-19 pandemic is profoundly impacting our lives, families, and in the last months, our company has focused on how we can help and effectively continue the supply of our medicines to patients globally, while play safety of our workforce. Teams around the world have risen to the challenge. During this pandemic, it has been abundantly a critical role in the prevention. have turned to us to identify and develop the diagnostic tests, effective treatments, and vaccines to prevent the knowledge, development expertise, and manufacturing capabilities are what will ultimately help us prevail. On slide four, let me start with what Bristol-Myers Squibb is doing to support the COVID, the global COVID response in four key areas, our science, our communities, our on the R&D front, we have identified approximately 1,000 compounds in our discovery library that we are making available globally to screen for potential molecules to treat COVID-19, certain medicines in our portfolio that could be included in near with a focus on the inflammatory COVID-19. We are also participating in cross-industry groups designed to foster collaboration. The Foundation COVID-19 Therapeutics Accelerator, the California, the National Institutes of Health, among others. First, our resources on how we can Bristol-Myers Squibb Foundation has provided over 170 grants to human service organizations and countries around the world in order to address gaps in the response to COVID-19. We have equipment to healthcare providers on the front lines in China, Italy, and the U.S. And very important to support our patients. We have expanded our existing patient and employed patients in the U.S. who have lost their health insurance due to the pandemic by offering access to any branded Bristol-Myers Square. We are working with healthcare providers in new ways through effective virtual engagements to ensure to treat their patients while minimizing potential spread of COVID-19. We adjusted our clinical trial operations where patients providers and our employees and to avoid stressing the overall healthcare system all clinical trial activities end of the year where local contrary although the impact on evaluated fully recruit the trials are at lower risk of delays across the globe. First, our essential workers continue to work at our sites to ensure our medicines reach patients who depend on them. Most of our people are working from home to keep essential workers safe and we are supporting our teams with increased flexibility to ensure care for those at home. Our employees who are licensed healthcare workers and wish to volunteer to provide medical services to patients during the pandemic are supported with full salary and benefits. Now, turning to the quarter. We had excellent performance financially and from a pipeline perspective. Ordinary pipeline execution in the first quarter on slide five. Very well on all key Starting with approvals, in late March, Ziposia was approved in the U.S. multiple sclerosis with a best-in-class label. And we also received a positive CHNP Ziposia in Europe. In April, we received FDA approval for Reblozil in MDS. This is the second indication for this medicine. The opportunity we have with this first to treat anemia. Additionally, we just announced a CHMP positive opinion for Reblosil for both beta-tactile and MDS in Europe. With respect to submission, priority review for Lysosil in FOMA in the U.S. Now, with the PDUFA rate extended to November 16. We completed our FDA submission for Idacel. which is an exciting next step in bringing the first CAR-T candidate to adult patients with multiple myeloma. And we very recently announced a new review for CC486 in first-line AML. With respect to lung cancer, we received a priority review in the U.S. and CHMP validation in the EU for Checkmate 9LA for Obdivo plus Yervoy plus Limited Chemo in first-line lung cancer. And we're looking forward to Checkmate 227 next week. Lastly, from a clinical research perspective, we recently reported positive top-line results from two positive pivotal Phase III studies in our IO pipeline. Checkmate 9ER, evaluating Obdivo in combination with Cabometics in first-line RCC, and Checkmate 743, where Obdivo plus Yervoy demonstrated survival benefit in first-line mesothelioma. We look forward to working with global health authorities to bring these new combination regimens to patients who are waiting for new treatment options. This has been a truly remarkable quarter. All of these exciting accomplishments would not have been possible without the focus and dedication of our global teams. Moving to slide six, we've had a very good quarter financially, despite the emergence of the pandemic. Our business is strong. In the first quarter, we delivered $10.8 billion in sales. Related buying patterns, this represents a pro forma underlying growth of 8% versus last year. Our performance was strong across brands and geographies. as a result of excellent commercial execution across the board. David will provide more details in his remarks, including the shifts we're seeing in buying patterns for some of our medicines. Let me now provide more details on how we are managing the business in the current environment. Our supply chain remains intact. We are continuing to manufacture API without disruption, and we have safety stock of raw materials and finished product. It has naturally caused some logistic complications and we are navigating this successfully. Our integration work is proceeding well. We continue to build on the hard work from 19 that allowed us to hit the ground running, operate with great efficiencies. We've seen an acceleration in the cultural cohesion of our new company during the work from home period. as the current environment has brought us together in even greater ways. We are on track to deliver 2.5 billion in synergies by the end of 2022. Finally, as we see countries moving to phase two of the pandemic and reopening parts of their economies, our focus has shifted to recovery, and we are accelerating planning for restart of many of our operations. We will do this gradually as conditions evolve, while continuing to keep the safety and health of our workforce, our patients, and our communities as our highest priorities. So looking forward, while industry-wide dynamics may create volatility in our business in the short term, and there is significant uncertainty regarding the dynamics of the evolution of the pandemic, we are executing well. We remain well positioned, and I am excited about the potential of the company. With that, I'll hand it over to David to walk you through our financials for this quarter and how we are thinking about our future. David?

Thank you, Giovanni. Hello, everyone, and thanks again for joining. I hope that you and your families are staying safe and healthy while we operate virtually. As Giovanni mentioned, I'm extremely pleased with the execution of our teams during these unprecedented times. The benefits of our medicines and the strong commercial execution resulted in exceptional performance in the first quarter. Turning to slide eight, we had strong top line performance in the quarter with global sales increasing double digits, growing 13% versus prior year on a pro forma basis. We saw significant strengthening of the dollar in the latter part of March, and though this had a minimal impact in the first quarter, it will be important to keep this in mind as we think about the full year outlook. Additionally, important to note, sales were favorably impacted due to COVID-19 related stocking by approximately $500 million. Excluding the COVID-19 impact, underlying sales performance continued to be strong with 8% growth year-over-year. Now let's turn to our key brand performance, starting with Eloquist on slide 9. Eloquist had another strong quarter, growing 37% year-over-year with sales of $2.6 billion globally, largely driven by strong underlying demand. We also saw significant favorable impact from channel and patient level stocking due to COVID-19 for approximately $359, which is expected to reverse over the remainder of the year. Excluding COVID-19 impact, sales growth in the quarter would have been 19%. As the COVID situation evolves, we'll continue to monitor the impact of customers and patients, including new patient starts. Although we expect some variability quarter to quarter due to the pandemic, remain confident of Eliquis' growth outlook, where there's continued momentum to grow considering TRX share of 47% and new-to-brand share of approximately 57%. Looking forward, we continue to expect significant growth driven by Eliquis' increasingly strong position as the number one product in the expanding NOAC class. Now turning to Abdeevo on slide 10. U.S. demand trends are in line with our expectations. As previously communicated, demand is down in the low single digits sequentially. We continue to see stabilization of the second-line IO eligibility pool of about one-third, as well as strengthening of our position in the first-line RCC market, which sets a good foundation for the potential future launch of Checkmate 9ER. Internationally, we saw strong execution continued with sales growth of 12% year-over-year. Abiva was minimally impacted by COVID-19 in the first quarter, with strong shares across all our indications. However, we are aware that COVID-19 has impacted patient access to oncology clinics and infusion centers, which could impact the violence of infused products in the second quarter. We will continue to monitor these factors. Importantly, as we look forward, we believe Adivo is well positioned for a return to growth in 2021, with action dates and frontline long for 227 next week and 9LA later this year, as well as the upcoming opportunity for Checkmate 90 off. Now, moving on to our inline multiple myeloma portfolio on slide 11, Revlimid and Pomelus continued to deliver strong double-digit growth of 14% and 29%, respectively, year over year. This growth was driven by increased share in treatment duration due to the demand for Revlimid and Pomelus-based triplet therapies. The U.S. impact from COVID-19 was relatively minimal in the first quarter. Outside the U.S., we estimate a favorable $50 million to $100 million COVID-related stocking, mainly for Revlimid. Due to the oral administration of Revlimid and Pomelus allowing patients to take their therapy at home and the potential for relapse in myeloma patients if treatment is stopped, we expect less of an impact due to treatment disruption related to the pandemic. We are continuing to monitor new patient starts as well as U.S. changes to buying patterns due to the FDA REMS program relaxation from 28-day to 56-day scripts. Because these products are sold through specialty pharmacies, we do not see the same level of stocking you would see with other chronic oral medications. Now let's turn to the strength of the balance sheet and capital allocation on slide 12. We ended the quarter in a strong liquidity position with approximately $19 billion in cash and marketable securities, with our net debt coming down to $28 billion. We generated significant cash flow from operations in the first quarter of nearly $4 billion. The strength of our balance sheet will allow us to execute on our capital allocation priorities, which will continue to be our prioritization of the leveraging and achieving less than one and a half times debt to EBITDA ratio by the end of 2023. Investing in future innovation through business development and our continued commitment to our dividend. As previously stated, At the close of the Celgene transaction, we entered into a $7 billion ASR agreement, of which 80% retired quickly. The remaining 20% will be completed by the end of the second quarter. Though we have a share repurchase authorization, our priority for share repurchase is offsetting stock-based compensation, and having completed the ASR, we don't plan any near-term share repurchases in the current environment. Now turning to guidance on slide 13. We are affirming our 2020 adjusted EPS and updating our revenue range, MS&A, R&D, and O&E line items. We now expect revenue to be between $40 billion and $42 billion, primarily driven by currency swings I just described. We expect MS&A to be between $6.5 billion and $6.7 billion, and R&D to be between $9.2 billion and $9.4 billion. reflecting reduced activity due to COVID-19 combined with incremental operational efficiencies. In OINE, we expect to have reduced interest income driven by the lower interest rates. Now, let me also provide you with some perspective on 2021. We are affirming our non-debt 2021 EPS based on positive momentum in the business and the assumptions we've made about the impact of COVID-19. As we mentioned in February, we don't plan to provide continual updates to our 2021 guidance. However, this quarter, in light of the exceptional circumstances associated with COVID-19, we believe it's important to confirm that our view of 2021 is intact. Our guidance reflects what we know today, and we will need to monitor how things evolve. With that in mind, let me provide you with some color on our guidance framework on slide 14. Our assumption is that the peak impact of COVID-19 crisis on our business occurs in Q2 2020, with a return to a more stable business environment in Q3 and minimal impact from Q4 2020 onwards. Key factors assumed in our guidance include products that sell significant advance buying at the end of Q1 will see that inventory work down during the rest of the year, mostly in Q2 and to a lesser extent in Q3 and Q4. a reduction in new brand prescriptions and physician-administered product demand during Q2, recovering in Q3, and fully recovered in Q4, and planning to resume all clinical activities by year-end where local and country restrictions have been lifted. These assumptions are based off holding FX and interest rates constant as of mid-April 2020. Our guidance does not include changes to macroeconomic factors that could affect not just our business but the entire industry. Of course, as we move forward, the factors that are more industry-related than company-specific might have an impact on our current view, and we will need to incorporate that in future analysis. These include persistence of the strength of the U.S. dollar, recovery of demand post-Q2 2020, and the evolution of the macroeconomic environment. Nevertheless, the fundamentals of the business remain very strong, and we remain disciplined with respect to our management of the P&L. Before we move on to Q&A, I want to reiterate how proud I am of our employees during the world crisis. Our strong first quarter results and our guidance demonstrate resiliency and diversification of our portfolio, and we continue to feel good about the long-term growth and financial flexibility of the business. I'll now turn it over to Tim and Giovanni to manage the Q&A.

Thanks, David. Chloe, could we go to the first question, please?

Absolutely. So the first question comes from Seamus Fernandez from Guggenheim. Please go ahead.

Oh, thanks very much for the question. So one of the products that we've argued is being missed in the cell gene acquisition is CC486. I was hoping the team could talk a little bit about the commercial prospects for 486 and kind of the durability of this asset as you think about it. And then incremental to that, just wondering if you could update us on any data that would be coming outside of ASCO. I believe the EHA abstracts are hitting, frankly, on the same day as the late breakers will come out either on the 28th or the 29th. So just hoping to get an update on the rest of the pipeline coming at EHA. Thanks.

Thank you, Seamus. Thank you very much. This is Giovanni. So we're very pleased with the priority review designation for CC486. I'll ask Nadine to give you a perspective on the commercial opportunity there, and then Samit can follow up on your questions regarding data at ASCO and beyond. Thanks. Great. Thanks for the question, Seamus. We remain very excited about CC486. I think it's important to provide some context. So with AML, it's a very poor prognosis disease, even in the newly diagnosed setting where we look at five-year survival rates of around 15% to 25%, depending on the age of patients. And even saying that most patients do have a complete response, but 80% of those patients will relapse within 18 months. So we're very excited about the fact that CC486 has delivered a 10-month survival benefit in that setting, so I think that's really important. And as we think about the opportunity, it's about 33,000 patients overall, and then if you think about the relapse rates, you can start to think about the epi related to the disease. So the fact that we've added 10-month survival benefit, we've doubled the relapse-free survival benefit, I think we're very excited about the commercial potential, not only in terms of impacting those patients' outcomes, but also the opportunity now to establish a maintenance treatment paradigm in AML, which other drugs have tried and we haven't seen survival benefit before in the maintenance setting. So I think from our perspective, now having clarity on the PDUFA date, the launch team preparations are going very well indeed, and we remain very excited about the opportunity with CC486. And in terms of durability, we feel very good about the position we have, our intellectual property around CC486.

So we're very excited about the opportunity for patients and for the business with CC486. Maybe I'll turn it over to Sumit now.

Thank you, Nadeem, and thank you, Seamus, for the question. Let me first say what we are looking at when we look at ASCO, as you've seen the titles that have come out, we are certainly looking forward to the very exciting data from 9LA in non-small cell lung cancer looking at abduro plus year one limited chemotherapy, along with an update with a three-year update for CHECKMATE 227. In addition to that, from a hematology perspective, more specifically, we're looking forward to the first presentation of the data from the CARMA trials for IDA cell in multiple myeloma, in addition to the ORVA cell data update that will be provided. And very importantly, continuing with the multiple myeloma team, looking at presentation of the data for CC480, the cell mod, which is going to be very, very important and exciting. You asked about EHA. EHA will be more of our encore presentations following up from ASCO. In addition to that, we are certainly looking at the data sets in terms of the outpatient use of Lysosil as well at EHA. So these are going to be important data sets at ASCO, which we will obviously continue to talk about as we go forward and then follow up if there is anything more to say about EHS thereafter. Thank you.

Thanks. Thanks so much. Chloe, can we go to the next question, please?

Absolutely. The next question comes from Terence Flynn from Goldman Sachs.

Great. Thanks for taking the questions. Maybe this is for Chris. You obviously have a number of ongoing or upcoming launches, and just wondering how you're adapting the commercial strategy here with the possibility that the current environment persists longer than maybe we'd expect. And are you confident that you can achieve your target sales goals for a lot of these new product launches? And then a follow-up question is just on Lysacell BLA submission. I was wondering if you can give any more specifics about the FDA request. Thank you.

Thank you, Terence. Let me just start. I'll ask Chris to comment on your question and Nadim and also then Samit can follow up on License Health. We're taking a very clear approach with launches and obviously the number one priority is the health and safety of our employees or of the healthcare professionals. Also, we don't want to disrupt sort of healthcare systems right now. And so we've taken the position to really maximize early on our remote capabilities in terms of engaging with our customers in order to respect the challenges of the pandemic. Having said that, while we have global principles, those principles apply differently to different parts of the world and they also apply to different brands because the launch of a new indication for an existing well-established brands is clearly a different strategy versus a totally new medicine. So Chris and Nadim can give you a couple of examples of how those principles, we are applying them to our launches and obviously the continued support of our portfolio.

Yeah, so maybe I'll start, Terence. Thanks for the question. So as Giovanni mentioned, we made the decision a number of weeks ago to pull in-person engagement with customers. That said, We have continued both on the medical and commercial side to engage with customers remotely. The good news is that BMS has made significant investments in remote engagement capabilities over the last few years. So the teams have a lot of experience, not just for the last couple of months, but for many years in leveraging this technology to engage with customers. And as Giovanni mentioned, we've very much taken the point of view that every launch is going to be viewed as as independently, and we'll look at how we're going to engage with customers and how we're going to think about those launches given the specifics. So, for example, you'll recall that when Zapposia was approved in late March, we decided to postpone that launch. We did so because at the time, the healthcare system was really just bracing for the impact of COVID, and within the MS community specifically, we were starting to see a pretty big impact on their ability to operate. Through March, for example, we saw about a 25% decrease in new to brand scripts in MS. And we frankly didn't feel that the conditions were appropriate to introduce a new medicine without having our commercial and medical teams be able to effectively engage with customers. That said, in recent weeks, we've begun to see the MS market begin to adapt to the current environment. Importantly, physicians are beginning to actively initiate new therapies. They've begun switching patients on therapy. And as a result, we plan to launch Ziposia on June the 1st. In terms of preparations, the teams are very well prepared. We've hired a very experienced medical and commercial team that's been fully in place, frankly, before launch. And we've gotten very good feedback on the Ziposia profile. So we're very excited about making that opportunity available. Obviously, initially, that launch will heavily index, and this will be true for first-line lung cancer as well. It will heavily index on remote engagements. Again, we have a lot of experience in leveraging that technology. And then as conditions warrant, we'll be able to dial up in-person promotion and ultimately, as we always do, we'll use a mix of both in-person and remote engagement to support those launches. And we have a lot of confidence in the teams across the commercial organization in our ability to execute these launches. Nadeem, anything to add? Sure. Thanks, Chris.

I mean, I'll just say a couple of things. We're very excited about the opportunity to launch four first-in-class or best-in-class medicines in the U.S. just this year. And so the launch preparations are going very, very well with the team. Of course, we'll continue to use our deep relationships with hematology experts and hematologists and also our commercial infrastructure. So between Rebizol, Lysosol, Ibisol, CC486, that's the potential for four launches in the U.S. this year. And just to give you some flavor of what Chris was saying, we were able to very quickly, with Rablazil, pivot to the MBS launch from an in-live situation, which we thought at the beginning of the year, to a virtual launch. And we continue to hear good success stories about the ability to access physicians and customers in general through virtual engagement. So we're very excited about the launches ahead of us. And as Chris said, we've really pivoted to that digital environment and we're finding we're gaining good access. So very excited about those launches. And then I'll hand over to Sumit for the other part of your question.

Thank you, Nadeem, and thanks, Terence, for the question. As it relates to Lysacell, as you know that we submitted the application, it comprehends the data sets at the end of last year. And the FDA accepted the application for Lysol and granted a priority review in February of this year. Now, it is typical for the FDA to request additional information as they continue their review process. And after the company supplied the information in response to several requests that the FDA has made, FDA has decided that the information they've received constitute a major amendment. And that's why the Purdue for date has been extended by three months to the 16th of November now. We're obviously committed to ensuring this medicine is available to patients as soon as possible, and we continue to meet our CVR milestones. Obviously, we're not going to comment on the specifics of our regulatory discussions, but let me just remind that we remain very confident about the data for lysis cells for these patients with large beasts of lymphoma as it is an unmet medical need, and we're truly looking forward to the approval of this therapy towards the end of the year. Thank you.

Thanks, Philip. Chloe, could we go to the next question, please?

Absolutely. The next question comes from Jeff Meacham from Bank of America.

Thanks for the question. I just got a couple as a follow-up for David. If the environment normalizes this year, it may still be at a lower run rate for some of your launches. Does this affect how you think about 2021 in terms of revenue or cash flow and other opportunities for synergies to be realized on an accelerated basis. And then Giovanni, big picture on the BD front, you've talked about deals still being in focus even as you integrate cell genes. I'm just curious whether the COVID-19 environment alters this view, either their priorities or perhaps the size and scope of it. Thank you.

Thank you, Jeff. Let me ask David to start and give you a perspective on 2020 and 21. It's really what has been reflected in our guidance, and I'll get to your second question immediately after.

Thank you for the question. Particularly on guidance, as we're thinking about it, as we said, is Right now, we think the inventory buildup that came through is going to release out mainly in Q2 and for the remainder of the year. As far as what we're watching closely is the new patient starts and our anticipation that that recovers in Q3 and we're back to normal in Q4, as well as the infusion centers and the volumes returning to normal. And that would continue into 2021. What I would say is that the underlying performance of the business is very strong in the first quarter. And as you heard about with the product launches, our confidence in those four product launches are coming this year as well as the product launches next year. That gives us the confidence in reiterating our guidance for both this year and next year. But we're going to keep a very close eye on the macroeconomic factors that could wind up impacting the entire industry, as I talked about in my remarks. As far as the synergies, we continually review those synergies, both internally as well as with our board. We are really pleased with the progress we've been making on the synergy front. And the progress with the third-party vendors has done very well. And as far as getting the organization in place, the vast majority of our placements of the organization are done, and as far as site selection is concerned, bringing our sites together, that's moving along as planned as well. So we remain confident in delivering the signature targets that we have.

Thank you, David. And going back to your question, Jeff, so let me just say, first of all, we are very happy with the progress we've made with the integration of the company, and at the same time, the strength of execution in the company. So on one side, our business continues to perform really well. As you've seen, we've made great progress with the pipeline against all key value drivers. We're executing well. We've made progress. I would say we are progressing really well with synergies as well, and we have tremendous flexibility from a P&L perspective and from a financial perspective. So going forward, we will continue to be very disciplined in terms of how we think about resource allocation and expenses given evolutions related to the COVID pandemic. Now, given our strong position, As David mentioned earlier, we've not really changed our capital allocation strategy. Business development remains the central pillar of our strategy. We are very focused on continuing to bring the new assets and innovation into the company. I expect that to continue to be the case, and it's very possible, in fact, that there are more opportunities available to us going forward. And we are definitely focused on business development, as we've always been. So thank you.

Thanks, Giovanni. Chloe, we're ready for the next one?

Absolutely. The next question comes from Chris Schott from JP Morgan.

Great. Thanks so much for the questions. Just two for me. The first one, in light of the 9ER study, can you talk about the RCC market and the opportunity you see for Updevo, Yervoy versus IO, TKI combinations over time? and how you see Bristol positioning these two different frontline offerings they're going to have as you think about how you're going to position them relative to one another. My second question was on COVID and drug pricing. I think you mentioned some of these kind of macroeconomic factors, but when you think about high unemployment as well as growing budget deficits from government payers, how do you see that flowing through as you think about net pricing looking out later this year and into 2021? Is it the core of the question? Do you think it's likely that we're going to see some sort of incremental impact to pricing from what's occurring with COVID right now? Thank you so much.

Thank you, Chris. Let me start. I'll give you my perspective on pricing. And then I'll ask Chris to comment on 9ER and NRCC. It's exciting there. So first of all, I think a lot of... First of all, I would say, Chris, the issue of drug pricing is one where we've been in dialogue now for a period of time, and we as an industry and as a company continue to think that there is a real need to be strategic and think about reforming some of the elements of the pricing system in the U.S. that are creating affordability issues for patients. As you know, we believe there is a real opportunity through rebate reform and other measures that are market-based to address the issue of drug pricing in terms of patient affordability, which is the real issue. Now, with respect to your question, first, it's early days, and it is early to say, and it's difficult to speculate on the future. Of course, the focus of many, and I think that was at the center of your question, is what happens in an environment where unemployment is higher, a significant impact to the commercial markets. So one way to think about it is if you look at our business, where 60% of our business approximately in the U.S., in the U.S., so of that 60%, about 25% of our business is in the commercial space. And when you look at the dynamics that may play out in the commercial space, I think a lot depends on what happens to patients that may be unemployed and potentially lose coverage. So some of those patients will move to a spouse's insurance plan. Some of those patients may take up COBRA. And obviously any strategy or policy that makes that more affordable would be beneficial for patients. Some of those patients will be eligible for Medicare if they're over 65. There may be some shift to government programs like the exchanges or Medicaid, and hopefully no patient or very few patients loses coverage. So these are all of the dynamics that we're going to be working through. And, of course, a lot depends on the shape of the recovery and how long unemployment lasts. lasts. But I think these are sort of the macro factors that we'll be looking at together. So with that, I'll ask Chris to give you his perspective about the ICC market and the excitement with DynER.

Yeah, thanks for the question, Chris. We're very excited about the data that we saw with DynER. Maybe in answering your question, I'll start with just kind of an update on where we are with Opdivo plus Urovoid today in first-line renal. If you go back a year One of the things that we said when we first started to see the IOTKI data was that we anticipated that Opdivo plus Urovoi would remain a standard of care in first line. And that's precisely what's happened. And we think that's been driven primarily by the impressive long-term benefits that you see with Opdivo plus Urovoi. We just saw the 42-month OS update at ASCO GU. That OS was about 56% in the ITT population. And that's driven primarily continued strong performance of Updivo plus Urovoi in first line. Market share right now is between 30% and 35% overall. It's on the upper end of that range when you look at the labeled indication that we have in intermediate and core. We do get some non-promoted use in the favorable population, which is off-label for us, of about 15% Updivo plus Urovoi use there. And we've also seen that the majority of the use that existing IO plus TKI therapies have gotten in first-line renal has largely been at the expense of TKI monotherapy. So Abdebo plus Urovoi has held up really well. And in fact, we've seen a bit of an uptick in Abdebo plus Urovoi over the last number of months. 9ER, very exciting data. We're very happy to see both the OS and the PS data that we saw there. Also very encouraged by the safety profile for 9ER. In terms of how we're thinking about positioning it, still very early days and we're working through the data, but we think these data compete very well against existing IO TKI therapies. As a result, we think there's an opportunity to drive share from existing IO TKI therapies. We also think that there's an opportunity to drive share from TKI monotherapy. In spite of advances in first-line renal, TKI monotherapy is still about 20 to 25% of share, mostly in the favorable population. And with respect to favorables, we think there's an opportunity there for us as well since 9ER crossed risk status and included that favorable population. And now once approved, we'll have access to that population promotionally. Importantly, the last thing I would say is that once approved, 9ER really does give us the opportunity to offer patients multiple IO modalities here. We'll be the only company, frankly, to have dual IO, but also what we believe will be a best-in-class IoTKI offering. So very excited about the opportunity that 9ER affords us to help patients and provide another modality to those patients, and I think that there's a nice opportunity.

Thanks, Chris. Chloe, could we go to the next question, please?

Certainly. The next question comes from Andrew Baum from Citi.

Thank you. Some questions for Simon, please.

In terms of the pending 9LA data at ASCO, what is the follow-up of that data for both OS and for PFS? My question is, are physicians going to come out of that presentation and rethink their strategy for first-line non-small cell lung on the back of that data? Is there enough follow-up there? Second, in terms of the 9ER trial, could you talk to Carbizantinib? I remember that when you ran the Phase II There was a question about toxicity, and I seem to remember you used a lower dose. So given it's a much more promiscuous TKI, should we assume a favorable or comparable tox profile? Anything you could share there would be interesting. And then finally, on TIGIT or TIGIT, Roche is pushing forward very aggressively with their TIGIT antagonist.

Merck clearly is interested and active with theirs. Your program seems not to have been very much.

Is that a function of resource allocation, or is it a function of what you're seeing with this particular molecule. Thank you. Thank you, Andrew. So, Samir, I believe all three elements of the questions are for you.

Thank you, Andrew. Always, as always, very thoughtful questions and certainly thought-provoking. From a 9LA perspective, certainly we're looking forward to the first presentation of the data at ASCO, although virtually, but certainly going to be very meaningful. As you recall, we had finished enrollment towards the beginning of last year. So at the first readout of the data, the interim analysis, the follow-up was short. What we will be able to share is follow-on data from that perspective. It's very important, I think, to realize from 9LA perspective a few questions that we will be looking towards the data to answer. One is, as we continue the follow-on and as we continue the follow-up, What happens to that OS curve? Does it start to flatten out, number one? Number two, what happens to that beginning part of the curve that we saw in Checkmate 227 where we have the early progressors and how a limited amount of chemotherapy can impact that? I think those are the very important answers that we'll be looking for as we look towards the presentation of the 9LA data. We remain excited. I think both of them have to be considered together, the 227 data and the 9LA data in overall management of a patient as we look towards non-small cell lung cancer management as we go forward. So I think that dual IO inhibition becomes very important along with that shortened duration of chemotherapy for some patients who require it. I will obviously ask towards the end when I finish to Chris also to comment from commercial perspective, what that really means. On the 9ER side, as you mentioned, carbometrics were used at the dose of 40 milligrams, and certainly that is going to be important in terms of management of the safety profile, as we've already said, that overall what we have seen is generally quite manageable safety profile, as Chris also spoke about, that this provides an opportunity for further use of Omdevo in all the risk categories in combination with COVID to this time. So certainly a very exciting news where the trial has met all three endpoints, the major endpoints that we look at from an overall survival benefit as well as looking at PFS and response rates in addition to a very well-managed safety profile. And I'll finish off on the TIGIT and then I'll pass it on to Chris to comment further on both, on 9LA as well as on ER. On the TJ perspective, we are looking forward to see the data that Roche will be presenting. Certainly a very complex mechanism, as you very well know. We have our molecule, which is in phase one. We continue to evaluate the safety and the overall dose profile for that agent, and certainly there's no data to be shared yet, but we will certainly learn from what Roche is going to present, and then we'll see if we need to manage differently. Chris, you want to add things?

Sure. I think that Samit said on most of the points around 9LA, what I would say from a commercial standpoint is obviously we've had a lot of discussions with physicians over the last few months about 227 and 9LA, and it's important what Samit said, that physicians and we really do think that 227 and 9LA really need to be thought about together. 227, you'll recall that what we showed was about 50% of Responders were still responding at two years, and we saw this nice flattening of the OS curve. You'll see how that data matures at ASCO in a few weeks. But then the way physicians are thinking about 9LA is very much as complementary to 227 in that they offer the benefit of Opdivo plus Uroboid to patients who don't need chemotherapy. That's 227. And for those patients who potentially do need chemotherapy, and that's where 9LA kind of came in, comes into play. And I think Simon hit on some of the key things that you'll want to pay attention to when that data are presented at ASCO in a few weeks. Two other things that I would just keep in mind with respect to Opdivo plus Urovoi in lung. First, about half of the lung cancer treaters have used Opdivo plus Urovoi either in melanoma or renal. So they're familiar with the benefit that we see with that regimen there. And those physicians account for about two-thirds of total lung cancer patients. And then the second thing, not a trivial thing, is that we have a very experienced team with a track record of being able to establish Opdivo plus Urovoi as a standard of care in both of the tumors in which we've been approved with that regimen. And they're incredibly excited and prepared to launch Opdivo plus Urovoi in first-line lung cancer. And we're really looking forward to the PDUFA date for 227 next week.

Thank you, Chris.

Thanks, Chris. Chloe, could we get to the next one, please?

Certainly. The next question comes from Tim Anderson from Wolf Research. Please go ahead.

Thank you. A couple of questions, please. Quite a few number of years ago, Bristol narrowed its footprint in emerging markets intentionally to kind of focus on, I think, what it felt was geographies where it had more scale and presence. But with Celgene folded in, you're a much bigger organization. And it kind of makes me wonder what the plan is with emerging markets going forward. I don't even see emerging markets or China mentioned in the press release or in the slide deck. But as we've seen across industry, geographies like China are very important, especially in the area of oncology. So it makes me wonder if there's kind of an untapped revenue stream here. And what's the solution if you think there is indeed a problem that you don't have a big enough footprint now given the size of the company? The second question is on LAG3. If I understand it, you have pivotal LAG3 plus OptEvo combination data coming up around year end in first-line melanoma. That's a program that doesn't seem to get talked about very much. Investor expectations are low. My question is, should those expectations be low? Do you view this as a high-risk program?

Thank you, Tim. Let me just answer your first question, and then I'll ask Samit to give you his perspective on the ongoing Black Tree program. I think your point is really important. It is a very good question. You are right that given our focus on... oncology and all of the work that we have done over the last few years. We have been focused primarily on, I would say, the developed world. I must say we have a meaningful presence in developing countries. And when we've seen, when we look at the development of our oncology business in particular, we have had significant success, actually, outside of the U.S. and Europe and major markets, including Central and Eastern Europe and some of the key markets in Latin America, and as you know, recently, with the approval of Devo in China. So it is also accurate that now we have a broader portfolio and more opportunities to establish a larger presence outside of the sort of tier one top markets And I'm actually really confident we have the right capabilities there, and we have a strong base to continue to invest internationally. There is a real opportunity, but there is also already a presence of the BMS portfolio that has been successful there. So we'll continue to invest across different geographies, and there is an opportunity with a broader portfolio to have an even broader approach with respect to the footprint. Shamit?

Thank you, Giovanni. I'll take on the LAC3 question. So I think, first of all, a lot has happened in terms of the drug development part in patients with melanoma, and certainly BMS has played a big role in getting the IO therapies there with both Abdevo and Yervoy. LAC3 is a new mechanism that we are excited about from the early phase 1 beta we have seen, and also from the biomarker data perspective, looking at the T-cell exhaustion and how to get the immune system going again. From that perspective, this is going to be a very important study. The trial is currently enrolling and we're certainly seeing from the investigator's perspective, they remain excited and they continue to enroll patients in the trial. It is on track from an enrollment perspective. We continue to collect the data. We're looking towards the readout towards the end of the year. And in parallel, we continue to plan livestock management studies in terms of looking at additional indications that you will hear about as we roll them out towards the end of the year, early next year as well.

Can we go to the next one, please, Chloe?

Certainly. The next question comes from Matt.

Lauren, thanks for taking my questions. First, given the current environment and potential trouble accessing infusion clinics, is there any reason to accelerate the development of a subcutaneous nivolumab? I know the trial has been going on there since 2018, looking at that. And secondly, for the TIK2 small molecule, I just want to confirm that the psoriasis trials are on track to complete mid-year or this summer, and all the physician assessments can be completed. And then there's been a lot of simulation work ongoing according to clinicaltrials.gov and just wondering if any of that will impact potential filings in the near-term if the trials are successful.

Thank you, Matt. So, Samit, I think there's two questions on SAPQ, OBDII, and then the status of the T2 program.

Absolutely. Thank you. So, the only thing I can say about the SAPQ NEVO that we are currently evaluating that, it is ongoing. I think acceleration will depend on the outcomes of the first phase one studies as we look towards the dosing and the tolerability and safety, which should be available sometime soon. And then based on that, we will continue to progress further, looking into the further development and bringing it to the patients. If you recall, the phase two data were certainly very, very promising. Phase three trials, both 046, 047, completed enrollment. So at this time, we're looking at follow-up of these patients, collection of the data and cleaning activities so that we can approach the database lock. There's no reason to believe that there will be any delays. We're looking towards the end of the year for readout of the first study, 046, and first quarter of next year for 047 for the psoriasis program. So those two are the updates for TIK2 and subcuneval. Back to you, Tim.

Thanks, Simon. And I know we're starting to run close to the end of our normal time, but I think it's maybe time to squeeze in two more questions, Chloe. Could we go to the next one?

Absolutely. The next question comes from Steve Scala from Cohen. Please go ahead.

Thank you. Your comments on the LysaCell PDUFA extension reflected no real concern whatsoever, and it's one of the four new launches you called out for this year. It seems you are completely comfortable with the FDA meeting the regulatory timeline. I just want to make sure that that's the impression you wish to convey to us. And then secondly, it was stated that the COVID-19 could lead to inventory destock and a drop in patient visits to infusion centers in the second quarter, as well as beyond that. I'm just curious, what was the decline in these metrics during the month of April? Thank you.

Sure. Thank you, Steve. So I think we've already made comments on Lysosol, but I'll ask Samit if there's anything he wants to add, and then David can give you a perspective about different market dynamics in the business for the rest of the year.

Thank you, Giovanni, and thanks, Steve, for the question. For Lysosol, what we have said is that we remain confident in the data We remain confident in the data that we submitted to the FDA. It is very normal for the FDA to, as they review the file, to ask questions. Certainly, we are looking towards the approval date now to in November. During the review process, there may be many more questions that come to us, but that's a very normal process. So I think that's the way to look at it. Obviously, we cannot comment specifically on types of questions or what it relates to from a regulatory point of view. We remain confident and we are looking forward to bringing this treatment to patients as soon as possible towards the end of this year.

Yes, and just on the question around the stocking that we saw. As we entered the pandemic situation in February and March, what we saw was across the board, we saw safety stocks increasing. So we saw wholesalers making sure they had increased inventory. We also saw that pharmacies had extra safety stock. And then we even saw with patients getting longer scripts, as we talked about, Revlimed was an example, doubling the number of days that they could get. What we are starting to see is some of that destocking come out, and we anticipate, as I said earlier, that the majority of that will come out in Q2. So of the $500 million that we talked about, the majority of that will come out in Q2, and then we'll see it coming out in the remainder is what we're anticipating. As far as what we're seeing on the new patient, it starts at early days, what we're seeing there, but we did see some of those new RXs declining about 10% to 20%, depending upon the patient. And we'll be watching that very closely in the second quarter, and we'll update you on that. And then on the infusion center, similar that we're seeing in that 10% to 20% range as well, fewer patients. So again, that's something that we're going to keep an eye on in the second quarter as well. Chris, I don't know if there's anything that you wanted to add to that.

I think you've managed to hit on the key points. The only other thing I would say is that the drop that we've seen in patient volume and particularly in new patient starts has varied really across therapeutic areas. So in the CV space, it's been sort of on the order of 20% to 25% across the OAC class A lesser extent in oncology and the tumors that we are in, it's been on the order of 5 to 20%. And as David mentioned, that has led to some choppiness, for example, in Opdivo sales in April, which we think is attributable to the drop in new patient starts. That said, we would expect that, as David had mentioned, the biggest impact for that would be in the second quarter. That would begin to normalize and be back to more normal levels by the fourth quarter, and that's what we'll be continuing to monitor.

Thanks, Chris. Maybe we can go to our last one, Chloe.

Absolutely. The next question comes from Dave Reisinger from Morgan Stanley. Okay.

Thanks very much. So congrats on the results and the prospects. I have two questions. First, could you just comment on the Zanamon opportunity and ulcerative colitis and the expected timing of phase three top line results? And then I missed part of the call earlier, so I don't know if you discussed it, but could you also comment on Opdivo adjuvant trial readouts to watch And maybe you could focus us on the biggest incremental commercial opportunities with respect to those adjuvant trials. Thank you.

Thank you, David. So, Samit and Chris can address both of your questions.

Samit, do you want to start with the data on IDE? And then I'll pick up on the commercial opportunity to talk about adjuvants.

Sure, absolutely. And then certainly for the data that we're looking forward to for Zanamara, Zipozi, and also the coitus, we are still on track. As you know, the trial had already completed enrollment, and we're looking towards the third quarter of this year for the top line readout. Let me go back to you for adjuvant timelines and the impact, Chris.

So just on the commercial opportunity in IBD, what I would say to build on what Sam had started with around the data is that with both ulcerative colitis and Crohn's disease, as you may know, these are chronic conditions. They require multiple treatments to manage. And in both of those disease areas, there really is a need for more efficacious drugs with a manageable safety profile. In terms of how we think we could play in that space with Ozanamide, In the pre-biologic space, I think there's a need for safe, convenient options with efficacy that's on the order of what you see with biologics. That's especially true in Crohn's disease, which lacks any sort of a well-established first-line treatment. And then in the post-biologic space, there's really a need for safe options with a different MOA for patients as they develop immunogenicity to biologics. And as Samit alluded to, The data are still relatively young and ultimately the opportunity that we're going to have is going to be data dependent there. With respect to the adjuvant opportunity, as we've talked about routinely, we're excited about the adjuvant opportunity. It's a space where IO should work given you have an intact immune system. The data that we've seen so far, both in adjuvant melanoma with Avdebo and Urovoi and some of the early data that we've seen with Avdebo and the neoadjuvant setting where we saw about a 45% pathological response rate look very encouraging. And we think it's the opportunity to have the biggest impact on patients. In terms of those commercial opportunities to be watching out for, remember the way to think about it commercially is not only the patients who are treated today, but much like what we saw with the introduction of IO in adjuvant melanoma, you really have an opportunity to improve the treatment rate. So you need to look at both patients who are treated today, but also what's the treatment rate. So the ones to keep an eye on would be lung. Lung is an area where in the U.S. there are about 10,000 patients treated today, but the treatment rate in adjuvant lung is only about 40%. Similarly, we're excited about the opportunities in renal cell and esophageal Those are also potentially large opportunities. Renal in particular, the treatment rate in adjuvant is only about 15%. And then obviously we have ongoing programs in adjuvant melanoma as well. Other programs that are of interest would be gastric bladder. And the nice thing about the portfolio of adjuvant programs we have is that we've got multiple approaches and we're also looking at traditional adjuvant as well as neoadjuvant and periadjuvant. Really excited about the opportunity.

Thank you. Thanks, Chris. So thanks everyone for participating in the call. This was a very strong quarter. I'm very proud of our execution and the resilience of our organization. I look forward to what we will continue to achieve together. In closing, it is clear that the pandemic is impacting our lives is also shining a light on the potential we have as an industry and as a company to transform the lives of patients through science. We're focused on doing our part in continuing to deliver medicines that our patients are depending on. Thanks, everyone, and our team will continue to be available to answer the rest of your questions. Have a good day. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.