Bristol-Myers Squibb Company

Good day and welcome to the Bristol-Myers Squibb 2020 Second Quarter Results 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, sir.

Thanks, Orlando, and good morning, everyone. Thanks for joining us today for our second quarter 2020 earnings call. Joining me this morning with prepared remarks are Giovanni Coforia, our Board Chair and Chief Executive Officer, and David Elkins, our Chief Financial Officer. And also participating in today's call are Chris Berner, our Chief Commercialization Officer, the DMF Med, President Hematology, and Sumit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to BMS.com that you can follow along with for David and Giovanni's remarks. But before we get going, I'll read our forward-looking statements. During this 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 the company's 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 their estimates change. 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 The most comparable gap measures are available on bms.com. With that, I'll hand it over to Giovanni on slide three.

Thank you, Tim, and good morning, everyone. I hope that everyone is remaining healthy and safe. As we continue to navigate the impact of the pandemic, I want to thank our colleagues around the world whose commitment to our mission and dedication to our patients has enabled us to continue delivering our medicines to those who are relying on us. Before starting the call, let me briefly comment on yesterday's news on Eliquis. We believe the IP for this medicine reflects the innovation we have brought to help patients with AF and VTE. In this regard, we are very pleased by the court's decision to rule in our favor on both patents. Let's turn to slide four. We have delivered another very strong quarter with solid commercial performance including a promising start with multiple launches, strong financial performance, and the achievement of important clinical and pipeline milestones that reinforce our long-term potential. Our ability to advance the business was enabled in part by our integration efforts. Our teams are working well across the organization. Our systems are coming together and we are on track to deliver 2.5 billion in synergies by the end of 2022. With a strong foundation, a broad and deep portfolio and pipeline, and significant financial flexibility, I have never been more confident in the future of Bristol-Myers Squibb. Before I discuss our results, I will take a moment to talk about how our teams are coming back to the workplace and into the field. We are taking a thoughtful and phased approach to our return to the workplace. Our timelines and circumstances vary by market, and we are taking significant measures to protect the safety of our colleagues while we continue to deliver medicines to patients and enhance our long-term competitive position as a company. In locations where country restrictions permit and we can ensure the safety of patients, providers, and colleagues, we have resumed recruiting for our clinical trials. Our discovery researchers have returned to our laboratories to continue their vital work. Depending on local and regional conditions in the US and globally, our sales and medical teams are continuing to effectively engage virtually, and where possible, returning to the field. We also continue to support the global COVID-19 response effort in a variety of areas, including working with researchers, the biopharma community, and the broader life sciences industry on ways to accelerate therapies for COVID-19. While uncertainty remains with how the COVID-19 pandemic will evolve, we have plans in place to adapt and ensure that our business continues to operate well. Now, let me turn to the quarter on slide five. David will provide more details later in the call, so I'll take a moment to cover the highlights. First, I'm very encouraged by the resilience and strength of our business and the robust demand for our medicines, enabled by strong commercial execution. We posted $10.1 billion in sales, and while COVID-related inventory and demand dynamics had an impact on sales of our medicines in Q2, underlying dynamics remain very positive and fully aligned with our expectations. During the quarter, we also made important progress with our pipeline. We achieved two first-line lung cancer approvals for dual IO therapy. We delivered positive pivotal phase three results for Ziposia in ulcerative colitis, which we look forward to discussing with health authorities and presenting at a future medical meeting. And we also made good progress with the regulatory process for our cell therapy medicines. particularly the submission of Idacel. Also, during the second quarter, we have launched several of our new medicines and new indications. And while we are clearly in the launch cycle, early in the launch cycle, we are seeing encouraging initial performance. We are off to a very good start with our Obdivo plus Yervoy launches in first-line lung, with encouraging initial feedback from physicians and good indications of early adoption. This supports our expectation that Opdivo will return to annual sales growth in 2021. We have launched Ziposia with a best-in-class S1P label in MS, and we are pleased with the feedback from customers so far, including with respect to the ease of treatment initiation. And we're very encouraged by the adoption we've seen with Reblozil in MDS. Early demand trends support our view that this will be an important drug for patients and for the company. And we further strengthened our financial position with strong operating results and cash flow. The results we've delivered in the quarter provide a strong foundation for the future. So looking forward and turning to slide six, As we discussed during our investor series in June, we are executing on an unprecedented number of new launch opportunities. And across almost every one of our new products, we have the potential to build on our initial launch success with additional new indications, benefiting more patients and growing our business. We believe that the new products we bring into market provide us with an opportunity to renew our portfolio for the long term. In fact, we estimate that the new launches, together with their lifecycle management opportunities, could deliver approximately $20 billion in peak revenue on a non-risk-adjusted basis. During the quarter, we began to realize this potential, having launched several new products and indications. And we also delivered key clinical data to potentially expand the use of Ziposia. Later this year, we expect key data for our TIK2 inhibitor, which we believe is an asset with significant potential as a broad-based autoimmune medicine. In fact, we have recently received Phase II data for TIK2 in psoriatic arthritis, reinforcing this view. We look forward to presenting the data at an upcoming medical meeting and embarking on a phase three program in this indication. And finally, in the very near term, we are looking forward to the U.S. PDUFA dates for CC486 in September and LysoCell in November. And of course, beyond our new launches, we have a pipeline full of promise. Turning to slide seven, I am encouraged by the progress with the next wave of medicines that are emerging. Our pipeline includes more than six assets that have achieved proof of concept or are close to it, spanning multiple disease areas. In IO, we have our Lactree inhibitor, Relathlimab, with potential Phase III data later this year or early next year, as well as Bempeg, partnered with Nectar. In multiple myeloma, we have two cell modes, Iberdomide and CC92-480. and our BCMA T-cell engager. In cardiovascular disease, we see promise in our factor 11a inhibitor. And finally, in immunology and GI, we are looking forward to taking Sandacumab into phase three trials in the eosinophilic esophagitis. All of these agents could have significant commercial potential. When I look at our portfolio, I'm confident that the opportunities we have with our new launches life cycle management programs, and earlier pipeline assets have the potential to strengthen our position in key therapeutic areas, such as expanding our franchise in hematology and sustaining a leadership position in multiple myeloma, broadening our presence in immunology with our TIK2 inhibitor, and establishing a GI franchise starting with Ziposia, and renewing our franchise in cardiovascular. Along with these opportunities, our financial flexibility enables the external sourcing of assets and innovation to complement our internal R&D efforts. Now, moving to slide eight. Our future has never been brighter. In the first half of the year, we've executed very well, realizing a number of important accomplishments while integrating the company. These accomplishments all point to our opportunity to successfully renew our portfolio for the long term. None of this would be possible without the tireless efforts of our extraordinary teams around the globe. I'm very proud of our colleagues and thank them for their focus and dedication. We have incredible talent in the company, and it is our priority to continue to attract, retain, and develop the best people. Before I hand it over to David, let me provide our perspective on the recent executive orders in the U.S. We are supportive of increasing access to medicines and reducing the out-of-pocket cost of medicines for seniors. Actions like the rebate rule would help achieve these goals. However, the IPI would not. The industry, physicians, and patient groups are very concerned about and firmly disagree with the administration's decision to sign the executive order on IPI. We believe that IPI has the potential to impose price controls from countries where government-run healthcare systems and price controls do not appropriately reward innovation and where too often patients do not even have access to new medicines. The policy of importing price controls from foreign countries, which the administration has described as having socialist healthcare systems, would have a significant impact on our industry in the U.S., starting with our ability to continue to invest in R&D and lead innovative research to treat disease at a time when we are leading the fight against COVID-19. I'll now hand it over to David to walk you through our financials for this quarter. David?