Bristol-Myers Squibb Company

Good day and welcome to the Bristol-Myers Squibb 2020 third 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, Kevin, and good morning, everyone. Thanks for joining us this morning for our third quarter 2020 earnings call. Joining me this morning with prepared remarks are Giovanni Cafforia, 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, Nadine Ahmed, President Hematology, and Sumit Hiralot, 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 Giovanni and David's remarks. And before we get going, I'll read our forward-looking statement. 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 our estimates change. We'll also focus our comments on our non-GAAP financial measures, which are adjusted to include certain specified items. Reconciliations of those non-GAAP financial measures, the most comparable GAAP measures, are available at bns.com. With that, I'll hand over to Giovanni.

Thank you, Tim, and good morning, everyone. I hope that you and your families are safe and healthy. Q3 was a very strong quarter across the company, adding to great performance over the past year. I will go into more details about the quarter in a few moments, but recognizing that it has been almost a year since we established our new company, I would first like to give you my perspective on the company overall. Turning to slide four, a year ago, we transformed our company with the goal of positioning us for growth in the near, medium, and long term. I am very pleased with our ability to consistently deliver on that promise across multiple dimensions. Starting with integration, where we continue to make great progress. The strength of our execution as a combined company is a testament to our successful integration so far. The culture of our company is being shaped by our values, including a focus on innovation, collaboration, and a great sense of urgency. Our synergy capture is ahead of our original expectations. From a commercial perspective, we have driven strong performance from our inline brands. We have launched four new medicines, including InRevit, Reblosil, Ziposia, and Onoreg. We have entered the first-line lung cancer market with Obdivo and Yergoin. In the past year, we've also delivered strongly on the potential of our pipelines. starting with immuno-oncology, where we have seen successful trials across both the metastatic and the adjuvant settings, which further supports the growth opportunity for Obdivo. Specifically in adjuvant, Obdivo is well positioned as a leading medicine with results in four different tumor types. Beyond immune oncology, we are continuing to strengthen our presence in immunology with very encouraging data from a number of assets and programs. These include Phase III data for Ziposia and ulcerative colitis, the decision to move to registrational trials for Syndacumab in eosinophilic esophagitis, and Phase II data for our TIK2 inhibitor, Ducravacitinib in psoriatic arthritis. Most importantly, we now have top-line data from our first Phase III trial for Ducravacetinib in psoriasis. Let me take a moment to talk about Ducravacetinib. Based on the top-line data that we have seen so far, we are very encouraged by the potential for this asset to be the best oral option for patients with psoriasis. with potential broad applicability across multiple diseases, including psoriatic arthritis and Crohn's disease. And finally, we strengthened our IP position for Reglimid and Eliquis, delivered strong financial results, and continue to invest in the future with a number of important business development transactions, including two early-stage assets, Cruforbius and Dragonfly, as well as the announced acquisition of Myocardium. Now, turning to slide five, through the planned acquisition of myocardia, we're gaining Mavacantin, a potential first-in-class medicine for the treatment of obstructive hypertrophic cardiomyopathy, which is a chronic heart disease with high morbidity and patient impact. We believe Mavacantin has multibillion-dollar potential, with further potential value drivers from additional indications and the myocardial pipeline. We look forward to closing the transaction during Q4 and welcoming our new colleagues from Myocardia to the Bristol Myosquib team. Turning to slide six, I am optimistic about the strategic position of our company and how we are well positioned for growth and to navigate through the pattern cycle. Today, Bristol Myosquib has significant strength and breadth in all four of our current therapeutic areas. Across oncology, hematology, immunology, and CV, we have robust in-line businesses, exciting near-term launches, as well as long-term pipeline opportunities. Across all four areas, we are successfully building our portfolio of new medicines through a combination of short-term launches, the advancement of significant late-stage pipeline opportunities, and disciplined business development. To be more specific, Eliquis and Opdivo are assets with significant growth potential. We have eight new medicines that are launching now or have the potential to launch over the next year. And most of these have important expansion opportunities beyond just their initial indication. We have gained clear line of sight to our next set of registrational assets with seven in or close to registrational development, including Roilatilamab, our two multiple myeloma cell mods, Ibergamide and CC92-480, as well as Sandacumab and our Factor XIa inhibitor. And our early pipeline will continue to advance, with more than 20 assets with the potential to transition to full development over the next three years. Given the strength of our portfolio and pipeline, together with the talent of our people, we are focused on delivering on our full potential. Within that context, let me turn briefly to the strength of the quarter on slide seven. David will provide more details. First, we continue to execute very well in highly competitive markets. compared to the same period last year on a pro forma basis. In addition, we are making good progress across our launches. And during the quarter, we have seen significant clinical progress, including multiple positive trials in IO, as well as the first Phase III trial for Duclavis adenovirus. Based on the strength of the business, we are increasing our EPS guidance for this year and continue to be very encouraged about the earnings growth opportunity ahead, as captured by our non-GAAP EPS guidance for next year, which we are reaffirming. Before I hand it over to David, I want to reiterate that I am more encouraged today than ever before about our future prospects. I can say with confidence that our company has never been stronger. Bristol-Myers Squibb is well-positioned to launch multiple new medicines, new indications, and benefit more patients in the very short term. And as we look to the future, our pipeline and financial flexibility, combined with the strength and critical mass we have built across all key areas, provide us with tremendous opportunity. I'm extremely grateful to David.

Thank you, Giovanni. Hello, everyone, and thanks again for joining our call today. I'm very pleased by the execution of our teams, delivering very strong quarterly and year-to-date results while operating in this global pandemic. Let's turn to slide nine to discuss our top-line performance. Third quarter and year-to-date revenues continue to reflect our strong execution, growing 6% versus prior year on a performance basis. As you can see, a vast majority of our brands demonstrated robust growth. Now let me provide additional commentary on the underlying performance of our key brands and new launches. Starting with Eloquist on slide 10, demand trends continue to be robust with double-digit TRX growth of 18% in the U.S. versus prior year. This demonstrates strong execution of our teams and best-in-class profile of the brand. As we discussed previously, we accrue our liability related to the coverage gap as patients enter it, which affects our second-half gross-to-net results. This is more pronounced this year as the size of the coverage gap per patient increased in 2020, and Medicare component is a larger component of our mix. This impact was in line with our expectations for Q3, and you should expect this to be a factor in the fourth quarter. Internationally, sales remained strong with revenue growth of approximately $1 billion, growing 22% versus prior year. Eloquist continues to be the number one NOAC in many key markets internationally. including Germany, France, and the United Kingdom. Both in the U.S. and globally, we continue to see very strong outlook for Eloquence, resulting from the strength of its profile, enabling increasing share within a growing class. Turning top to you on slide 11, in the U.S., the teams have been executing very well. We continue to see strong shares across key indications. We now have high single-digit share in first-line lung cancer, with more patients benefiting from the approvals 227 and 9LA. And you can see that the adoption of first-line lung is reflected in the acceleration of year avoidance. What we are really encouraged by is the return to sequential underlying growth for Avdevo. Underlying demand growth from Q2 to Q3 was approximately 2%. Sales grew 6% versus Q2, driven by growing underlying demand as well as the favorable customer buying patterns. We expect the impact from these buying patterns to reverse in the fourth quarter, but sequential demand growth to continue, supporting our return to annual year-over-year growth throughout EVO in 2021. Internationally, we've seen strong commercial execution across the board, with sales up 5% versus prior year. Sequentially, we saw a rebound to a stronger demand driven primarily by the European and Japanese markets, as our markets continue to gain reimbursement for new indications and first-line RCC in melanoma. While there continues to be some softness in new patient starts across tumors, but most notably in melanoma, we generally saw good recovery of the impact of COVID in Q3. And we also look forward to bringing up EVO plus year-term launches in 2021, including the potential for first-line gastric and several adjuvant indications, such as esophageal and muscle-invasive bladder cancer. And up EVO plus CAVO and first-line RCC, for which we will grant a priority review. To sum things up, the teams have executed well, both commercially and clinically, which shows the continued promise for Avivo and Urovoid and makes us even more confident in our expectations for the annual year-over-year growth in 2021. Moving on to our inline multiple myeloma portfolio on slide 12, Revlimid and Pomalyst continue to perform very well with strong double-digit growth on a performative basis. Revlimid grew 10%, primarily driven off increased treatment duration. And POMLIS grew 17%, driven by growth in earlier lines of treatment and increased treatment duration. In the U.S., we experienced some temporary softness due to the new brand share during COVID, which is now recovering. And this is being offset by better adherence and longer duration of therapy for existing patients. XUS performance sales for Revlimid increased 11%. while XUS performance sales for promolis increased 19%. This strong performance was driven by increased use of triplipase therapies and treatment duration in major European markets. COVID had a minimal impact on ongoing patient treatments, with a small impact observed in new patient starts. We are seeing strong signs of new patients returning to prior treatment patterns. Now, moving on to our recent launches on slide 13, Rebazel has been off to a robust start with the approval of virus-positive MDS-associated anemia. Global sales in the quarter were $96 million in patient uptake and patient retention on the product, where the majority of patients have adhered to their treatment. As a reminder, a significant proportion of early uptake is driven by the initial bolus of patients waiting for a new treatment option. We remain very encouraged by the underlying demand for the product in patients with beta thalassemia as well as MDS-associated anemia. Internationally, recent launches in Germany and Austria are going well, although very early in the launch. We also received approval for beta thalassemia-associated anemia in Canada and look forward to launching in various markets globally over the course of 2021 as we receive reimbursement. Turning to Supposia, we're encouraged by what we're seeing through the first few months of Supposia's launch. We are focused on driving demand and establishing Soposia as the leading S1P modulator in multiple sclerosis. We have secured strong commercial access, and our commercial teams are executing well. We are pleased with the physician receptivity and prescription initiation we've seen thus far. Now moving on to our newest launch, Onureg, which has granted approval for first-line AML maintenance by the FDA on September 1st. While very early in the launch, feedback from physicians has been promising. The message that On Your Egg is the first and only medicine to demonstrate overall survival in the maintenance setting with a convenient oral route of administration is resonating well. This is a market that is largely underdeveloped as there were previously no FDA-approved options for patients in the maintenance setting after intensive chemotherapy. And like many other medicines in the maintenance setting, it will take some time to educate prescribers about the use of new treatment for our patients. And NMA is under review in Europe, and we expect approval in 2021. And I'm moving on to our balance sheet and capital allocation on slide 14. We continue to generate significant amount of cash flow from operations in the third quarter. We ended the quarter in a strong liquidity position with approximately $22 billion in cash and marketable securities. That's after tax payments of approximately $1.7 billion for debt pay down and large cash payments, including tax payments associated with the gain on the Tesla. Our capital allocation priorities remain unchanged, delivering and achieving less than one and a half times debt to EBITDA ratio, which is now expected by the end of 2024. We continued our commitment to our dividend and investing in future innovation through business development. To touch on our business development activities, as Giovanni discussed, we have not wavered against our priorities. We have executed some important deals over the third quarter, including our acquisition of Forbius and license agreement with Dragonfly, as well as our recently announced pending acquisition of Myocardia. Each of these transactions is in line with our criteria for business development, strategically aligned, scientifically sound, and financially attractive. We will continue to be active in business development, searching for additional opportunities to further strengthen our growth profile of the company for the long-term and and creating value for our shareholders. Now let's turn to guidance on slide 15. Based on the strength of our results year to date, we're updating our full year 2020 outlook. We are narrowing our revenue range to between $41.5 billion and $42 billion based upon the strong performance year to date. And we do expect sales to be at the higher end of the range. Turning to operating expenses, we expect total spend to be generally in line with our expectations. We do have some slight shifts in spend related to our MS&A and R&D lines. For MS&A, we decided to make additional one-time investments, such as accelerating DTC advertising to support the business as we close out the year, and we now expect to spend approximately $6.9 billion. This is being offset by lower R&D expense, now expected to be approximately $9.2 billion. At the same time, we remain very pleased with our synergy capture, which, as Giovanni mentioned, is tracking ahead of our original expectations. We now expect our tax rate to be approximately 16% for the full year. In taking all this together, we are increasing our full-year adjusted EPS range to be between $6.25 and $6.35 per share. Our revenue guidance takes into account the donor hole, which continues to affect eloquence in the fourth quarter, as I mentioned earlier. as well as continued competitive dynamics associated with some of our established brands. Now, as it relates to our 2021 guidance, we are reaffirming our non-GAAP EPS guidance, $7.15 to $7.45, which absorbs the dilution associated with the myocardial acquisition. We look forward to providing more color on 2021 during our fourth quarter call as we normally do. Before we move to question and answer, I want to thank all of our teams around the world for delivering such outstanding results here today. These results allow me to remain confident in the long-term outlook for the company. I'll now turn the call back over to Tim and Giovanni for Q&A.

Great. Thanks very much, David.

Kevin, can we go to our first question, please? Certainly. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star 1. Our first question today comes from Chris Schott of JP Morgan.

Great. Thanks very much for the questions, and congrats on all the progress you've made this year. I guess I said two here. Maybe first on the TIC-2, can you elaborate a little bit more on the safety profile? I think there's still some lingering questions out there of will we see any of maybe some of the jack-like safety issues. I know you've talked a lot about that in the past. But just to confirm, did you see any imbalance at all, small or not, on thrombotic events from the POEC study? And just help us a little bit in terms of what the profile is shaping up like. on the safety there. And then my second question was on Updivo. You're launching a number of adjuvant indications next year. Just remind us on those, do you expect that these will have fast uptake like we've seen in some of the metastatic settings, or are these indications that maybe take a little bit longer to build out over time? Thanks so much.

Chris, thank you. I think I'll start off, and then Chris, I'll pass it on to you for Updivo-related questions. From a TIC2 perspective, Look, first of all, we are very happy with what we've seen from the results perspective. This is the first of the two phase three trials for TIK1 that have read out. And we have seen not only statistical as well as clinical meaningfulness uh versus placebo but also the the uh superiority versus uh apremilats or tesla in moderate to severe psoriasis uh from what we have uh seen before from the phase two studies and we've talked about safety profile we continue to believe in that there is a differentiated mechanism of action that we believe in we do think that the tick two inhibition which has a specific downstream effect on r12 r23 as well as interferon alpha has played out, and we continue to believe in that. Of course, I can't go into the specifics of the data. They will be presented in the future in the medical meeting. But overall, we're very happy where we are, and I'll look forward to the readout of the second phase three in the first quarter of 2021. So hopefully that answers your question. Let me pass it on to Chris to talk about Avdevo from here on.

Sure. Thanks for the question, Chris. We do have a number of exciting opportunities in the adjuvant setting. I'll maybe just highlight gastric and bladder specifically. As we talked about a few months ago with respect to gastric cancer, we're excited about the opportunity coming out of Checkmate 577. This is a space where there's significant unmet need. There's very little in the way of systemic therapy that's used here, and as Simon has previously talked about, Those patients who are getting neoadjuvant chemoradiotherapy, about three-quarters of those patients don't get a PATH-CR. So, really, there are no great options for those patients. And we've seen very good efficacy coming out of 577 with a doubling of DFS at a manageable safety profile. And there's relative clean air here from a competitive standpoint, as we'll be the first IO in the setting for a number of years. With respect to bladder, again, happy with the results that we saw with 274. This is a space with about 6,000 to 7,000 treated patients in the U.S. Again, not a lot in the way of great systemic therapies here. And as we've said, we met the primary endpoint. for Updivo and very much look forward to launching in the space. And this is, again, another space where there's relative clean air. So we would expect reasonably aggressive uptake in both of these indications.

Thanks, Chris.

Kevin, can we go to the next question, please? The next question today comes from Seamus Fernandez of Guggenheim.

Oh, great. Thanks so much, everybody. You know, congrats on the quarter and all the progress as well. Simon, my question is actually on the higher dose, the 12 milligram dose that we're going to see next week in psoriatic arthritis. Can you just give us, you know, that's really where we've seen problems with other JAKs. Just trying to get your sense of you know, what we should be looking for in those data. Obviously, they're about to be presented, but I think that's something that investors are interested in. And then incremental to that, as we think about the opportunity in areas like ulcerative colitis, you've really emphasized this IL-23, 1223 profile. Is that really where your enthusiasm for the product is? in ulcerative colitis in particular. Thanks so much.

Thank you, James, for the question, and quite appropriate. In fact, when we look at the POETEC-1 readout, as we said in the preceding, the dose used in the Phase III trial is the 6-mg dose. And what you have in the abstract in the poster at the ATR for psoriatic arthritis, as you mentioned, are both doses, the 6- and the 12-mg dose. We do see a profile from a safety perspective of the six milligram doses we talked about. Also, in looking at the older phase two study, generally very good at that dose, and that's the efficacy we have now seen in the phase three study as well. As a 12 milligram dose, we do see a dose response. But then we have to keep in mind, as you very correctly said, the overall safety management as well. So we will continue to dig deeper into the data as we plan phase three studies in the psoriatic arthritis space. But overall, we are very happy with the dose that we have tested in the phase three study. And of course, as I said earlier, we look at it again in the second readout in the first quarter of next year as we move forward. So that's, I think, the differentiation that it's not just about efficacy. We have to balance the benefit-risk, and that's why the six milligram dose seems quite reasonable for us from a safety and efficacy combined benefit-risk ratio. As it relates to the ulcerative colitis, the mechanism, as you very well said, I think the differentiation, the oral administration, the convenience of treatment, we've talked about ulcerative colitis with Ziposia already, and now we are looking towards a readout in the future for the TIK2 program, and bringing that differentiated mechanism once again and hopefully be able to show the efficacy and safety for patients with ulcerative colitis with TIK2 will be important. And, yes, IL-12 and IL-23 inhibition mechanism is going to play a big role both in ulcerative colitis and then in the future in Crohn's disease as well.

Thanks so much.

Kevin, can we go to our next question, please? The next question comes from Jeff Meacham of Bank of America.

Great. Thanks a lot, guys, for the questions. Just had a couple, I think both of them for Chris. So when you look at the first line lung trends for Opdivo, Chris, you guys have gained some share, I think 5% or so in the US, but I don't see much of a trend break this quarter. Was there already reasonable share in first line lung before the label expansion? And maybe just help us with what's been the feedback from the ground so far. And the second one on ribosome, the sequential trends have been really strong. I know, obviously, it's early. But what can you say about the distribution between MDS and beta-file and maybe just the cadence of uptick between the two indications? Thanks a lot, guys. Maybe I'll start and then I'll turn it over to Nadim to address the second part of your question. So with respect to Avdevo, let me just first give you the dynamics for the quarter. So obviously happy with the sequential growth that we saw for the quarter. That in the U.S. is a function of favorable demand, and I'll talk about that in a second. uh we also as david had noted saw some inventory bills um this was partially offset by the impact that we've seen with uh the decline in io eligibility that we've been discussing previously that's mainly in the second line thoracic indications and that still is a drag on a devo um currently that said um we were happy to see that we got consequential growth for the quarter And that was in part as a function of first line long. And with respect to first line long, we're very happy with what we're seeing with the launches so far in the U.S. The uptake continues to increase steadily. As we noted earlier, the market share is currently in the high single digits. The execution here continues to be very good. So, for example, we have a leading share of voice in first-line lung. And importantly, at this stage of the launch, we're seeing a nice, steady growth in the number of new trialists week over week. So, overall, we're happy with the update that we've seen. We knew, as we discussed previously, that this was going to be a different set of launches, just given the entrenched dynamics from a competitive standpoint in first-line lung. But we continue to be very pleased with the team's performance here. So maybe I'll turn it over to Nadim for the second part of your question.

Great. Thanks, Jeff, for your question. So regarding the Reblazil launch, maybe I'll just make a couple of points. As David said, very pleased with the launch so far, high demand, very good brand awareness. The field team is doing really well. And if you remember, we had always said that the predominant use, at least in the U.S., would be MDS, and it's playing out exactly that same way. So today the majority use in the U.S. is on MDS patients. And the interesting thing is we've seen a little bit of a halo effect on beta-thal in that we've seen a little bit more uptake with beta-thal since the MDS launch, but the predominant use is still MDS. Now, globally, as we launch across the world, there'll be different regions where you see a different prevalence profile of beta-thalassemia, where it's higher, for example, in Asia, the Mediterranean. But today in the U.S., Jeff, the predominant use is still MDS, exactly as we had anticipated. Thanks for your question.

Thanks. Kevin, can we go to the next?

Hi. Thanks for taking the questions. I was just wondering, first on Opdivo for neoadjuvant lung, if you can give us any update on the regulatory path and when you might know more there and if you're confident that you could get approval on the PCR endpoint alone. And then the second question, you mentioned that the synergies are tracking ahead of your expectations. I guess just trying to understand how much of the spend is synergies and how much is kind of, you know, from a COVID environment. And so how much of that should we expect to carry forward into 2021? Thank you.

Thank you Terence for the question. As Chris mentioned earlier, there is still obviously a much required need for new medicines in patients with early disease to be able to get into a pathological complete response because that may signal for the long-term benefit for these patients. Now of course, this is not a validated regulatory endpoint as you very well said. So what we are looking forward to now, of course, continuing our dialogue with the regulatory agency especially with the FDA, as we also continue to follow these patients for the first data for event-free survival as well. So we will obviously keep you posted in the future as we make progress. At the current time, we continue our dialogue and continue the patient follow-up to generate more data. I don't think we can give clear guidance today in terms of approvability based on the endpoint. And for synergies, I think David or David, why don't you go next?

Yeah, Kent. Thanks for the question. Look, we've been very pleased with our ability to capture synergy so far this year, and we're really encouraged to see that our synergy capture is actually tracking ahead of our original expectations for this year. So we'll provide further insight to that on our expectations of the overall synergy achievement after we close the year, but things are going very well.

Thanks, David. Kevin, can we go to our next question, please?

The next question comes from Tim Anderson of Wolf Research.

Thank you. I have a question on going back to TIC2. So I think most investors view the value proposition in psoriasis relative to Tesla as being better efficacy, but we've wondered if better tolerability could also be a differentiator, because with a Tesla, there's GI side effects that require dose titration, and your drug doesn't require dose titration. And at least in phase two, there were no GI side effects. So when we see the full phase three results, might we also see better tolerability as yet another area of differentiation beyond just oral dosing and beyond better efficacy?

Thank you, Tim, for the question. as we said if you look at the overall trial design for this one as well as for the next study to be followed the good news is that there is a comparison not only versus placebo but also the comparison versus the tesla and so there will certainly be an opportunity to contrast and compare not only the efficacy but also the tolerability or safety as we talk about and those are going to be very important from a patient perspective and physician perspective uh from a convenience perspective

uh certainly these will have implications from a commercial perspective and then we pass it on to chris to comment on that yeah thanks for the question tim i mean i think as we've said previously we're excited with the opportunity that we have here based on the data that we see coming out of poetic i think we have a real opportunity to establish tick as the frontline branded oral choice for these moderate to severe patients what i would say just to build on what some had mentioned is that This is a market where, in spite of new biologics coming into the space, dermatologists continue to believe in an ascending treatment algorithm. So they typically start with topicals, they move to orals, then they go to injectables. It is also a market, as I think you point out, where patient preference drives choice. So you do see a very strong focus on safety concerns, needle phobia is an issue here. And we think these dynamics really play to the profile that we have with TIC-2. Very strong efficacy in an oral formulation, a novel MOA, and a favorable tolerability and safety profile. And so we think we've got real opportunity here to establish TIC as the leading oral in the space.

Kevin, can we go to our next question, please?

The next question comes from Andrew Baum of Citi.

Thank you. A couple of questions, please. First on a Tesla, as you think about marketing, is the position to displace a Tesla as the oral agent of choice given the efficacy tolerability, or to what extent can you actually seek to slow or defer the initiation of therapy with biologics? And then second, perhaps you could just give us the market shares in non-small cell for 2279LA in the U.S. in the first line setting. Thank you. Thank you.

sure sure um andrew thanks for the question with respect to tesla and um how we are looking at um uh the tick opportunity in psoriasis i mean i think the way i answered the previous question is probably what i would go back to we think based on these data that tick has the opportunity to to be the branded oral of choice for for moderate to severe uh patients writ large in this space And we think that's a reflection of the fact that this is a market where dermatologists typically are going to try to treat with less burdensome routes of administration. They're going to go for the activity that, the best activity they can find. However, safety is a prominent concern here. And so I think that we have the opportunity to displace existing therapy with respect to orals pre-biologic. And we also believe that we have the opportunity to potentially provide more of an opportunity before patients move on to biologics. And remember, this is a space where only about 15% of patients ultimately ever get to biologics, and that's in spite of a number of new biologics coming into the market. So we think we actually have an opportunity to do both. As it relates to the first-line market share, as we said previously and as David mentioned, we have current first-line market share in the high single digits. The 227 regimen is mainly being used in the PDL 1 to 49 as expected. And then we're seeing recent uptake of the 9LA regimen, and that's mainly in the PDL 1 less than 1 and PDL 1 negatives.

Thanks, Cliff. Kevin, can we go to the next question, please?

Certainly. The next question comes from Louisa Hector of Barenburg.

Oh, hello. I wonder, now we have the ASH abstract, whether there's anything you'd like to point out from the various data sets you're presenting and any particular updates on durability of response. And then Ida-Cell and Liza-Cell, any updates you can give us on the FDA reviews? Thank you.

Sure. Thank you. So let me start with Ash first, and then I'll go to the lysocell, idacel, and then certainly if Nadim wants to comment also, that would be wonderful. So for Ash's perspective, over the last few years, certainly both cell gene and hereditary cell gene as well as PMS have had basic presence. And based on the data that has been presented in the past, obviously these medicines have now moved on to late-stage development, and we are continuing to gather more data. Having said that, there are a few abstracts that are very important that are being presented. So number one, the activity of lysocell as a single therapy as well as in combination where the group-neuron patients who have received prior group-neuron venetoclax, both in CLL, are quite important and interesting if you look at the overall response rate, tolerability, as well as durability in these patients that continue to evolve. especially as we think of the future where the population with CLL, where patients with CLL will have been treated with agrupnib and venetoclax, there will be a need for subsequent therapy that will rescue them if the disease has a recurrence or relapse. Another data set will be presented, as you might have seen in the abstracts, will be the triplet combination of albertamide, the daratumumab, as well as dexamethasone, and then valcade and dexamethasone. And those are evolutions in the data sets, and we'll continue to see how that comes through, but certainly response rates are going to be important as we look forward to moving albertamide into the earlier settings as these data will then start dictating how we proceed further so very happy with these we'll continue to look deeper into it and next year will be big from a cell mods perspective as we look to the completion of the trials for iberdomide and then of course progressing other cell mods as you heard from jirani in his opening comments From licensal perspective, not much to share, except for the fact that we've already communicated. We continue our dialogue with the regulatory agencies. We've had the inspection done for the facility in Washington. And as we communicated earlier, that we don't have any scheduled inspections for the second facility, which is independent of the other facility. For Lysacell, we do have a producer date on the 16th of November. For Idacell, same thing. We are continuing our dialogue, and we have a producer date of March 27 of 2021. That's where we are. I don't know, Nadeem, if you want to add something, or Giovanni?

No, I think you covered it well, Salma. Thanks. The only thing I would add, Mr. Giovanni, the only thing I would add is

Just to close on what Samit mentioned with respect to licensure, as always, obviously, we will update you as our discussion with the regulatory authorities progress.

Thanks, Giovanni.

Kevin, can we go to the next question, please? The next question comes from Dane Leon of Raymond James.

Thank you for taking the question. Congratulations on all the progress. Just some quick ones from me. When do you think you would be able to disclose the actual pathologic complete response rate for the 816 study, and if that would still be a nondisclosure item for you until regulatory discussions are complete? Could you at least give us how the study was powered on that endpoint so we can make our own assumptions on how the chemo arm would perform and then how the combo arm probably would have performed against that SIG? And then in terms of ibertamide, do you have a longer timeline now in terms of a path to pivotal studies and when that could actually get to market? I think a lot of us in the clinical community as well are thinking about this as an offset to Revlimed and the patent expiration there. So any kind of longer-term insight you might be able to give in the development path would be super helpful. Thank you.

Thank you for the question. So let me start with the PCR part. So certainly we're going to look for an opportunity for proper presentation of the data at a future medical meeting. That is not dependent on the regulatory aspects because it's an independent endpoint that can certainly be discussed. So we're looking to that. I think the trial details, we have not shared the statistical analysis plan per se in terms of the assumptions made for the sample size calculation at this time. So we will not be able to share that, but certainly there is previous data that have been presented and published for chemotherapy leading to PCR responses, so you can assume with that. Now, what differences will be important in terms of the delta between chemotherapy and then the combination with nivolumab, those are the types of discussions we'll need to continue to have with the regulatory agencies as to what becomes meaningful. So as the dialogue evolves and once the decisions are made, we'll certainly communicate that with you. From the abredomide perspective, the Fortline Plus study is already ongoing, as we said, and as I just mentioned previously, as the data continuously evolves and we'll have the data readout sometime next year, those will be the trigger points for us to discuss that single agent or the combination of dexamethasone discussions with the regulatory agencies to see if the data would suffice for a regulatory dialogue in the fourth line plus setting. And then as the data evolves for the doublets and the triplets in the earlier setting, then we'll launch the later line trials as well in the earlier settings. Nadeem, do you want to add something to that?

Sure. I would just add a couple of points maybe. So thanks, Dane, for your question. The point that Summit had made, our plan had always been to move from the doublet to the triplet, which is, as you know, very important now, especially in relapse and newly diagnosed disease. So having these data at ASH will be an important foundation on how we move the treatment up from the late-line setting, then to the early relapse setting, and then ultimately newly diagnosed setting since you'd asked the question about Revlimid and impact in the future. So we have a very clear development plan. At some it says, of course, we have to pass through all the clinical gates as we go through, but the starting point is the triplet data that we're seeing at ASH now, so we're excited about the opportunity moving forward. Thanks for your question.

Can we go to the next question, please?

The next question comes from David Reisinger of Morgan Stanley.

Yes, thank you very much. So I have two questions, please. First, could you provide more color on what you need to discuss with the FDA on Lysa-Cell? It seemed to me that discussion should be over by this point. And a follow-on to that is, are there any issues with the recent manufacturing inspections or do you have confidence following those manufacturing inspections? And then the second question is, Other BCMA ADCs have been associated with ocular tox and multiple myeloma. Do you expect a differentiated profile for your BCMA CC99712? And when should we expect to see data? Thank you.

Thank you for the question. For Lysosal, as we mentioned earlier, As we've disclosed in the past, FDA has informed the company that both our plants in Washington, as well as the one in Texas, need to be inspected. They've been able to inspect our plant in Washington at this time, but have not scheduled any inspection at the second plant. As you know, FDA are doing what they can to ensure that the staff are kept safe in this COVID pandemic. And because of the travel restrictions, we have to obviously honor their desire as to where they go and when they go. uh as we said in the past uh that the conversations with the agencies are going well and we look forward to seeing the uh the hopefully the approval at some point to be able to bring it to the patients as soon as possible we'll obviously let you know as soon as we get the decision we are not going to comment obviously specifically about uh the dialogue around inspections etc we're generally very happy with the dialogue that has been happening On the ADC front for multiple myeloma, we are in the phase one. It's early time to comment whether we'll be able to differentiate or not, but we absolutely are aware of the ocular toxicity and certainly will keep that in mind as we go along. We continue to evaluate the patients for that. I think the first data we would see would be sometime late next year because we are still in the dose escalation phase. And so certainly as soon as the data are mature enough to be presented, we'll be able to bring it to the medical conference and share that with you.

Can we go for our next question, please? Next question comes from Greg Gilbert of Truist.

Hi. Thank you for the question. Giovanni, you've made it very clear that cardiovascular is the core franchise for the company. On factor XIa, what do you think you have to deliver in terms of clinical profile to enable that asset to add value in what will eventually be a generic environment? And then maybe more strategically in cardiovascular, it looks like you have at one end of the spectrum kind of a mass market, Eloquist and factor XIa approach, and on the other hand, a more specialized approach. approach with myocardia. So I assume your strategic vision and cardiovascular spans across that. But curious if you want to be more focused in one end or the other as you consider additional BD and cardiovascular. And then a follow-up for David, how would you describe the LOE step down for Revlimid in the coming years? And do you think the street has that right, at least in general, in terms of how it's being modeled? We obviously have imperfect information. Thank you.

Thank you, Greg. Let me start, and then maybe I'll ask specifically on cardiovascular and factor XIa summit and Chris to add, and then David will cover your question about the relevant LOE. So, first of all, let me say, yes, to answer your question, cardiovascular is an area of strategic importance to us, and it has been consistently. for the company. And when you look at what we've done with Eliquis, I'm really proud of our ability to develop differentiated assets in cardiovascular, take a very different approach to establishing the value of those assets in the case of Eliquis, which was through real-world evidence, as an example, and maximize the value of the medicine. And so whether you look at Eliquis, you look at Navacampton, or at Factory 11A in inhibitor, we feel really good about our ability to execute in cardiovascular and our commitment to cardiovascular. I think the approaches are different between a broader asset like Eliquis or Factor XIa could be. In those cases, as you know, we made a choice to partner those assets because we want to be working with another company that together enables us to have a broader reach into primary care market and support the development of assets that require very large investments in the development of the asset across multiple indications. I think when you look at Maracanthin, it's much more about a precision approach to cardiovascular, which fits really nicely with our R&D strategy. Actually, it's very consistent with the early pipeline we have in heart failure and cardiovascular. So I don't think it's necessarily one approach versus the other, but it's really looking at cardiovascular as one of the areas where the underneath continues to be really high. The company has demonstrated ability to execute, which is excellent. And then we take a different approach depending on what an asset needs in order for its value to be maximized and where we as BMS. at the best capability. So, you know, that's the way we think about it. And actually, myocardial is a really, really interesting asset because acquisition, because the precision approach is really consistent when we look at things. Let me just ask Samet if he wants to add anything on factor 11a, specifically differentiation and our development strategy, and then we'll move to your question on that, Samet.

Thank you, Giovanni. One thing that I would also add, and I can't remember Patients with obstructive hypertrophic cardiomyopathy, the ones that are symptomatic, the ones that we are talking about from a treatment perspective, also have arrhythmia, especially atrial fibrillation that they experience. So aliquis is used there as well. And many cardiologists are very well aware of use of aliquis. And certainly in the future, when myocardial cancer potentially might be available, it would be very helpful for these patients. coming back again then uh onto the anticoagulation and factor 11a i think certainly very happy that we are in that space and with eloquence what we have done the two things that are going to be important to remember is number one there are still bleeding risks and patients don't necessarily get treated with full doses of of the currently available agents and some patients are not even treated because of the bleeding risk The second unmet medical need is that patients cannot be treated on top of their background antiplatelet therapies for indications such as the secondary strokes. And that is a very high unmet medical need and patients who have had a uh first stroke are at very high risk of experience in the second stroke maybe even 50 to 60 percent probability and therefore what we're looking for in the factor linear development program as we look at the phase two studies that are currently ongoing is the is number one the decrease in the uh leading uh probabilities and second is the combined ability with that background therapy of anti-platelet agents in the secondary stroke prevention study that is currently ongoing in terms of its enrollment So those are the important aspects that will make us go into the Phase 3 development program once the data are available. Let me pass it over to David to comment further on Revlimid's side.

Yeah, thank you. And Greg, thank you for the question. We made great progress this year on the IP front, both with Revlimid as well as with Eloquist. And as you know, we settled with Dr. Reddy's We have the settlement with NAFTA, which just to remind you, remember, the NAFTA agreement is a single-digit volume entry in 2022, which grows to about a third by 2025. And we have other settlements which aren't public with Dr. Eddies and Aldergen. But as you know, we clearly see it more as a slope, not as a cliff, starting in 2022 with full generic entry coming in 26. And You know, at the time we did the acquisition, all I'd say is that we took a more conservative view on Revlimid than the cell site equity analyst did at that time. So, you know, with that said, we still believe Revlimid will add potential, you know, significant cash flow for the business over that period from 2022 through 2025.

Yeah, thank you, David. Let me just reiterate, I think. And specifically to your question, when we look at the period during which, you know, over time the slow-port red limit will take place between 2020 to – sorry, 2022 to 2026, first of all, I think, you know, this is playing out the way we had modeled it. to be a slope that starts at a point where the overall performance of the brand has been really strong and our view of IP and the strength of IP has been validated by the IPRs that were not granted and the two settlements that David mentioned. At the same time, the strength of our business beyond Red Limit has continued to be really, really good. The progress we've made with the pipeline has given us real confidence in our ability as a company to continue to renew the portfolio. So as I mentioned at the beginning, I feel really good about it. our ability to continue to perform very strongly as we renew our portfolio during the time in which over time, private limited will lose exclusivity. That's what we set up to do from the very beginning. And I think execution so far has been really strong, which makes me confident in our ability to continue to be successful during that time.

Thanks, Giovanni. Kevin, we might have time for one or two more. Maybe we can just go to our next question.

The next question comes from Matt Phipps of William Blair.

Good morning. Thanks, and congrats on the next quarter. I'm wondering if after the positive poetic study, if you're going to look at moving this asset into a more mild patient setting, similar to the recent advanced study? And then also, I think a quick question on the 4B attack with this. And just wondering if you could compare and contrast maybe moving a TGF-beta monoclonal antibody plus something like Avivo versus a bispecific molecule like Bintrapis-alpha that has the TGF-beta trap kind of combined with the PGL1 antibody.

Thanks. Thank you for the question, Matt. First of all, on the TIK2 aspect, So you know that we are very happy with the results from the POETIC-1 study. We also know that there is a broad program already underway where we have the evaluation ongoing in psoriatic arthritis and lupus, SLE, lupus and arthritis, as well as the inflammatory bowel disease. Mild psoriasis, we certainly have our eye on it. We obviously think about this as we evolve with the data on the psoriasis. We have to look at the overall efficacy and safety profile when the second study also reads out, and that will dictate where we go next in terms of evaluation of the classic in psoriasis and other indications related to psoriasis. On the TGS data front, we are, of course, aware of the bispecific TGS data PD1 that the competitors have. When we look at TGS data, the specificity of the inhibition caused by this particular antibody is very important, and we certainly will look at the combinations with our own pipeline, not only with nivolumab, but we also have relactamab, as we know, in development. So we'll be looking at all those combinations as the phase one study data evolves, and we get to see what the dose and the schedule will be for dosing patients with oncologic indications, and that will pave the way for the combination strategies looking forward. I think having the ability to give two drugs separately will give us more opportunities for combination strategies looking forward.

Kevin, can we go to our last question, please?

Certainly the last question today comes from Carter Gould of Barclays.

Great. Good morning, guys. Thanks for taking the question. Congrats on the quarter. I guess first, a competitor in the ticket space that was perceived to be most closely related to you with also an FC Mutated region discontinued their program recently. In the past, you've used relatively balanced language on the outlook for this program. Any change or updates on how you see the area? Any commentary on that discontinuation or differentiation that maybe the street doesn't appreciate between those two programs? And then maybe coming back to the cell mods again, Should we think about the ibrutamide decision sort of running independent of 92480, or is there going to be a decision to be made at some point next year where you need to sort of pick a winner, or can they coexist? Thank you.

Sure. Thank you, Carter. I think great questions. First of all, on the TZIP side, we certainly have seen the announcement from the competitor from discontinuation of the program on the TZIP side. And we don't know the details and the structure of their molecule, etc. But certainly we have our own molecule, which is in phase 1. We also have been looking at to see where we go with the combination very early on to be able to define the path forward. As the data evolves, we'll certainly update you and others in terms of where we go or what the fate of the program will be. But too early to say from our own perspective, the specificity of inert FC portion or an active FC portion, I think still needs to be further investigated before a decisive decision can be made on that side. So more to follow on TIGIT in the future. On the cell mobs and abratamide side, As we said, both of our programs are in development. Iberdomide runs a little bit further because it started earlier. 480 is a very potent molecule. We shared the data, 50-plus percent of overall response rate with 480 plus dexamethasone in the late-line setting. Both of those studies are developing in the full-time class setting. But if you recall, the overall development of IMID in the past, Revlimid and Pomalidomide, how they were developed in the heritage cell gene organization, how Revlimid then got set up in the upfront setting, and Pomalidomide then became a preferred molecule for the second, third line patient population. So, we have to keep that in mind as we continue to evolve, and we also have the good position that we have a lot of data available from multiple maluma perspective that we can actually investigate to see what is the mechanism, where these drugs will fit the best, what opportunities we may be able to avail in terms of combination strategies with our own pipeline, looking at the platforms that we already have, not only with CellMods, but also from the T-cell engagement, from card cell therapy, as well as the evolving ADC platform. So those opportunities, because of the two cell models we have in our hands, can certainly be further investigated in a broader way rather than limiting ourselves to a singular cell model. But let me ask Nadeem to add anything he wants to further elaborate on this. Thank you.

Sure. Thanks, Simon, and thanks, Carter, for your question. So I think right now we're very pleased with the early data we're seeing for both. And as Summit said, you know, we've done the same with Revlimid and Pomelist in the past. So there are discrete patient segments with very different clinical needs where you could potentially see the coexistence of both cell mods. So, for example, the maintenance setting, a cell mod with a better tolerability profile in a relapse setting with high-risk disease, you could see a more potent cell mod come through. So I think we're going to continue to look at the data, but we're pleased with how both are progressing. And then at Summit said, you know, one of our key objectives is to come up with this multi-modality combination approach. So you can visit a cell mod plus BCMA through multiple lines of therapy as patients uh progress from newly diagnosed disease to late stage disease and we've already seen the use of sequential treatment uh through the current cell mods or image i should say with revlimid and pommelis so we do think that the combination of bcma and cell mods across lines of therapy for different patient segments could be really important both clinically and commercially so thanks for your question thank you thank you nadim and thanks uh to all of you for uh joining our call today we had a uh

A lot to discuss, and I think that speaks to the breadth and depth of our business and importantly of our pipeline. So as we discussed, it's been a really active year and a very, very exciting first year for our new company. And I can say with confidence that Bristol MySQL today is in a really strong position. with significant near-term launch opportunities and a substantial pipeline to address unmet needs of patients that will position us very strongly and very well for the future. So thanks again for joining us, and as always, our team will be able to answer further questions you may have. Have a good day. Thanks, everyone.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation.