Bristol-Myers Squibb Company

Good day and welcome to the Bristol Myers Squibb 2021 second quarter results conference call. Today's conference is being recorded and at this time I'd like to turn the conference over to Mr. Tim Power, Vice President, Investor Relations. Please go ahead, sir.

Thanks, Catherine, and good morning, everybody. Thanks for joining us this morning for our second quarter 2021 earnings call. Joining me this morning with prepared remarks are Giovanni Coforio, our board chair and chief executive officer, and David Elkins, our Chief Financial Officer. Also participating in the call today are Chris Burner, our Chief Commercialisation Officer, and Sumit Heroat, our Chief Medical Officer and Head of Global Drug Development. As you'll be aware, we've posted slides to bms.com that you can use to follow along for David and Jeeva and his remarks. But before we get started, I'll read our forward-looking statements. During today's 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 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 were adjusted to exclude certain specified items. Reconciliations of those non-GAAP financial measures to the most comparable GAAP measures are available at bms.com. And with that, I'll hand it over to Giovanni.

Thank you, Tim, and good morning, everyone. I hope you're all staying safe and healthy. Now, turning to slide four, let me start by saying I am very proud of our second quarter results and express my gratitude to our teams across the globe for their dedication and steadfast commitment to our patients. Through their work, we are continuing to make great progress to diversify and renew our portfolio and position Bristol Myers Squibb for an even stronger future. During the second quarter, we delivered excellent results across the board, including strong sales growth due to solid commercial performance, positive clinical results in our mid- and late-stage pipeline, continued BD execution, and strengthened our financial position. The strength of our commercial execution this quarter was underscored by the performance of our key medicines, including the return of Obdivo to growth and the uptake of our new launch portfolio. Over the last 18 months, we launched five new medicines with significant potential, and we are very encouraged by their performance to date. Clinically, we continue to deliver on the potential of our pipeline with significant mid and late stage clinical readouts and important regulatory actions across our therapeutic areas. The recent additions to our portfolio added diversification to our business and an opportunity to generate sustained growth over time. From a financial perspective, we saw double digit growth for both the top and bottom line. and we are reaffirming our full-year revenue and non-GAAP EPS guidance. We continue to maintain a strong balance sheet and generate significant cash flow, allowing us to advance our disciplined capital allocation strategy. We remain focused on external business development opportunities to further strengthen our pipeline over the long term. This quarter, we executed two licensing deals, an antitiget bispecific antibody program with Agenis, and Morab202, a folate receptor alpha-ADC with ASI, both strategically aligned with our oncology franchise. Overall, I am extremely pleased with our progress in the quarter. Turning now to our execution scorecard on slide five, we have made tremendous progress here to date across our therapeutic areas. In oncology, we are strengthening our IO franchise and have returned Opdivo to growth through multiple clinical successes and excellent commercial execution. Earlier this year, we launched Opdivo in three additional indications, including first-line gastric cancer, where we are the first and only IO agent. We anticipate additional launch opportunities and growth drivers for Opdivo to further accelerate the growth of the brand. We also see opportunities to expand our IO portfolio through the fixed-dose combination of our Lactree inhibitor Relatlimab with Optivo. At ASCO last month, we announced impressive results for Relatlimab, potentially the third IO therapy for BMS, building on our leadership in the field and expanding the durability of our franchise. We have a broader development program underway in I.O. to benefit more patients over time. Moving to hematology, we received approval in the U.S. for two cell therapies, Brianzi and Abecma, and demand for these products has been strong. Physicians recognize the value of these treatments and there is significant patient need. Building on existing indications for Brianzi, we announced the first-ever positive Phase III top-line data in second-line transplant-eligible large B-cell lymphoma last month. This is an important result. For the first time, we have shown that our cell therapy treatment is superior to a well-established standard of care. The positive results demonstrate that we can benefit patients early in their treatment journey. We look forward to sharing more details on these results later this year. We also have Iberdomide Phase II data in-house, which we are very pleased with and look forward to discussing with health authorities. The data are potentially the first step towards the establishment of a new backbone of treatment in multiple myeloma, offering a better option to benefit patients. We have made tremendous progress expanding our immunology franchise. Ducravacitinib, a first-in-class selective TIK2 inhibitor, has the potential to be the oral agent of choice. We expect to launch this potential new medicine in psoriasis in the second half of 2022. We have initiated our Phase III program in psoriatic arthritis, And we also look forward to Phase II data in ulcerative colitis later this year and in Crohn's disease and lupus in 2022 to further expand the potential of this molecule. We initiated our Phase III program for Sendakumad in eosinophilic esophagitis. And last month in the U.S., we launched Ziposia in ulcerative colitis. Finally, turning to CB, We are encouraged by the top line results we received this quarter for Milvexian, our factor XIa inhibitor. We look forward to presenting the data at a medical meeting later in the year. Additionally, we are preparing to launch Mavacamptan for symptomatic obstructive HCM in the US early next year. We are encouraged by the potential of these assets to strengthen the durability of our CV franchise. In closing, on slide six, Our steadfast progress gives me great confidence that we are well positioned for growth. We are rapidly advancing a new launch portfolio of first-in-class or best-in-class medicines across therapeutic areas. We remain focused on driving in-light product performance, executing on our launches, advancing early-, mid-, and late-stage pipeline opportunities, and continuing to take a disciplined approach to capital allocation. Our strong clinical performance further de-risks our launch portfolio, and as a result, our confidence in our ability to deliver the 20 to 25 billion in non-risk-adjusted revenue in 2029 continues to increase. Our continued strong financial performance and balance sheet enable us to diversify and strengthen our long-term prospects. As our sales force returns to the field and we welcome our remote teams back to the office, I'm excited by the opportunity to reconnect with our colleagues, stakeholders, and patients. I believe we have the strongest pipeline and launch portfolio in BMS's history, and I'm very excited about our future. With that, I'll turn it over to David to walk you through the financials.

David? Thank you, Giovanni, and thank you all for joining our call today. Let me start with our top-line performance on slide eight. I'm very pleased to discuss our strong double-digit growth this quarter, driven by increased demand for our key medicines across the globe. Looking at the first half of the year, which normalizes for most of the COVID-related buying patterns we experienced last year, commercial performance was strong, up 9% year-over-year or 7% excluding currency. This robust performance demonstrates both our strong execution of our commercial teams as well as increased demand for our products. I'll now provide additional color on the performance of our key brands and new launches, starting with Eloquist on slide nine. This is another strong quarter for Eloquist, with global sales up 29% versus last year. Second quarter growth benefited from a favorable year-over-year comparison, as prior year included the unwinding of COVID-related buying patterns. When looking at the first half to normalize for this dynamic, sales remained strong, up 18%. In the U.S., we saw strong demand with total prescription growth of 14% versus prior year, driven by market share gains, which continue to expect strong new-to-brand share growth for further translate to overall total prescription growth. As a reminder, when we look toward the third and fourth quarters, we expect similar dynamics from the Medicare coverage gap as seen in previous years. Internationally, we had very strong demand across all key geographies. As we further gain shares, the number one OAC in multiple markets, and we continue to see additional room to grow. Overall, we remain very pleased with the execution of Eloquus around the world and expect to continue to grow Eloquus share within a growing class. Now, turning to Optiva on slide 10, let me start by saying we're very pleased to deliver return to growth this quarter, up 16% versus last year. While COVID recovery dynamics, as well as approximately $40 million in U.S. inventory bills, contributed this quarter's growth, the brand's performance is largely driven by strong demand for both our core and our newly launched indications. In the U.S., sales are up 13% year-over-year, as well as 14% sequentially, driven by launches in lung, RCC, and our upper GI cancers, which are all going well. And lung shares in the low double digits with positive momentum, and we're seeing use across all histologies. In RCC, our Opdivo plus Cabo launch continues to do well, with Opdivo now the leading PD-1 first-line renal across both available regimens. In upper GI, we saw a very strong start with Opdivo plus chemo in first-line gastric cancer, with checkmate 649, which reached 25% to 30% share in just a few months, based upon the strength of our data. The adjuvant Saffageo launch, while still in early days, is off to a great start. Overall, we see upper GI as an important opportunity for Updiva based on the breadth of offered indications and the fact that Updiva is the only PD therapy approved for HER2 negative gastric cancer. Outside the U.S., we had another strong quarter with sales up 13%, excluding the impact of foreign currency versus last year. Growth was primarily driven by demand of our new launches in lung and renal cancer. Results also benefited from a favorable comparison due to COVID-related impact last year. All in all, we're very pleased with Octiva's performance and future growth outlook based on the positive momentum for our current launches, our future potential launches, including muscle-invasive bladder cancer and first-line esophageal, as well as potential expansion opportunities from clinical trials that will read out over time. Now, turning to slide 11 regarding our inline multiple myeloma portfolio, Revimed was up globally, primarily driven by demand for triplet-based therapies and increasing treatment duration. In the U.S., we are encouraged to see prescriptions nearing pre-COVID levels. POMOS global sales were up 15%, driven by continued strong demand for triplet-based therapies and use in earlier lines. Now, moving to our recent launches on slide 12, we continue to be very pleased with our new launches, beginning with Revlozil, which generated $128 million in Q2 and increased 14% sequentially. As the bolus from the MDS launches continue to wind down, it's being replaced by underlying demand growth as expected. We continue to expect sustained growth in the second half of the year as we remain focused on treating new patients earlier in their treatment journey, and ensuring they receive the most appropriate dose for sustained benefit. Moving to Supposia, which generate $28 million in a quarter, the MS launch continues to progress well, where Supposia is the S1P of choice in terms of written prescriptions and where we continue to see high intent to prescribe metrics. We have also seen an acceleration in the conversion time from written prescriptions to commercially supplied products. Looking forward, we continue to focus on establishing supposia not only as the S1P of choice, but also the oral treatment of choice for MS. Beyond MS, we launched supposia and ulcerative colitis in the U.S. in early June. While early in the launch, we are very encouraged by physician receptivity to the product so far, our plan is to focus on stepwise process of building volume by establishing demand for this differentiated oral-like biologic-like medicine while maximizing access over time. Turning to Anyureg, the launch is also going well with double-digit demand growth over prior quarter. We continue to expand the user base with physicians recognizing Anyureg as the first and only FDA-approved treatment for AML patients in first remission with a demonstrated OS benefit. Second quarter sales were impacted by reduced inventory driven by our transition from bottles to blister cards. However, based upon the strength of the underlying demand trends, we expect to see sales rebound in the second half of the year. Remember that this is a new treatment segment where it will take time to shape and establish Onurag as a maintenance treatment. Looking at each of these products internationally, we are encouraged to see how these launches are going, and we look forward to driving growth to gaining access and reimbursement in additional markets over time. Now I'd like to turn to slide 13 and discuss cell therapy. Demand for our two new differentiated cell therapy products has been strong. Starting with Brianzi, we were pleased with our launch progress with Q2 sales of 17 million, driven by strong execution and rapid site activation, with more than 65 sites activated to date. Messages around our differentiated profile and outpatient utilization are resonating well, with high awareness among CAR T treaters. Next, as it relates to Abecna, our first-in-class BCMA CAR T had sales of $24 million in the quarter, led by very strong demand. We were able to leverage the site footprint of Breonzi to accelerate site onboarding, an advantage of launching two CAR T medicines simultaneously. Based on the significant unmet demand and differentiated profile, we have seen robust demand for this product. Beyond our current capacity, and we are looking hard to increase capacity over time, Looking forward, we continue to see meaningful long-term potential with our cell therapy franchise across both Beyonce and Abecma, as evidenced by the recent demand we've seen. Now, turning to the next slide, a few points as we think about our launch portfolio overall. First, we are very encouraged with how each of these products are progressing at this point in the launch cycle. Together, they have already contributed $225 million this quarter and are approaching a billion-dollar run rate. Importantly, we review these products as having significant future potential. This gives us great confidence in our ability to diversify and renew our portfolio as we look forward. Now, let me take you through a few line items on our P&L on slide 15. Since we've already covered strong sales for the quarter, I'll focus on a couple other key line items. First, gross margin decreased versus prior year, which is primarily due to foreign exchange and product mix. Operating expenses were higher than last year, particularly in MS&A, due to higher launch and pre-launch investments across therapeutic areas, as well as foreign exchange, which were partially offset by our realized synergies. Remember that at the same time period last year, our spend levels were lower than normal due to the initial wave of COVID. Effective tax rate was 16.9%, primarily driven by our earnings mix. And overall, non-GAAP EPS increased significantly year-over-year, primarily driven by our strong top-line performance. Now, switching gears to the balance sheet and our capital allocation on slide 16, our liquidity position remains strong, with over $13 billion in cash and marketable securities, and strong cash flow from operations of $3.1 billion and a quarter. Our capital allocations priorities remain unchanged. During the quarter, we continue to strengthen the balance sheet while renewing and diversifying our portfolio through business development. As Giovanni mentioned, we executed two deals during the quarter that both complement and diversify our oncology portfolio with Agenis and Esai. As it relates to continued debt reduction, our $4 billion tender offer and additional $1.5 billion in maturities in the first half of the year demonstrate our commitment to strong investment-grade ratings. As it relates to our share repurchases, of the planned buyback of $3 to $4 billion this year, we have already bought back $3 billion to date and will remain opportunistic as the year progresses. Now, turning to our 2021 guidance on slide 17, following this quarter's performance, we are reaffirming our top and bottom line non-GAAP guidance for the year, which reflects significant growth over last year. From a full-year revenue perspective, we continue to expect growth in the high single digits, In terms of phasing for the remainder of the year, due to Eliquis' coverage gap and unwinding of Updivo inventory that I noted earlier, we expect Q3 global revenues to be similar to Q2. However, we are encouraged by the strength in the business and expect full-year sales at the higher end of our guidance. We have updated our gross margin assumption to 80% for the full year, primarily due to product mix and the impact of foreign exchange. Moving to operating expenses, we are maintaining our full-year guidance on MSNA of low single-digit increase and on R&D of mid-single-digit increase. In terms of phasing for OPEX, we expect it to increase quarter over quarter at a similar pace to the first half of the year. Based on that and the strength of the business, we are reaffirming non-gap diluted EPS of $7.35 and $7.55 for 2021. This quarter, we remain pleased not just with our performance, but also with the considerable progress we've made in executing our launches and advancing our pipeline. I'll now turn the call back over to Tim and Giovanni for Q&A. Great.

Thanks, David. Catherine, could we go to our first question, please?

Well, thank you. We'll take the first question from Chris Scott at J.P. Morgan. Please go ahead.

Great. Thanks so much for the questions. I guess the first one for me was on Updivo and maybe just a two-parter here. First of all, good to see that return to growth. But what are you seeing for Updivo in terms of the COVID impact? I know you've talked in the past about some lingering kind of headwinds, but I just want to get the latest as we move through June, July. Is that business still depressed or are we starting to see a more normalized environment? And then the second one on Updivo was just a little bit more color on the rollout in gastric in terms of where we stand today in terms of penetration rates. And my final question was just on the competitive environment for Mavacampton in light of some of the recent competitor data. I just want to see kind of more broadly speaking, has there been any change in view or confidence in that asset at all? Thanks so much.

Thank you, Chris. Let me ask Chris Berner to answer your question about Obdivo, and then Samit will make some comments on the profile of Mavacampton.

Sure. Thanks for the question, Chris. So let me start with the COVID impact. We have seen a recovery in the IO market really coming out of Q1 and into Q2. And I would say that is recovery on multiple parameters. First, we've seen new patient claims. While they still lag pre-COVID levels, they've certainly improved quarter over quarter. IO demand continues to recover versus the pre-COVID levels and, in fact, grew about 5% quarter over quarter. And importantly, we've seen an increase in in-person engagement. Oncology still lacks other therapeutic areas, but increasingly our field teams are able to engage live with our customers. And that's going to be really important given the competitive nature of a number of these markets like first-line lung cancer. So I would say in general, COVID continues to be dynamic really across markets, and certainly that's true in oncology. But I would say there's been a general improvement as we exit at Q1 and into Q2. As for how things are going in gastric cancer, I would say the gastric launch continues to go really very well. As you know, we have multiple indications now in gastric cancer. And I would say that in general, the first line metastatic launch is going quite well. Our share is roughly 35%. That's being led really by the gastric segment that we see really good utilization of Avdevo plus chemo in both GEJ and EAC as well. We're seeing use across all CPS levels. As you would expect, the majority is in the greater than 10%, but we are seeing strong uptake in less than 10% as well. And I would say execution has been very good. And in fact, we have the number one share of voice and we continue to build new trialists, which is important at this stage in the launch. So overall, we're very happy with the performance in gastric.

And then, Chris, I'll just take on the question that you asked. And I guess the question is emerging from the Redwood data that were recently shared through a press release. And while it's truly an apples to oranges comparison, if we were to indulge in that, I would say that we don't see a differentiation as might have been perceived. And the reason for that is if you look at it from our efficacy perspective, The measures were at a different time point, first of all, 10 weeks versus a 30-week trial for Explorer. Secondly, the differences or the primary endpoints that were measured were at rest and with Valsalva manure in the Redwood trial versus doing exercise. So if you were to compare those apples to apples, there is no differentiation that we see. From a safety perspective as well, when we talk about decreasing the ejection fraction, If you start with a higher ejection fraction, of course, you will not see as big of a decrease below 50%, which was the case in the Redwood trial. We had patients enrolled in our Explorer study with a lower ejection fraction of 55% or lower. And therefore, when we compare apples to apples again, in fact, if anything, we could turn out to be better. At the end of it all, I would say we need to wait to see the data in the phase three trial for the competitor molecule. We already have our phase three data. We've already submitted and look forward to bringing it to patients with a PDUFA date in January.

Great. Thanks so much. Can we go to our next question, please?

Thank you. We'll now take the next question of Jeff Meacham at Bank of America. Please go ahead.

Hey, guys. Thanks for the question. Congrats on the quarter. Just had a few. On the cell therapy launches, you guys had a good quarter out of the gate. So I wanted to ask you what the drivers the next few quarters are. Is it signing up more accounts? Is it establishing better reimbursement? And maybe just help us with kind of if you had any manufacturing bottlenecks. I know you guys have talked about that previously. And then on Ducravacitinib, maybe just help us with kind of how you're thinking about what success looks like in ulcerative colitis, and also any additional thoughts that you've had. I know there's been a lot of discussion about, you know, potential labeling and differentiation versus Jax. And maybe as you've had time to digest the recent data, maybe just give some up-to-date thoughts on that. Thank you.

Thank you, Jeff. So let's start with cell therapy. Let me just say first, really exciting. and the launch is off to a great start. It really demonstrates that our decision to invest in this technology and the differentiated nature of our two products is paying off. There is a lot of excitement. Let me ask Chris to give you more details, and then Samit will give you his perspective on Ducrona 7M.

Yeah, so I would just reiterate what Giovanni just said. The commercial and medical launches for both products continues to be very strong. We've seen good execution across the teams. Importantly, for both Abecna and Breonzi, the profiles for these products are resonating well with customers in the case of Abecna as a first-in-class BCMA-targeted cell therapy and for Breonzi as a best-in-class BCMA. One of the things we've seen across both products is their significant unmet need. That's particularly true in the case of Abecma, just given the fact that there are no other opportunities in many cases for these patients. And as a result, we've seen very strong demand for both products. What I would say is for Breonzi, the focus continues to be on ensuring that sites know how to manage these patients well, continuing to sell the best-in-class profile that we have with Breonzi. And we're increasingly seeing interest in patients being referred to clinical trial sites who were managing that well with Brianzi. For APECMA, I would say the focus there continues to be engaging with customers around manufacturing capacity. As we had said previously, this is a space where because of the significant unmet need and because we are the first PCMA-targeted cell therapy in the space, The demand for this product has outstripped our current capacity to manufacture. What I would say is the sole focus that we have there is on steadily increasing manufacturing capacity. We have a very strong team that's in place focused on this. We're engaging, obviously, internally and externally with third parties, including regulators, to increase the number of slots that we have available for patients, and that's going to be the main focus on that product for the coming months.

Thanks. And maybe I can take on the Ducrava question in terms of ulcerative colitis for Ducrava. As you know, with a TIK2 inhibitor, we know the downstream effect is an inhibition of IL-12 and IL-23 pathway. These mechanisms are already proven to be effective in ulcerative colitis. So we are truly looking forward to seeing the data at the end of the year from our phase two study, where we will get to see the induction data comparing Ducrava versus placebo. So we know what success would look like because There is proven mechanisms out there. We know what the efficacy that we would be looking for in a Phase II study to initiate our Phase III program. And the good news is we also have the Crohn's disease study ongoing, which we'll read out in next year. So a broad program that we will be able to take forward to really get the Phase III data to impact the second half of the decade following the Ziposia launch right now in that disease.

Thanks so much, Catherine. Can we go to the next question, please?

Thank you. We'll now take the next question from Terence Flynn at Goldman Sachs. Please go ahead.

Hi. Great. Thanks for taking the questions. Congrats on the progress of the new products. Maybe two for me. Just one follow-up on BECMA. I was wondering if you could give us any guidance in terms of number of patients you can currently serve from your manufacturing facility that you have right now, and then remind us of timing to bring on additional capacity. Again, I think you guys are building out some further capacity there, so any update on timing. And then a question for Summit on the Factor 11a program. I know we talked about this last month. You have the data in-house, but any more perspective on how to think about starting up a trial in the AFib setting, or is that really contingent on seeing data from the second Phase II trial? Thank you.

Thanks, Terrence.

Chris, do you want to start on ABECMA? Sure. So, as I said in the previous question, our focus continues to be to increase the available capacity that we have for this product. As I think we discussed previously, we had increased the number of thoughts that were available for patients to August, and so we were able to increase to meet the demand in August. At the same time, we continue to see a shortage of vector. That is something that's been affecting multiple cell therapy products. And so we're keeping an eye on that. And what I would say, Terrence, is that the situation on vector supply continues to be fairly dynamic. And so with respect to wind supply, will ramp significantly. I would say that rather than put out a date that would likely shift, I'll just say that this continues to be a top priority for us. Our sole focus continues to be on increasing the supply to meet the near-term anticipated commercial demand. And then obviously we have a longer-term focus on ensuring more stable long-term supply for Vector that would be available to support both of these products. But that's where the situation sets for a Vecna.

And Terrence, for milvexian or factor 11a inhibitor, what I would say is that what we've seen thus far from the total knee replacement study, we are very pleased with that. The trial showed exactly what we anticipated it to show. And we do believe, along with our collaborator, Janssen, that we do need the second trial data, as collectively the two trials will form the basis for the clinical development plan. Remember, in the first study, in the TKR study, we only have about two weeks of dosing with a single agent factor 11a inhibitor. Whereas in the second trial, in the secondary stroke prevention, we have the background therapy of doublet antiplatelet therapy as well with up to three months of dosing. And so that longevity will be important to understand the overall safety profile, and that will obviously then be able to go into phase three program, not only just AF, but we're thinking of other indications as well.

Thank you so much. Catherine, could we go to the next question, please?

Thank you. We'll now take the next question of Andrew Balm at Citi. Please go ahead.

Thank you. A couple of questions. First, we don't hear so much about your earlier generation of immuno-oncology programs before the transaction. There's been a number of papers out on the importance of T-reg depletion and ADCC the part of the CTLA-4 mechanism. And I know you have your A2-cosylated molecule in a fairly large trial. Could you update us on when we might expect the CT results and just your general level of enthusiasm on that approach for a validated target? And then second, in light of the Adderhelm approval and particularly the biomarker, how is this thinking influencing you over your efforts in neurodegenerative disease? Obviously, you've been invested historically in that space. Is this a catalyst for Bristol to re-enter that segment?

Thanks, Andrew. Let me make just a couple of very high-level comments, and then Samit will take both of your questions. So first of all, with respect to IO, I think we're really excited about the opportunity to launch our third IO agent potentially soon, which is Relatlimab in metastatic melanoma. And that really shows how we are progressing and extending, in fact, the strength of our IO franchise. With respect to the CNS, again, Samit will address your question in more detail. From my perspective, I'd like to say this is a research area that we committed to, in fact, as part of the Celgene research strategy a few years ago. We are really excited to have a number of early programs that are continuing to advance. It's primarily driven by a really interesting set of external partnerships. So let me ask Samir to give you more detail on both of those topics.

Andrew, I think from a CTLA-4 perspective, as you know, we have three molecules in development in the backup CTLA-4, pro-body, non-fecosylated and fecosylated molecules. The trials are ongoing, as you said, very well, and we are actually looking forward to see the data towards the end of the year as well as in the early part of next year. That will certainly pave the way for new trials looking at combinations with our pipeline with Opdivo as well as other molecules that you just heard from Giovanni. We have Rilatilamab and then new additions to our pipeline with TIGIDS as well as with the ADC that we recently acquired. Those clinical development plans are being formulated and appropriate indications are yet to be chosen based on the activity that we will see from these trials. To your second question on the recent approval on Alzheimer's disease and then how to see that data and what to do with that, we do believe, as Giovanni said, that our focus on neurology and neurodegenerative disease has continued to be there and will continue actually to increase from there onwards. The way we look at that data is now that the threshold has been set from a regulatory perspective, it was hard to gauge before what endpoints to really shoot for and what was the threshold. Now that we know what the threshold is, it is now probably going to be better or easier to develop studies because there is a regulatory path forward. As you recall, we recently had announced our collaboration with Protina and looking forward to make our way into the clinical studies with that tau inhibitor with a differentiated mechanism that we'll be able to take forward. More to follow in the future.

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

Thank you. We'll now take the next question from Seamus Fernandez at Guggenheim. Please go ahead.

Oh, great. Thanks for the question. So first on a BECMA, just wanted to get a better sense of, you know, where capacity could potentially go to and if there's any visibility on the vector dynamics you know, and perhaps when that might release, is that entirely, you know, reflective of, is that more reflective of the situation in terms of vector manufacturing and capabilities at Bluebird, or is it a global market dynamic, you know, associated with this sort of use of nucleic acid targeted therapies? Just wanted to get a sense of what the impact And then what would the hopes for expansion of capacity capabilities be in 2022 relative to 2021? Do you have any sense of timing improvement for the vectors as it relates to ABECMA? Second question, just wanted to, you know, get a little bit of a better sense of the ongoing strategy the number of targets that you guys are pursuing specifically in multiple myeloma. You know, you have a huge number of programs ongoing there. Just wanted to have you guys talk a little bit about prioritization in that regard and where you see, you know, the most opportunity for new products in that space, whether it be the cell mods, you know or by specific the t-cell engager you know just wondering where we're going to see some acceleration in those programs there thanks so much thank you so on a back matter let me just say to your question you know the supply chain of globally the supply chain for vector

is very dynamic. We don't look at this as a specific issue, but rather a really complex issue across the industry. I'll ask Chris whether there's anything he wants to add. And then we'll talk with Samit about our strategy in multiple myeloma. As I mentioned, excited to have the abirdomide phase 2 data in-house, which is a really important step forward for us. Chris, anything to add on Abecma?

Yeah, the only thing I would add is, Seamus, just there are sort of two dynamics at play with Abecma. One is the significant demand that we're seeing in the marketplace, which is, I would say, a function of the fact that there's significant unmet need. The profile of Abecma is very strong. And the fact that you've seen a bolus of patients who have been really reserved for these therapies and this therapy in particular when it launched. So there's very strong demand. And so obviously there's an internal focus on increasing our ability to supply that demand, which has exceeded the supply that we anticipated having to deliver into the marketplace. The second thing I would say is this broader global issue around vector supply. That's something we've been hearing from customers that's impacting multiple cell therapy products. And obviously, as we think about our strategy, not only for the end of this year, but really as we get into next year, our focus is going to be ensuring a more stable long-term supply of vector. And that's something we'll be happy to update on as we have more details to provide.

And Seamus, from a multiple myeloma perspective, we certainly remain the leaders in multiple myeloma and want to continue to progress on that path. And we have a very strong pipeline, as you very well mentioned. There are three pillars to the multiple myeloma strategy. Number one, the cell mods. And we intend to use these cell mods as the future backbone to placing the image that are currently out there. In that regard, the strategy is two-pronged. One is a single agent entering in the late line of therapy. The first data we've seen with ibertamide already. And then next year, we'll see the data for CC480, the second cell mod, which is more potent. And then progressing them further up the line in terms of combinations. You might see on KuhnTrials.gov, we've already announced and are initiating a trial in patients who have received two to three prior lines of therapy as a combination of iberdamide with daratumumab and dexamethasone compared to Velcade, daratumumab, dexamethasone. And that strategy will continue as we go further up the line with the cell mods. The second pillar is the BCMA targeted therapies, first of which is already approved, that is a BECMA. And the idea for BECMA will to again move further up the line for eligible patients who can receive cell therapies. CARMA-3 is currently enrolling, looking at patients who have received three prior lines of therapy. And then intention would be to go further up the line again for the right patient population. Now, not all patients can get cell therapy because of comorbidities or other reasons. And therefore, other BCMA-directed therapies are going to be important, and that's where the T-cell engagers and the ADC come into play, but they are very early in development right now in phase one studies. And so more to follow on that. Our prioritization, our belief remains very strong that patients with multiple myeloma still are not cured, and we will require combination therapies in the future with multiple targets and multiple modalities, and we'll progress accordingly.

Thanks so much. Catherine, could we go to our next question, please?

Thank you. We'll now take the next question from Tim Anderson at Wolf Research. Please go ahead.

Thank you. Eloquence continues to do well. Of course, one thing that could derail would be an appeals court ruling overturning the lower court. Can you just give us your expectation for a timeline on an appeals court ruling? And then second question, just Matt Acampin asks, It feels like there's a kind of a back story on the regulatory front, you know, why you guys got the standard review. Because at the time of that deal, you did expect, and you had it in your slides, that you thought you'd get a second half 2021 launch. So a fair amount of time has elapsed since you got the standard review, and I'm wondering if you can share, you know, what concerns the agency may have. It seems like there may be some concerns about not having long enough pretty bad for duration in terms of efficacy.

Thanks, Tim. Sami, do you want to start with the second question?

Sure, absolutely. For Mavikampton, Tim, we've already filed for Mavikampton. The FDA has already accepted the file. We have a PDUFA date. So those concerns, I think, are relieved. And we are really looking forward to bringing these exciting data as well as the medicine to patients with obstructive hypertrophic cardiomyopathy. As you know, with Mavacampton, we have other plans that are already ongoing and in execution in other disease types as well. So we don't see it as a showstopper in any way, Trey, and looking forward to really the readout on the regulatory side, also bringing it globally to other parts of the world.

Thank you, Samit. And with respect to your first question, Tim, on the IP litigation for Eliquis, you know, first of all, as you know, we're very pleased with the decision that was made by the court last summer, which really confirms the strength of not only the compositional matter patent, but also our formulation patent. And as you mentioned, there is an appeal that has been filed and a hearing is scheduled in September. So we look forward to hearing the result of that process.

Thanks, Giovanni. Catherine, could we go to the next question, please?

Thank you. We'll now take the next question from Carter Gold at Barclays. Please go ahead.

Good morning. Thanks again. Congrats on the results so far. Maybe just first on RebelZil. Can you talk about, you know, sort of the headwinds you're still seeing from COVID, and also as you think about ex-U.S. kind of ramping over the second half of the year, any color on expectations or additional countries you expect to launch in. And then maybe coming back to ibertamide, some of you talked about the combination study that got posted on clintrials.gov. Can you just talk a little bit more around just sort of demonstrating clinical meaningfulness in the setting where, you know, obviously you're going to have – you know, generic image in the not too distant future and you're still, you know, in the study you're comparing against, you know, there's no image in the comparison. So just really kind of driving home that, you know, the importance of cell mods in this setting would be helpful. Thank you.

Thanks for the questions. You know, there's really good dynamics on Replizil. Let me ask Chris to give you a better perspective before we call it at Bird of Mind with Summit.

Yeah, thanks for the question, Carter. So with respect to COVID, I would say it's very similar to the answer I gave previously on COVID. I think the dynamics in that market are still still evolving. We've not yet seen a full return to normal, but what I would say is in the quarter we also there saw an improvement both with respect to new patients entering the clinic and being given access to therapy, as well as importantly, again, our field team's ability to interact with customers, and that's going to be really important here because you've got to continue to push on an urgency to treat these patients, many of whom have been treated for a considerable time on ESAs. um so those dynamics we think are very favorable and bode well for continued um uh growth opportunities for us as we go into the second half of the year and with respect to the xus launches say it's still very early days but what we've seen is very good customer reception in early launch markets like germany the execution in those markets have been good as covet continues to improve there and we're able to engage with customers more we see those dynamics continuing to improve over the course of the year and then we have of course additional launches as access is secured most notably with Belgium, the Netherlands, France, and Italy in the coming months.

Thanks, Chris. And for ibertamide, the way I look at it is there is a progression of how we move forward and how we move up the line. If you recall, over the last couple of meetings at ASCO as well as ASH, we've been able to show the overall profile for ibertamide because if it's tolerability, the combinability is good. So we've been able to combine with DARA. We've been able to combine with Kyprolis as well as with Valcade. So this is just one of the first studies that we have launched in the phase three setting in the randomized trials. As you know, there's a phase two study that is also ongoing doing a head-to-head comparison of Revlimid versus Ibertamide in Europe through E&M. And we will get to see the data that will form the basis of the future phase three trial there. And there will be other studies that will be coming through where you'll start to see the comparisons versus the image as well.

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

Thank you. We'll now take the next question from Larissa Hector at Barenburg. Please go ahead.

Thank you for taking my question. I wanted to come back to Ducravacitinib. You talked about a potential launch in the second half of next year. Is that a delay? And I know previously you've commented on your plans to build out your dermatology sales towards the end of this year. Is that still the plan or does that shift slightly into next year? Thank you.

Thanks, Louisa. Let me say we're really excited getting ready for Ducrava. There is no delay, but I'll ask Sami to give you more perspective and then Chris will talk about commercial preparation.

Sure. Thanks, Giovanni. And Louisa, thanks for your question as well. There is One thing that we need to remember that this is an NDA, not an SNDA, and certainly two very large studies. This is a priority for the company. We are certainly looking forward to launching in the second half of next year, and certainly we will share the acceptance of the file as the file is validated by the regulatory agencies. There is no other way to say it that we are excited about the data with the efficacy and the safety that we've shared before.

Yeah, and what I would say in terms of the commercial and medical build-out is that's well underway. We feel very good about where we are and the quality of the teams that we've been able to put in place. Medical has been in place for a number of months, and I would say those teams have very deep dermatology experience. We obviously have our key internal roles that have been filled in the process of building out launch planning. Our plan is and has been to build out the sales teams in the second half of this year. We feel very good about where we are in that timing. And our anticipation is that we're going to be ready for launch whenever the approval comes. And so really no change in how we're thinking about building out the commercial teams.

Great. Thanks. Catherine, could we go to the next question, please?

Thank you. We'll now take the next question from Steve Scala at Cohen. Please go ahead.

Thank you. I have a few questions regarding the factor 11, a BTE total knee replacement phase two data summit. You said that the trial showed exactly what was expected. Can you remind us of what you expected? For instance, did you expect zero bleeds? Second, has the FDA asked any questions on Ducravacitinib CV risk? And if so, what was the nature of those questions? And then lastly, do you expect an FDA panel for Mavik Hampton? Thank you.

Thank you, Steve. Let me ask Samit to address all three of your questions.

So for Factor XIa, Steve, when I say we got what we wanted is it was a multi-arm study where we looked at single daily dose as well as BID, and it was a dose range. What we wanted from the study to give us an inkling on, number one, the safety profile that we were observing, as well as to see what is the dose that we should take to phase three. And that's what we intended from the study, and that's what we got. And plus, we wanted to see the therapeutic index overall, what dose range one can use in the future programs, and that's what we got. Now, of course, you'll hear more as the data are presented later this year, but this is where we started off in the TKR study, and that's what we got. On the Ducrava study that you asked about what the cardiovascular risk questions, et cetera, from the regulatory agencies, of course, we will not comment on our conversations with the regulatory agencies. Having said that, you've seen the data. You've shown what the nonexistence of the cardiovascular risk in the follow-up that we have for Ducrava-Citinib, and we are very pleased with the profile that we currently have, which is very differentiated. On the Mavikampton side, once again, not commenting on the regulatory strategies and regulatory conversations, but we continue to look forward to the PDUFA date in January, and we are certainly very excited with the data on that side as well.

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

Thank you. We'll now take the next question from Matthew Harrison at Morgan Stanley. Please go ahead.

Great. Good morning. Thanks for taking the question. I guess two for me, following up on a couple questions from before. On factor 11, can you just maybe put the secondary stroke trial into context? What is a good outcome from that study when we see the results later this year? And then second... On the cell mods, especially now that you have some data in-house, what do you see as the quickest sort of regulatory plan to get that to market? Thanks.

Thanks, Matthew. Let me ask Samit to address both of your questions.

Thank you, Matt. For Factor XIa from the secondary stroke prevention, the aim of the trial is to be able to see if Factor XIa can be combined with the background therapy of antiplatelet agency. And that's what we are looking forward to because, as you recall, factor Xa inhibitors that are out there have a higher risk of bleeding when they're combined with antidepressant therapies. So that's what the good outcome would look like if we can actually manage that risk profile that is there, and that will then pave the way for taking it forward into indications that are to be discussed with our partners and, of course, with the agencies in the future. For cell mods, as Giovanni already shared in his prepared remarks, We've seen the data from the Phase II trial of ibertamide. We are looking forward to having those conversations with the health agencies based on the overall response rate data and the overall profile that we have for ibertamide. And then that will pave the way for seeing if we can bring the drug to market with these data or not. And we'll share those as we know more.

Let me just say that with cell mugs, You know, we have been discussing the progress with this platform for some time, and I think it's really good to be seeing now that we have four, five of those agents in the clinic, and the alberdomide data is really the beginning of looking at really important proof-of-concept data on a number of assets, and I'm really pleased that this platform is progressing so well. I think it's going to be really important for us. going forward.

Thanks, Giovanni. Catherine, can we go to our next question, please?

Thank you. We'll take the next question from Matt Phipps at William Blair. Please go ahead.

Morning. Thanks for taking my question. Another factor 10A, 10 or 11A question. Do you have any thoughts on the recent antibody results in total knee arthroplasty that were published in the New England Journal of Medicine last week? Obviously, some nice VT prevention, but no real difference in bleeding rates, which might be expected given that was a smaller size study. And then I guess just any general thoughts on an antibody versus small molecule approach. And then lastly, can you just confirm if Any additional clinical studies for DUCRA, whether it be longer follow-up or any healthy participant data with BVI or anything, is needed prior to submission.

Thank you. Samit? Let me start on the Factor XIa. I will hold myself from commenting on anybody else's studies, but certainly there is the specificity of the antibodies that we have to keep in mind. On the other hand, then you have to keep in mind the oral versus IV aspect of things and oral versus subcutaneous, which will be very important in the future development and the patient burden as well as the healthcare system. So we'll need to continue to monitor that and then we'll compare the results when full results are available for our program and then other programs as well as we take into account phase three development. For Ducrevacitinib, as we have previously talked about, We are looking forward to the approval in the second half of next year, so we are not waiting for additional studies from that perspective unless, of course, they become a part of the conversations with the health agencies.

Simon, I think we've maybe got time for one last question.

Thank you. We'll now take the next question from Dane Leon. Raymond James, please go ahead.

Thank you very much for taking the questions and getting one last in here for me. And appreciate the updates across the portfolio. Just one quick one to wrap things up on Factor 11a. How do you see the program evolving? Obviously, you sound encouraged by the results you have in-house that will be presented later on TKR. But are you going to take additional compounds into the clinic? You recently published a paper on 724296 that looked promising. Just thinking about your competitors and the multi-prong approach they're taking versus how you see the program expanding over time. Thank you.

Thank you for the question. For Factor XIa, we are pleased with the profile that we have thus far for Factor XIa that is in the clinic already, the Milvixin molecule. We do have a backup, but that is progressing as one would always have a backup plan at its own pace. We are not accelerating that. We are looking forward to seeing the data for the secondary stroke prevention study early next year, and that would then pave the way for Phase 3 program. Nothing more to add from that perspective at this time.

Thank you, Samit, and thank you all for joining us today. As we've discussed throughout the call, we had a very successful quarter. We delivered strong results consistent with our strategy by continuing to grow revenue, execute on new launches, and advance our pipeline. I'm proud of what our team has accomplished so far this year, including the attainment of several important milestones. And I'm really encouraged by what we are doing for patients. I believe we're very well positioned for the future. I'd like to thank everybody for participating in the call. And of course, our team is available to answer any additional questions you may have. Thank you and have a good day.

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