Bristol-Myers Squibb Company

Good day and welcome to the Bristol-Myers Squibb Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw your question, please press star then two. Please note this event is being recorded I would now like to turn the conference over to Mr. Chuck Triano, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. I'm happy to be here at Bristol-Myers Squibb, and we appreciate you joining our third quarter 2024 earnings call. Joining me this morning with prepared remarks are Chris Berner, our board chair and chief executive officer, and David Elkins, our chief financial officer. Also participating in today's call are Adam Lankowski, our chief commercialization officer, and Samit Hirawat, our chief medical officer and head of global drug development. Earlier this morning, we posted our quarterly slide presentation to bms.com that you can use to follow along with Chris and David's remarks. Before we get started, I'll remind everybody that during this call, we will make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by those forward-looking 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, and 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 exclude certain specified items. Reconciliations of certain non-GAAP financial measures to the most comparable GAAP measures are available at bms.com. And with that, I'll hand it over to Chris.

Thank you, Chuck, and thank you all for joining us this morning. Starting on slide four, our third quarter results reflect our continued focus on near-term execution and building the foundation for long-term sustainable growth. During the quarter, we saw solid demand for key products across our growth and legacy portfolios. We remained disciplined in managing expenses, and we continue to advance important pipeline programs. Let me highlight a few achievements in the quarter. Growth portfolio revenues increased 20% in Q3 at constant currency and now account for approximately half of total revenues. These are primarily young assets that have exclusivity well into the next decade. Our legacy portfolio also performed well generating cash flow that allows us to strategically invest in growth opportunities. During the quarter, we achieved several clinical and regulatory milestones. Notably, we reestablished our presence in neuroscience with the approval of CoBINFI, which I'll speak to in a moment. We also strengthened our leading oncology portfolio. And earlier this month, we received FDA approval for an Opdivo-based perioperative treatment regimen in non-small cell lung cancer. Additionally, we continue to advance our innovative pipeline. In oncology, we presented data at ESMO highlighting eight new registrational opportunities. We shared positive clinical data for our nivolumab plus rilatilamib high-dose combination in first-line lung cancer, which is now advancing to phase three. And we talked about the progress we're making across other promising assets and modalities, including our bispecific ADC and our radiopharmaceutical pipeline. This past week at ENA, we also presented promising phase one data for our PRMT5 program across all the tumors. Turning to slide five, the acquisition of Karuna Therapeutics is a key example of how we are strengthening our long-term growth outlook. We're proud to highlight the recent FDA approval of CoBenfi, formerly known as CarXTE, with a strong label that reflects its efficacy and safety profile. This milestone marks significant progress in delivering value from the Karuna acquisition for patients. CoBenfi is the first truly novel mechanism approved for adults with schizophrenia in decades, and it addresses one of the most significant unmet needs in mental health. There are approximately 1.6 million people being treated for schizophrenia in the U.S. alone, many of whom have endured debilitating side effects from older treatments. Cobenvi delivers compelling efficacy without the notable side effects associated with atypicals. The BMS team has been laying the groundwork for a successful launch. We built an experienced sales and medical team, engaged with payers to secure access and develop sophisticated patient support services. We have ongoing clinical programs in adjunctive schizophrenia with phase three data expected in 2025. And we have expanded the ongoing ADEPT program in Alzheimer's disease psychosis with phase three data expected in 2026. we remain on track to start registrational trials next year in Alzheimer's agitation, Alzheimer's cognition, bipolar disorder, and autism spectrum disorder. Adam and Samit can speak more to our launch progress in schizophrenia and other potential indications we are actively assessing for CoBinFy in Q&A. Turning to slide six, I'll spend a moment updating you on our progress against our key strategic priorities. First, We're focused on transformational medicines where we have a competitive advantage. We are advancing our mission to serve patients with first or best-in-class treatments across our therapeutic areas. This includes driving leadership in hematology, cardiology, and oncology therapeutic areas with products like Reblazil, Breonzi, Chemzios, and Optulag. At the same time, we're strengthening our innovative pipeline by prioritizing key programs. One asset that continues to advance well is Milvaxian. We continue to see considerable unmet need across indications, in particular AF, as well as a large commercial opportunity. Today, we want to share an encouraging update related to our atrial fibrillation phase 3 trial, which continues to recruit very well. As you'll soon see on clinicaltrials.gov, we and our partner J&J have approved an increase in patient enrollment size. This is because at this time, based on review of event rates, we are seeing a lower rate of strokes and systemic embolisms than originally anticipated. And the increased enrollment supports maintaining the planned data readout in 2027. As a reminder, as described in our published study design paper, we indicated that the sample size may be adjusted based on review of event rates. We remain confident in the design and progress of the program. Beyond Milvexian, we continue to advance other programs where we have a right to win. This includes our CD19 NextT cell therapy, our radiopharmaceutical and protein degradation platforms, as well as additional indications for Cobenvi. Our second priority is driving operational excellence. We are reviewing overall spending and prioritizing investments that will deliver the best long-term returns. We remain on track to deliver $1.5 billion in savings by the end of 2025. These savings will be reinvested into high ROI opportunities that serve patients' needs and accelerate growth. We are becoming a more agile company with stronger commercial and pipeline execution. Our progress on this front was demonstrated by the performance of our growth portfolio in Q3, the approval of CoBEN fee, and acceleration of key programs. We see the drive for greater operational excellence as a continuous process. As such, we are exploring opportunities to further improve productivity and efficiency over the coming quarters. Our third priority is to strategically allocate capital for long-term growth and returns. We remain focused on our near-term goal of de-levering our balance sheet. We made further progress during Q3 and are on track to pay down our target of $10 billion of debt by the first half of 2026. We're committed to the dividend, and we will continue to invest strategically in growth through our own pipeline, as well as sourcing innovation externally. Now, turning to upcoming milestones on slide seven. At the American College of Rheumatology's annual meeting in November, we will present promising phase one data for our CD19 NextT cell therapy. This is a next generation immunology asset leveraging the Brionzi construct. We are optimistic about its potential to deliver benefits for patients across multiple immunology indications by resetting the immune system. In late December, we expect the FDA's decision on the subcutaneous formulation of nivolumab. We anticipate this launch in early 2025 will provide an important benefit for both patients and physicians while extending our leadership in immuno-oncology into the next decade. We're also on track to share top line phase three data from SOTIC2 and psoriatic arthritis by year end. This data should help strengthen the competitive profile for SOTIC2 as roughly one third of psoriasis patients also have psoriatic arthritis. Turning to our outlook on slide eight, given the strength of our results year to date, we are raising both our full year revenue target and our full year EPS guidance. David will discuss these updates in more detail shortly. Looking ahead, I'm confident in our ability to deliver long-term value for patients and our shareholders. To summarize on slide nine, I'm pleased with our achievements in critical areas. Our overall business mix is beginning to transform as our growth portfolio is becoming a bigger component. The U.S. approval of CoBinfi adds another asset with multi-billion dollar potential to serve more patients and accelerate growth. Our pipeline continues to advance with additional near-term catalysts, and we are maintaining a disciplined focus on expense management, driving initiatives across the company to lower cost. These actions underscore our focus on executing in the near-term while laying the groundwork for long-term sustainable growth. We look forward to keeping you updated as we build momentum with important milestones in 2025 and significant data flow in 2026. Before I close, I want to thank our employees for their dedication and performance in the quarter. Together, we are building a strong future for BMS and the patients we serve. Now, I'll turn it over to David.