Bristol-Myers Squibb Company

Welcome to the Bristol-Myers Squibb Second Quarter 2026 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. To withdraw your question, please press star then two. I would now like to turn the conference over to Chuck Triano, Senior Vice President and Head of Investor Relations. Please go ahead.

Thank you and good morning, everyone. We appreciate you joining our second quarter 2026 earnings call. With me this morning with prepared remarks are Chris Boerner, our board chair and chief executive officer, and David Elkins, our chief financial officer. Also participating in today's call is Adam Lenkowski, our chief commercialization officer, and Cristian Massacesi, 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. Finally, unless otherwise stated, all comparisons are made from the same period in 2025 and sales growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. All references to our P&L are on a non-GAAP basis. And with that, I'll hand it over to Chris.

Thanks, Chuck. Good morning, everyone, and thank you for joining our Q2 2026 earnings call. We delivered another excellent quarter driven by disciplined execution across the business. Our progress towards transitioning the portfolio to fuel durable long-term growth is reflected in our growth portfolio's strong Q2 performance. At the same time, we're delivering strong performance from our existing business. We're also advancing a broad and differentiated pipeline while maintaining financial flexibility to invest in the highest value opportunities for patients and shareholders. Together, these efforts continue to strengthen the foundation we're building and increase our confidence in our ability to grow the company as we exit the decade. Let me walk you through some of the highlights of our performance, beginning with our Q2 results on slide 4. Our growth portfolio continued its strong performance, with sales up 14%. Key assets including Reblazil, Brianzi, Chemzios, Optulag, and Qvantik continued to perform well, with 10 products in our overall portfolio achieving double-digit growth. This performance demonstrates both the value creation of our portfolio and the continued execution of our commercial organization. Based on the strength of our results, we are increasing our full-year 2026 revenue and adjusted EPS guidance. David will provide additional details shortly. Building on our in-market performance, our pipeline of differentiated assets is an important driver of our long-term growth, and we're making significant progress there as well. We had an exciting ASCO in June, where we shared data that reinforces the breadth of innovation across our leading oncology franchise. To highlight a few examples, In hematology, we presented positive phase 3 data from the mesignamide successor 2 study evaluating mesi-KD for patients with relapse or refractory multiple myeloma. The study showed a statistically significant and clinically meaningful improvement in progression-free survival. This further strengthens our confidence in the CellMod class and its potential to drive the advancement of future myeloma treatment. In solid tumors, we saw encouraging Phase III data from two Isobren studies supporting our strategy of building differentiated ADC capabilities across multiple difficult-to-treat solid tumors. We are also initiating our fourth global phase 3 study in first-line EGFR mutant non-small cell lung cancer. For Pimidamig, we shared encouraging early phase 2 global data in combination with chemotherapy for first-line non-small cell lung cancer. and in terms of our expanding development program, we are initiating a new phase two novel-novel study combining Pometamig with Imzocatug, our CCR8 antibody. These programs reinforce the power of our innovation engine and support our strategy of combining different modalities to deliver transformational medicines and improve patient outcomes. Turning now to our near-term pipeline milestones we anticipate during the remainder of 2026 on slide 5. We've talked about our ambition to translate a data-rich pipeline into durable, long-term growth drivers, and we continue to expect pivotal readouts across our therapeutic areas by the end of this year. These near-term readouts represent compelling opportunities, including admilpirant, a potential first-in-class medicine that could redefine the standard of care in pulmonary fibrosis, Arlocell in relapsed or refractory multiple myeloma, Ibertamide progression-free survival data, Milvexian in secondary stroke prevention, RAISE-101 in GEPNETs, and SOTIC-2 in lupus, a disease affecting millions of patients with very limited treatment options. Each of these pipeline opportunities carries the potential to redefine treatment standards, addressing large, underserved patient populations and helping to accelerate our long-term growth trajectory. Together, they represent multi-billion dollar peak sales potential and reflect the full depth and breadth of what we're building. For Milvexian, we now expect the atrial fibrillation study to read out in the first quarter of 2027. This is an event-driven study, and the updated timing from late 2026 reflects the pace of events. As a reminder, the study is being monitored by an independent data monitoring committee, which continues to endorse the study. And with the passage of time, as the study progresses, we are increasingly encouraged about Milvexian's potential and look forward to seeing the results of this important study. With respect to the CoBINFI development program in Alzheimer's psychosis, based on the pace of enrollment in the ADEPT 2 and 4 studies and relapse events accruing more slowly than projected in ADEPT 1, we now anticipate top-line data readouts from the ADEPT program to begin in early 2027. Thank you for watching. These data reinforce our continued confidence in the potential for this medicine in Alzheimer's psychosis. Finally, our Phase 3 Balsam 1 and 2 studies evaluating Cobenfi and Bipolar 1 disorder continue to enroll well, and we anticipate reading out in the first half of 2027. Thank you for joining us. and we're pleased that the FDA accepted our NDA for mesignamide with a PDUFA date of May 13, 2027. Together, Ibertamide and Mazignamide continue to reinforce our confidence in the long-term potential of our protein degradation platform. The FDA also recently accepted our supplemental NDA for Camxios in adolescents with obstructive hypertrophic cardiomyopathy and assigned a September 30th VEDUFA date. At the same time, we continue to actively plan our previously announced Phase 3 study evaluating camxios in patients with non-obstructive hypertrophic cardiomyopathy and expect to initiate the study by the end of the year. I want to step back for a moment and take stock of where we are and why I'm energized by what's to come. Our growth portfolio is delivering today, and our differentiated pipeline is on the verge of multiple pivotal readouts with the potential to introduce more than 10 new medicines by the end of the decade, including ibertamide and mesignamide, both of which have upcoming PDUFA dates. In addition, we also anticipate over 30 meaningful lifecycle management opportunities during that same period. Our priorities are clear. Continue executing with discipline and translate differentiated science into transformational medicines for patients. Turning to slide six, we continue to evolve how we operate as a company. Over the past few years, we've made significant progress rewiring BMS into a more agile, focused and efficient organization. This includes expanding the use of AI to help our teams move faster, execute better, and operate more effectively. Over the past several years, BMS has embedded AI across its research and enterprise operations, and demand for compute has grown alongside the scale and maturity of our AI capabilities. In support of this expansion, we've recently announced partnership agreements with both Anthropic and NVIDIA. Concretely, this will help our scientists do three things, understand disease biology more deeply, design and test candidate molecules faster, and make earlier, better-informed Thank you for watching. at the same time we remain disciplined in how we manage our resources our focus on productivity continues to generate meaningful savings when combined with our strong free cash flow generation and balance sheet these efforts continue to fortify the company's financial foundation before i turn the call over to david i'll emphasize that the strong financial foundation we've built provides us with the optionality and flexibility to continue investing in growth drivers pursuing business development opportunities and returning cash to shareholders

And with that, David, over to you. Thank you, Chris. And good morning, everyone. We delivered another strong quarter with the results continuing to highlight the underlying strength of our growth portfolio comprised of many products that are early in their life cycles. Our performance is also supported by disciplined investment and growth-oriented initiatives. Results were further bolstered by Eloquus. Based on this first half momentum and confidence in our second half outlook, we are raising our full year guidance for both revenue and adjusted diluted EPS. Let me begin with a review of our second quarter results. Now representing nearly 60% of total revenue. As Chris referenced, multiple products contributed to this growth as this portfolio continues to emerge as a broadening foundation for durable long-term growth, further supported by the broad pipeline. Within the legacy portfolio, Eloquist delivered demand-driven growth of 21%, which nearly offset declines from generic entry across the remainder of the legacy portfolio. Despite full generic availability in the U.S., RevelMid revenue remains more resilient. Turning to product performance on slide nine, starting with oncology. Javanta continued its strong launch trajectory with revenue of $261 million and is now annualizing at over $1 billion. For Updivo, revenue decreased 4% to approximately $2.5 billion, primarily driven by continued conversion to Uvantic in the U.S. In the quarter, we saw some inventory build at the wholesale level, reversing some of the drawdown we referenced in the first quarter. OptiLag delivered another quarter of strong double-digit growth, which continues to be driven by demand globally. and its leading position as a standard of care in first-line melanoma in the U.S. Turning to slide 10, Reblazo grew 29% reflecting solid uptake in first-line MDS-associated anemia, continued strength in the second-line setting, and further penetration in the first-line RS-negative population. Grionzi posted 41% growth in the second quarter, driven by its best-in-class profile and strong demand across approved indications in both the U.S. and international markets. As in prior years, we anticipate the typical summer demand patterns to moderate growth in the third quarter. Moving to cardiovascular and immunology on slide 11, Eloquist's revenue was approximately $4.5 billion, up 21%, driven by strong demand through continued market share gains. As a result of the price decrease implemented at the start of the year, U.S. second-half sales are expected to benefit from the elimination of the accumulated CPI penalty and certain government channels. ChemZio's revenues increased 59% to $416 million, reflecting continued promotional efforts, new patient prescriber additions and deeper penetration into the community setting. Now moving to immunology. Global revenue for Citictu grew 23%. We are supporting the recent indication for cirrhotic arthritis in adults, and we look forward to the Phase 3 readouts in lupus later this year. I will wrap up our product performance review on slide 12 with neuroscience. Kvanfi grew 81% to $63 million in revenue in the quarter, reflecting continued steady progress in the schizophrenia market. Let's now move to the P&L on slide 13. Gross margin in the second quarter was 71.4%, reflecting product mix. Operating expenses for the second quarter were $4.1 billion. We continue to benefit from our strategic productivity initiative, which provides us both the ability to reduce expenses in identified areas, as well as the flexibility to invest in multiple growth-oriented opportunities. Our effective tax rate in the quarter was 16.5%, reflecting jurisdictional earnings mix. Overall, diluted earnings per share were $2.04 for the quarter. Now turning to the balance sheet and capital allocation highlights on slide 14, we remain in a strong financial position with approximately $11.5 billion in cash equivalents and marketable securities as of June 30th. In the second quarter, we generated approximately $3.4 billion in operating cash flow and paid down an additional $1.2 billion in debt. In terms of capital allocation, we maintain a strategic and balanced approach to deploying our strong cash flows. Business development remains a priority, and we are regularly evaluating opportunities in the therapeutic areas we know best, while continuing to return cash to shareholders through our commitment to the dividend. Moving to guidance on slide 15, we are increasing our full year 2026 financial guidance for both revenue and adjusted diluted EPS based upon our strong first half results and our current projections for the balance of the year, while maintaining our projections for gross margin, other income and expense, and our tax rate. Incorporated into these revisions are projected higher eloquence revenue growth of Thank you for joining us. and opportunities to further support the growth portfolio. And to reiterate Chris's comment, our strategy remains focused on driving execution across the organization to build momentum in our growth portfolio and advance our pipeline while maintaining financial flexibility to balance investment and future growth with disciplined, shareholder-friendly capital allocation. In closing, our strong performance in quarter reinforces our confidence to deliver long-term value for our patients and shareholders. And with that, I'll now turn the call back over to Chuck for Q&A.

Thanks, David. And everybody, if you could please help us post questions, operator, and we'll get started with the Q&A session.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. We ask that you please limit yourself to one question and to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Jeff Meacham with Citibank. Please go ahead.

Jeff Meacham Hey, guys. Thanks for the question. Congrats on the quarter. Chris or Cristian, I guess I just wanted to talk about the ADEPT and Milvexiant studies going into 2027. I know they're event driven, but maybe can you talk a little bit about what this means relative to your initial assumptions? Is there something in the patient population maybe that has changed or that is perhaps different than what you guys initially assumed? Just wanted to get a little bit more context for both of those. Thank you. Good morning, Jeff, and thanks for the question. Cristian?

Good morning, Jeff. Thanks for the question. Let me start with Cobenfi, with Adept. First, let me explain the reasons for the delay. Chris highlighted in his opening remarks, let me In ADEPT-1, you know we are recruiting events, psychotic relapses, and we are having now slower pace of how we are recruiting these events than predicted. So this can be seen overall as a positive way. And anyway, ADEPT-1 will be the first interim analysis to read out by the end of this year or beginning next year. In ADEPT 2 and ADEPT 4 is different because like for the rest of COBE-AMPHI program, the first priority has been to ensure the highest quality in terms of the patients we are including in the trial, the conduction of the study. If you think about it, this is one of the best ways to ensure for these trials the highest chance of success. And then this is very important also to support the registration. So this scrutiny, in preserving quality and increasing quality impacted the enrollment pace. The second point I want to make is about where we are now. I think we have implemented now several measures to accelerate this enrollment. And I think the pace and the projections on timelines are solid. Finally, related to your question on ADEPT program overall, there has been no change in any way in our confidence in both the underlying science, the scientific rationale, and also the study designs that we are implementing in ADEPT program. We continue to believe that CAR-XT can provide a substantial benefit to patients with Alzheimer's disease and psychosis. And actually, this is the main reasons we decided to share the open label data of ADEPT-1 and the rollover ADEPT-3 data in one of the next meeting of forums later this year. Moving to Malvexion, as you said, and Chris said, first of all, we remain blinded, but these shifting into first quarter 27 of AFib timelines is, again, a simple reflection of the way the pace we are recruiting events. It is lower. then predicted. DMC continue to oversee the study in a regular way and continue to endorse the conduction of the study. I see favorably this delay because actually give us more confidence that we are a target for both the primary endpoint non-inferiority and the secondary endpoint superiority of bleedings. I remain very excited. Malvexian can be the first factor 11 drug to be at parity on efficacy with Eliquis, but beating Eliquis on bleeding.

Great. Thanks for the detail, Cristian. Let's take our next question, please.

The next question comes from Chris Schott with J.P. Morgan. Please go ahead.

Great. Thanks so much. Just following up on Milvexian, I guess beyond just the non-inferiority primary endpoint, I think there's a debate on the street of what type of hazard ratio you need to see. for this drug to get broad adoption, cannibalizing sizable pieces of eloquence versus just targeting maybe an underserved segment of the AF market. Can you just help frame out what you think you'd need to see from that study for this to be a very large opportunity for Bristol versus what would be maybe more of just an incremental new product for the company just in terms of how strong that data has to be? And if I just throw a second one in really quickly, on the guidance increase, can you just talk a little bit about the drivers of the upside for the growth portfolio that's implied in the guidance. I guess, are there any standout assets that are driving that upside? Thanks so much.

Thanks for the question, Chris. I'll ask Adam to start, and then David, you can jump in on guidance.

Great. Thank you, Chris. Good morning. So, Malvexia represents a significant commercial opportunity, and we know there is a need for a medicine that has low bleeding risk, lower than Eloquist, and can play across both AFib and SSP. As far as the atrial fibrillation opportunity, this is a very large market. There are approximately 10 million patients diagnosed and treated in the U.S. We know this market well, we know the customers well, and we know what it takes to compete and win. Fear of bleeding continues to be the main reason why clinicians continue to hold back from using more Factor Xa's. and more patients. And despite what we see today with Eliquis, there's still roughly 40% of patients who should be anticoagulated, who are undertreated, they're underdosed or discontinued treatment. And that's driven largely by physician concerns around bleeding risk. And so, you know, I don't think it makes sense to speculate on hazard ratio, but, you know, what I can say is, you know, our study, as Christian mentioned, was designed to demonstrate a superior bleeding profile compared to Eliquis with comparable efficacy. And so, you know, AFib patients with bleeding liability risk factors are more likely to experience HCP hesitation today for anticoagulation treatment. So for example, patients who are elderly, low body weight represent a high unmet need, patients who have renal impairment. And Melvexian has the potential not just to unlock those patients, but also we expect Melvexian to shift first-line decision-making over time allowing physicians to initiate and maintain milvexian treatment more confidently than they can even do today by using Eliquis.

Thank you. And on guidance, Chris, look, it was, you saw in the results, it was pretty pervasive across the growth portfolio. We saw really strong growth. You know, Optilag was up 22%, Reblazel 29, Breonzi, we continue to see great growth there at 41%, and Camzias was at 59%. And, you know, as we also talked about the Let's take our next question, please, operator.

The next question comes from Evan Ziegerman with BMO Capital Markets. Please go ahead.

Hi, guys. Thank you for taking my question. I'm going to not ask one on Milvexian or the ADEPT program, but taking a step back, you've been clear that BD remains a really important part of your long-term growth strategy. Can you just walk me through what excites you in biotech these days and kind of where you would look? I know you're not going to give specifics, but what type of technologies or therapeutic areas do you think would best fit within Bristol's portfolio? Thank you.

So maybe I'll start and then I'll ask Cristian to chime in. Look, thanks for the question, Evan. Business development, as you know, and as we've discussed repeatedly, continues to be a top allocation priority. You know, the way I think about BD just at a macro level is we've got a very strong late stage pipeline. You see that in the commentary that we've made just this morning. We certainly don't feel any compulsion to chase deals. But as we've said consistently, if there's an opportunity David Elkins. continue to enable us to de-risk our near-term growth profile, we certainly have the financial flexibility and the capabilities to be in the mix. And so that's been our guiding philosophy around business development for some time now, and it continues to be our focus. But Cristian, are there particular areas you would highlight?

Thanks, Evan, for the question. I would frame it in two ways. I'm excited by what is new, what is innovative in terms of new targets, but also the way you deliver your drugs against that target, the modalities. I think this is where I think internally, but also looking at external innovation is very, very, continue to be very important. I want to give you some concrete examples. We know better and better the biology of the diseases where we are operating. Think cancer, think neuroscience, cardiovascular. Now it's identifying targets that becoming more and more relevant and then the way we deliver against them. I want to give an example of an internal product that is our cell mod BCL6 is coming from our protein targeted degradation platform. You know, BCL6 is a key target in lymphomas, drive lymphomas, but because it's the scriptural factor, we're unable to inhibit them. Now with the degraded we can. This is just an example. Imagine the potential in neuroscience. We are building up our Alzheimer portfolio and you know, we start to understand more and more on the biology of Alzheimer Now the question is, how can we deliver against amyloid, against tau, against new targets, and how we can have better drugs to get into the brain? The shuttles is an example. So these are the kind of, I hope I give you concrete examples on what I think innovation can look like, especially looking then at the development part that ultimately is our job. Thanks, Christian.

Let's take our next question, please.

The next question comes from Emily Field with Barclays. Please go ahead.

Okay, thanks so much for taking my question. A question on Cabenzi and the approved schizophrenia indication. You've talked about one of the drags on sales being that clinicians aren't titrating up quickly enough to the therapeutic dose. So I was just wondering if you could give us an update on how the educational efforts on optimizing that are going and when perhaps we could see that reflected in the sales trajectory. And if I could just sneak in another one on TIC2 in lupus, obviously a lot of readouts coming in the lupus space over the next couple of years. So I was just wondering if you could highlight your confidence in the TIC2 MOA in this obviously notoriously difficult space. Thank you.

Good morning, Emily. So Adam, maybe you could start and Christian, you can chime in. Sure.

Emily, let me just take the first part of your question about Cobenfi. Cobenfi continues to deliver steady growth and we see significant upside coming from future label expansions. What we're seeing today in schizophrenia is a number of positive leading indicators for the brand that continues to give us confidence. We're encouraged by the positive trends in total script volumes. In fact, in the quarter, we saw roughly a 15% growth in TRXs quarter over quarter. We're driving consistent increases in new prescribers and physician feedback continues to be positive. That said, we have areas where we need to make further progress. We need to accelerate new patient starts as well as improve repeat prescribing. As we shared before, this is a disease state that prescribing behavior is deeply entrenched. and CoBENFI will continue to grow by building more positive experiences in the market. As far as dosing, we have been educating physicians on the importance of rapidly titrating CoBENFI to the effective dose of 125 milligrams as we see far too many patients that remain on either the 50 or 100 milligram dose. What we have seen though is an increase in 125 milligram prescribing since introducing our phase four switch study. which will both help maximize efficacy, but we need to see further increases in the dose shift towards the 125 milligrams. But taken together, we have a meaningful opportunity to continue to build confidence and bring clarity on how to maximize CoBENFI use. And overall, we do expect CoBENFI to grow consistently throughout the year with significant upside through a very broad LCM program. As far as Sotictu in Lupus, this is a market that is very different than the PSO market. Sotictu remains really a strategically important asset, which we believe could see renewed momentum with our new indications. SLE, which will be out this year, and Sjogren's will be out next year. In particular, A real need exists for more effective treatments. Those include treatments that reduce steroid dependence. That includes treatments that are associated with fewer side effects. And what we saw in our phase two study gives us a lot of confidence. That study was one of the largest and most compelling in SLE to date, having met both the primary and key secondary efficacy endpoints. So we believe we have a real opportunity to differentiate Sutictu based on overall clinical responses, efficacy in skin and joint involvement, the ability to reduce steroid dependence, and also associated toxicity. So we very much look forward to our SLE data readout this year as this could really catalyze growth for the brand.

Thanks, Adam, and thanks, Emily, for asking about these important readouts that will happen this year, both studies. As Adam said, the confidence stays on the phase two. Adam explained very well why the phase two were positive and positive for primary modes, secondary points. It's not very typical in this space. Now what I'm pleased is on the fact that we have been able to mimic the phase two study into the phase three studies. This is very important because when I look at patient demographics, disease characteristics, trial management, endpoints, everything is very matching. and there are, you know, in immunology, you have some kind of risks sometimes related to placebo response. I think that our teams and investigators did a very good job in managing that risk in terms of checking carefully and actively monitoring the primary endpoint. So really looking forward on the results this year. And I think, as Adam said, that this can be a very important oral drug to bring these patients.

Great, thanks both. Let's move to the next question, operator. Thank you.

The next question comes from Asad Haider with Goldman Sachs. Please go ahead.

Great, thanks for taking the questions and congratulations on the quota. Maybe for Cristian on Admiral Parent, this now seems to be becoming the key clinical event for the balance of the year given the updates that you guys just described. Perhaps just level set us on expectations as we sharpen our pencils ahead of this readout. Can you contextualize where this fits into the IPF landscape if the clinical benefit turns out to be in line with currently available drugs, which have improved FVC by roughly 40 to 50 percent? What would be the use case for adding it in? And then on the PPF side, is that trial still tracking to read out closely after IPF? And then anything you can tell us on the fighting strategies. Thank you.

Thanks, Azad. I'll start with Cristian and then maybe Adam, you can chime in as well.

Thanks. Thanks, Azad, for the question. You're right. This is becoming a very important readout and guided by the end of this year. Let me start with a mechanism of action. FPA1 is a very important novel target because it's not working only on the fibrotic and inflammatory pathway, but also potentially on the epithelium repair pathway. And this is novel. We believe that Amiparant can be first and best in class against LPA1 and the conviction on the phase 3 again sits on the phase 2 results both in IPF and PPF. You know the results were very positive for FDC primary endpoint. What we did and we were able to do also in this setting was ensure consistency how we run the phase 2 into the phase 3. again in terms of endpoints, population, overall criteria. There is an important aspect I wanna highlight. In phase three, we have two shots on goal in each of the studies, IPF and PPF, because we are testing two doses, 60 milligram, it is the dose that emerged from the phase two, but also 120 milligram that was introduced later. We know there is a dose relation activity and these give us more chances with both doses. Also looking overall at the study conduction and how the blinded data emerging on the safety side very well. Overall, I have to say I'm really looking forward to these readouts because the profile of this drug can be very helpful for patients with both IPF and PPF. To IPF guided this year, PPF to the second part of your question will be just a few months after. So very, very same ballpark timelines beginning next year. Adam, you want to speak about the positioning?

Yes. No, thanks for the question, Saad. So Emil Braun has the potential to play a truly meaningful role in both IPF and PPF as we expect an improved efficacy and tolerability profile. There is still a significant unmet need for new and improved therapies. that slow disease progression, potentially even halting disease progression that are well tolerated and ultimately help patients better manage their disease. Now remember, GI tolerability remains a significant challenge with current agents in the market. and in fact, 50 to 60% of IPF patients continue to stop their medications by 12 months. And that's with current standard of care. And what you've seen in the most recent launch, it clearly validates the market opportunity that there is an opportunity to gain significant share as better tolerated and more effective new treatment options emerge. And so what we're seeing happen in the market today is the emergence of a large second line add-on and switch market for the first time. We're seeing that with Jaskators, over 50% of their starts are coming after generic. So today, this is a roughly $4 billion market. We expect this market to grow significantly with improved treatments that could Double to $8 to $10 billion by the middle of the 2030s with improved treatment options. And we believe that Emilpron truly has the potential to be foundational as a first branded option with the versatility of being used in combination. So we very much look forward to the readout in the back half of this year. All right, thanks both.

Next question, please.

The next question comes from Seamus Fernandez with Guggenheim Securities. Please go ahead.

Oh, thanks so much for the question. So I wanted to drill in a little bit on the sell mods. You know, we've got two assets that are either filed or fileable with the agency. Just wanted to get a better sense of how in, you know, let's say 2028 to 2030, how you see the sell mods actually contributing to the growth revenue for the company. This does seem like a multi-billion dollar, perhaps even a double-digit billion dollar potential opportunity if the earlier stage studies read out positively. But even in the existing indications that you see today, what kind of contribution do you see coming from your SUMOD portfolio? Thanks.

Thanks, Seamus. Great question. And obviously, we're quite excited about the platform and both Iber and Messy, but Adam, you can chime in.

Yeah, no, thank you, Seamus, for the question. So clearly, cell mods represent a significant commercial opportunity, and we're confident that both Ibertamide and Mazictamide will deliver very strong growth for the company. And We're very much looking forward to Ibertamide's PDUFA date, which is just a few weeks away, and our commercial teams are launch ready. We're also pleased to have a PDUFA date set for mezignamide, as you had heard earlier on the call, which will come in May of next year. Let me just step back. Recall that 70 to 80% of patients are treated with multiple myeloma in the community. And both Iber and Mezzi, are able to provide a balance of high potency, able to provide a manageable and very familiar toxicity profile that are able to provide a better experience for patients with the convenience of an oral treatment that fits within the workflow of their practice. So Iber will replace Pomalyst and Revlimid in the leading triplet regimens in second line and combine with Daratumab and will amplify the efficacy of current imid-based regimens. Our goal is to make Iber and Mezzi foundational in myeloma, replacing Rev and Pom in second line over time. We do expect strong adoption in the community and PFS data should be available within just a few months after our approval, which will certainly help accelerate uptake as some physicians are gonna wanna see PFS data before adopting. But we are ready to launch. We know the work we need to do to establish both Iber and Mezzi in the market. So we're also excited about the upcoming readouts for Gocatomide, which will be the third cell mod in the market that has the opportunity to really revolutionize first line LBCL and also play a significant role in second line follicular lymphoma. So we're excited to bring these important medicines to patients. And we know these three drugs will provide meaningful contributions to growth for the company.

Thank you. Let's move to the next question, please.

The next question comes from Michael Yee with UBS. Please go ahead.

Thanks. Two questions, both for Cristian. On IPF, can you just talk a little bit about the 120 dose that you're using and how you feel about how much more efficacy that could add and what exposure analysis data you might have seen there in the context of also blood pressure questions and how you feel about the risk benefit of the 120? And then just perhaps a clarification on Melvexian. I know that everyone's asking about hazard ratios, but just so that you could confirm, I would assume that as a non-inferiority study, you expect the hazard ratios, certainly on the upper bound, to be well above 1.0. But as long as it's non-inferior, that that is a win for you. Just wanted to clarify and confirm. Thank you.

Thanks, Mike. And Christian, you can start, and then Adam, you can just chime in with any additional detail on Melvexian.

Thank you, Mike, for the question on IPF. As I said, we introduced 120 milligram dose based on some modeling work showing that there was a dose relation. You remember in the phase two, we tested 30 milligram, 60 milligram, and 60 milligram was the dose showing better and higher benefit. And this is what we brought in phase three. At the start of the phase three, there was a randomized run-in introducing 120. DMC have seen this data and cleared that dose. We believe that there is a dose relation. The real, as you mentioned, the real unknown for the conduction study was 120 safety profile in terms of hypotensions. What I can tell you is that DMC is monitoring regularly the study. We have completed the recruitment, we are waiting the readout, and there was, in a blinded way, a very reassuring event safety profile rate. So this increases the confidence that we have two shots on goal, and the studies are fully powered for both doses. On related to Malvexian, again, we remain blinded, and you're right, the margins are non-inferiority, are a range that is around one, but the study is fully designed and powered to show another rational one. This is what we expect, Malvexian being as good as Eloquist in terms of stroke and systemic embolism, and then, of course, being better on bleedings.

Yeah, just as far as what we're hearing from our physicians. I think number one, physicians, payers, as we meet with them, they're not anchored on a specific percentage threshold. What they're looking for, though, is clinically meaningful reduction in major bleeding that translates into fewer events, fewer hospitalizations, and ultimately a lower cost in treating AFib It's why Eloquist continues to play such a prominent role in the marketplace. Our customers focus on whether treatment enables them to have broader and more confident use of anticoagulation, preserving stroke protection while improving the safety margin has a potential to really meaningfully reshape the treatment dynamics that we see today. And we believe that the profile that we have described and we fully expect

will drive significant demand and will be important for payers, patients, and providers.

Thank you. Operator, let's take our next question, please.

The next question comes from Jason Gerberry with Bank of America. Please go ahead.

Hey, guys. Thanks for taking my question. Another one on IPF and maybe for Adam. Given the really strong launch of Giscade by BI, does this impact the bar for success in your view? Does it elevate maybe the commercial bar for success or is potentially winning and differentiating versus Gade, mainly on tolerability? And do you see the market potentially moving to polypharmacy, much like markets like pulmonary hypertension? So just wanted to get your perspective on some of those market considerations. Thanks.

Jason, thanks for the question. As we said, Cristian and I both shared, IPF and PPF, remains a market with significant unmet needs. And those needs are in both efficacy and tolerability improvement. Admiral Perron, as the first ever LPA1 antagonist, has the potential to play a real significant role. And we expect both improved efficacy and improved tolerability, specifically as it relates to GI toxicity, which even what we see today with some of the most recently approved products has an overall rate of diarrhea of 40%, over 60% in combination. And what we've seen with admilpirant in our phase two studies is a side effect profile that is comparable to placebo. I think what you're getting at is right, Jaskade's launch validates the market opportunity and shows there's an opportunity to gain significant share as better tolerated and effective new treatment options emerge. And that's what we're seeing. We're seeing the creation The second line add-on market for the first time ever as over 50% of new Jascade starts are coming after generic Ofev or generic Esprit as switch or add-on treatments. And we'll see this part of the market grow substantially after generic use. So clearly we'll see a big market in polypharmacy or in switch and add-on. As I talked about, this is a market that we think could double in size over time. with improved treatment options. And Admiral Prandt certainly has the potential to be foundational both as a first branded option in monotherapy with the versatility of being used in combination given what we expect to be a really exciting efficacy profile and tolerability profile. Thanks, Adam.

Great. Let's take our next question, please.

The next question comes from David Amselem with Piper Sandler. Please go ahead.

Thanks. So I had a question about your TAO program with the data coming next year. Just with the recent data from Biogen, Deer & Urson, their TAO ASO, and just given the body of data for the A-beta therapies, I wanted to get a better sense from you on what we'd like to see from CDR, some of the boxes, and just the totality of the data that you get next year for Moponatog. in order to justify moving forward. And then also what you're seeing with that molecule that potentially differentiates it from D-remersin.

Thanks. Thank you for the question, David. Our anti-Tau antibody, Moponitac, is a very... Potential best-in-class and potent antimicrotubule binding region tau. I'm specific on this because there are many antibodies out there, but I think binding R1 and R3 domains in the MTRB, in the microtubule region, is believed to be very important because it is a critical area that lead to formation and spread of the tau tangles. So the job of the drug is blocking this spread from one neuro to another. We did the phase one and the phase one was very reassuring in terms of the safety and tolerability of the product and now we completed the recruitment of the phase two. The readout of the phase two is gonna be next year. As you said, it's an exciting moment because what is emerging is that the tau clearance is impacting cognition in Alzheimer patient with mild impairment and cognitive impairment. And this can translate maybe into clinical benefit. So as you can imagine, our phase two study will assess tau clearance, but will assess also some endpoints related to cognition and potential clinical benefit. This will give us the way forward for the next stage of the development. I'm very excited about this space in general. We have now a second mechanism validated, tau on top of amyloid. And I think now started to emerge also the discussion how we sequence these anti-amyloid versus anti-tau drug, how we combine them. And for us is an entry because of course we are very much into this space and developing the next generation of assets that are shuttles to increase the brain penetration. but very excited about my Ponytag and see the data next year.

Thanks, Cristian. Great. Next question, please.

The next question comes from Louisa Hector with Barenburg. Please go ahead.

Hello. Thank you for taking my question. I wanted to just check on Milvexian a little bit around how nimble you can be around launch cost. Do you need to Paul Back on any investment due to this delay, or is it just a matter of a quarter? It's not a big deal. And with that in mind, could you remind us the setup? I mean, Eloquus, you have the sales force, you've had the rebate, but you've had some changes there with IRA and pricing. So as we think about the future, Eloquus and then Milvexian hopefully launching, are there any constraints there? in that partnership with Pfizer on Eloquist that makes things more difficult when you launch Milvexian. Just anything we should think about there or your sales rules and your rebate are kind of transferable. Thank you.

Adam, you want to take that? Sure, Louise. Thanks for the question. As we said, Milvexian represents a significant commercial opportunity. What's great about Milvexian is we have The infrastructure that has been established now for many years with Eloquus. So we have that in place today covering, you know, virtually all of the physicians in atrial fibrillation. It's also a high overlap with SSP as well, save for a small number of stroke neurologists that we'll be able to cover in the market today with our current Zapposia team. So we really have the full infrastructure commercially set and we're very much looking forward to launching. As far as the interplay with Eliquis, Eloquis LOE, as you're aware, is April of 2028. And this lines up very nicely with the filing and launch timelines of Milvexian. So we expect that Eloquis LOE to lead directly into the successful launch of Milvexian.

Yeah. And just to follow up, there would be no constraints with respect to the relationship that we have with Pfizer in terms of our ability to successfully launch and commercialize Milvexian.

Thank you both. Let's move to the next question, please.

The next question comes from David Reisinger with Lee Ring Partners. Please go ahead.

Yes, thanks very much and thanks for all the updates. So, Chris, regarding milvexy and an atrial fibrillation, you had stated in your prepared remarks, quote, an independent data monitoring committee continues to endorse the study And with the passage of time as the study progresses, we are increasingly encouraged about Milvexie, end quote. So, can you please comment further on the endorsement, including how you're interpreting study continuation as a positive signal when the DMC is evaluating both efficacy and bleeding? I ask because it's already known and clear that Novexian is associated with much lower bleeding risk than Eliquis. So that is not any surprise that lower bleeding would be positive in the trial. So I'm more interested in your interpretation on the primary endpoint of efficacy. with respect to your observations. Thank you.

Sure. Thanks, David. Maybe I'll start, and then, Cristian, you can continue to chime in or extend upon your earlier comments. Look, we continue to see on a routine basis the DMC looking, as you noted, both safety and efficacy. And if you look not only at the most recent reviews, but really just look at this over time, we continue to see on this program a slowing of event rates, along with the continued view that the efficacy continues to be in line with expectations to continue the study. The safety, as you point out, we had a lot of confidence in. But in the backdrop of this broader program from a competitive standpoint, the fact that we continue to see DMC reviews and that as we look at the blinded data and see the event rate profile, we continue to gain confidence that this program has significant potential to read out in a way that would be a competitive product relative to the position that we have with Eloquus. But Cristian, do you want to comment further?

Yeah, David, you know, let me use an analog in the same disease, a fever. with the same class drug. One study was in recent times stopped by the DMC based on regular data review because the events were going in a different direction. So there was actually a potential detriment on the permanent point on strokes and embolisms. in the investigational arm versus the comparator arm Eloquis. So the DMC stopped the study because that was becoming a problem. So having DMC continues to assess the efficacy and safety data, as you say, and giving us in very much closer to the final readout, the reassurance that the study can progress is a good thing. It's a good thing because at least we are sure that we are not bringing anything that goes against the patients or detrimental to the patient on efficacy. Remember that this study needs to show non-inferiority, needs to be as good as eloquence on strokes. and considering the number of events that we recruited so far, the pace of the events and the DMC Continuous Review, this looks good. and then as you said, the bleeding set, probably my vaccine is gonna be better. And I wish this is that expectations.

So if you just step back in this program, generally, David, what I would say is that you continue to have very strong scientific rationale. We know the strong phase two data that we had. As you've highlighted, we know the safety and on efficacy, given the event profile and how it's evolving in a blinded fashion and DMC has continued to endorse the continuation of the study. You add all of that up, we feel very good about this program. Thank you both.

Let's move to the next question, please.

The next question comes from Steve Scala with TD Cowan. Please go ahead.

Thank you so much. I have two questions. First, how will the increased growth of Eloquist in 2026 impact sales in 2027 and beyond? Is it a tailwind, a headwind, or neither in 2027? and is any portion of those revenues in 26 sustainable? Secondly, after a number of phase three setbacks in recent years, Bristol actively addressed study conduct deficiencies. Curious where you stand relative to resolving them and are Milvexian and CoBENFI delays completely unrelated to any lingering study conduct issues such as maybe assessment of primary events? Thank you.

So thanks for the question, Steve. Maybe Adam, you want to start with Eloquus and then Christian, you can address the second part of the question.

Yeah, Steve, thanks for the question. Eloquus continues to deliver strong demand growth. Back in the U.S., new to brand share is approaching 80%. As we said, coming into this year, we would see the benefit of the WAC reduction taken seriously. January 1st in the second half of the year. And thus sales in the U.S. in the second half would be higher than in the first half of the year. And as we talked about, you know, David talked about Eloquist sales this year are anticipated to grow roughly 20 to 25% year over year. Now we still expect the $1.5 to $2 billion step down in 2027. that we referenced on the Q1 call. We'll clearly provide any appropriate update in conjunction with our 2027 guidance when issued, but the US sales certainly would carry forward to next year, offset by the patent expiry of Eloquus in Europe in mid Q4.

Cristian?

Thank you, Steve, for the question. Very, very broad one. Let me tell you that, let me start with a general concept. The phase three trial can fail if the science doesn't hold. You cannot do a lot on that, but most of the time fails because also execution can be related to the execution. Execution means not only how you run the trial, but also the study design, the statistical assumptions, the comparator arm performance, and so on. So what we did as a general way of working was to identify in any of the ongoing studies potential risks and mitigate them. Because you know, this is with none, it's impossible to have 100% probability of success in any of the registration studies, but you can get, you wanna get as close as possible to that. And this is what now we are working, integrating AI, technology, data, and everything to have for each program this TTS improvement. Malvexian and Cobenfi delays are unrelated in a certain way because Malvexian is event-driven and actually the event is slowing down, I see favorably, because it brings us on what we were expecting. And for Cobenfi, Quality is another potential aspect that can lead to failure of studies. And the preserving quality is capital to increase success. And this is one of the reasons for ADEPT-2 and ADEPT-4 of the delay. ADEPT-1, again, is event-driven. And actually, event coming slower can be a good sign.

Steve, let me just weigh in on maybe that last comment. So, you know, Christian's approaching his one year anniversary at the company. And I just want to say I'm incredibly pleased with the progress that he and the team have made. He has been consistently focusing on making sure we have the right scientific talents and expertise across therapeutic areas. He's brought an incredible focus on being great operationally. He's made good progress on ensuring we've got the right infrastructure and ways of working. And at the end of the day, we continue to make sure that we're investing in the right areas of science where the company can be successful. And if you add all of that up, I feel very good that the R&D engine that he's helping to build is going to sustain the growth of this enterprise.

Right. Thanks. And Operator, if we could please take our last question.

The last question today will come from Akash Tiwari with Jefferies. Please go ahead.

Akash Tiwari Hey, thank you. Just a clarification on Mulvexian. You previously mentioned both bleeding events and AFib events need to mature for the trial to stop. Are both bleeding and AFib tracking slower than expected, or have we already reached the required number of events for bleeding events already? Thank you.

Thank you, Akash. I don't drive on the number of events. What I can tell you, because we disclosed this, we need to recruit 430 events for primary endpoint, strokes and embolisms, and 530 events for bleedings. We want to achieve both numbers before looking at the database and having it out, because the primary endpoint is very important, but also then how we test the superiority of bleedings is also very important. So we are on track for this and this will happen first quarter 27.

Thanks, Cristian. So let me just say in closing that I just want to reiterate that a big focus of the team has been to drive what we call a say-to-do ratio. And I think what you're seeing in the performance for the quarter is that we're doing what we said we did do, what we would do today's results really underscore that. The impact of what we see as a multiyear strategy to reshape our business and drive sustainable growth. We're delivering very strong commercial execution across our growth portfolio. We're advancing a broad and differentiated pipeline. while being very disciplined in maintaining the financial flexibility that we need to invest in future growth while also, of course, returning capital to shareholders. We continue to see the company through focused execution. We continue to strengthen the company through focused execution, and we're very confident in the long-term trajectory of the business. So finally, I'd like to just thank our colleagues around the world for their continued dedication to the mission that we have and to their focus on serving our patients. So thank you all for joining us today. And as always, we'll be available for any follow-up questions. Thanks.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.