Amgen, Inc. (NASDAQ:AMGN) Q1 2024 Earnings Conference Call May 2, 2024 4:30 PM ET

Company Participants

Justin Claeys - VP, IR
Robert Bradway - Chairman, CEO & President
James Bradner - EVP, Research and Development & Chief Scientific Officer
Vikram Karnani - EVP & President, Global Commercial Operations & Medical Affairs (Rare Disease)
Murdo Gordon - EVP, Global Commercial Operations
Peter Griffith - EVP & CFO

Conference Call Participants

Salveen Richter - Goldman Sachs Group
Michael Yee - Jefferies
Terence Flynn - Morgan Stanley
Srikripa Devarakonda - Truist Securities
Timothy Anderson - Wolfe Research
Yaron Werber - TD Cowen
Umer Raffat - Evercore ISI
Jay Olson - Oppenheimer
Christopher Schott - JPMorgan Chase & Co.
Geoffrey Meacham - Bank of America Merrill Lynch
Gary Nachman - Raymond James & Associates
Mohit Bansal - Wells Fargo Securities
Michael Schmidt - Guggenheim Securities
James Shin - Deutsche Bank
Gregory Renza - RBC Capital Markets
Evan Seigerman - BMO Capital Markets

Operator

My name is Julianne, and I will be your conference facilitator today for Amgen's First Quarter 2024 Financial Results Conference Call. [Operator Instructions].

I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Justin Claeys

Thank you, Julianne. Good afternoon, and welcome to our first quarter 2024 earnings call. Bob Bradway will lead the call and be followed by a broader review of our performance by Jay Bradner, Murdo Gordon, Vikram Karnani and Peter Griffith.

Through the course of our discussion today, we will use non-GAAP financial measures to describe our performance and have provided appropriate reconciliations within the materials that accompany this call. We will also make some forward-looking statements, which are qualified by our safe harbor statement. And please note that actual results can vary materially. Over to you, Bob.

Robert Bradway

Okay. Thank you, Justin, and thank you to our callers for joining us today. This is a busy and exciting time here at Amgen. And as you can see from our results, we're reaching many more patients around the world with our existing medicines, advancing a broad range of potential first-in-class medicines in our mid- and late-stage pipeline, and redefining what's possible in research as we integrate wet and dry lab capabilities and harness transformative technologies.

I'll touch on a few highlights from the quarter that give me great confidence that we're on a path to deliver attractive long-term growth. First, we have a number of products across general medicine, oncology and inflammation that have strong momentum and still plenty of room to grow. These include Repatha, which was up 33%; EVENITY, up 35%; BLINCYTO, up 26%; and TEZSPIRE, up 80%. With BLINCYTO, we expect an approval in June that should accelerate our efforts to integrate into earlier treatment lines for acute lymphoblastic leukemia.

With TEZSPIRE, we'll share data later this month that reflect the attractive potential of this medicine in chronic obstructive pulmonary disease. COPD is the world's third leading cause of death. Clearly, new treatments are very much needed, and we're excited by TEZSPIRE's potential to make a difference there.

Second, our newest pillar of growth, rare disease, contributed nearly $1 billion of sales in the quarter, up 14% compared with the sales of these products from a year ago. We see significant upside potential for first-in-class early-life cycle medicines like TEPEZZA, KRYSTEXXA, UPLIZNA and TAVNEOS. And we're pursuing launches in new geographic markets, new indications and/or new formulations for each. As an example, we announced last week our imminent plans to file TEPEZZA for approval in the European Union.

Overall, the integration of Horizon, its people, products and pipeline is proceeding well, reflecting the strong fit between our organizations. Third, we are rapidly advancing a number of promising new medicines in our mid- and late-stage pipeline, spanning all 4 of our therapeutic areas. We are awaiting approval for tarlatamab, for example, and look forward to bringing this transformative innovation to patients with small cell lung cancer. Tarlatamab is the first T-cell-engaging therapy to demonstrate significant clinical activity against a common solid tumor, a watershed moment in a field that Amgen pioneered and continues to lead.

Looking to the rest of the year, we anticipate data readouts from 5 Phase III trials. In addition, we announced today the development of a biosimilar to KEYTRUDA as we look to build upon the global leadership we have established in biosimilars.

In sum, we have a broad range of medicines in hand today and coming through our pipeline that will enable us to meet the needs of millions of patients around the world and deliver strong growth through the end of the decade and beyond.

Now let me just add one other important update. Whereas we don't normally comment on interim data, especially for our Phase II trial, we recognize there is significant interest in obesity in MariTide, so we'll provide additional commentary today. The interim Phase II analysis for this study is complete, and we are very encouraged with the results that we've seen thus far and with the conduct of the trial. Following the interim analysis, I would say we're confident in MariTide's differentiated profile and believe it will address important unmet medical needs.

We are actively planning a broad Phase III program including obesity, obesity-related conditions and diabetes. Obviously, we expect to carefully complete our ongoing Phase II trial before then moving as swiftly as appropriate to establish the safety and efficacy of this potential medicine in Phase III trials. We've initiated activities as well to further expand manufacturing capacity with both clinical and commercial supply in mind.

Jay will provide a few additional remarks with respect to this ongoing study. And I would ask you to recognize that to protect the integrity of the study beyond this update, we would not expect to discuss these data in further detail before completion. As always, I want to thank our employees around the world for their commitment to our business and to the patients we serve. Jay, I'll turn it over to you.

James Bradner

Thank you, Bob, and good afternoon, everyone. Let me start with MariTide. Reiterating Bob's comments, we are very pleased with the results seen with MariTide thus far. And we're very pleased with the overall conduct of the ongoing Phase II trial. All arms remain active, patient dropout has not been an issue, and we're fully on track for top line 52-week data from this 11-arm Phase II study in late 2024.

We're seeing a differentiated profile of MariTide and are confident that it will address important unmet medical needs, obesity, obesity-related conditions and diabetes. We look forward to completing the ongoing Phase II study and working with regulators to move rapidly to the broad Phase III program.

Later this year, we plan to initiate an additional dedicated Phase II trial investigating MariTide for the treatment of diabetes in patients with and without obesity. This new trial is not a gating step for our Phase III program in patients with obesity. Informed by dose and schedule insights from the ongoing Phase II obesity study, the dedicated Phase II study in diabetes conforms to regulatory requirements for Phase III and is the next step towards a diabetes indication for MariTide.

In terms of patient experience, we expect to deliver MariTide in a convenient, handheld, patient-friendly auto-injector device with a monthly or even less frequent single-injection administration, assuming eventual approval. Across the portfolio, we are presently prioritizing differentiated medicines, those that stand to provide the greatest benefit for patients. Given the profile we've seen with AMG 786, we will not pursue further development. Instead, in obesity, we're differentially investing in MariTide and a number of preclinical assets.

Beyond MariTide, in the first quarter, we rapidly advanced our diverse clinical pipeline of potentially first-in-class or best-in-class programs. Looking ahead, the remainder of 2024 promises to be an exciting time for research and development with 2 PDUFA dates in June for tarlatamab in small cell lung cancer and BLINCYTO in adult acute lymphoblastic leukemia as well as 5 Phase III data readouts. Each of these milestones could represent a significant advance towards our mission to deliver groundbreaking treatments to patients in real need.

Moving to olpasiran. We're pleased to announce that we've completed enrollment of the OCEAN(a)-Outcomes trial, a Phase III cardiovascular outcome study of olpasiran, our potentially best-in-class Lp(a)-targeting small interfering RNA medicine. Reflecting both our commitment to patients suffering from cardiovascular disease and the strong interest of the medical community, we successfully enrolled 7,297 patients across the globe in just 15.5 months. To our knowledge, this is the fastest-enrolling Phase III outcome study of its size. And to remind, Lp(a) is a genetically defined cardiovascular risk factor, which is elevated in approximately 20% of individuals and for whom no effective or targeted therapies currently exist.

In oncology, we continue to deliver on high-conviction targets with differentiated therapies capable of delivering a large effect size for patients. Starting with tarlatamab, a first-in-class BiTE molecule targeting DLL3 for small cell lung cancer. We remain on track with an FDA priority review for a June 12 PDUFA date.

We're excited about tarlatamab as potentially the first selective therapy for small cell lung cancer. Based on the remarkable activity observed as a single agent in patients receiving second and third-line therapy, we are rapidly advancing tarlatamab in a frontline treatment with 3 Phase III studies now initiated in both extensive stage and limited stage disease.

The rationale for studying tarlatamab in earlier lines of the context of lower tumor burden draws from our experience with BLINCYTO in B-cell ALL. There, we saw a dramatic improvement in overall survival in minimal residual disease-negative patients. These BLINCYTO data provide evidence that directing the T-cell in this manner is an effective means of finding and eliminating residual cancer cells, which are primarily the drivers of recurrent disease. We're hopeful we can build on this insight with tarlatamab, where comparable activity in early-stage small cell lung cancer patients would very meaningfully improve outcomes for patients facing the challenge of this aggressive cancer.

In sum, we regard tarlatamab as a major advance as the first bispecific T-cell engager to demonstrate efficacy in a common solid tumor, further establishing the broad potential of our bispecific T-cell engager platform. Our first-in-class STEAP1 CD3 bispecific molecule, xaluritamig, has also demonstrated unambiguous activity in the solid tumor, namely prostate cancer, continues to advance following a presentation of encouraging Phase I data last fall. We have now fully enrolled the monotherapy Phase I dose expansion and continue to enroll patients in reduced monitoring and outpatient cohorts. Further, combination studies with xaluritamig in novel hormonal therapies are progressing in dose escalation studies with near-term plans to initiate dose expansion cohorts.

To round out oncology, we are rapidly advancing AMG 193, our oral PRMT5 inhibitor targeting MTAP null solid tumors. We've moved forward with monotherapy dose expansion studies and have initiated 2 additional Phase I studies targeting MTAP null tumors in thoracic, gastrointestinal, biliary tract and pancreatic cancers, exploring relevant combinations with standard of care.

In our inflammation portfolio, we are encouraged by the results of the COURSE Phase IIa proof-of-concept study, which investigated TEZSPIRE in patients with moderate to very severe COPD. This study was designed to test TSLP inhibition across an intentionally broad range of eosinophil levels, irrespective of inflammatory drivers, emphysema, chronic bronchitis and smoking status. While TEZSPIRE achieved a clinically meaningful 17% reduction in the annualized rate of moderate or severe COPD exacerbations compared to placebo, this result fell short of statistical significance likely owing to the broad overall patient demographic.

However, even greater reductions in COPD exacerbations were observed in a planned subgroup of patients with baseline blood eosinophil counts greater than 150 cells per microliter with a trend for further reduction in a small number of subjects with baseline counts greater than 300. We're excited by these data, which will be presented in an oral session of the American Thoracic Society Annual Meeting later this month.

Together with our partner, AstraZeneca, we are actively planning for Phase III development of TEZSPIRE in COPD. Beyond COPD, we continue to explore TEZSPIRE in separate Phase III studies in eosinophilic esophagitis and chronic rhinosinusitis with nasal polyps, where top line data are expected in the second half of this year.

The ROCKET Phase III program for rocatinlimab, a first-in-class anti-OX40 monoclonal antibody, has successfully enrolled over 2,800 patients with moderate to severe atopic dermatitis. Indeed, 3 of the 8 studies in the rocatinlimab ROCKET study program are now fully enrolled. The Phase III Horizon study, part of this ROCKET program, evaluates rocatinlimab monotherapy versus placebo in adults with moderate to severe atopic dermatitis and remains on track for top line data readout in the second half of this year.

Beyond atopic dermatitis, we continue to broadly explore rocatinlimab in additional indications and have initiated a Phase II study in moderate to severe asthma with plans to initiate a Phase III study in prurigo nodularis in the second half of this year. We're encouraged by the advancements of our rare disease pipeline as well with several mid- to late-stage opportunities.

Starting with UPLIZNA, we anticipate important Phase III data readouts this year in myasthenia gravis and IgG4-related disease, both diseases with significant unmet need and where we have the potential to make a real difference for patients.

Dazodalibep, an innovative CD40 ligand inhibitor fusion protein, has entered Phase III for Sjogren's disease with 2 studies now enrolling patients. This follows encouraging Phase II data with efficacy across patients with moderate to severe systemic disease and patients with high symptom burden. Dazodalibep is the first therapy to demonstrate efficacy in the latter patient population.

Lastly, in our biosimilars portfolio, we've initiated a Phase III study of ABP 234, a biosimilar candidate to KEYTRUDA, in subjects with advanced or metastatic non-squamous non-small cell lung cancer. We're also pleased to announce that WEZLANA, our biosimilar candidate to STELARA, has received a positive CHMP opinion.

In closing, I'd like to thank my Amgen colleagues for their strong sense of service to patients facing serious illness and their commitment to growing the impact of both our research and our business to our portfolio of potential first-in-class and best-in-class medicines. And I'll now turn it over to Murdo.

Murdo Gordon

Thanks, Jay. I'm pleased with our performance in the first quarter. Strong execution resulted in sales growth of 22% year-over-year, with robust volume growth across the 4 therapeutic pillars of our business. We drove compelling growth across our regions with 10 products delivering at least double-digit volume growth, including Repatha, EVENITY, TEZSPIRE, TAVNEOS and BLINCYTO. Our integration of the legacy Horizon business continues to progress well with that portfolio generating $914 million in the quarter.

Sales in our general medicines business, including Repatha, Prolia, EVENITY and Aimovig grew 18% year-over-year in the first quarter, driven by volume growth. Repatha sales increased 33% year-over-year to a record of $517 million for the first quarter, and Repatha is now well on its way to becoming a multibillion-dollar business. In the quarter, we saw year-over-year volume growth of 44%, partially offset with 13% lower net selling price.

Expanded formulary coverage for Repatha in the U.S. has accelerated volume growth. This was partially offset by lower net selling price resulting from higher rebates to support and expand access for patients. We expect this expanded formulary coverage, along with the removal of prior authorization requirements by several payers, will lead to increased cardiologist and primary care physician adoption.

Outside the U.S., we also delivered strong growth, helping even more patients reduce their cardiovascular risk. EVENITY had record sales of $342 million for the quarter. And in the U.S., volume growth was supported by an expansion of EVENITY prescribers. In Japan, EVENITY continues to be the segment leader with 46% of the bone builder market. And while we're happy with the growth of EVENITY, there are many women who remain at risk of a fracture due to their postmenopausal osteoporosis. And we see exciting growth potential for EVENITY to combat this risk, and we'll continue to apply our proven experience in bone health to ensure EVENITY reaches all the patients who need it.

Prolia sales grew 8% year-over-year. Volume growth continues to be supported by real-world evidence, reaffirming Prolia's superiority in reducing fracture risk when compared to alendronate in treatment-naive patients with postmenopausal osteoporosis, who are at high risk of fracture.

In our inflammation business, Otezla sales increased 1% year-over-year for the first quarter. In the U.S., we saw strong new patient volume growth early in the quarter. This was disrupted in February and March by the Change Healthcare cybersecurity issue, which created challenges for some patients trying to fill prescriptions at specialty pharmacies.

We've seen a return to accelerating new patient prescription growth in recent weeks. We see significant potential for future growth of Otezla, given its established efficacy and safety profile, excellent payer coverage with limited prior authorization requirements and, of course, ease of administration. To realize this potential, we've increased our investment in dermatology field force and Otezla direct-to-consumer media, focusing on efforts to educate physicians and patients on the importance of treating psoriasis systemically and the safety and efficacy profile of Otezla.

I'm also pleased that Otezla was recently granted pediatric exclusivity and approved by the FDA for the treatment of pediatric patients 6 years of age and older with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy. This is the first pediatric indication for Otezla.

Enbrel sales decreased 2% year-over-year for the first quarter, driven by volume decline, partially offset by higher inventory levels. Moving forward, we expect modest volume growth offset by declining net selling price. TEZSPIRE continues its strong trajectory with $173 million in sales in the first quarter. Sales increased 80% year-over-year, primarily driven by uptake of the prefilled single-use pen.

In our rare disease business, sales of TAVNEOS were $51 million in the first quarter. Sales increased 122% year-over-year, driven by volume growth. In the U.S., more than 3,000 patients have now been treated with TAVNEOS by over 2,000 health care professionals. Looking forward, we'll continue to leverage our expertise in nephrology and inflammation to bring TAVNEOS to even more patients with ANCA-associated vasculitis.

Sales for our biosimilars portfolio grew 12% year-over-year for the first quarter, with volume growth partially offset by lower inventory levels and net selling price decline. We expect continued growth in our biosimilars business to be driven by the addition of new molecules and additional launches.

In oncology, sales of our 6 innovative products, BLINCYTO, LUMAKRAS, Vectibix, KYPROLIS, Nplate and XGEVA, grew 4% year-over-year for the first quarter, driven by volume growth. BLINCYTO sales grew 26% year-over-year to a record $244 million for the first quarter, driven by broad prescribing across academic and community segments for patients with B-cell precursor acute lymphoblastic leukemia. The U.S. Food and Drug Administration has set a PDUFA date of June 21 of this year for its decision on approving BLINCYTO as a treatment for patients with early-stage CD19-positive, B-cell ALL. We see significant growth potential for BLINCYTO from utilization in frontline treatment.

LUMAKRAS sales increased 11% year-over-year for the first quarter to a record $82 million. We see future growth opportunities for LUMAKRAS coming from the launches in new markets and additional indications. Vectibix sales increased 6% year-over-year, driven by higher net selling price and volume growth, partially offset by unfavorable foreign exchange impact. KYPROLIS sales grew 5% year-over-year to a record $376 million for the first quarter, primarily driven by volume growth outside the U.S. Nplate sales decreased 12% year-over-year for the first quarter, primarily driven by volume decline in comparison to the first quarter of 2023, which included a U.S. government order of $82 million. Excluding the Q1 2023 U.S. government order, Nplate sales grew 13% year-over-year.

I'm pleased with our execution in the quarter and the momentum across the 4 pillars of our business. And we look forward to serving many more patients around the world who can benefit from our innovative therapies. And with that, I'll turn it over to Vikram.

Vikram Karnani

Thank you, Murdo. I am pleased to provide an update on rare disease, Amgen's fourth therapeutic pillar of growth, which delivered product sales of over $950 million in Q1. Beginning with TEPEZZA for the treatment of thyroid eye disease, or TED, first quarter sales were $424 million, reflecting growth of 5% year-over-year when compared to results from the legacy Horizon business.

As we discussed at our rare disease investor meeting a few months back, TED is often assessed using the clinical activity score, or CAS, which covers a number of different signs and symptoms, including pain, redness, swelling and function. And we now refer to TED in terms of high and low clinical activity score or high and low CAS. For the approximately 100,000 TED patients in the U.S. who could benefit from TEPEZZA, the majority of these patients, roughly 80%, are in low CAS settings. We continue to focus on this large number of low CAS patients not being appropriately treated.

As we previously discussed, one of the main hurdles in the patient journey in this setting is access. To help patients overcome that challenge, we have generated favorable medical policy changes for greater than 50% of U.S. covered lives, and we expect to continue this momentum throughout 2024.

In addition, we are expanding our reach among new prescribers, particularly ophthalmologists and endocrinologists who manage many low CAS patients. The impact of TED on quality of life is often underestimated. So our focus is on educating health care providers about the significant effects on patients, even those with less visible symptoms. In addition to our focus on educating ocular surgeons and ophthalmologists, we are increasing our strategic focus in endocrinology and creating a dedicated sales force to engage in this important space.

International expansion remains a meaningful long-term growth opportunity for TEPEZZA, which is currently approved in Brazil and Saudi Arabia. As a reminder, in January, we filed for high CAS approval in Japan. And our Phase III trial in low CAS is continuing to enroll. We have completed additional regulatory submissions in Australia, Canada, Great Britain and most recently with the European Medicines Agency. We initiated a Phase III subcutaneous study and see this as an opportunity to increase adoption and improve the patient experience with an alternative option to our current IV formulation.

KRYSTEXXA, for patients with chronic refractory gout, delivered $235 million in sales in Q1, representing 26% year-over-year growth, driven by volume growth from strong commercial execution. UPLIZNA, the fastest-growing biologic in NMOSD, delivered a record $80 million in net sales in Q1, representing 49% year-over-year growth. International expansion is also underway with UPLIZNA now launched in multiple ex-U.S. markets including Canada, which launched in January of this year.

The integration of the legacy Horizon business continues to be on track as we leverage Amgen's leadership in inflammation, world-class manufacturing and process development and extensive global footprint. Now I will pass it over to Peter for our financial update.

Peter Griffith

Thank you, Vikram. We're pleased with our performance and on track to meet our 2024 full goals and long-term objectives. Our strong growth outlook is driven across each of our 4 therapeutic pillars by our innovative pipeline and in-market portfolio products, which serve patients with serious illnesses around the globe. I'll review our first quarter results before discussing our 2024 guidance.

As shown on Slide 23 of the slide deck, in the first quarter, we delivered $7.4 billion in total revenue, a 22% increase year-over-year. This reflects 25% volume growth, including over $900 million from acquired Horizon products and also key brands, including Repatha, TEZSPIRE, EVENITY, Prolia and BLINCYTO. Excluding the addition of Horizon, product sales increased 6% year-over-year, driven by 9% volume growth.

Our non-GAAP operating expenses rose by 33%, reflecting investments in Horizon acquired products, along with other late-stage pipeline medicines, including rocatinlimab, MariTide and tarlatamab. As a result, our Q1 operating margin was 43%, consistent with our guidance on the fourth quarter earnings call. Our non-GAAP OI&E resulted in $549 million expense, up $334 million year-over-year, almost entirely due to increased interest expense from debt issued for the Horizon acquisition, partially offset by higher interest income and gains from debt repurchases.

Our non-GAAP tax rate decreased 2.4 percentage points year-over-year to 15.4%, primarily due to the change in earnings mix, the inclusion of the Horizon business, and net favorable items in the quarter. In the first quarter, the company generated $0.5 billion in free cash flow, a decrease from $0.7 billion in the previous year, primarily impacted by a planned $800 million tax deposit to the IRS to stop the accrual of interest on uncertain tax positions, as we discussed on our fourth quarter earnings call.

As a reminder, there is no change in our belief in the merits of our legal position as we prepare for trial later this year. This impact on free cash flow was partially offset by the timing of working capital items. The Horizon integration is on track, and we expect to reach our pretax $500 million synergy target by year 3 post acquisition. We also expect to achieve roughly 50% of this synergy target in our annual run rate by the end of this year 2024. We expect accretion to non-GAAP EPS in 2024 and anticipate maintaining strong cash flow generation while we continue to execute on our deleveraging plan to return to our pre-acquisition efficient capital structure by the end of 2025.

We remain on track to achieve the pre-acquisition leverage ratio, normalized for certain other noncash items, including fair value, market value adjustment of equity investments and Horizon acquisition-related costs. We remain committed to our multiple capital allocation priorities. We continue to prioritize investing in the best innovation, both internally and externally, with increased spending on late-stage programs, including olpasiran, bemarituzumab, MariTide and rocatinlimab.

Second, we continue investing in our business for long-term growth, including expanding capacity in our state-of-the-art manufacturing facilities. Our North Carolina site is expected to be operational by 2026. And Amgen Ohio opened in the first quarter and is utilizing artificial intelligence and extensive robotics to boost operational efficiencies.

We're actively integrating generative AI across the enterprise to spearhead innovation and reinforce our leadership in the industry. This strategic commitment to innovative technology enables us to lead advancements, streamline drug development and enhance patient care more effectively.

Finally, we returned capital to shareholders as we paid dividends of $2.25 per share in the first quarter. This represented a 6% increase over that paid in each of 2023's four quarters.

Turning to the outlook for the business for 2024 on Slide 25. We expect our 2024 total revenues in the range of $32.5 billion to $33.8 billion and anticipate non-GAAP earnings per share between $19 and $20.20. I'll mention a few considerations as you model the remainder of 2024. Our non-GAAP R&D expenses are expected to increase by approximately 25% year-over-year versus our prior guidance to you roughly 20% year-over-year. We're making incremental investments based on our confidence in our late-stage pipeline.

Our R&D investment reflects our commitment to innovation, accelerating our pipeline, focusing on advancing multiple potentially first-in-class and best-in-class medicines, including supporting MariTide, 2 PDUFA dates scheduled for June and 5 Phase III data readouts throughout the year. Total non-GAAP operating expenses over the second and third quarters are expected to grow at a rate comparable to the first quarter. The fourth quarter rate will normalize with a comparable expense base in the fourth quarter of 2023 since the Horizon transaction completed in early October 2023.

We continue to anticipate our operating margin will improve over the next 3 quarters. We expect OI&E to be roughly $2.6 billion, which includes the interest expense related to the $28 billion of debt raised for the Horizon acquisition. We expect the non-GAAP tax rate to be in the range of 15% to 16%, primarily being driven by a more favorable jurisdictional mix of income, which includes the full year benefits associated with the inclusion of the Horizon business. Our capital expenditures guidance remains unchanged at approximately $1.1 billion in 2024. We've initiated activities to further expand manufacturing capacity for MariTide.

We project full year Neulasta sales of approximately $500 million. Our long-term outlook remains robust. I am grateful to our 27,000-plus colleagues worldwide for their dedication to serving patients. So this concludes the financial update. I'll hand it now back to Bob for our Q&A session.

Robert Bradway

Okay. Thank you, Peter. And before you open the line, Julianne, let me just point out that, obviously, we have a lot of exciting opportunities here. And we're excited about the ways we think we can make a difference for patients. In terms of the opportunity in obesity, again, we recognize that there's significant interest. And we provided today's update to keep you apprised of our plans in this area. But I would just reiterate, we're focused on successfully completing and maintaining the integrity of the ongoing Phase II studies.

So as we turn to Q&A, just bear in mind that we're going to have to be very limited in what we can say beyond what we've already delivered in our prepared remarks on obesity and MariTide. But with that in mind, Julianne, maybe you could remind our callers of the process for asking questions.

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from Salveen Richter from Goldman Sachs.

Salveen Richter

On MariTide here, just given the move forward to Phase III, can you just remind us what you were looking to learn in the Phase II trial and likely did here, but that enabled you to kind of get confident here with the program on the ?

Robert Bradway

Sure. Salveen, thanks for the question. Why don't you jump in, Jay?

James Bradner

Yes. Thanks, Salveen, for your question. Look, we're benefiting from a really well-designed and well-executed Phase II study, a study that can teach us a lot about this medicine and how it's best dosed and received. And we're seeing from these data in aggregate a broad and differentiated profile that will guide and also encourage a Phase III clinical investigation.

Operator

Our next question comes from Michael Yee from Jefferies.

Michael Yee

I appreciate the update. I think we all do. Just to clarify or to ease any investor concerns, is it safe to say that your interim looked at all doses and you feel comfortable including the highest doses and safety metrics, including bone? And all of that was looked at to date?

James Bradner

Thanks a lot, Michael. I'll take this one as well. Again, a very well-designed and well-executed study, a study that's replete with measurements. This is an ongoing study, so we have to be careful to avoid in introducing an inadvertent bias or unblinding. And so we just can't comment on individual characteristics, but we're very pleased with the results to date. We're moving rapidly forward with the Phase III program as well as the diabetes Phase II. I would reiterate that all the arms remain active, and we haven't had an issue with patient dropout to date.

Robert Bradway

I think, again, Michael, as Jay said, it's a well-designed study, and you can be sure that we review the data carefully.

Operator

Our next question comes from Terence Flynn from Morgan Stanley.

Terence Flynn

Great. Jay, you mentioned on MariTide seeing a differentiated profile. Recognize you're limited in what you can say. But as we think about areas of differentiation, it's clearly efficacy, tolerability and dosing interval. So just wondering if you can comment on which of those areas you're differentiated on? And then what benchmark are you looking to? Is it semaglutide, tirzepatide, both of those?

Robert Bradway

Thanks, Terence. Again, we can appreciate the desire to get into that detail. But maybe, Murdo, do you want to speak to the competitive differentiation? And then Jay, if there's anything you feel appropriate to elaborate on, you can jump in after Murdo.

Murdo Gordon

Yes. Thanks for the question, Terence. Thanks, Bob. Obviously, we're watching the in-market products very closely with respect to differentiation. And we're also looking at products that are in the clinic being developed. And we continue to feel very confident in our ability to have a differentiated and broad profile for MariTide as we develop it in this Phase II and as we consider our broader Phase III development program.

James Bradner

Yes. I'd just add, this is, Terence, a very exciting, very dynamic area. We follow the development of obesity medicines very closely. And I think in this case, the actions we're taking speak for themselves. We're hard at work planning a comprehensive and competitive Phase III program.

Operator

Our next question comes from Jay Olson from Oppenheimer.

Jay Olson

Congrats on all the progress and thanks for providing the update. Maybe just to shift gears a little bit to tarlatamab. With the potential launch rapidly approaching, can you just talk about the work you're doing to prepare for that launch and the strategy behind the initial launch in the late line and then the clinical and commercial work to go behind expanding the profile and potential for tarlatamab?

Robert Bradway

Yes, let's take that in 2 pieces. And maybe, Murdo, you can talk about the launch. And then I'm sure, Jay, you'd like to elaborate on the thinking for the clinical development of this.

Murdo Gordon

Sure. Jay, thank you for the question on another exciting product in our portfolio, one that I think will deliver a lot of benefit for patients with small cell lung cancer, which is a very, very difficult diagnosis with very little in the way of highly effective treatments that deliver any kind of durable response in small cell. So we're anxiously awaiting approval from the FDA, but we are well prepared and have been for some time across our field organizations. All our field personnel, including their medical teams, are trained and prepared.

We have very clear plans to reach treating physicians in very short order post approval. We have a very clear understanding of making sure that we can provide broad access to tarlatamab when it's approved. And we feel really good about this. This is a very important moment not just for Amgen but for the treatment of patients with small cell lung cancer where, quite frankly, the survival in the late-stage setting is really dismal and is a matter of single-digit months. And so we have a huge opportunity here to impact, and we're not wasting any minute, any hour or any day in our planning to do that.

James Bradner

And Jay, thanks for highlighting the potential of this medicine, which we consider a major advance. The treatment of this disease has really not meaningfully evolved since I trained as an oncologist in the mid-90s with upfront chemotherapy and meaningful but incremental benefit to immuno-oncology therapy with PD-L1 agents today. And so this is the case where time just can't move fast enough to get this medicine into earlier lines of therapy. And so we have initiated 3 Phase III studies.

And as you asked, I'll just give an architecture of them briefly. We have a study that will compare to tarlatamab to standard of care chemotherapy. And this is in the second line dedicated patients with a primary endpoint of overall survival, and this study is enrolling. We really want to get this medicine tested in frontline therapy, where, as you must know, patients progress so quickly that a great many of them never reach the chance to receive second and third-line therapy. And so in a pair of trials, one for extensive-stage small cell lung cancer and one for limited-stage small cell lung cancer, we'll study the contribution of tarlatamab immediately following upfront therapy with response.

We've learned through the development of these BiTE molecules that they work best when they're given as early as possible in the course of treatment for a disease. That has been the case with ALL as we move into frontline. And we've also learned that they work best when there is a low burden of disease. And so the design of these 3 Phase III studies will bring this medicine to earlier patient therapy lines. And I'll say there's been intense interest and great hope in this community. And so we expect to enroll these studies expeditiously.

Operator

Our next question comes from Mohit Bansal from Wells Fargo.

Mohit Bansal

I have a question regarding the manufacturing of AMG 133. Could you help us understand how complicated or simpler it is versus the traditional GLP-1s peptide base in terms of complexity as well as cost? And what kind of investment do you think we should be expecting as you go -- as you embark on this journey?

Robert Bradway

Mohit, I don't think we're intimidated about the challenge on the manufacturing or the process development front. I think, again, we've established ourselves firmly as a world leader in biotherapeutic manufacturing. And as you know, this is a therapy that's based on a antibody backbone. So it's right down the middle of the fairway for us. We've -- not lost on us that these competitors who are in the market now have found it difficult to maintain supply of these medicines, and I'm sure that's not lost in the patients either.

And we're determined to do our best to make sure that we uphold our long tradition of supplying every patient, every time in the marketplace. So again, we think this is down the middle of the fairway in terms of the technical challenges that we need to address. We think that -- we look forward to being able to do that. And again, as I said, maintaining our track record of every patient, every time.

In terms of your question about what it will require from us over time, obviously, to the extent that, that becomes meaningful, Mohit, we'll have the opportunity to address it down the road. But as Peter said in his remarks, our capital expenditure guidance for the year embraces the activity that we have underway to make ourselves ready for the clinical and commercial challenge that we see imminently.

Operator

Our next question comes from Umer Raffat from Evercore ISI.

Umer Raffat

I'll spare all my curiosities on your ongoing trial. But I will ask this. One, on manufacturing capacity. I'm curious, is your aim to have 1 million to 2 million patients worth of capacity or 5 million to 10 million? You can imagine from a modeling perspective, from a CapEx side, this would be relevant, knowing obviously how much manufacturing experience and capacity you guys have. And then secondly, the -- is it a pen device? I know you mentioned it's a "handheld patient-friendly auto-injector" which is a single injection. But is it a pen device or is it something else?

Robert Bradway

Yes. So Umer, I don't think we're going to say anything more about the delivery -- expected delivery device at this point. I think we were as clear as we could be. And we think it will be patient-friendly and convenient. And with respect to the quantity of patients that we expect to serve, we recognize that the unmet need here is very large, and we want to be in position to supply the patients that we think will be interested in the differentiated profile of our medicine.

I would point out to you and I hope you're aware that we are already serving millions of patients today around the globe with our biotherapeutics. So again, we're used to supplying many millions of patients with antibody-based therapies. I think we're pushing up on 8 million Prolia patients right now worldwide. So we understand what it takes to supply large quantities of antibody therapies and what it means to do that with successful delivery devices.

And I'm sure it's not lost on all of you that the fact that, as Jay said, the delivery dosing schedule is likely to be monthly or less frequently implies far fewer injection devices than competitors who, for example, are administering a weekly therapy. So again, all in all, we recognize the reasons for your questions on supply. But I hope you recognize as well the reasons why we're confident that we'll be up to that challenge.

Operator

Our next question comes from Gregory Renza from RBC Capital Markets.

Gregory Renza

Congrats on the updates as well. And just a question on your larger obesity and cardiometabolic strategy. Certainly, with the news on 786 and as you speak to MariTide's efforts on convenience, how are you thinking about oral options within your portfolio now that you are certainly levered towards MariTide as the lead asset? I'm just curious how oral options should fit in with the portfolio longer term.

James Bradner

Gregory, thank you. This differentiated profile that we're seeing with MariTide really raises the bar for Amgen obesity medicines. And the profile for 786 just did not meet that bar in our assessment. We do have a pipeline, a strong pipeline of earlier assets. There are incretin as well as non-incretin based. Some are injectable and some are oral. And we believe that the heterogeneity, the diversity of the marketplace of -- and honestly, the different types of patients that will need medicines for obesity and all the obesity-related conditions demands medicines with different profiles, and we are hard at work on that.

Operator

Our next question comes from Tim Anderson from Wolfe Research.

Timothy Anderson

On MariTide, I'll ask a question on differentiation that I think you should be able to answer, which is, can you remind us what in the past you felt would be differentiating based on what the Phase I showed? So I'm not asking you to comment on what you just recently saw, but just a reminder of past comments on what you felt the data seemed to show in that front. Less frequent dosing frequency, of course, is the obvious one, but what else?

Murdo Gordon

Yes. Tim, I think we've been fairly consistent on what we believe an opportunity is to differentiate in the market, both in the past and obviously as we see the interim analysis of these results. We think that we have a broad opportunity to differentiate with MariTide. And by that, I mean a broad differentiated profile on a number of fronts. And we continue to believe that we will be able to move into the market with a differentiated product, establish MariTide as a really good opportunity to address unmet medical needs and provide access for millions of patients as we go forward.

Operator

Our next question comes from Yaron Werber from TD Cowen.

Yaron Werber

Congrats on the update. So I'm just going to ask a question I think you can answer on -- it's a little technical in nature. In the interim analysis for MariTide, was it blinded or not blinded? And then just remind us, is there a dose titration in that study?

James Bradner

Sure. This is Jay, Yaron. Thank you. The interim analysis, we as R&D leaders have had an ability to see the assigned treatment arms of the study. But importantly, this interim analysis is blinded to investigators and to participants to preserve the integrity of the study.

Operator

Our next question comes from Geoff Meacham from Bank of America.

Geoffrey Meacham

Thanks for the question. Yet another one on MariTide. Just given Amgen's cardio portfolio and focus, do you have any updated thoughts on expanding the program beyond just diabetes and obesity? Obviously, recognizing that you now have a better picture of the safety and tolerability profile.

James Bradner

Yes. Thank you, Geoff, for asking and allowing a clarification. What we're observing with MariTide and what we intended for the development of MariTide continues at pace. And we're preparing for a broad Phase III program that can work to address the unmet needs in obesity and a number of obesity-related conditions and, as you heard, in diabetes as well.

Operator

Our next question comes from Evan Seigerman from BMO Capital Markets.

Evan Seigerman

I'm not going to ask on MariTide, although I am tempted to. I actually want to ask one on rocatinlimab. So with the Horizon ROCKET studies upcoming, can you just talk us through what the differentiations you want to see? And how would you position this asset versus, say, the entrenched Dupixent and RINVOQ in the atopic dermatitis space?

Robert Bradway

Two pieces. Maybe Jay can address the clinical perspective on differentiation. And then Murdo, to the extent it's appropriate, you can jump in on how to think about positioning it.

James Bradner

Yes. It sounds as though, Evan, you're close to this work. But as you know, rocatinlimab is an OX40-directed monoclonal antibody, afucosylated IgG1, a strong ADCC. We have a program called ROCKET that has over 2,800 patients enrolled. And so to address differentiation, I'm going to limit that maybe scope to the atopic dermatitis space. And here in the Horizon, the so called Horizon study, it's a Phase III randomized controlled trial. It's in moderate to severe atopic dermatitis. It's 726 patients actually enrolled. And in this case, it's rocatinlimab every 4 weeks against placebo with a 24-week treatment readout. We have endpoints at 16 and 24 weeks. We will -- it's always apples to oranges to compare between trials, but we hope to observe and expect to observe in moderate to severe atopic dermatitis a very competitive profile with strong efficacy and excellent patient experience and tolerability. Here, we think about Dupixent and follow that work in its development closely. And Murdo, I leave it to you to talk through how to best think about differentiation.

Murdo Gordon

Yes. Thanks, Jay. And thanks for the question, Evan. We are studying, as Jay mentioned, a broad population of patients in atopic dermatitis. So we will have some patients that will have previous biologic experience as well as bio-naive. So we will know how to position this product effectively in the market. I would just -- I would perhaps use the recent experience of how we launched TEZSPIRE and differentiated against Dupixent in a different indication using a highly differentiated mechanism and the fact that prescribers in this area are looking for alternatives to nonresponsive patients and to bio-naive patients. So we feel good about the opportunity here. But obviously, we have to await data and see the readouts of the clinical trials.

Operator

Our next question comes from Chris Schott from JPMorgan.

Christopher Schott

Can you just elaborate a little bit more on TEZSPIRE and its potential role in COPD post the Phase II data? And maybe as part of that, how broadly do you expect to study this compound in Phase III, I guess, given the efficacy across the different eosinophil counts that we saw in the Phase II program?

James Bradner

Yes. Thanks for the question, Chris. It's Jay again. And so the Phase II COPD data will be presented in an oral presentation, as I mentioned, at the American Thoracic Society Meeting later this month. And so as that work and its abstract are presently embargoed, there is a natural limit to what I'm able to share. But what I will remind, as you asked more mechanistically, is that TSLP comes from this family of what are called alarmins. And they do just what it sounds like they do.

An epithelium, inflamed or irritated or activated, that's inflamed releases TSLP and triggers what's called type 2 inflammation. There are a number of signaling factors that participate in type 2 inflammation. But then, TSLP then converges down in this type 2 T-cell inflammatory milieu in response also involving eosinophils. And that's why we often invoke that measurement in clinical investigation.

The rationale for COPD is as strong as it is for asthma. But COPD, if you must know, is a much more heterogeneous disease than asthma. And so the design of this clinical trial appreciated and understood that and built into it some predefined stratifications for analysis, one of which was this eosinophil threshold of 150 cells per microliter.

And so we look forward to sharing the full data. We have already disclosed that there's clinically meaningful activity of the molecule in this randomized controlled trial. And so please expect more at the ATS. You asked about the more broad development. You are right that TSLP is not only a feature of an inflamed airway epithelium but other epithelial surfaces as well. Hence, our interest to develop it in eosinophilic esophagitis as well as chronic rhinosinusitis with nasal polyps. And both of these diseases are characterized molecularly by type 2 inflammation.

Operator

Our next question comes from James Shin from Deutsche Bank.

James Shin

This one is a little bit off the reservation. It's for Jay and on oncology. It's for AMG 651, the EGFR CD3. Just wanted to get your thoughts on that. I think there's going to be some data coming up soon, and there's some other data that's come out recently from peers.

James Bradner

Yes. Well, I would say this, James. Thanks for the question. We have a large experience of developing CD3 bispecifics. And we have learned over time to tune the potency of engagement to the cell surface antigen to the degree of engagement and activation of the CD3. And there is no news to share with you at this moment. We continue to study this and other solid tumor-targeting T-cell-engaging bispecifics, really buoyed by the confidence and the guidance from tarlatamab and xaluritamig. So I would expect more in the future on that medicine as well as other solid tumor-targeting bispecific T-cell engagers.

Operator

Our next question comes from Kripa Devarakonda from Truist Securities.

Srikripa Devarakonda

I have a question on TEPEZZA in TED. Can you please talk about where you are with this subcu program? I think the Phase III is ongoing. Just a little bit of update on that. And as you continue to treat more patients with TED, what are you hearing about concerns around safety concerns? And is that having any impact on uptake?

Robert Bradway

We'll take it in 2 parts. Jay, you can address the clinical questions. And then to the extent that, Vikram, you want to share any thoughts on the marketplace, jump in.

James Bradner

Yes, thanks for the question. The development of a subcutaneous administration of TEPEZZA is a major priority for Amgen R&D in the program. We have initiated a Phase III study. This will be -- this is in moderate to severe active TED. And the design is akin to what we have reported already with the intravenous label-enabling studies completed to date. And Vikram, if you want to speak to the clinical experience.

Vikram Karnani

Yes, I think -- so thanks for the question. I think the question was around AEs and if that is limiting growth. And I imagine, Kripa, that you're maybe specifically referring to hearing loss or about hearing loss.

So let's start at the top. TEPEZZA, it very effectively treats TED, which we all now is a pretty severe and debilitating disease. IGF-1, we know is going to be involved in hearing function. So during the clinical assessment and the clinical development of TEPEZZA, we very carefully have -- we looked at -- we assessed hearing function. We now have included this in the warnings and precautions section of the PI, along with a recommendation for assessment and monitoring. It's important because patients who use TEPEZZA should be monitored for any specific experience with hearing impairment.

We're also working with professional societies to increase education. And while many physicians do use a baseline hearing assessment, getting it in the label helps standardize this approach, okay? So after working through the management of this with HCPs, this has not generally turned to be a barrier for growth as physicians generally understand the favorable risk-benefit profile of TEPEZZA.

Robert Bradway

Thank you. So Julianne, we're pushing up to the appointed bottom of the hour here, but we still have a few questions in the queue. So we'll take a couple more to try to get through your questions. If we don't get to everybody, obviously, Justin and his team will be around this evening to answer any questions. But let's try and click through these, the ones we can quickly, Julianne.

Operator

Our next question comes from Michael Schmidt from Guggenheim Partners.

Michael Schmidt

I had one on BLINCYTO, which has recently gained some commercial momentum recently. And there was some interesting academic data reported last week in Nature Medicine showing some activity in RA. And so I was just wondering if you have any plans? Or how are you thinking about potentially developing BLINCYTO or maybe other BiTEs in autoimmune?

Robert Bradway

Sorry. In autoimmune disorders?

Michael Schmidt

Yes.

James Bradner

Thanks for your question. With very deep expertise here in CD19-directed therapeutics, with deep and committed expertise in inflammation and autoimmunity, we've been following this space very closely, the early suggestive evidence from CAR T-cell therapy and, more recently, this work that's been reported in systemic sclerosis. And as you noted, 6 patients with quite refractory rheumatoid arthritis is very exciting to see. And so you can imagine that we're well organized around this opportunity. And we found that work quite inspiring and we'll have more to report in the future.

Justin Claeys

Julianne, I think we've got time for one more question.

Operator

Our last question will come from Gary Nachman from Raymond James.

Gary Nachman

Great. So back to MariTide, I have to finish with that. As you're planning for the Phase III studies, do you have a sense of when you could start those? How big those might be? And anything about design and overall timing relative to other Phase III studies in this space? And any strategies you have to accelerate those studies as quickly as possible and how you'll incorporate both U.S. and ex U.S. in the program?

Robert Bradway

So Gary, again, we appreciate it. I can understand why you'd be asking those questions. As I said in my remarks, we will do our level best now to successfully complete the Phase II study and then work swiftly with regulators to agree the program that establishes safety and efficacy in Phase III, and we'll do that as swiftly as we can. We recognize there's a huge unmet need still in the marketplace, and we believe we have an asset that can help address that. But Jay, I don't know whether you feel you can say anything more specific, but jump in if you do.

James Bradner

Yes, I'd say the same, Bob. Gary, as you know, this is one part, collecting the data that regulators rightly expect, and ongoing conversations around the design. This study is moving as rapidly as possible within -- this program is moving as rapidly as possible within the organization, you can rest assured.

Robert Bradway

Okay. Well, again, let me thank you all for joining the call and reiterate that Justin and his team will be around if you have any further questions. We look forward to having an opportunity to talk to you in the summer after the second quarter and provide update on the flow of information that we expect to generate between now and then on the many programs that we've referred to on the call. So thank you for your interest. Appreciate it.

Operator

This concludes our 2024 Q1 earnings call. You may now disconnect.