Amgen Inc. (NASDAQ:AMGN) BofA Securities 2024 Health Care Conference May 14, 2024 ET

Company Participants

Peter Griffith - EVP & CFO
James Bradner - EVP, Research and Development & Chief Scientific Officer
Justin Claeys - VP, IR

Conference Call Participants

Geoff Meacham - BofA Securities

Peter Griffith

[Call Starts Abruptly] for the Phase II study is complete and that we are confident in MariTide's differentiated profile and are actively planning a broad Phase 3 program, including obesity, obesity-related conditions, and diabetes. We've also initiated activities to further expand manufacturing capacity with both clinical and commercial supply in mind. We had a chance to meet with investors following the earnings call. We were asked an important question. How do we view the business beyond obesity?

In short, we've got great confidence we're on a path to deliver attractive long-term growth through the end of the decade and beyond. Not just because of obesity, but rather from the breadth and the depth of our four therapeutic areas, general medicine, oncology, inflammation, and rare disease, each of which have strong momentum and plenty of room to grow.

In terms of marketed products, let's recap. Repatha in the first quarter, up 33%, 44% volume growth. EVENITY was up 35% in the bone franchise. BLINCYTO, acute lymphoblastic leukemia, very important medicine, up 26%. TEZSPIRE treating severe asthma 80%. With BLINCYTO, we expect an approval in June, June 21st PDUFA date that should accelerate our efforts to integrate into earlier lines for acute lymphoblastic leukemia. With test fire, we'll share encouraging data later this month that reflect the attractive potential of the medicine in chronic obstructive pulmonary disease, where new treatments are very much needed.

Rare disease contributed nearly $1 billion of sales in the quarter, up 14% year-over-year. Of those sales from a year ago, we didn't own Horizon the year before that, but we wanted to give you apples-to-apples on that, including TAVNEOS. Those are all significant upside in those products. First in class, early life cycle products, TEPEZZA, KRYSTEXXA, UPLIZNA, and TAVNEOS. We're pushing, pursuing launches in new geographic markets, new indications and new formulations for each.

So, beyond the strong foundation provided by the marketed products, we wanted to remind you about our rapidly advancing number of promising new medicines in our mid and late-stage pipeline, all four of our therapeutic areas. We're eagerly awaiting approval of tarlatamab, which is the first T-cell engaging therapy to demonstrate significant clinical activity against a common solid tumor.

Behind that, in Phase I, we have xaluritamig for prostate cancer. We're excited in xaluritamig 2 as a T-cell engaging therapy. We anticipate data readouts from 5 Phase III trials later this year and recently announced the development of a biosimilar to KEYTRUDA, ABP 234, as we look to build upon the global leadership we've established in biosimilars. And beyond these programs, we have a number of very exciting, potentially first-in-class and or best-in-class programs.

We're in Lp(a) with olpasiran, looking and that's a cardiovascular outcome trial. Rocatinlimab Phase III for atopic dermatitis. That first Phase III readout I expected later this year in a number of oncology programs, including AMG 193s. And I mentioned xaluritamig, bemarituzumab and gastric cancer. These programs alone have great potential to contribute meaningfully to the long-term growth.

So just one thought to leave you with here as we jump into Q&A. Jeff certainly knows that. Just recognize to protect the integrity of the study, of MariTide, we're limited in what we can say about it before completion of the ongoing study. So, we feel great about a broad range of medicines at Amgen. We're looking forward to continuing to drive innovation at speed and scale through the decade and beyond. So, Geoff, that's not just the first quarter, that's more and we're excited about what's going on.

I would just say too at Amgen, I always like to start as we go into this. The mission at Amgen, people come to work each day because of the mission at Amgen. We discover, we develop, we manufacture and we deliver first-in-class and best-in-class innovative medicines to patients with serious and grievous illnesses and all over the globe. So, we're excited about that every day and that's why we're here. Jeff?

Question-and-Answer Session

Q - Geoff Meacham

Awesome. Thank you, Peter. Great a great background. Jay, so let's get into just a few questions on MariTide. I'm sure you've gotten a few close to quarter. I guess one of the main questions that we're getting is just differentiation. Once monthly or longer could be one element of that. I know you're still working on optimizing the profile in Phase III. But give us maybe Amgen's view of how you would sort of stack up the kind of the profile of MariTide relative to standards-of-care today from a competitive or from a differentiation standpoint?

James Bradner

Thanks for the question. Really, honestly, we're thrilled by the interest in this medicine, which we think is very special, very unique medicine. I'm sure that many in the room are familiar with, AMG 133 or MariTide. I'll give just a little background on what the medicine is in part to address your question, but to bring everybody along in the discussion. Companies like ours and honestly, like Novo and Eli Lilly have been studying metabolism and obesity with real surgical focus for more than a decade, and we didn't show up to this party because it got hot and interesting. We've had scientists, at Amgen probing on mechanisms of obesity for 20 years.

Secondly, we probably are the industry's leading harvester of insights from human genetic variation, if you know our work at decode genetics in Iceland. Putting these two pieces together, an interest in metabolism and a fundamental capability in human genome science, we learned years ago that polymorphisms or variation in the GIP receptor or its pathway that would lead to its down regulation were protective against obesity and cardiovascular outcomes. And so, scientists like Maria Vignette [ph] Ellison and others in our organization built a monoclonal antibody that would inhibit the GIP receptor, recognizing that GLP one agonism can also confer favorable physiology and obesity and related conditions, we have appended two GLP-1 peptides to this antibody.

But one would be wrong to think of this as a pharmacokinetic play only, because it turns out that the exact spatial location of those appended peptides in the middle of the antibody versus the determinants or up in the variable chains has a quite substantial effect on the pre-clinical measurements of weight loss. And so, with this precision instrument and antibody peptide conjugate 221 DAR, we've built a strong preclinical dataset that's now widely considered and reported, a Phase I dataset that was strongly encouraging, a Phase II human clinical investigation, and are now amidst, as Peter shared, a 592 patient, 11 arm characterization of this molecule, antecedent to Phase III definitive clinical investigation.

As we recently reported, we've conducted an interim analysis, quite recently and had a chance as a very small group to see the complete unblinded, arm assigned dataset and emerge from that analysis very confident in the medicine as well as its differentiated profile. One could infer from some of the characteristics I've shared and the many measurements you make in Phase II clinical investigation, really many things around differentiation. And as Peter shared, we're not at liberty right now to dimensionalize that for you. But the profile that we see, even with outstanding medicines in the market, is differentiated, and it's given us the confidence to enter into final Phase III planning as well as to announce and open a Phase II clinical trial dedicated for the study of diabetes.

Geoff Meacham

That’s helpful. And just along those lines and again appreciating that, you may, you're going to talk about this data in a more public format when you publish the data or present it at a conference. But maybe give us some perspective on what you saw on the tolerability piece of it in the ongoing Phase II that would give you the confidence to go into a Phase III to invest heavily in the development beyond that, knowing that, of course, the Phase I was 50 patients or something in that range and maybe help us with bridging the Phase II optimism with what kind of you learned in Phase I?

Peter Griffith

I mean, for all medicines, but especially those, treated, treating diseases as broad as we hope MariTide can. It will be a broad Phase III program that we will hopefully open. Tolerability is very important. What I can share at this time is that of this 11-arm study, that seeks to explore, chronic weight management in different doses and schedules, monthly and even less frequent dosing, as well as with different paths to peak dose. And all arms of this study remain open right now.

Geoff Meacham

And from the device itself, just help us with bridge the injectable device and kind of how you see the ultimate Phase III and commercial profile happening in the real world with the device with what you have today and in Phase I?

James Bradner

With early clinical investigation, we take the fastest path to initiating these studies, with a reliable administration and subcutaneous administration of MariTide. But we expect once this medicine is brought to patients worldwide, that it'll be a simple handheld auto injector with an outstanding patient experience.

Geoff Meacham

And looking to beyond 133 or MariTide in the obesity pipeline, when you think about 786 or maybe other mechanisms of action in metabolic from you deCODE days or from the deCODE data would other more novel targets to be explored in this space?

James Bradner

We have a handful of programs behind MariTide. This isn't a one and done, adventure for us. This longitudinal commitment to the biology and pharmacology of obesity and its related conditions has proffered a number of mechanistically novel approaches to chronic weight management and associated diseases. You mentioned the 786 molecule, which we just announced. We're retiring from the portfolio, and, we did not take this decision, lightly. In the fullness of time, we'll be able to describe to the community the mechanism of action, the remarkable molecule that we made, and all that we learned from it. But the bar is just higher right now, at Amgen for medicines, that one might invest, so strongly behind for obesity. And it's a competitive landscape, which is great for patients, but it also really draws us to focus our attention on those medicines and we have the confidence in carrying the distance. And the totality of the data set around 786 did not meet the bar that we have for medicines that we would advance into Phase II clinical investigation for obesity.

Peter Griffith

Jeff, I would add to that. In terms of allocating capital to obesity, we view it as a platform. We've said that all along. We're very, very committed to it. We think Amgen's going to be an important participant in this global health crisis. We're all in. We think this moment is made for Amgen. I think, one way to think about these different activities, we have is heterogeneity of how we view obesity, right, Jay, and how we think about that. We're just going to be committed to exploring what needs to be explored on behalf of patients.

James Bradner

That's right. I mean, this is a massive, number of patients that need these medicines. Surely, these at the individual level, at various population levels, they'll have different needs, different expectations, different desires. Weekly injectable therapy is not for everybody. And so, recognizing that, our pipeline seeks to develop incretin-based medicines like MariTide as well as non-incretin mechanistically distinct medicines injectable, in this case, monthly or less frequent medicines like MariTide and also oral medicines. And, the call to arms out in the biotech industry has created so much attention to this as well. We don't view this as only an internal innovation story and we watch innovation, broadly in the sector.

Geoff Meacham

Along these lines and maybe for both of you guys, when you think about the investments to make in manufacturing capacity, obviously, super-hot topic today with Lilly and Novo, you can likely get to Phase III pretty easily with Amgen's current capabilities. But how are you thinking about three, five years from now if MariTide if the data shape up like you think it's going to shape up in a Phase III, what's the kind of level of investment you'll have to make in manufacturing? Maybe help us also with the difficulty of manufacturing just given the science behind the drug.

Peter Griffith

Let me jump in on that one, Jeff. That's an area that we're spending, as you can imagine, an enormous amount of time. Maybe it's an area that, it's not disadvantageous to be later in the market, not the first two. Amgen, really since 2007 and we think all the way back has always had an opportunity to supply medicine for patients without, any shortages. But we recognize in this case, this is a really important and large public health crisis, so we're prepared to invest behind it.

I've indicated that, we're making the capital expenditures we need to make this year to advance that broad Phase III opportunities that we see for MariTide itself. From a capacity perspective, our investors should rest assured that, we're exploring all the alternatives we need. I would just remind all of you that, we opened Amgen, Ohio in the first quarter. It's a fill-and-finish drug product plant, very automated. We think state-of-the-art. I went through there and I was just glad to avoid all those automated vehicles with no one driving them, as I was going through there. But it's a great plant, so we're proud of that in the Columbus area.

We've also shared with you that we have a new drug substance plant that's opening in Holly Springs, North Carolina, right next to the Research Triangle, in the first half of 2026, that's on time. And so, we're looking forward to having that in our network. We always are thinking about network optimization around the world. And so, we're committed to spend the capital both on a CapEx standpoint and an OpEx standpoint to make sure that, we're fully prepared to meet patient demand on this, as best we possibly can. That's we show up every day for patients and we realize this is a critical part of the equation here. So that's where we sit on it. We're going keep pushing very, very hard on capacity and make sure we don't leave any stone unturned.

Geoff Meacham

Can I pipe in? Because you invited around chemical synthesis. If you could break the whiteboard out.

Peter Griffith

I thought you're going to give him the peptide on this antibody.

James Bradner

Peter, you have this lovely way of saying that Amgen was made for this moment. I'm new to the company just these last five months. And now I've been to, most of the sites and the large manufacturing facilities, and it's just true what you say. It's not every company that's built for biotherapeutic manufacturing. It's not every company that's built for biotherapeutic manufacturing a population scale. How many patients have received Prolia now?

Geoff Meacham

Yes. So, it was almost 8 million last year.

James Bradner

Yes. 8 million patients have received Prolia. When I was a practicing hematologist prescribing the erythropoietins and GCSF, I mean, this is a company that has done, the work necessary to be in a position to take on a project like this and it's not for everybody. Now we'll say from a synthetic standpoint, the molecule's complex in design, but not as complex in its manufacturer. It has two ingredients. It has a peptide ingredient, and it has an antibody ingredient and then those are appended with very facile chemistry.

The numbers that I've seen from, our earlier pipeline from sequence to clinical material are unprecedented in my experience in the industry. This makes us so competitive in things like biosimilars, but it also reads through to the type of expertise, discipline, and process to take on a project like MariTide with population intent.

Geoff Meacham

I know when you and last question on MariTide. When you look at the diabetes, obesity, the logical indications and then there's even the sort of next indications that companies today are working on heart failure, maybe CKD. Are there other things Jay, that you see that MariTide could do in terms of other obesity-related indications? Amgen obviously is in a fair number of therapeutic areas. And I'm just I'm wondering if that if you can maybe accelerate the indications where weight is a central component of pathophysiology maybe faster than the competitors.

James Bradner

I mean, we're obviously very drawn to those domains where we have longitudinal expertise and experience around cardiovascular risk reduction, around outcomes in heart failure, around the kidney diseases that often commingle with those spaces. But if there's any advantage to being third in line, is that, it's active so much of the biomedical community is now activated to study the plausible role of GLP-1s and in different disease processes that we harvest a lot of these learnings as well.

And so, at the time that we announce our, intentions of the, first flight of our broad Phase III program, we'll be able to bring to light our specific priorities. But it is quite amazing now, including this morning's Nature Medicine paper, which I enjoyed over coffee, that looks at longer-term outcomes of patients treated with a sentinel molecule, in this case, semaglutide.

So, I think that we're not restricting our focus to those familiar areas, because we want we need to follow the science and just read through the impact of this medicine to all the, serious diseases that, where patients stand to benefit.

Geoff Meacham

Well, let's switch gears. Peter, you mentioned Repatha and its performance, in 1Q. Maybe just help us with kind of what you see in terms of the market dynamics? Have we hit a tipping point on reimbursement access positioning of PCSK9s that is driving kind of the uptake? And then, looking beyond that, lots of competitors coming, orals and LP(a), et cetera. Competitively, maybe, Jay, how do you see the backdrop there?

James Bradner

You want or want to take?

Peter Griffith

All I know is -- was a great outcome study for us, and VESALIUS, I think, is coming in, I think we've indicated, 2025 or so.

James Bradner

Yes. We have a real first mover advantage with Repatha. It's having a huge impact for patients. It's growing in its utility by those patients at risk, and we continue to invest heavily, behind its accelerated development and new indications. And so, it's not lost on us that there are some patients who prefer oral medicines and maybe this will ultimately expand the reach of a PCSK9 as a therapeutic class. But, Repatha has outperformed a lot of people's expectations for what value it can deliver to patients into this business.

Peter Griffith

And I think just to add, I was just going to jump in and say on Repatha. Recall, 44% volume growth last quarter, Jeff, 33% sales growth. We are taking some price to get that access out there. We think that's really, really important. I think we had 20,000 new prescribers last year between, primary care physicians and cardiologists and we're annualizing at over $2 billion a year off the first quarter amount. We feel like this is a fantastic medicine and super important to continue to get out. And I did say VESALIUS is coming, and it's primary prevention for high-risk cardiovascular patients’ outcomes trial next year. We feel like, on behalf of patients, we need to just keep moving as fast as we can and get as much of this medicine out to patients as we possibly can as fast as possible. Justin?

Justin Claeys

Yes. To your point, Jeff, it does feel like we've crossed a tipping point. The reimbursement is in place, we're investing, we're growing in primary care. Firing on all cylinders.

Geoff Meacham

And then to TEZSPIRE, so talk a little bit about the recent dynamics post the horizon closing and the integration and now that you've really had a chance to look under the hood. Give us the drivers there for looking out in the next, say, six months to 12 months.

Peter Griffith

Now you said TEZSPIRE, you mean TEPEZZA.

Geoff Meacham

TEPEZZA, Sorry.

Peter Griffith

It's alright. On TEPEZZA, I would say, last year in each of the second, third and fourth quarter, quarter-over-quarter growth, we indicated on rare disease day that we saw growth year over year in the first quarter, mid-single digit, which we hit. We hit about 5%. Good prescriber growth in TEPEZZA. We've indicated that, we think the growth there will be coming in large part from the low CAS or clinical activity Score patients. We think that, that's about 80% of the addressable market. We think we are only in the high single digits in terms of market penetration on TEPEZZA for those with thyroid eye disease. And so, we're very excited about that.

Moving into ophthalmologist, moving into endocrinologist, we're standing up an endocrinology sales force on this, which, of course, leans on Amgen's strengths because endocrinology has been a specialty we've called on, of course, with the bone franchise. We are excited about where we see TEPEZZA going. I'll just remind everyone that, we haven't really started to get it rolled out internationally yet. We are in a Phase III trial for -- in Japan right now, which is important. We've seeking approval on acute treatment of those with acute thyroid eye disease in Japan right now. We think that's a very strong market. We are approved in Brazil and Saudi Arabia.

And so, we see international as a really strong push, a step change for TEPEZZA, and we're going to continue to bring the strengths of Amgen and legacy horizon come together to move TEPEZZA out in the United States, we see it as a very strong opportunity. And rare is it, KRYSTEXXA is annualizing at over a 1 billion now, chronic refractory gout. UPLIZNA was up 50% or 60%. I think it was 59%, but I don't want to miss in the first quarter year-over-year.

UPLIZNA for NMOSD, a very serious autoimmune disorder. And also, in rare disease, Geoff, of TAVNEOS, ANCA-associated vasculitis. I think it was up 122% year-over-year in the first quarter. And that's a really important medicine too. We like rare disease. We think it's important and we think it's it goes very nicely and has a strong strategic fit with Amgen's legacy.

Geoff Meacham

Just along those lines, Peter, I mean, when you look at the deal capacity, I mean, I know the answer to public entities we're always looking, we're always evaluating. But would you, should we view '24 as more of an execution year on 133 and sort of post-integration like focusing on the launches? Or is there still a hunger to do to step up on the BD front? Because you're right, I mean, rare diseases, there's tons of companies that are still out there that have products that could slot right in.

Peter Griffith

Rare disease. And you're right. Our aperture is always wide open. So, we're going to look at everything. We believe that our shareholders expect us to have an opinion, a view and be prepared to look at anything out there. We think that's important. We want to be the best buyer or collaborator. We want a positive cash on cash return on top of our above our hurdle rate. We want situations and opportunities align with our discovery research areas and we want fourth we want to make sure it something that we can fluctuate, that we can integrate, that we can done quickly.

So that's always open. But 2024, 2025, we have a plan to deleverage. We're on track with that plan. We're going to remain on track with that plan. But in the interim, if something comes up that's exciting, we'll certainly take it on. So, you kind of ask about '24 and '25. I mean I'd be remiss if I didn't ask Jay to say just a couple of words on tarlatamab, which we expect approval on, a June 12 PDUFA date as part of our plan here as to what we're investing in, what we want to make sure we have launch excellence in.

James Bradner

Yes. And I do pay attention to tarlatamab. This is a, I think, a generational medicine. Tarlatamab is a bispecific antibody, a T-cell engager that drags and activates CD3 positive T-cells to small cell lung carcinoma cells through a protein on their cell surface called DLL3. And, as Peter shared, we will are expecting feedback from the FDA on or before, the second week of June, which would be its first approval in small cell lung carcinoma and a first of many firsts for patients with this disease. Maybe 65,000 patients in the United States who've been largely overlooked, as there's been so much innovation in non-small cell lung cancer.

Think LUMAKRAS with G12C KRAS, think EGFR and ALK. There's been no such benefit to the small cell lung carcinoma patient. I stopped practicing oncology in December, but up and through that point, the upfront therapy really hasn't evolved much from combination platinum chemotherapy. And now we see in third- and second-line patients with this disease unprecedented responses and durability of response.

These are patients that by and large have 4 months, 4.5 months, 5 months to live if they make it to receive second- and third-line therapy and don't succumb to their disease earlier. And we're seeing overall survival in that population that's at least double the that number. We're doing the work now through 3 open phase III clinical trials to move tarlatamab into earlier lines of therapy and have just jumped to two upfront therapy studies, anticipating a successful engagement. This will be in the limited stage disease. Those that have disease confined to one radiation port as well as extensive stage disease in frontline. And it is our expectation and hope that, this medicine really changes the practice medicine for those patients.

Geoff Meacham

Fantastic. We are out of time. Thank you very much. Great dialogue. Appreciate the time.

Peter Griffith

Thank you.