Amgen Inc. (NASDAQ:AMGN) Goldman Sachs 45th Annual Global Healthcare Conference June 10, 2024 9:20 AM ET

Company Participants

James E. Bradner – EVP of Research and Development & Chief Scientific Officer
Peter H. Griffith – EVP & CFO

Conference Call Participants

Salveen Richter - Goldman Sachs

Salveen Richter

Great, good morning, everyone. Thank you so much for joining us. I'm Salveen Richter, Biotechnology Analyst at Goldman Sachs, and we're really pleased to have the Amgen team here with us. We have Peter Griffith, CFO; Jay Bradner, Head of R&D and CSO; as well as Justin Claeys, Head of IR. So with that, Peter, why don't I turn it over to you for a high-level interview -- a high-level overview of where the business stands today, including your core franchises, key priorities, and how you're thinking about the forward strategy for the company.

Peter H. Griffith

Salveen, thank you very much. It's great to be here. We thank Goldman Sachs. It's a great conference, a great location, and we're delighted to be in a bright sunny room this morning. That's certainly how we see this as an exciting and transformative period for Amgen. We're expanding our global reach with our existing medicines, advancing a diverse range of potentially first-in-class and/or best-in-class medicines, a lot in the mid and late-stage pipeline redefining what's possible in research as we harness transformative technologies. I'm sure we'll talk about that with Dr. Bradner. We're committed to creating value for patients, staff and shareholders.

Currently, obesity is a major focus and we hope our first quarter earnings call made it clear our strong confidence in the potential of MariTide. At a high level, we announced that the MariTide interim analysis was complete, and Phase 2 study was complete, and we're confident MariTide differentiated profile. We're actively planning a broad Phase 3 program, and we've initiated activities to further expand manufacturing capabilities. This was evidenced in the manufacturing capability thought during the last global public health crisis, COVID, when we were able to help peers in the industry respond to their capacity constraints with our global every patient, every time, supply chain and manufacturing network capacity.

We had the chance to meet with investors following the earnings call, and were asked an important question, how do we view the business beyond obesity? And well ensure we have great confidence we're on a path to deliver very 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 opportunities across the four therapeutic area pillars: general medicine, oncology, inflammation and rare disease, each of which have strong momentum and plenty of room to grow. We're driving growth in our marketed products and driving our innovative pipeline.

We recently shared exciting news of IMDELLTRA's approval in the United States in second line or later, small cell lung cancer. We're excited about IMDELLTRA's potential. We're rapidly advancing into earlier treatment lines with Phase 3 studies underway. This builds upon the success of BLINCYTO, which was our first approved bispecific T cell engager for the treatment of acute lymphoblastic leukemia. BLINCYTO is now annualizing at over 1 billion of sales and has a PDUFA date this month for approval in the frontline setting. I'd also like to highlight another bispecific, xaluritamig, which is rapidly advancing for the treatment of prostate cancer based upon promising early data. We shared encouraging Phase 2 data for TEZSPIRE, at the American Thoracic Society last month, that reflects the attractive potential of this medicine in chronic obstructive pulmonary disorder, the third leading cause of death worldwide where new treatments are very much needed.

Now in rare disease, last week, you saw that we announced positive Phase 3 data for UPLIZNA and IgG4-related disease, a devastating disease with no currently approved treatment. The trial med is primary and all key secondary endpoints showing a statistically significant 87% reduction in the risk of IgG4-rated disease flare compared to placebo. Importantly, these data reaffirm our confidence in the long-term growth outlook for our rare disease pillar. We're currently looking forward to an additional Phase 3 readout this year for UPLIZNA in myasthenia gravis. And we also have three other Phase 3 readouts coming this year to aspire and endplate indications, which are additional indications for marketed products; and also rocatinlumab in atopic dermatitis. We just received FDA approval for BKEMV, an interchangeable biosimilar to SOLIRIS in our first biosimilar and rare disease, which we expect the United States to launch in March 2025.

We recently announced the development of a biosimilar to KEYTUDA, ABP 234 as we look to build upon the global leadership we have established in biosimilars. We continue to create value for patients, staff and shareholders with the value -- with the biosimilars business, which is vertically integrated. The pipeline is advancing on a strong foundation based on our marketed products. I'll just remind you that Repatha was up 33% in the first quarter. EVENITY was up -- our bone builder was up 35%, BLINCYTO was up 26%, and TEZSPIRE was up 80%, all in the first quarter. The rare disease portfolio, including products like the TEPEZZA, KRYSTEXXA, UPLIZNA, and TAVNEOS was nearly $1 billion of product sales in the first quarter. Each of these products early in their life cycle with plenty of room for growth. With regards to TEPEZZA medium -- TEPEZZA continues to be very high bar in efficacy, supported by strong clinical data, demonstrating its effectiveness in thyroid eye disease. We have extensive experience in collaborating with patients and providers to manage the intricate care pathways associated with serious rare diseases.

Let me provide some additional commentary on the second quarter. We continue to expect total non-GAAP operating expenses, the sum cost of sales, R&D and SG&A over the second and third quarters to grow at a rate comparable to the first quarter, which, as a reminder was 33% year-over-year. For the full year, we now expect CAPEX expenditures of $1.1 billion to $1.2 billion versus previous guidance of $1.1 billion.

Before jumping into Q&A, I'd like to remind everyone that to protect the integrity of the study of MariTide, we're limited in what we can say before the completion of the ongoing study. But in sum -- in response to your question, we have a broad range of medicines in hand today coming through our pipeline that will enable us to meet the needs of millions of patients around the world with serious and grievous illnesses. So I appreciate the opportunity to make some comments. And as I said, it's just a very exciting and transformative time for Amgen, but most importantly, Salveen for patients.

Question-and-Answer Session

Q - Salveen Richter

Thank you. Okay, to start here with MariTide, given we have this Phase 2 full data set or top line data set that will come out at the end of the year, help put it into context for us when you talk about differentiation, what differentiation can mean and just the overall treatment paradigm that currently exists today where you could come in and basically find a piece of that market that works for the first drug in the portfolio?

James E. Bradner

Yes, thanks, Salveen. Obesity is one of the most prevalent diseases in the world. It remains a profound unmet medical need. Its associations with other serious conditions. There's a lot of ways to better serve that patient population. As you know, we're in the middle of a Phase 2 clinical trial, have looked at data at a planned interim analysis, and we like what we're seeing. We're confident in the differentiated profile of MariTide. Owing, as Peter said to the integrity of the trial, we're not parameterizing these insights at this time but we will read it out at the end of this year and share the news of that in the appropriate way at the appropriate time. We see a real chance for MariTide to have a huge impact on patients with obesity and obesity-related conditions.

Salveen Richter

Just remind us about the levers that you were trying to pull at after the Phase 1 data that we saw with regard to efficacy, with regard to tolerability around the first dose and then delivery?

James E. Bradner

Yes. Thank you. MariTide is delivered, as you must know, by injection. It's an antibody peptide conjugate that would be digested if it were ingested. The -- I think the best way to answer your question is to speak to the design [Technical Difficulty] it has a part 1 and a part 2. Part 1 is a 52-week study, looking principally at a primary outcome of weight management or body mass index. And it is appropriate for medicine at this stage, we're making a lot of measurements on this trial that will assess different dosing regimes as well as different frequencies or schedules of administration. MariTide is subcutaneously on a monthly or even less frequent basis. The results of this study -- directional for the Phase 3 program, which is indeed already deeply in its planning right now. In the fullness of time, as the medicine is administered hopefully in the marketplace, the patient is really benefiting -- convenient handheld once a day -- so a really favorable patient experience, which is what one would expect from a company as experienced in providing biological therapies to patients at population scale as Amgen has in the past.

Peter H. Griffith

And just to clarify one point on the administration. I think, Jay, what you were saying was that it would be a single injection administration?

James E. Bradner

Correct.

Peter H. Griffith

I think that's what you meant by one today.

James E. Bradner

Single injection. It's not a daily medicine.

Salveen Richter

And Peter, you touched on manufacturing capacity. Could you speak to the plans that you have right now and just the approach and I don't think you've quantified the capacity that you have, but help us understand how you're thinking about this on a successful path forward?

Peter H. Griffith

Now did you say plans or plants?

Salveen Richter

Plans.

Peter H. Griffith

Plans, so thank you. I'd like to remind everyone that we are finishing and we've been sharing with you. Our capital allocation hierarchy is invest first in the best innovation, internal and external. Secondly is investing in the business, capital expenditures. And we're finishing in North Carolina, Holly Springs, North Carolina, right next to the research triangle, a new drug substance plan, and we expect that to be up operational and licensed in 2026. So we started that several years ago. And that will be state-of-the-art plant for Amgen drug substance. So we're looking forward to having that up. We've got plenty of room there to continue with expansion activities as needed. And exciting to say and remind all of our colleagues here, that in Ohio, we opened in the first quarter, and it's up running, licensed a finished drug product packaging plant. And it's our most automated plant. We think it might be one of the most, if not the most automated facilities in the industry. I've been there, and it's very exciting. Really kind of once materials come in the plant over the receiving line, really humans don't touch them until they go out the door. And so we're very excited about those two additions to our network and what we call our network optimization. We're always focused on it, Salveen. We think we come from a position of strength in manufacturing capacity. It's always been a focus of Amgen. As I mentioned in my opening remarks, manufacturing capacity was helpful for us to have for the industry and really for patients during COVID because we were able to help peers in the industry set manufacturing them.

So we're going to -- we are looking ahead, and we're looking over the curvature there to make sure that we design Phase 3 and we're well coordinated, well calibrated with our manufacturing capacity needs and requirements going forward. And we realize the importance of making sure we're very thoughtful about supply chain. We've always had a great supply chain group, and we're continuing to rely on them. We had no issues during COVID and we don't take anything for granted ever. We are working very, very hard from top to bottom and side to side in the company to -- the readout on Phase 2 and so forth in MariTide that we're ready to make this in capacity that we can respond to arguably the greatest global health crisis since COVID, certainly.

Salveen Richter

Maybe one last question here on the obesity side of the business. Could you speak to the broader portfolio behind MariTide and where you might be doing work?

James E. Bradner

Thank you. We are taking a platform approach to obesity, and this is not a company that waded into these waters because it got warm and inviting. Amgen has been studying metabolic disease and the condition of obesity for over a decade, all the way since the pathway was first identified genetically. As such, our pipeline reflects programs that focus on the Incretin pathway to make the most of this signal that has been largely serendipitously identified to be associated with weight loss, as well as non-Incretin pathway programs. We have in both injectable programs and oral programs at various stages of preclinical development.

Salveen Richter

Great. The Phase 3 Olpasiran study is expected to complete enrollment in the near term. When could we see initial data from the program, could you describe how you would position it within your broader cardiovascular portfolio? And also, how derisked is it at this point in terms of likelihood of success?

James E. Bradner

Yes. So the OCEAN(a) program -- the OCEAN(a) study within the Olpasiran program is very exciting. And so thanks for asking about that. Lp(a), as this room will know, is one of the last otherwise unmodifiable risk factors for atherosclerotic coronary vascular disease. Experiments of nature have established that with increasing Lp(a), it is unambiguously associated with adverse outcomes with respect to cardiovascular health. And so enter Olpasiran this is an sRNA medicine that selectively depletes only one gene in the genome and its expression and that's Lp(a). And it does so in the one tissue of relevance and with great magnitude. Our Phase 2, we saw better than 95% reduction of Lp(a), which, by analogy to experiments of nature would be fully protective of the cardiovascular risk attributable to Lp(a).

This OCEAN(a) study is a double-blind randomized controlled trial. It's over 7,000 patients. As you heard, we enrolled this study in 15.5 months, almost 7,300 patients. And is well on track to provide the, I think, the definitive answer as to the modifiable risk factor of Lp(a). We're not the only organization that's studying this pathway that's good for patients. But we really like the differentiated profile of Olpasiran with respect to the magnitude of response to the medicine. Again, better than 95%, which compares favorably to published Phase 2 data from our competitor at 80% and also the fact that this medicine can be administered quarterly. So we're very hopeful for this medicinal pathway as we read out the first Phase 3 trial.

Salveen Richter

You've also had encouraging Phase 2 proof of concept for TEZSPIRE in COPD. When will you expect to share with us the strategy for the Phase 3 program and how broad you will go in terms of the population?

Peter H. Griffith

I think the best answer is soon. The results of the TEZSPIRE or TSLP targeting monoclonal antibody shared at the American Thoracic Society Meeting has established a lot of real interest and momentum for the program. COPD being the third leading cause of death, it being a heterogeneous population of patients with many different paths leading to a common endpoint of severe respiratory exacerbations. We have a chance with TEZSPIRE, both to help COPD patients reduce the number of exacerbations and to learn something more about the disease. Are there subsets in this heterogeneous group that will be most -- that would most benefit from a TSLP targeting agent. And the signs from our directional that looking at one measurement of patient diversity, the degree of eosinophil circulating in the blood stream, which are a critical immune cell that participates in TSLP signaling. We found that with a blood eosinophil count greater than 150 in a preplanned empowered analysis, there was significant both symptomatic benefit -- clinical benefit and statistically significant benefit with a 37% reduction in that Phase 2 setting. And so we are -- with our partners at AstraZeneca, who are great partners and also very knowledgeable about respiratory diseases as we are, we look forward to advancing TEZSPIRE into Phase 3 clinical investigation very soon.

James E. Bradner

And Salveen, I will be remiss if I didn't mention that both the Olpasiran and the TEZSPIRE COPD opportunities are just such a great fit with our current footprint and execution. If you think about Repatha, all the work we've done with the cardiologists and now primary care physicians to really educate and engage with them, this would be a great fit. And obviously, TEZSPIRE has great momentum in the market in severe asthma as Peter mentioned, 80% growth in the first quarter. So part of what we're excited about with a setup here is not just a great pipeline but also a great fit to our current footprint.

Salveen Richter

Okay. You will have Phase 3 OX40 data in atopic dermatitis in the second half of the year. Help us understand how you're thinking about this in terms of positioning commercially in light of Regeneron's Dupixent among other drugs that are on the market as well as the safety and tolerability profile to date?

Peter H. Griffith

Yes. Thank you. It is an exciting year. We read out five Phase 3 clinical trials this year. And we're off to a great start. We have two PDUFA dates and some big Phase 2s as well. And rocatinlumab is a monoclonal antibody directed at OX40. This is a protein on the surface of T cells when they become pathogenic. And so this really then should be disease-modifying therapy for the atopic dermatitis patient. And we'll read out the Phase 3 study of rocatinlumab at the end of this year as you highlight.

Thankfully, for patients with atopic dermatitis, this is a very competitive space. The elucidation of the disease biology has created a lot of opportunities to help patients. And dupilumab is one such example of a very important medicine to manage this disease. We're working here through a perfectly orthogonal mechanism of action. And we've even seen in our Phase 2 trial of rocotinlamab in atopic dermatitis that about 14% of the patients on that trial had seen prior biological therapy, the majority of which received dupilumab. And as we look at that subset of -- patients for response, there's no difference in the response rate, whether you're a dupilumab failed patient or whether you have yet to see that medicine. And so though the Phase 3 study doesn't compare directly to dupilumab, which would, I think, really answer your question, we hope to give the clinicians managing this disease the optionality with a strong efficacy and tolerability signal this should replicate from our Phase 2 work, and there's no reason it shouldn't. It should give the physicians optionality to treat patients before or after that medicine, but we'll wait to see what the data declares at the end of this year.

James E. Bradner

And then maybe just on the tolerability question you raised, Salveen, I think one encouraging sign is enrollment has been very strong. The investigator interest has been very strong. That always gives a good sense that the doctors are comfortable with what they're seeing. And also to one of the effects that was noted earlier was Pyrexia or fever and chills. Fortunately, that has been very transient, it has been mild, and also it's not something that we've been premedicating or pretreating in any of the trials. So I think to Jay's point, and I think so far, it feels like it's a good profile.

Salveen Richter

Alright. You've also seen some positive data with your CD3, CD19 bispecific T-cell engager BLINCYTO recently in rheumatoid arthritis. So help us understand in the context of the overall portfolio how you're thinking about going after autoimmune diseases on this?

James E. Bradner

Yes. No, this is a really cool question. There's so much excitement right now on the CD19 pathway. It's just been true for years that medicine's first pioneer or innovated in cancer are subsequently considered as maybe having a utility beyond cancer and CD19 is yet another example in this narrative. CD19 is a protein that sits on the surface of B cells and not just the mature B cells like the CD20 positive B cells, which have been targeted with medicines like Rituxan and others for first cancer and then autoimmune diseases, but rather on the whole of the B-cell compartment, including more early plasma blasts and the like is CD19. And so now with CD19 directed therapeutics, and there's a number of them, there's CAR T cell therapies, there's bispecific T-cell engagers like blinatumomab and there's direct afucosylated CD19 B cell depleting antibodies like UPLIZNA. We have a lot of instruments to study the CD19 pathway in cancer and beyond. You referenced in your question, a really cool paper by a German investigator who is taking care of patients with very severe multi-refractory rheumatoid arthritis. And I ask you to look at the study, which is not an Amgen-sponsored study, but was of great interest to us. In that the table of medicines that these patients have been failed by was quite exhaustive with persistent syndactyly other inflammatory markers just off the charts. And treating with blinatumomab on a schedule not unlike we use to treat leukemia, although there are some differences. This investigator saw very dramatic responses with strong depletion of the B-cell compartment, strong reduction of inflammatory markers, reduction of auto antibodies, and most importantly, really meaningful clinical improvement of the signs and symptoms of RA.

Now we are very organized at Amgen around the study of the CD19 pathway. We have the two agents, FDA approved and a strong pipeline behind those as well. And we're also very organized around inflammatory diseases. I think the activity of UPLIZNA IgG4-related diseases as Peter shared, was a wonderful outcome to a Phase 3 clinical trial that will hopefully lead to a real registrational consideration. And in that study, where we saw a hazard ratio of 0.13 and a p-value of 5 to the negative 7, and only 135 patient study it's a very, if not unambiguous sign that CD19-directed therapy can have a real impact on diseases where the pathology are autoreactive immunoglobulins. And that opens up, I think, a pathway to several other very severe diseases with unmet need. So please expect more from us in the future, in the near future. It will be UPLIZNA in myasthenia gravis, which we'll read out later this year. And then in the fullness of time, we'll have a chance to share with you our CD19 in autoimmunity and inflammation game plan.

Salveen Richter

Great. We're coming off ASCO and you're clearly in the process of launching tralatinab for small cell lung cancer. Help us understand the physician receptivity to the asset, how they're thinking about using it and your development strategy beyond the current setting and maybe even beyond small cell lung cancer?

James E. Bradner

We met with a lot of physicians at ASCO, thanking the investigators that worked with us and meeting with those that haven't to try to understand what, if any, barriers would exist to provide access to this remarkable medicine. And I think the short answer to your question is the feedback has been very strongly positive. This is a profound unmet need, small cell lung carcinoma, a fraction, a meaningful fraction of non-small cell has received not nearly the attention with respect to targeted therapies, and there is no tumor targeted therapy for this disease until IMDELLTRA, which is a bispecific T-cell engager that grabs DLL3 on the surface of the small cell, recruits and immune cell to lead to unprecedented and durable responses in the toughest to treat patients, those with extensive disease that relapses after platinum.

Just to calibrate the degree of demand for this medicine only a minority of patients will make it to second and third line. So many others will succumb to their disease after frontline platinum chemotherapy. Second, the overall survival expected of patients in any geography in the world is about four months to five months once you hit third line of therapy. And here, we've observed a median overall travel of 14 months. So we're very hopeful for the immediate impact of IMDELLTRA on patients with small cell lung cancer and the demand is quite high right now. But we're also working very hard to move it to frontline therapy because it's been our experience with all cancer medicines, but especially T cell engagers that the clinical benefits arrived in earlier lines of therapy is -- has historically with blinatumomab been significantly improved the earlier we can move these medicines in upfront therapy.

Peter H. Griffith

Yes. I think that point on blinatumomab is a really important one. Amgen was pioneers in this BiTE field with the acquisition of Micromet over 10 years ago. And I think in the early days, it wasn't well understood what the best use or positioning was. And over time, what we've really methodically demonstrated is that there's obviously important utility in the later lines, but really great results in earlier lines as well. So just to James point, to now see activity in a common solid tumor with tarlatimab, and now we have saluridomig is the third bite in the BiTE platform, gives us a lot of optimism there.

James E. Bradner

That's right, Justin. No access to this medicine is greatly enhanced by the label that we received that calls for only 22 to 24-hour monitoring with the first dose. And we're working to reduce the monitoring requirement as we have systematically with blinatumomab as well. And secondarily, unlike the majority of targeted therapies, there's no additional diagnostic required to give a small cell lung carcinoma patients this medicine because better than 90% of patients will exhibit DLL3 positive staining. It is a characteristic feature of the neuroendocrine cell that defines the disease. So we're very hopeful that this medicine can have a real immediate impact on those patients.

Salveen Richter

On the rare disease or Horizon franchise, maybe a two-part question here. So one is there are additional readouts coming. Phase 3 Myasthenia Gravis being one of them. Speak to your level of confidence here where you see the most potential from that portfolio? But if you could also speak to your confidence that TEPEZZA sales can inflect here and how important the subcue aspect is from a commercial standpoint?

James E. Bradner

Sure. Why don't I start with deep pipeline, and you could speak to TEPEZZA perhaps, Peter, but -- so I think Horizon, I wasn't a party to the acquisition. It's a brilliant acquisition for our company, providing this fourth pillar with important medicines in the market that are having a big impact on unmet need like TEPEZZA and a really strong pipeline. UPLIZNA is a great outcome as I just referenced, in IgG4-related diseases but it's probably the tip of the iceberg of what this medicine can do. And we'll read out the myasthenia gravis study that you referenced at the end of this year. I would never read through from one study to another. They have the same stage specific probability of success. Still it is true that having seen the growing momentum around UPLIZNA now for two diseases, neuromyelitis optimum spectrum disorder in IgG4-related diseases, both of which have a significant contribution of pathologic autoantibodies that in myasthenia gravis, a disease characterized by at least two pathological -- pathologic polyclonal antibodies, anticholinergic receptor antibodies and also antimusc antibodies that we're very hopeful that this momentum carries through to that patient population.

The integration has been, I would say, from all experiences I've had in the industry seamless and very positive. There's been no challenge to the momentum around R&D or our ability to execute and complete these clinical trials, and the IgG4-related diseases outcome is, I think, a strong example of that. And now on the global Amgen platform, we hope and expect to pursue regulatory filings for this condition around the world. This is true for TEPEZZA as well, where part of the opportunity of being a part of Amgen is to pursue the globalization of access to this medicine. You might speak to sales.

Peter H. Griffith

No, I'd like to. Thank you. Depends on the United States, Salveen, we're very excited about it and confident in it. We like to see the expansion of prescribers to the general ophthalmologist, the endocrinologists, especially in the lower CAS or clinical activity score or chronic as people call it, stage of thyroid eye disease. We think that's really important. We think in United States, it's about 100,000 or so patient population, we think about 80% of that or so is lower CAS or clinical activity score, the other 20% being the higher CAS. And we only think we have high single-digit penetration in that. So we did a great opportunity.

Quarter-over-quarter growth in quarters two, three, and four in 2023, mid-single-digit growth, 5% growth, and it depends year-over-year in the first quarter. We really, really think this is a really important medicine, we're working hard on the subcu version of that, too, going forward as all of our colleagues know. And so TEPEZZA and then going internationally, as Jay said, we're approved in Brazil and Saudi Arabia. That's exciting for us. We've got the filing up in Japan. We're also sharing data with regulators in the EMA and the UK. So we think this is going to be a continued great integration between Amgen and legacy Horizon. And now, of course, one team working really, really well together. That rare disease pillar is also strong, and we're very excited about it. We think it's really important as our fourth pillar in the business.

And -- having said that, I see we're kind of winding down a little bit. Just out of an abundance of clarity, back on obesity and MariTide, and I'm sure all of our colleagues will be fine if we go back to that because we tend to spend a lot of time on it. A couple of points I just wanted to punctuate or make really clear, which are -- we're very, very pleased with the results we've seen so far and the conduct of the ongoing Phase 2 trial. All arms remain active. Patient dropout has not been an issue. We talked earlier, in terms of the patient experience, we expect to deliver MariTide in a convenient, handheld, patient-friendly autoinjector device with a monthly or even less frequent single injection administration assuming eventual approval. So we're excited about what we have going on. We're excited about the four pillars. You asked about rare disease. We're excited about that TAVNEOS had a great first quarter, just in small numbers, but I think up 120% or so year-over-year, but more and more patients with ANCA-associated vasculitis being treated with KRYSTEXXA is annualizing at over $1 billion for chronic refractory gout. And of course, we've talked extensively about UPLIZNA. So -- it's all a wonderful rare disease pillar and first and foremost for patients.

Salveen Richter

Peter, maybe one last question here. You will head back towards pre-Horizon leverage levels next year, speak to the broader capital allocation strategy. And if there's anything you want to speak to on Medicare price negotiations or Part D redesign.

Peter H. Griffith

Well, Medicare price negotiations, we weren’t that differently normally. We call that Medicare price controls, but I won't get into that too deeply. I think we probably all see it the same way. Capital allocation, we're clear, we're consistent, we're predictable. Best innovation, internal and external CAPEX into our business, North Carolina, Ohio, artificial intelligence. We haven't had a chance to speak about that today. Critical to us, Dave Reese who preceded Jay in the Head of R&D role as our Chief Technology Officer. Now we're all ahead to go there. So that's an allocation of capital and that investing in the business category and then return capital to our debt holders, which we're doing. We indicated we're slightly ahead of schedule there. We're working to be on schedule for the deleveraging by the end of 2025 back to where we were pre horizon and efficient capital structure, with an optimized WACC. And on the other side, returning capital to shareholders, increased the dividend 6% to $2.25 a share. And we've indicated share repurchases wouldn't exceed $500 million this year. We didn't have any last year. We didn't have any in the first quarter. So that's where we sit on that.

So going forward, we're going to be -- continue to be very focused on capital allocation. We're going to continue to focus on funding a fantastic innovative pipeline and making sure that we use our shareholders' capital to do that because we think it's such an exciting time. And at the same time, we've indicated we're roughly a 48% operating margin this year. Just a couple of points off of where we've been historically, but flexing it simply because we see after-tax cash returns well above our hurdle rate for what we have going on in the pipeline, particularly in development. So I really appreciate the question. We really appreciate being with you, Salveen. We appreciate Goldman Sachs inviting us and certainly appreciate all our colleagues who've come to see us today or listening in. We're very excited about this time for Amgen, and we're really excited for all the patients that are going to get help.

Salveen Richter

Great. Well with that, Peter, Jay and Justin, thank you so much. I appreciate the discussion.

Peter H. Griffith

Thank you.