Operator:

My name is Julianne, and I will be your conference facilitator today for Amgen's Second Quarter 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at conclusion of the last speaker’s prepared remarks. In order to ensure that everyone has a chance to participate, we will like to request that you limit yourself to asking one question during the Q&A session. [Operator Instructions] I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Bob Bradway:

Okay. Well, thank you, Justin, and let me thank all of you for joining the call today. We're especially grateful in light of all of the volatility in the markets that you would carve out the time to be with us. So thank you. Through the first half of the year, our business is performing well, and we remain confident in our ability to deliver attractive long-term growth. We're achieving strong results the same way we always have, which is by providing innovative medicines to address challenging diseases. Starting with the in-market portfolio. Second quarter revenues grew 20% to $8.4 billion with numerous medicines delivering double-digit sales growth, including in general medicine, Repatha and EVENITY, in oncology, of course, BLINCYTO, an inflammation TEZSPIRE, and then turning to rare disease, which delivered more than $1 billion on the quarter. I would highlight that KRYSTEXXA, UPLIZNA and TAVNEOS, each delivered at least double-digit sales growth in the quarter, and TEPEZZA grew 8% year-over-year and 13% quarter-over-quarter. All of these first or best-in-class medicines are still early in their life cycles and have plenty of room to run through geographic expansion, new indications and/or new formulations. You'll hear more about these brands in a moment. Turning to research and development. We believe our pipeline looks very promising as well, not just in obesity, but across all of our therapeutic areas. We told you at the beginning of the year that we were anticipating more than a dozen significant pipeline milestones in 2024. We are, so far, so good. In the second quarter alone, we received accelerated approval for IMDELLTRA, a landmark new medicine for small cell lung cancer. And in fact, the physicians I've spoken to since approval are really excited about this drug as the first meaningful innovation in decades for these patients. We also received approval for BLINCYTO in the frontline treatment for B-cell precursor acute lymphoblastic leukemia, based on significantly improved overall survival rates. The frontline approval meaningfully expands the potential impact of BLINCYTO for all patients with B-ALL. We announced impressive Phase III data for UPLIZNA in IgG4-related disease, which is a grievous illness for which there are no currently approved therapies of any kind. Building on our success with TEZSPIRE in treating severe asthma, we announced exciting data from our Phase II study in patients with chronic obstructive pulmonary disease that earned this molecule breakthrough therapy designation. COPD is the world's third leading cause of death, and new treatment options are very much needed. We look forward to additional data readouts later this year across therapeutic areas, highlighted, of course, by top line data from the ongoing MariTide Phase II study. We're encouraged by the emerging data in this field, particularly in cardiovascular and renal disease areas of long-standing strategic focus for us. We are laser focused on preparing to launch a broad Phase III program for MariTide that includes obesity, obesity-related conditions and type 2 diabetes, and we're further ramping our investment to support MariTide in the rest of the pipeline. You'll hear more about that pipeline shortly on this call. All in all, this is a very exciting time for us at Amgen. And as always, I'm grateful to my Amgen colleagues all around the world for their enduring commitment to patients. And now let me turn things over to Murdo.

Vikram Karnani:

Thank you, Murdo. I am pleased to provide an update on rare disease, which delivered product sales of over $1.1 billion in Q2. Beginning with TEPEZZA for the treatment of thyroid-eye disease, second quarter sales were $479 million, reflecting growth of 8% year-over-year and 13% quarter-over-quarter, when compared to results from the legacy Horizon business. Recall that there are roughly 100,000 TED patients in the U.S., and penetration is currently only in the single digits. The main growth opportunity is within the roughly 80% of TED patients who have a low clinical activity score or CAS. We are expanding our reach among new prescribers, particularly ophthalmologists and endocrinologists who manage many of the low cash patients who can benefit from TEPEZZA. The impact of thyroid-eye disease 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, we are increasing our strategic focus in endocrinology with a dedicated sales force to engage in this important space. We are also making significant strides in improving access. Thanks to the recognition of TEPEZZA's efficacy by payers. To date, we have achieved favorable medical policy changes for greater than 55% of U.S. covered lives, compared to 50% last quarter and just 5% roughly one year ago. We expect to continue this momentum throughout 2024. International expansion remains a meaningful long-term growth opportunity for TEPEZZA with regulatory filings complete or underway in multiple geographies. With Japan as the next significant launch expected by early 2025. We also 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 $294 million in sales in Q2, representing 20% year-over-year growth driven by volume growth from strong commercial execution. KRYSTEXXA with immunomodulation continues to redefine the standard of care for uncontrolled gout. UPLIZNA, for patients with neuromyelitis optica spectrum disorder, or NMOSD, delivered $92 million in sales in Q2, representing 35% year-over-year growth. International expansion of UPLIZNA is also underway with launches in multiple ex U.S. markets, including Canada, which launched earlier this year. In addition to NMOSD, we are excited about the impressive Phase III results with UPLIZNA in IgG4-related disease. And the potential it has to address a debilitating condition that impacts more than 20,000 patients in the U.S. We also look forward to the Phase III readout for UPLIZNA in myasthenia gravis later this year. Jay will address these in more detail in a moment. Sales of TAVNEOS were $71 million for the second quarter. Sales increased 137% year-over-year driven by volume growth. In the U.S., more than 3,500 patients with ANCA-associated vasculitis have been treated with TAVNEOS. Over 2,300 health care professionals have now prescribed TAVNEOS, a roughly 35% increase in the prescriber base so far this year. The integration of the legacy Horizon business is progressing nicely 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 Jay for our R&D update.

Peter Griffith:

Thank you, Jay. We're pleased with our strong second quarter performance and are on track with our 2024 full year goals and long-term objectives. We have a strong long-term growth outlook across our four therapeutic areas, driven by the breadth and depth of our innovative pipeline and in-market products, serving patients with serious illnesses around the globe. Starting with our second quarter results, as shown on Slide 27 of the slide deck, we delivered $8.4 billion in total revenue, a 20% increase year-over-year. It's the highest quarterly revenue in Amgen history, achieved with 26% volume growth. This means more patients than ever are receiving Amgen medicines. Excluding the addition of Horizon, product sales increased 5% year-over-year, driven by 10% volume growth. In the second quarter, we delivered a non-GAAP operating margin of 48.2% as a percentage of product sales with total non-GAAP operating expenses increasing 30% year-over-year. Non-GAAP cost of sales as a percent of product sales increased 0.4 percentage points on a year-over-year basis, primarily driven by higher royalties and profit share due to changes in sales mix. Non-GAAP R&D spending in the second quarter increased 30% year-over-year as we strategically invested in the late-stage pipeline, including MariTide, rocatinlimab and bemarituzumab as well as Horizon acquired programs. Non-GAAP SG&A expenses increased 36% year-over-year, primarily driven by the addition of Horizon. Excluding the addition of Horizon, non-GAAP SG&A expenses increased 14% year-over-year, driven by investment in Repatha, Otezla and EVENITY. Our non-GAAP OI&E resulted in a $700 million expense, up $400 million year-over-year, almost entirely due to increased interest expenses from the Horizon acquisition. We remain on track to deleverage with line of sight to retiring greater than $10 billion of debt by the end of 2025. This includes $1.4 billion of debt retired in the second quarter and $2.0 billion year-to-date. Our non-GAAP tax rate decreased 1.5 percentage points year-over-year to 14.9%, primarily due to the change in sales mix from the inclusion of our Horizon. In the second quarter of 2024, the Company generated $2.2 billion of free cash flow, a decrease of $3.8 billion -- a decrease from $3.8 billion in the previous year, driven by the timing of tax payments. In 2023, federal tax payments, including our repatriation tax were made in the fourth quarter, whereas in 2024, these payments were made in the second quarter. The Horizon integration is progressing well, and we expect to reach $500 million in pretax synergies by year three post acquisition, with roughly 50% to be realized by the end of this year. We expect accretion to non-GAAP earnings per share in 2024. We continue to execute on our capital allocation priorities. We're investing in the best innovation, both internally and externally to rapidly advance an innovative pipeline, multiple potentially first-in-class and/or best-in-class medicines across the four therapeutic areas. As I said earlier, this is reflected in our second quarter non-GAAP R&D spend of $1.4 billion, an increase of 30% year-over-year. Second, we continue investing in our business for long-term growth. We are expanding capacity in our state-of-the-art manufacturing facilities, including investments to support MariTide. Beyond manufacturing, we are opening a new global technology and innovation center in Hyderabad, India, which will attract talent at scale and accelerate digital capabilities across the organization, including artificial intelligence, data science, life science and medical. And third, we returned capital to shareholders as we paid competitive dividends of $2.25 per share in the second quarter. This represented a 6% increase compared to 2023. Turning to the outlook for the business for 2024 on Slide 29. We expect our 2024 total revenues in the range of $32.8 billion to $33.8 billion in non-GAAP earnings per share between $19.10 and $20.10. I will mention a few considerations as you model the remainder of 2024. On revenues, we expect mid-single-digit growth quarter-over-quarter in the fourth quarter compared to Q3. Our full year non-GAAP R&D expenses are now expected to increase more than 25% year-over-year as we further invest in our late-stage pipeline to support multiple late-stage studies underway across all therapeutic areas. As a result, we now project the full year non-GAAP operating margin as a percentage of product sales to be roughly 47% with Q3 operating margin lower than Q2. Total non-GAAP operating expenses for the third quarter are expected to grow at a similar rate to the first two quarters of this year. We expect OI&E to be approximately $2.5 billion, which includes the interest expense related to the $28 billion of debt raised for the Horizon acquisition. We continue to expect the non-GAAP tax rate to be in the 15% to 16% range, including the full year benefits associated with the inclusion of the Horizon business. As we have previously indicated, we have initiated activities to further expand MariTide manufacturing capacity. To support these initial efforts, we now expect capital expenditures of $1.3 billion in 2024 versus our most recent guidance of $1.1 billion to $1.2 billion. Our long-term outlook remains robust, and I am grateful to our 27,000-plus colleagues worldwide for their dedication to serve patients. This concludes our financial update. We will now begin our Q&A session. Julianne, please remind our participants of the process. Thank you.

Yaron Werber:

Jay, maybe a question for you, actually. I want to start with the UPLIZNA. And we noticed a few things. The MINT study was supposed to have complete -- completion around mid-May. And Amgen just posted a whole bunch of new job postings for GMJ and you have a slot on October 15 at the MGFA to present the data. As you noted, you're doing steroid tapering. It's a different trial design but you also did steroid tapering and the other two indications, NMO and IgG4. Can you talk a little bit sort of what are you hoping to see and what are you expecting to see from the data?

Operator:

Our next question comes from Salveen Richter from Goldman Sachs.

Jay Bradner:

Thanks, Salveen. As I just mentioned to Yaron, we won't be providing further guidance on the timing of the results from the UPLIZNA study, the MINT study in myasthenia gravis of that you stay tuned. And as also, as shared knowing that patients with myasthenia gravis are repeatedly and over many, many months of treatment challenge by the requirement for persistent steroids, we built in a taper steroids on to this study. And these results to read out in the second half of this year will bring to light exactly how successful we are at liberating patients from steroids with every six months UPLIZNA.

Evan Seigerman:

Well, not a huge growth driver. I'd love if you could characterize on some of your negotiations with CMS on Enbrel. Many of your peers are pleased with kind of the fair price that they negotiated with CMS. Do you feel the same way? I'd also love to know how you're seeing about the impact of Part D redesign?

Operator:

Our next question comes from Mike Yee from Jefferies.

Jay Bradner:

Thanks, Mike. Why don't I get started and Murdo, perhaps you could add on at the end. We are very pleased with the results that we've seen at the interim with the overall conduct of the Phase II study. Though there's been no further analysis since the interim, as of the interim all the arms were active, dropout had not been an issue. And we saw a differentiated profile with MariTide and remain confident that this medicine can address significant important unmet medical need in obesity, obesity-related conditions and, in particular, type 2 diabetes, as shared earlier in the call. There's no question that there is quite a democratized and broad base of innovation in this space. And potentially oral medicines could serve to address some of that still vast and remaining unmet need, and we follow these programs very closely. Still, the development of MariTide is advancing very briskly, as we now move to rapidly initiate a broad Phase III program. And we remain confident in what MariTide can offer for patients with obesity-related conditions as well as diabetes. Murdo?

Operator:

Our next question comes from Umer Raffat from Evercore ISI.

Jay Bradner:

Yes. Thanks. Pete, why don't I start on the overall development plan for MariTide and the value of the Phase II data that we'll have at the end of this year. Umer, as you know, this medicine coming out of Phase I showed a quite remarkable impact on obesity with a dramatic reduction in BMI, actually proved quite durable after just three doses, MariTide in that Phase I study, we saw persistent weight loss really out 150 days or more at some doses. The Phase II study is a much larger concern. This is a 592 patient study. It has 11 arms, it has monthly or as Murdo said, even less frequent dosing. As a part two that allows us to really follow up on this durability signal, and it will allow the precision selection of dose or doses that patients and their practitioners really desire. This also confirms to regulatory requirements entering into Phase III.

Operator:

Our next question comes from Jay Olson from Oppenheimer.

Bob Bradway:

Take it in a couple of parts here. Murdo, do you want to share what we're learning from the launch?

Jay Bradner:

Yes. Thanks for the question, Jay. You picked up on something really interesting and that's leveraging the learnings of BLINCYTO. I mean this really is a platform capability that we enjoy with bispecific T-cell engagers. And already in the development of IMDELLTRA after its first approval, we are seeing significant readthrough of the BLINCYTO lessons, moving from later lines of therapy to earlier lines of therapy, to drive efficacy in the setting of reduced tumor burden. The utility of these medicines in combination, which is so much easier to access and assess than other complex modalities, say, like CAR-T and moving these medicines to the point of therapy where they can have the greatest impact, namely frontline, also pathways to reduce monitoring. Jay, we are leveraging all the learnings of BLINCYTO to drive and expedite the development of IMDELLTRA to be a component of frontline small cell lung cancer therapy, both with extensive stage and limited stage disease. And as Murdo shared, we do this work really quite inspired by the impact of the medicine, even so early in its launch, significant demand to learn and access and offer this medicine.

Operator:

Our next question comes from Mohit Bansal from Wells Fargo.

Jay Bradner:

Yes. Thank you, Mohit. I can surely understand the interest. And indeed, we are making all these measurements and more. We won't dimensionalize what we mean when we say differentiated profile at this time. We're so focused on completing this ongoing and well-conducted MariTide Phase II study but do expect to learn and listen more when ultimately we're able to be in a position to share the outcomes of Part A of the Phase II study. We are taking a comprehensive assessment to optimize dose and schedule and impact of this medicine.

Gregory Renza:

Congratulations on the quarter. My question is just on the obesity franchise. As you and the team had mentioned to expect one of the early obesity programs to enter clinical development later this year. Just curious if you could elaborate on what lens you're using to nominate that first or that next program? I'd imagine it's rather complex in the assessment and any color you have on determining that choice and how to take that forward, would be great.

Operator:

Our next question comes from Chris Raymond from Piper Sandler.

Bob Bradway:

Chris, as you can expect, we're focused now on completing the Phase II trial and moving as swiftly as appropriate into Phase III. So we'll have more to say that over the course of the coming year. You can appreciate it's a competitively intense field. So we're not giving dates at this point.

Carter Gould:

For Peter, on August 2, the U.S. Tax Court entered a decision against Coke. Their litigation was often referenced as sort of the best benchmark for sort of what you're facing. Appreciating that you took the deposit earlier this year but why shouldn't there be read through from that case? And maybe you could speak to your overall confidence in the outcome.

Operator:

Our next question comes from Terence Flynn from Morgan Stanley.

Peter Griffith:

Terence, we don't -- as you know, we don't guide long-term margins but let me just comment on what you're seeing this year. I'm happy to speak to that. And I think it's important. We're -- at Amgen, we're committed to a capital allocation hierarchy, where we first invest in innovation and first internal innovation. And so with that in mind, Terence, we've consistently said that we would flex out margin, which remember, with us, as a percentage of product sales, not revenue, if there were opportunities to achieve strong after-tax cash returns on our investment in excess of our hurdle rate. And then we would communicate that ahead of time. So this year, we shared with you at the beginning of the year, we felt operating margin to be about 48%. We see an opportunity here during the year to make some investments in the research and development activities with an emphasis, I would say, on development. That's up 30% year-over-year in the quarter, non-GAAP R&D. We now see non-GAAP R&D spend up over 25% year-over-year for '24, which we think is great because you've heard about the deep mid- and late-stage pipeline we have, driving MariTide in that deep mid- and late-stage pipeline. We're always focused Terence, whether it's this year or next year on productivity and prioritization, always looking for opportunities to generate capital to allocate the innovation. We've got a new program called technology and workforce strategy that we're moving along at speed and scale. I spoke about opening a new talent and innovation center in Hyderabad, India. So we are doing everything we can to preserve that margin, reallocate capital innovation and be the disciplined spenders of capital that Amgen always has been.

Chris Schott:

Just had a question on MariTide and your plans in that Phase II diabetes study. Company, obviously, very excited about the broader opportunity for the drug but it does seem like diabetes is a more established market with maybe less of the capacity constraints than we've see in obesity. So can you just talk a little bit about what you think you need to see to be able to compete here in dislodging [compens]. And can you also confirm that the study is not needed to move forward in the Phase III obesity studies, or it's just a completely separate program related to the diabetes piece of things?

Jay Bradner:

Yes, absolutely. As you nicely identified later this year, we will initiate an additional dedicated Phase II study that will characterize MariTide from the treatment of diabetes in patients with and without obesity. And this new study is not a gating step at all for the Phase III program for patients with obesity, but conforms to regulatory guidance and importantly, allows us to optimize dosing for the diabetic patients, where medically, I can say [indiscernible], your considerable perspective, I'm unaware of a highly efficacious monthly or less frequently administered medicine for the treatment of diabetes. Murdo?

Operator:

Our next question comes from Kripa Devarakonda from Truist Securities.

Bob Bradway:

Sure. Jay, why don't you jump in there?

Justin Claeys:

Julianne saying we're getting to the top half of the hour here. Maybe we'll just take two more questions.

James Shin:

For the next obesity asset that's entering clinics later this year, can you specify whether this asset is aimed to fill in for 786, and whether there's no next obesity asset will work in tandem with 133?

Operator:

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

Bob Bradway:

A lot of questions there, Gary, but why don't we take it in a couple of pieces. Go ahead, Vikram.

Bob Bradway:

In Japan, Gary, we expect that they'll be, again, an attractive market and this will be well received in that country, and we'll talk about that once we've launched there during the course of next year. With respect to leverage, I think I would just offer that we're on track. With respect to our synergy targets there, and we'll begin to get even more leverage as we're able to take full control of the supply chain for the rare disease products. And then I would just further observe, as we've said many times, that feel fortunate that there's a good overlap between some of our existing capabilities in sales and marketing and the needs of those rare disease products. So all in all, we remain really excited about what we're able to do for rare disease patients, the position we have and the likelihood of that just improving over time. So with that, let me thank all of you. I know we've gone a few minutes over the set time but thank you all for participating in the call, and we look forward to regrouping with you after the third quarter. Thanks.

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]

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.

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.

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.

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.

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.

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.

Operator:

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

Robert Bradway:

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

Operator:

Our next question comes from Michael Yee from Jefferies.

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.

Operator:

Our next question comes from Terence Flynn from Morgan Stanley.

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.

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.

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?

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.

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.

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?

Operator:

Our next question comes from Umer Raffat from Evercore ISI.

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.

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.

Operator:

Our next question comes from Tim Anderson from Wolfe Research.

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.

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?

Operator:

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

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.

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?

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.

Operator:

Our next question comes from Chris Schott from JPMorgan.

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.

Operator:

Our next question comes from James Shin from Deutsche Bank.

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.

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?

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.

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.

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?

Michael Schmidt:

Yes.

Justin Claeys:

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

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?

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.

Operator:

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

Operator:

My name is Julianne, and I'll be your conference facilitator today for Amgen's Fourth Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speaker's prepared remarks. [Operator Instructions] I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Robert Bradway:

Okay. Thank you, Justin, and let me thank all of you for joining our call. 2023 was another year of performance and progress for Amgen, further positioning us to deliver attractive growth through the end of the decade and beyond. Last year, we delivered double-digit volume growth in all four quarters with balanced growth across products and geographies. 18 [ph] of our medicines generated record annual sales, including Repatha, Prolia EVENITY, TEZSPIRE, BLINCYTO, KRYSTEXXA and UPLIZNA. The acquisition of Horizon, which is completed on October 6, gives us a significant new rare disease business that now stands as a fourth pillar of growth alongside our leading general medicine, oncology and inflammation businesses. The medicines we acquired are all very early in their life cycles and by leveraging Amgen's world-class biologics manufacturing, decades of experience in inflammation and our extensive global presence, we believe these products have the potential to reach many more patients around the world. Last year, we also advanced the deepest and most diverse pipeline in our history with promising molecules at all stages of development across our four pillars of growth. We anticipate well over a dozen significant pipeline milestones this year. I'll touch on a few. In General Medicine, we'll generate Phase II data this year for our lead obesity molecule, MariTide, and we're excited, of course, to learn more about this asset. We're also advancing a number of early-stage assets in this space. In Oncology, we have a June 12 PDUFA date for the FDA to complete its priority review of Tarlatamab as a third-line treatment for small cell lung cancer. Tarlatamab is the first bispecific T cell engager shown to be effective in addressing a major solid tumor. In this case, one for which there has been no new treatment in decades and which today has a 5-year survival rate of just 3%. We're studying Tarlatamab in earlier lines of treatment and hope over the fullness of time to be able to serve the tens of thousands of patients diagnosed with small cell lung cancer each year in the U.S. and major markets around the world. We've done this very successfully now with our first BiTE BLINCYTO, which has steadily moved into earlier lines of treatment for acute lymphoblastic leukemia, and we'll take the same approach with yet another promising BiTE at being Xaluritamig in prostate cancer. In inflammation, we'll have Phase III data from Rocatinlimab in atopic dermatitis from the first of 1 are now 8 trials in the ROCKE program. And in rare disease, we'll have Phase III data for UPLIZNA and myasthenia gravis and IgG4-related disease. At a time when a rapidly aging global population needs more innovation, Amgen is delivering, both with the medicines we have in the market today and with the promising new medicines that are advancing in our pipeline. We're also excited by the rapid convergence of biotech and tech, which is enabling us to innovate more quickly and confidently. We've been preparing for this hinge moment for more than a decade and recently named Dave Reese as our first ever Chief Technology Officer to ensure that we're capitalizing on technologies like generative artificial intelligence, not just in R&D, but across the entire company. Succeeding Dave is Amgen's Head of R&D is Jay Bradner. Jay is a physician scientist and a seasoned R&D leader, having served for many years as President of the Novartis Institute for Biomedical Research. Jay previously also served as a faculty member at Harvard Medical School and prior to joining Amgen was a practicing oncologist at the Dana-Farber Cancer Institute. We're delighted to have Jay on board and excited by the work that he Dave and the rest of our team will do together to accelerate innovation at Amgen for the good of patients and for the long-term growth of our business. And with that, I want to thank our 27,000 employees around the world for their many contributions to our success. And let me now ask Murdo to talk about our commercial performance in 2023.

Vikram Karnani:

Thanks, Murdo. I am glad to share an update on our rare disease business now that we are 4 months past due close. We are now fully operating as part of Amgen with integration activities ongoing. As Bob has mentioned before, we are excited to be Amgen's fourth pillar of long-term growth. I wanted to make sure you're aware that we are not reporting the full quarter in press release and slides, which reflects sales from October 6 onwards and totaled $954 million. This excludes $41 million of sales that occurred in the first week of October prior to deal close. For the full quarter, our rare disease brands from Horizon delivered product sales of $995 million, representing 6% year-over-year sales growth. Throughout the remainder of my remarks, I will reference full quarter product sales. TEPEZZA, and IGF-1R monoclonal antibody for patients with thyroid eye disease generated $467 million of sales during the entire fourth quarter, representing 3% quarter-over-quarter growth. This is the third quarter in a row of quarter-over-quarter growth for TEPEZZA with the growth largely driven by the U.S. We saw a number of positive leading indicators, including a record number of unique TEPEZZA prescribers, total patient enrollment forms and patient starts in 2023. Additionally, thanks to our efforts, we've been able to generate favorable medical policy changes for greater than 50% of U.S. covered lives, and we expect to continue this momentum throughout 2024. We continue to see approximately 100,000 patients with moderate to severe disease in the U.S. who could benefit from TEPEZZA with the majority of these patients in low clinical activity score settings. Given positive leading indicators and high unmet need, we see a long-term growth opportunity for TEPEZZA in the U.S., while also recognizing there is some time lag between our execution efforts and the realization of increased patient numbers. International expansion also remains a meaningful long-term growth opportunity for TEPEZZA. TEPEZZA is approved in Brazil, and we are progressing towards approval in additional countries. Our expansion into both Japan and Europe is a high priority with regulatory review underway in Japan and filings in the EU throughout the year. KRYSTEXXA, a PEGylated uricase enzyme for patients with chronic refractory gout delivered a record $280 million in sales for the entire fourth quarter, representing 30% year-over-year growth, driven by continued strong commercial execution. Sales are now annualizing at $80 billion [ph] run rate. Performance was driven by execution across all phases of the patient journey, demand generation, stakeholder engagement and adherence to treatment. UPLIZNA, an anti-CD19 monoclonal antibody, which is now the fastest-growing biologic in NMOSD, delivered a record $70 million in sales for the entire fourth quarter, representing 68% year-over-year growth. International expansion is also underway with UPLIZNA now launched in multiple ex U.S. markets. Our remaining ultra-rare portfolio generated $178 million of sales for the entire fourth quarter, primarily driven by our ultra-rare medicines, RAVICTI, PROCYSBI and ACTIMMUNE. Looking ahead at 2024 by leveraging Amgen's world-class biologics capabilities, decades of experience in inflammation and extensive global presence, we are ready to reach more patients than ever before. I will now turn it over to Jay.

Peter Griffith:

Thank you, Jay. We're pleased with our strong execution and performance in the fourth quarter and for the full year 2023. In the fourth quarter, total revenue of $8.2 billion grew 20% year-over-year and non-GAAP EPS of $4.71 grew 15% year-over-year. For the full year, we delivered total revenue of $28.2 billion, 7% growth year-over-year and non-GAAP EPS of $18.65, 5% growth year-over-year. As a reminder, both Q4 and the full year results include Horizon's results beginning October 6 when the acquisition closed. So our financial results will exclude approximately 1 week of Horizon's results from our fourth quarter results. I'll review the details of our fourth quarter and full year financial results before discussing our outlook for 2024. The financial results are shown on Slides 54 to 56 of the slide deck. Turning to our fourth quarter's total revenue of $8.2 billion. We saw product sales increased 20% year-over-year, driven by volume growth of 23%, offset by net selling price decline of 3%. Excluding the impact of Horizon, product sales increased 5% year-over-year driven by volume growth of 9%. Full year total revenues of $28.2 billion grew 7% year-over-year. Product sales increased 9% year-over-year, driven by 15% volume growth. Other revenues decreased 16% year-over-year, primarily due to lower profit and cost sharing from our COVID-19 collaboration with Lilly in 2022. Strong expense discipline resulted in a 50% non-GAAP operating margin as a percentage of product sales for the full year 2023. While we continue to focus on both internal and external innovation, investing $4.7 billion in our pipeline and $27.8 billion in our acquisition of Horizon. With product sales volume growth at 23% in Q4 and 15% for the full year, we still efficiently manage the operating expenses of the business. Q4 non-GAAP operating expenses increasing 18% year-over-year, while full year non-GAAP operating expenses increased 9%. Excluding the impact of Horizon, Q4 non-GAAP operating expenses increased 3% and full year non-GAAP operating expenses increased 5%. On a non-GAAP basis, Q4 cost of sales as a percentage of product sales was flat on a year-over-year basis at 16.3%. For the full year, cost of sales as a percentage of product sales increased by 1.1 percentage points to 17.0%. The full year increase was primarily driven by higher profit share and changes in our product mix, partially offset by the replacement of the Puerto Rico excise tax with an income tax beginning in 2023. Non-GAAP R&D spend in the fourth quarter increased 16% year-over-year and 8% year-over-year for the full year primarily due to higher spend on later-stage clinical program and marketed product support, including spend on programs acquired from the Horizon acquisition and continuing investment in our pipeline, including MariTide. Q4 non-GAAP SG&A expenses increased 20% year-over-year, primarily driven by commercial and G&A expenses related to the Horizon acquisition. Full year non-GAAP SG&A expenses increased 5% year-over-year, primarily driven by commercial and G&A expenses related to the Horizon acquisition, partially offset by a decline in other marketed product spend. Non-GAAP OI&E were about $635 million in expense in the fourth quarter, a $168 million increase year-over-year, primarily driven by increased interest expense related to the debt issued for the Horizon acquisition. Full year non-GAAP OI&E was favorable $279 million year-over-year, primarily driven by the change in accounting for the BeiGene investment to the fair value mark-to-market method and by gains related to early debt retirement, partially offset by higher net interest expense. Our non-GAAP tax rate increased 2.5 percentage points year-over-year to 15.9% in the fourth quarter and 2.7 percentage points year-over-year to 16.5% for the full year primarily due to the 2022 Puerto Rico tax law change mentioned previously. The company generated $7.4 billion of free cash flow in 2023 compared with $8.8 billion in 2022. The decrease is driven by the Horizon transaction and integration costs, higher repatriation tax payments and higher capital expenditures. We expect to continue to generate strong cash flows with the addition of Horizon and are on track with our deleveraging plans to return to our efficient capital structure by the end of 2025. In summary, we continue to execute on our multiple capital allocation priorities. First, we continue to prioritize investments in both internal and external innovation. Our increased spending in non-GAAP R&D of 8% in '23 over '22, coupled with the acquisition of Horizon Therapeutics, continues to broaden and strengthen our balanced portfolio across therapeutic areas. With our strong late-stage innovative pipeline moving forward through development, we expect our non-GAAP R&D to continue to increase in 2024. Second, we continue investing in our business for long-term growth, including our state-of-the-art manufacturing facilities in Ohio and North Carolina. Amgen, Ohio, our new advanced assembly and final product packaging plant has just received license from the FDA for commercial production in January, roughly 2 years after we broke ground and our innovative drug substance plan under construction in North Carolina is expected to be operational by 2026. In addition, we've positioned the organization to accelerate investments in innovation, including leveraging the power of generative artificial intelligence. And third, we returned capital to shareholders through growing dividends, including $2.13 per share in the quarter. This represented a 10% increase over that paid in each of 2022 four [ph] quarters. Turning to the outlook for the business for 2024. First, because this is the first full year incorporating the impact of Horizon, we're providing some additional granularity in our guidance, which we don't expect to repeat to the same extent in the future. For 2024, we're expecting revenue of $32.4 billion to $33.8 billion and non-GAAP earnings per share of $18.90 to $20.30. As we continue to integrate Horizon, we expect the acquisition to be accretive to non-GAAP EPS in 2024, and we're on track to meet the synergies target previously communicated of at least $500 million in pretax cost by year 3 after closing or in 2026. Our revenue range reflects our strong growth outlook driven by numerous opportunities across our four therapeutic area pillars. We will record a full year of legacy Horizon product sales, and we expect continued volume-driven growth in our priority products Repatha, TEZSPIRE, EVENITY, Prolia and BLINCYTO consistent with industry trends in our recent history, we expect mid single-digit price decline for our portfolio in 2024. As a reminder, as you model the first quarter of 2024 and consistent with our historical trends, we expect first quarter product sales to be the lowest quarter as a percentage of the full year due to benefit plan changes, insurance reverifications and increased co-pay charges. So we expect the first quarter of 2024 total revenue to grow roughly 20% year-over-year. For the full year, we expect other revenue to be in the range of approximately $1.3 billion to $1.4 billion. And we continue to efficiently run the business through our disciplined approach to managing operating expenses. In 2024, we're making incremental R&D investments to support our promising late-stage pipeline, including our rapidly advancing oncology programs as discussed following ESMO in October and other programs, including MariTide. Furthermore, the addition of Horizon has an impact on the 2024 operating margin given the timing of when synergies are realized. As a result, we project the full year non-GAAP operating margin as a percentage of product sales to be roughly 48%. Note that we expect non-GAAP operating margin growth to accelerate in each of the quarters following the first quarter. There are primarily three reasons for this. First, typical lower product sales in Q1, as I mentioned above, and in each of the following quarters. Second, increased spend on our commercial brands will continue building on the investments we made in the second half of 2023, including Repatha, Otezla, and our bone portfolio of EVENITY and Prolia And third, Q1 2024 reflects the addition of Horizon, for which we are just at the beginning stages of realizing synergies given the acquisition close date of October 6. So we expect non-GAAP operating margin to be roughly 43% in the first quarter. I would reiterate that we expect operating margin growth to accelerate in each of the quarters following the first quarter. We project non-GAAP cost of sales to be in the range of 17% to 18% as a percentage of product sales for the 2024 year. Taking into account the full year of Horizon related expenses, we expect non-GAAP R&D expenses in 2024 to increase approximately 20% year-over-year with investments also increasing to advance key pipeline assets, including AMG 193, MariTide, rocatinlimab and tarlatamab. We see significant potential in our innovative pipeline, and it is important that we strategically invest now to fully unlock the opportunities ahead to create long-term value for patients, staff and shareholders. And for non-GAAP SG&A spend, we expect 2024 full year amounts as a percentage of product sales to be between 21% and 22%. We anticipate non-GAAP OI&E to be in the range of $2.6 billion to $2.7 billion. As mentioned on our Q3 '23 call, the '24 guidance includes the interest expense related to the $28 billion of debt rates for the Horizon acquisition. We expect a non-GAAP tax rate of 16% to 17%. Our guidance is primarily being driven by two factors. The first is the jurisdictional mix of income, including the full year benefits associated with the Horizon transaction and the legal entity rationalization undertaken in the fourth quarter of 2023 in part to integrate the Horizon entities into our existing U.S. headquartered legal entity structure. The second is the benefit from a planned payment to the IRS as an advanced deposit as we've done in the past to stop the accrual of interest on uncertain tax positions. There is no change in our belief in the merits of our legal arguments with the IRS as we prepare for trial. Given the interest rate environment, although the deposit negatively affects our cash flow in '24, if any of the deposit is returned to us upon the resolution of our litigation, those funds would accrue interest income. Therefore, the makes this payment makes this payment a prudent use of our capital. Once again, out of an abundance of clarity, this represents no change in our belief in the merits of the tax court case. The guidance also includes the impact of the adoption of the OECD 15% minimum tax by certain jurisdictions. Based on our individual footprint, we don't anticipate any significant effects of the new rules in 2024, but we're closely watching the global tax landscape for future impacts as the framework continues to be considered by additional jurisdictions and new rules take effect. We expect governments around the world, including the United States to continue to look for more sources of tax revenue from large multinational corporations that could result in higher taxes in the coming years. Similar to 2023, we expect share repurchases not to exceed $500 million in 2024 we expect that we will continue to increase our dividend. We expect capital expenditures of approximately $1.1 billion in 2024, consistent with our capital allocation priority to invest in our business, including the Ohio and North Carolina facilities I mentioned ahead and into the rare disease pillar. In summary, we delivered another strong year of financial results in 2023. Our confidence in the long-term growth of Amgen is strong, and we believe that our new rare disease pillar, one of our four pillars will be an important additive source of growth for the company. This concludes the financial update. My thanks to my approximately 27,000 plus colleagues at Amgen around the world for their commitment to our mission of serving patients and their tireless efforts in 2023. I'll turn it back to Bob for Q&A.

Operator:

Thank you [Operator Instructions] Our first question comes from Michael Yee from Jefferies. Please go ahead. Your line is open.

Jay Bradner:

Yes. Thanks a lot, Michael. We really appreciate the consideration the Phase 1 paper is receiving from the community. It's exciting to report these data. For those who haven't seen it, this was a randomized, double-blind, placebo-controlled study, 49 patients, looking at safety, PK, PD, single ascending dose, 7 cohorts, multiple ascending dose 3 cohorts, 3 monthly doses, patients with obesity being migrated than 30. And we were quite pleased with the outcome. Looking at the 420-milligram dose as an example, which was the highest dose study, 14.5% weight loss at only day 85. And moreover, quite durable coming off of that medicine out to 150 days, all with relatively mild gastrointestinal side effects. And so to answer your last question first, we find the Phase I data, which we're pleased to share with the community to be quite supportive of our ongoing work to develop this medicine to the greatest possible benefit of patients suffering from obesity. Now you've asked questions around some of the measurements on this study, lipid, blood pressure and A1C. And I would just caution that this is a Phase I trial, the numbers are very small, that the duration of treatment is rather short. But even with all of those caveats, while hard to draw conclusions from such small numbers, especially labile measurements like blood pressure and lipids, all are directionally favorable. And so we have - we take no concern whatsoever from those measurements on the study.

Operator:

Thank you, Michael. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line open.

Jay Bradner:

Yes. Thanks for the question. I'll take this one as well. As you may or may not know, the Phase II study, which is ongoing at present and going very well, explores 11 dosing cohorts with relevant placebo controls. And through that study, we'll have a chance to gain an experience with a longer exposure to MariTide dosed in different ways. We've recently added a part 2 to this study that will allow us to explore even more durable weight loss beyond 52 weeks enabled by just very rapid enrollment. And these four dosing cohorts will go on to test dose level and even less frequent dosing schedules than monthly. And so these Phase II data, even by end of year will be strongly instructive as to finding a safe and tolerated and efficacious dose to carry into Phase III clinical investigation.

Justin Claeys:

Thanks, Julianne. We'll go to the next question.

Jay Olson:

Hey, thank you so much for taking a question, and congrats on the progress. Another question on 133. Talk about whether or not that we see later this year will include patients from two of the study? And do you think it's possible that 133 could be dosed twice every 2 or 3 months? And also, if you could just comment on the rollover rate of patients from Part 1 to Part 2? Thank you.

Jay Bradner:

The third part was a little bit broken up of your question. I heard a better explanation of part two frequency of dosing. And then I did not hear your third part.

Jay Bradner:

Okay. Yes. Thank you for the question, Jay. Let me give a little bit of context on this Part 2 study that I think will help answer them. In part 2, the intent is to really look at durable weight loss beyond 52 weeks. And so by durable weight loss, patients eligible for Part 2, which begins at the end of 52 weeks, will be responding to this medicine. And then they'll be rerandomized to four cohorts that will test dose level. And again, this even less frequent dosing schedule. We have not disclosed the granularity on the dosing schedule. This is a competitive environment. But we're afforded this chance because the ADC, the antibody core of MariTide, like so many immunoglobulin therapeutics allows for the opportunity to use it much less frequently. The rate of patients rolling over to Part 2 will be established as the Phase II study continues to progress this year.

Operator:

Thank you, Jay. Our next question comes from Chris Schott from JPMorgan. Please go ahead. Your line is open.

Robert Bradway:

Sure, Chris. Maybe we'll take it in a couple of parts. But Vikram, share your thoughts first.

Robert Bradway:

And Chris, the only thing I would add is building on what Vikram said in his prepared remarks, we're excited about the international opportunity as well, and I think he characterized that well previously. And we're also excited about what we see as ongoing opportunities to invest in innovation for the benefit of TED patients. So all in all, I feel excited about the rare disease pillar that we've established and the role that TEPEZZA will play in that.

Operator:

Thank you, Chris. Our next question comes from Evan Seigerman from BMO Capital Markets. Please go ahead. Your line is open.

Robert Bradway:

Yes, and thanks for the question. Murdo, why don't I start and then you add on. So it's a great and timely question. The Phase II COPD study of TEZSPIRE, we expect data in the first half of this year. This was a big study, 337 patients, moderate to severe COPD. They're having exacerbations despite being on triple therapy. And so reflective of the current unmet need inadequacy of therapy for patients with COPD. This is a slightly broader population than Dupi that we're studying here. We're totally on track for the readout. We quite like the mechanism here. You must know that TSLP [j works as a signaling factor upstream and by blocking it with our unique biotherapeutic, we block TSLP IL-25, IL-33 signaling. TSLP so many cell types modulating this airway Type 2 response. By hitting TSLP upstream, we think we can really have an impact on the disease biology. We see TSLP-elevated in the serum patients in bronchial mucosa [PH] and bronchoalveolar lavage fluid. It's released by airway epithelium. There's just a lot of signals from the basic biology of this disease pointing to a medicine of this nature. And by looking at the broader population than they did with Dupi, we have a chance to really figure out who the responder is. Murdo?

Justin Claeys:

Okay. All right. Thank you, Julian. Next question?

Umer Raffat:

Hi, guys. Thanks for taking my question. I wanted to touch up on AMG 133 as well, two parts question. First, on the discontinuations at the high dose, we know five out of eight did not finish the full duration of the study, but there was a second arm also of this high dose 420-milligram with 10 patients, which was not reported. This was the one with digital tools. Could you speak to the discontinuation rate in that arm? So this a 420 done separately, which is not part of paper? And secondly, I know there's a case of liver enzyme elevation of the 280-meg dose, but this patient also had COVID. Could you perhaps speak to the timing of liver enzyme elevation relative to the COVID episode? Thank you very much.

David Reese:

No. I mean we can get back to you on that. I don't know that we reported that - those data and the discontinuation rate.

Operator:

Thank you, Umer. Our next question comes from Colin Bristow from UBS. Please go ahead. Your line is open.

Robert Bradway:

Yes. Thanks, Colin. I appreciate the deep consideration of the molecule, especially. I'd start by saying, I don't regard these doses as high. I'm new here, but 420 milligrams for biotherapeutic that's an antibody drug conjugate with a peptide antibody ratio 2:1 seems well in scope for a modern biotherapeutic product. I don't need to tell this community paying so close - such close attention to Amgen that this is a very sophisticated biotherapeutics organization. And on the manufacturing side, just every patient, every time. And we have all the capabilities necessary to deliver this medicine at whichever of these three or other dose and schedule we arrived at. So no concerns there for me whatsoever. Regarding the balance of the pharmacology, you do invoke a difference between our medicine and medicines developed by pure pharmaceutical companies. Namely mechanistically the core antibody of MariTide inhibits the GIP receptor, whereas these other peptide medicines agonize it. We feel very secure in our choice to inhibit that receptor supported by just the finest level of experimental data available experiments of nature that genome-wide association studies in very large populations have pointed to a need, an opportunity to inhibit the gift receptor to deliver lower BMI as observed with variance in that receptor and downstream signaling pathways that correlate with reduced body mass index in large populations. As to the balance, which you asked, between inhibition of GIP receptor and agonism of GLP-1, these are very difficult measurements to make in humans, but our modeling suggests that with the therapeutic doses and exposures that we observe that we're achieving both.

Jay Bradner:

Just as we go to the next question, let me observe that we're almost up to the hour that we actually all to set aside, but I know we still have quite a few questions in the queue. So we'll try to get one question for a caller here and get through. We'll stay through the queue of calls or questions rather that's still waiting for us, but I know some of you may have to drop. So let's move forward, Justin.

Operator:

Thank you, Collin. Our next question comes from Yaron Werber from TD Cowen. Please go ahead. Your line is open.

Robert Bradway:

First, why don't we ask Vikram, just to address the performance of the product right now in NMOSD. And then a combination of Jay and Dave can talk about the other activities or other potential applications.

Jay Bradner:

Yes. No, I'm happy to. As you may know, on a hematologist, I think CD19 is a terrific target. It's expressed really on all B cells and spares plasma cells. And therefore, considering indication expansion, as you've asked, there's a large number of diseases that could potentially be approached with UPLIZNA to the real benefit of patients with unmet need, far beyond the application of the prevailing CD20s that target just a subset of B cells. This is not lost on our team, and we're working through indication expansion priorities presently.

Operator:

Thank you. Our next question comes from Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.

Robert Bradway:

Sorry, I had trouble understanding your question.

Robert Bradway:

Maybe I'll jump in. Mohit, we're not commenting at this point on the provider. We just said that we're going forward with the subcu.

Operator:

Thank you, Mohit. Our next question comes from Geoff Meacham from Bank of America. Please go ahead. Your line is open

Robert Bradway:

Yes. Thanks for the question, Geoff, really appreciate it. As you know, obesity is a major public health crisis, maybe 40% of Americans with a BMI over 30 massively costly. So a huge burden to the global third-party payers and societies. The obesity-related disease list is quite long and expanding from cardiovascular disease and heart failure, type 2 diabetes, obstructive sleep apnea, NASH and AFLD kidney disease. These are chronic conditions that really demand medicines that can deliver durable and chronic weight loss. And so we think we have a really strong offering for these obesity-related diseases rising in our Phase II program, as you know. And obesity has a strong genetic component and we locked on to gipper [ph] inhibition based on genetic insights. So the opportunity space is quite large. You asked the question what indications and perhaps even in what sequence. And when we have all the requisite data, we'll remark in due course. But we intend all indications where this dual mechanism can improve public health. And we are actively planning and on track for an expansive Phase III program.

David Reese:

Yes, I think -- Geoff, this is Dave Reese. I would just add that we're planning a very expansive Phase III program. So you can expect to see multiple indications move forward in parallel. And as Jay indicated, as we start to see data, we will begin launching those trials, and we'll discuss them. And then in addition, as you're aware, regulatory authorities around the world require a certain body of safety data before Phase III launches. And so of course, we will be compliant with that. But our goal is to launch Phase III as quickly as possible once we have the requisite data set and regulatory approval.

Operator:

Thank you, Geoff. Our next question comes from David Risinger from Leerink Partners. Please go ahead. Your line is open.

Robert Bradway:

Yes. Thanks, David. I mean we're making all these measurements, and I'm not going to try to forecast the outcome of that pharmacology at this time. As you've seen in our Phase I program, the medicines very well tolerated, delivering durable weight loss and benefit without significant excursion of some of those measurements. I just think it's too early to try to answer your question, and we'll have all that data at the end of the first part of Phase II towards the end of this calendar year.

Justin Claeys:

Okay. Julian, we’ll go to next question, please.

Q – Unidentified Analyst:

It's Ege [ph] on for Michael. Thanks for taking our question. A quick one on [indiscernible] Can you talk about your plan of data disclosure this year and your current thinking on the potential registration path? How do you think about the positioning of this agent relative to some of the other emerging agents based on different mechanisms such as ADC or AR degradors in prostate cancer? Thank you.

Murdo Gordon:

Jay, in terms of the data sharing, do you want to share...

Justin Claeys:

Julianne, next question, please.

Tim Anderson:

Thank you very much. So Eli Lilly today made a couple of sets of comments about this topic of GIP agonism versus antagonism and they also weighed in on the data you published yesterday. And I'm wondering, in as much as you heard that or read those comments, is there any context to add or anything that's factually incorrect or anything to refute because they covered quite a few points, and they continue to express their view, which is agonism is the best way not antagonism?

Justin Claeys:

Okay. Julianne, next question, please.

Q – Unidentified Analyst:

Hi. Thanks so much for taking the question. This is Nicole on for Robin. So on Daxdilimab, targeting ILT7 business, can you talk about your level of confidence in this target in light of the competitive landscape? And would you expect to see near term from safety and efficacy?

Jay Bradner:

Yes. Well, it's very early days with this medicine. There is strong preclinical support from the published literature and our own preclinical work. It's nicely for patients, a very competitive landscape, but this is the earliest phases of clinical investigation. And so we're going to approach this with total aquapoise and bring the medicine to the patients that stand to benefit the best based on the biology underlying.

Justin Claeys:

Okay. Jullian, next question please.

James Shin:

Thanks for taking our question. I have one for Jay. I just kind of want to piggyback on what Tim was alluding to. The GIP antagonism versus agonism, I'm looking at the Nature paper, it looks like 133 420-milligram dose has a slight blip in triglycerides that eventually fades, but it does seem like antagonism is behaving a little differently from the literature for agonism. Is it too early to chalk it up to antagonism versus agonism in your view? Just wanted to get your thoughts there.

Justin Claeys:

Great. Then I think we have time for one more, Julianne.

Carter Gould:

Good evening. Thanks for taking the questions. Maybe just one on 786. Can you walk through exactly what's sort of driving - maybe let me take it back. Maybe first kind of if you could outline sort of how you're setting expectations there? And any color on what's driving the delay there? It seems like it's taking a long time to enroll 72 patients? Thank you.

Justin Claeys:

And Julianne, we're going to turn it back to Bob for some closing remarks.

Operator:

This concludes our 2023 Q4 earnings call. You may now disconnect.+

Operator:

My name is Julianne, and I'll be your conference facilitator today for Amgen's Third Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speaker's prepared remarks. [Operator Instructions] I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Robert Bradway:

Okay. Thank you, Justin and thank all of you for joining our call. It's an exciting time here at Amgen. And we're continuing to execute well this year, serving many more patients around the world with medicines such as Repatha, EVENITY and Tezspire, advancing a number of promising first-in-class medicines rapidly through our pipeline and preparing for our next wave of biosimilar launches. However, as this is our first earnings call following the close of our acquisition of Horizon Therapeutics, I thought we might turn our attention there first. The Horizon acquisition, coupled with our purchase of ChemoCentryx, which we acquired a little more than a year ago, gives Amgen a significant rare disease business that fits squarely within our overall strategy and will be additive to the growth we expect from our base business. At the heart of our strategy of course is innovation. First, our best-in-class medicines that make a big difference for patients suffering from serious diseases. The medicines in our rare disease portfolio like Tavneos, Tepezza, KRYSTEXXA and UPLIZNA fit this description perfectly and they'll benefit from Amgen's decades of experience in inflammatory diseases. These medicines are also early enough in their lifecycles that we can positively impact their growth by leveraging Amgen's capabilities in process development, lifecycle management and manufacturing. Finally, we spent the past decade or so building out our international footprint with Amgen medicines now available in about 100 countries. And today our rare disease sales come almost exclusively from the U.S. So, we'll be able to leverage our global presence to quickly bring these medicines to patients around the world. You'll hear more in a minute from Vikram Karnani, who joined us through the Horizon acquisition and is leading a newly created rare disease business that is now the fourth leg of Amgen's commercial stool, alongside our inflammation, oncology and general medicine businesses. Turning to our financial performance in the quarter. Total revenues were up 4% and earnings per share were up 6% compared with a year ago. Volume increased 11% globally, which represents our fourth consecutive quarter of double-digit volume growth. And we achieved good balance across all of our geographic regions and therapeutic areas. Seven of our medicines generated record sales in the quarter. And I'll highlight one of these, BLINCYTO, which delivered 55% sales growth in the third quarter. We see continued upside potential for BLINCYTO as it is increasingly used in earlier lines of therapy and as practice guidelines are updated to reflect the role this medicine can play in treating a broad range of patients with acute lymphoblastic leukemia. Turning to our pipeline. We had the opportunity to discuss six potential first-in-class oncology assets with you recently following ESMO. Three of these have earned Breakthrough Therapy designations from the FDA; tarlatamab, BLINCYTO and LUMAKRAS in combination with Vectibix in colorectal cancer. We also continue to progress trials for bemarituzumab in gastric cancer, for Xaluritamig in prostate cancer and for AMG 193, our PRMT5 inhibitor, which has generated responses across six solid tumors. I'll just quickly note that AMG 193 was identified through our proprietary DNA encoded library technology which we added through the 2019 acquisition of Nuevolution, and it demonstrates our leadership in the emerging field of multi-specific drugs that can address pathways that have long been recognized but considered inaccessible to traditional drug discovery efforts. In other pipeline news, we've completed enrollment in our Phase 2 obesity study for maridebart cafraglutide, which was formerly known as AMG 133. And finally, the FDA has accepted our BLA for our biosimilar to EYLEA. Looking at our business, we feel we have good momentum across the board. We have everything we need with the portfolio, the pipeline and the people to deliver attractive sales and earnings growth through the end of the decade and beyond. As always, I want to thank Amgen employees around the world, including some 2,000 new colleagues focused on rare diseases for their commitment to strong execution on behalf of the patients we serve. With that, I'll now turn it over to Murdo Gordon. Murdo?

Vikram Karnani:

Thanks, Murdo. We're excited to bring together Horizon's medicines, pipeline and rare disease expertise with Amgen's history of leadership in inflammatory diseases, global infrastructure and world-class biologic capabilities. For those that are not as familiar with Horizon's portfolio, I will spend the next few minutes providing some background on our rare disease medicines. Horizon's business delivered $945 million of sales in the third quarter, representing 2% year-over-year sales growth with multiple positive leading indicators. Let me describe in more detail. Tepezza, the first and only medicine approved for the treatment of thyroid eye disease, regardless of disease activity or duration, generated $453 million of sales in the third quarter, representing 2% quarter-over-quarter growth. We are confident that now as we have officially joined forces and have on-boarded the full commercial team, we will make significant progress in advancing this important product over time to patients. We are driving several initiatives to continue to build the U.S. thyroid eye disease market. In the third quarter, we saw a greater than 50% year-over-year increase in the number of Tepezza prescribers, supported by the April 2023 FDA label update to treat patients with thyroid eye disease, regardless of disease activity or duration. We are pleased with this progress and are continuing to educate the physician community on new clinical data and updated indication across the full spectrum of TED patients. Second, large national and regional payers are continuing to make favorable policy changes to help eligible patients access Tepezza. To date, we have obtained favorable policy changes for greater than 30% of U.S.-covered lives, which are expected to take effect later this year and early next year. As a reminder, for Tepezza, there is a time lag between a patient being identified for Tepezza treatment and treatment being initiated. It can take up to 90 days for a patient enrollment form to move through the prior authorization process. Once that step is complete, then the patient's infusion needs to be scheduled at an appropriate site of care. This process takes time and we have taken several important steps to minimize the time between patient identification and treatment initiation. Finally, we continue to see approximately 100,000 patients with moderate-to-severe disease in the U.S. that are appropriate for Tepezza, with the majority of these patients in low Clinical Activity Score settings. Therefore, the patients -- the FDA's label update, combined with favorable medical policy changes by payers and supported by the expanding base of prescribing physicians, gives us a significant opportunity to reach more patients. These positive execution trends underpin our confidence in Tepezza's growth potential in the U.S. Moving on to markets outside the U.S. We continue to see international expansion as a meaningful long-term growth opportunity for Tepezza which received its first ex-U.S. approval in Brazil in the second quarter of this year. We are particularly excited about the opportunity to leverage Amgen's long-standing presence in multiple major ex-U.S. markets, including Europe and in Japan, where we have reported positive data from the Phase 3 OPTIC-J trial. We also continue to enroll a Tepezza Phase 3 trial in Japanese patients with chronic or low clinical activity thyroid eye disease. KRYSTEXXA, the first and only medicine approved for uncontrolled gout, delivered a record $253 million of sales in the third quarter, representing 32% year-over-year growth. Sales are now annualizing at a $1 billion run rate. Performance in the third quarter reflected continued strong uptake in both the rheumatology and nephrology segments. Strong results were driven by execution across all phases of the patient journey, demand-generation, stakeholder education and adherence to treatment. The FDA approved KRYSTEXXA's label change for combination with methotrexate in July 2022. We have seen a steady increase in uptake since then. Immunomodulation usage remained above 70% of new patient starts in the third quarter. We see an opportunity to redefine KRYSTEXXA with methotrexate as a standard of care and reach even more of the over 100,000 uncontrolled gout patients in the U.S. UPLIZNA sales increased 54% year-over-year in the third quarter to $67 million. International expansion is also underway with UPLIZNA now launched in multiple ex-U.S. markets, including Germany, France, Italy, Spain and Brazil. Additional indications in development also support UPLIZNA's long-term growth potential with Phase 3 trials underway in both IgG4-related disease, and myasthenia gravis. The rest of Horizon's portfolio generated $173 million of sales in the third quarter, primarily driven by our portfolio of ultra-rare medicines; RAVICTI, PROCYSBI and ACTIMMUNE. We see an opportunity for this basket of products to continue to generate robust sales. Before I turn it over to Dave Reese, I want to take the opportunity to thank all my colleagues in the rare disease business for maintaining their focus on patients throughout a period of distraction over the last several months. Looking ahead, we are excited to work together by leveraging Amgen and Horizon's combined capabilities to ensure our medicines reach more patients even faster who are suffering from serious and rare diseases globally. I'll now turn it over to Dave.

Peter Griffith:

Thank you, Dave. I'll review our third quarter results before discussing our updated 2023 guidance. Turning to our third quarter financial results, which are shown on Slide 44, total revenues of $6.9 billion grew 4% year-over-year and non-GAAP earnings per share of $4.96 grew 6% year-over-year. The growth in revenues was due to product sales increasing 5% year-over-year, driven by a 11% volume growth. Third quarter total non-GAAP operating expenses increased 4% year-over-year. We advanced our pipeline and invested in growth opportunities in the quarter, while delivering a non-GAAP operating margin as a percent of product sales of 52%. Non-GAAP cost of sales as a percent of product sales increased 1.3 percentage points on a year-over-year basis to 17.4%, primarily driven by higher profit shares and changes in product mix. Non-GAAP R&D expenses in the quarter decreased 2% year-over-year due to lower spend in research and early pipeline activities, partially offset by higher spend in later-stage clinical programs and marketed products. Year-to-date, non-GAAP R&D expenses increased 5% due to higher spend in later-stage clinical programs and marketed products, partially offset by lower spend in research and early pipeline. Non-GAAP SG&A expenses in the third quarter increased 1% year-over-year. We continue to focus on prioritizing key investments, digitalization, driving productivity and accelerating use cases for artificial intelligence. Non-GAAP OI&E were a net $225 million expense in the third quarter. The year-over-year favorability was driven primarily by higher interest income and the change in Beijing accounting from equity method to a mark-to-market investments, with the impact included only in our GAAP results. Our third quarter non-GAAP tax rate increased 3.2 percentage points to 16.1%, primarily due to the 2022 Puerto Rico tax law change that replaced the excise tax with an income tax beginning in 2023. We continue to execute on our capital allocation priorities. First, we continue to prioritize investments in both internal and external innovation. In the third quarter, we increased investments in programs, including maridebart cafraglutide, I'll call it mari from now on, Rocatinlimab, Tavneos and ABP 206, our biosimilar to OPDIVO. Second, we continue investing in our business for long-term growth, including through simultaneous construction of our state-of-the-art manufacturing facilities in Ohio and North Carolina. We're excited for the anticipated licensure of our Ohio facility in the first half of 2024. Additionally, we're making investments in all parts of our business to leverage the power of Generative AI opportunities. Third, we have a strong track record of returning capital to our shareholders and pay dividends of $2.13 per share in the third quarter, representing a 10% increase over the third quarter in 2022. The company generated $2.5 billion of free cash flow in the third quarter of 2023 compared with $2.8 billion in the third quarter of 2022. We will continue to generate strong cash flows. However, Q4 cash flow will be lower than historical patterns due to the timing of tax payments and Horizon transaction-related expenses. Turning to the outlook for the business for 2023 on Slide 46. We're pleased to have closed the acquisition of Horizon Therapeutics. We're updating our full-year 2023 guidance to include Horizon financial results starting October 6, 2023. So our Q4 results will exclude approximately one week of Horizon's results. We are raising our 2023 revenue guidance to$28.0 billion to $28.4 billion versus previous guidance of $26.6 billion to $27.4 billion. For 2023 non-GAAP earnings per share, we are narrowing the range to $18.20 to $18.80 versus previous guidance of $17.80 to $18.80. We will add Horizon's business into Q4 without material non-GAAP EPS dilution. However, we do expect Q4 non-GAAP EPS to be lower than Q3 non-GAAP EPS because of planned investment increases in our business, including key assets in our innovative pipeline, beginning with mari, Olpasiran and AMG 193, and other strategic business investments, including Generative AI use cases in all parts of our business. This sequential pattern is consistent with historical trends. And in addition, Q4 non-GAAP EPS will begin to include the recognition of interest expense related to the Horizon financing as a non-GAAP expense, important additional points to consider as you model the remainder of 2023. We now expect other revenue for 2023 to be in the range of $1.2 billion to $1.3 billion versus our prior range of $1.1 billion to $1.3 billion. With the Horizon acquisition, we now anticipate full year non-GAAP operating expense for 2023 to increase from our previous estimate of 3% (ph) to approximately 10% versus last year. Horizon represents approximately 5 percentage points of this 10% year-over-year increase. We continue to expect the full year 2023 operating margin as a percentage of product sales to be roughly 50%. We continue to expect non-GAAP cost of sales as a percentage of product sales to be between 16% and 17%. We now expect our non-GAAP R&D expenses to increase from our prior guidance of 5% to about 10% year-over-year. Horizon represents approximately 3 percentage points of this 10% year-over-year increase. The additional 2 percentage points are driven by planned increase in our investments in our innovative pipeline, including mari, Olpasiran, and AMG 193. We continue to expect non-GAAP SG&A to be down year-over-year as a percentage of product sales slightly. We now expect non-GAAP OI&E expenses to be in the range of $1.4 billion to $1.5 billion, up from our prior guidance of $1.1 billion to $1.2 billion. We expect Q4 OI&E to be about $700 million, reflecting interest expense related to the Horizon financing, which will be included in our non-GAAP results effective October 6. And as you begin to model 2024, note that we expect 2024 OI&E to be consistent with this Q4 run rate. This higher interest expense is driven by the $28 billion of debt raised for the Horizon acquisition at a weighted average interest rate of 5.6%. We expect to end 2023 with approximately $65 billion of long-term debt, including the current portion of it, and $11 billion of cash and cash equivalents. For the full year, we anticipate a non-GAAP tax rate of 16.5% to 17%, down from prior guidance of 17.5% to 18.5%. We expect approximately 540 million shares to be outstanding in Q4. This increase from Q3 is driven by the conversion of unvested Horizon equity awards and the Amgen equity awards. Our 2023 capital expenditures are now projected to be approximately $950 million, up from our prior guidance of $925 million. The addition of Horizon's rare disease team further strengthens our confidence in delivering against our long-term growth objectives. We continue to allocate capital to advance innovation at speed and at scale. And I'm incredibly grateful to our now 26,000-plus colleagues for successfully executing our mission of serving patients. This concludes the financial update. And now, I will ask our operator, Julianne, please open the lines for Q&A and remind our participants of the procedure to ask their questions. Julianne?

Michael Yee:

Hey, guys. Good morning. Thanks for all the details around the Horizon transaction. I just wanted to ask a question to David Reese. I mean, David unless we're hiding under a rock, I guess obesity is like the biggest thing ever now and wanted to understand your commentary and confidence around 133 and the profile around what you think that could be relative to leaders and how 786 would fit into that given such a high bar for other orals? Thank you.

Operator:

Thank you, Michael. Our next question comes from Yaron Werber from Cowen. Please go ahead. Your line is open.

Peter Griffith:

Right. Thank you, Yaron. The 700 is everything, so that's the full run rate. And on the question on R&D, as I said in my remarks, we've focused our spending on the later clinical and in-market portfolio that was slightly offset by some decreases in early research. But we continue to spend and invest in the business and we'll continue to do that. As you can see, we're fortunate to have a significant number of opportunities in Phase 3 in the later stages. So that's what we'll stay focused on, will continue to differentially invest in the opportunities in innovation and we're very excited about that.

Terence Flynn:

Great. Thanks for taking the question. Maybe a two-parter from me for Peter as well. Peter, again, I know you went through a lot of numbers there at the end. But in terms of the revenue guidance raise for the year, can you just characterize if that was all coming from the Horizon portfolio or if there was any other contribution from the underlying base business? And then the second part of the question is just any directional help with how to think about 2024 tax rate, as I know there's a number of moving pieces from some legislation, but then you obviously have the Horizon deal close. So just directionally, can you help us out in 2024 tax rate? Thank you.

Robert Bradway:

Revenues.

Operator:

Thank you, Terence. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Robert Bradway:

Yeah. Maybe we'll take this in two parts, Salveen, it's Bob. Obviously, we're not going to provide '24 guidance here this morning. But we'll see whether we can give you a clear sense of the things that are exciting us when we look at those products for -- heading into next year. And just generally on the question of long-term guidance, as you've heard us say on a number of occasions, we remain confident that we're on track to meet or beat the objectives that we established for 2030, in some ways now frankly, we're more focused on what we can deliver through 2031 and soon to be 2032 as well. So we reviewed -- in-depth review of the oncology portfolio a couple of weeks ago and gave you a good sense for the moving pieces through the end of the decade. And we may seek to present a picture of the business in that way now heading into next year, so that you can get a more comprehensive deep-dive into the different segments of the business that are driving growth. But let's turn to first question, which is the outlook for Horizon and the initiatives that are underway, in particular, with respect to Tepezza, and KRYSTEXXA and UPLIZNA. So Vikram, why don't you fire away?

Salveen Richter:

Thank you, Vikram.

Jay Olson:

Hey, congrats on all the progress on so many fronts. Could you talk about your investments in AI technology and how that may influence your drug discovery and development over the next five to 10 years? Thank you.

David Reese:

Yeah. Thanks, Jay. This is an area where we're very excited. You know, I'd like to characterize it as the hinge moment where we're seeing the coming together or the unification of technology and biotechnology. I really think this is going to affect over time a qualitative change in how we do drug discovery and drug development. So everything from protein structure prediction, protein-protein interaction, prediction at the molecular level, to multiomic analysis on extraordinarily large datasets which can -- which is only tractable through AI or machine learning, dense clinical trials data and then real-world evidence and real-world data. When you look across that spectrum, I believe we probably have the largest datasets in the industry. And so we are putting the tools in place and the foundation or models to really mine those data for deeper insights in the biology and then all the way out into the market. We'll talk about this more over time. But this is going to be an area of investment and it can be overhyped. It's not a panacea, but it is absolutely going to be the most powerful tool we've seen in a long, long time.

Umer Raffat:

Hi, guys. Thanks for taking my question. Dave, I have a two-part question on AMG 786, the oral for obesity. First, I noticed you guys dropped a cohort in your SAD portion of the trial. Is that because you ran into MTD? And then also, I noticed the exclusion criteria around suicide ideation were intensified and I can't tell if we could be reading into that or not, would love to get any color. Thank you

Operator:

Thank you, Umar. Our next question comes from Robyn Karnauskas from Truist Securities. Please go ahead. Your line is open.

Robert Bradway:

Okay. Thank you, Robyn. So I think it's a two-part question there on Tepezza. We may tackle it in two parts with the combination of Vikram and Murdo. So go ahead, Vikram, why don't you start?

Murdo Gordon:

Yes. Thanks, Vikram. Hi, Robyn. I would add, much the same way when we acquired ChemoCentryx and Tavneos, we realized that there was a low level of awareness of Tavneos. What we did there was we added reminder messaging to some of our broader rheumatology-covered sales forces to increase awareness of the data associated with Tavneos in ANCA-associated vasculitis patients. We've seen a corresponding increase in utilization, of course, driven by awareness of that product. So the core team is still promoting the attributes of the product and educating physicians, but there is a broader group of field personnel building general awareness of that product. What I think Vikram and I are talking about is the Amgen teams that cover endocrinologists were involved in the diagnosing and treatment of Thyroid Eye Disease, would be an ideal opportunity for us to broaden the awareness amongst that community of endocrinologists who are diagnosing and treating thyroid eye disease today to augment the great work that is happening with the rare disease teams under Vikram's leadership. So there's a number of things like that where we can scale and speed up the building of awareness, for example, of the new data that Vikram was just describing and the broadening of the label language. Vikram also mentioned the international expansion. The original plan was quite ambitious for Horizon. We've actually increased the number of markets that we intend to file and launch in, in a shorter period of time. So that would be an additional opportunity for growth given the strength of the two companies now combined.

Operator:

Thank you, Robyn. Our next question comes from David Risinger from Leerink Partners. Please go ahead. Your line is open.

David Reese:

Yeah. Thanks, David. Dave Reese, I'll start and then turn things over to Murdo, and Vikram. In terms of oral obesity molecule 786, as I've said, it has a novel mechanism of action, it's a Phase 1 molecule. So you should view it as a Phase 1 molecule. And we're bringing in the data I said, and we'll take a look at that as we get into the new year and make a determination on potential path forward for that molecule. I wouldn't view it as anything more or less than a Phase 1 asset with a novel mechanism of action. In terms of additional molecules and when we might file INDs and launch our first in human trials, we'll give guidance as that portfolio advances over time. Again, many of those molecules are targets that we emanated from deCODE Genetics, our colleagues in Iceland. And I'll provide further information as we get ready to move towards the clinic. But this is playing a long game. If you step back, look, this field is in its infancy. We are just beginning to understand the complex metabolic arrangements that occur with obesity and there are clearly different forms of obesity. There's a lot of work to do. And as I've indicated, our intent here is to play the long game given that this is one of the major public health challenges of the 21st Century. So let me now hand it over to Vikram and Murdo for additional commentary on your second question.

Operator:

Thank you, David. Our next question comes from Chris Raymond from Piper Sandler. Please go ahead. Your line is open.

Murdo Gordon:

Thanks for the question, Chris. This is Murdo. So let's just recapitulate what's happening in this market. At the beginning of the year, you had a number of new launches, not just SOTYKTU, with novel topicals coming into the market as well as a novel oral and every one of those products had very generous free drug programs and that had two effects on Otezla. There were topical patients who would have normally moved to their first systemic option who tried the new topical treatments on a free drug basis. And at the same time, there was a launch of a new oral that had a very generous free drug program. And so, Otezla, which sources the majority of its growth from topical patients for systemic, in other words, biologic naive patients. Otezla got squeezed in the first and second quarter on the basis of those new programs coming into the market. What we've seen since those two events in the market is that the novel topicals have flattened out in their growth and have pulled back to some extent on their free drug offering. The other oral therapy SOTYKTU continues to provide free drug, and so continues to have some effect on Otezla. What we think will happen and we're already seeing the very early signals of this is that we will continue to source our new growth from the topical patients, bio-naive patients. Given that Otezla is the ideal for a systemic agent, we have established ourselves with really strong access in the market. So we don't need to provide free drug programs to the extent that everybody else is. And then as the contracting cycle for 2024 matures and we see what the actual access is for some of the other competitors in the market, including the new oral, we should be able to give better guidance on our growth prospects for the future. But we almost certainly expect the impact of the free goods program to continue to reduce and that will help us grow Otezla. The investments we've made are really just kicking in this quarter. So the expansion in the field force, and your number was right, by 20%, the derm team was just deployed at the beginning of Q4. So they are only in-field as of a few weeks. So that impact is not in the historical performance of the brand. And our direct-to-consumer spend has been increased for the fourth quarter as well. So we will be able to tell you more as we go forward, but we feel given the very large number of patients here who continue to persist on topicals, when they really are better candidates for a systemic agent, will convert to Otezla as we build into that market. And just a reminder, we're the only product in the market that has a broad label regardless of severity of psoriasis. So we're optimistic and we're enthusiastic and that's why we've made these investments and we'll continue to look to add to our dermatology portfolio as we go forward.

Mohit Bansal:

Hey. Thank you very much for taking my question and thank you for changing the time to make sure people can enjoy Halloween. So maybe one question on sequential growth. If I look at second quarter from third quarter, it seems like pretty much every product, even including Nplate accounts for the government budget, seems to be down. I know that you warned about this in the second quarter call regarding Medicare donut hole, but can you talk a little bit about the dynamics there and how should we be thinking about this going forward?

Operator:

Thank you, Mohit. Our next question comes from Gregory Renza from RBC Capital Markets. Please go ahead your line is open.

Robert Bradway:

Now, we're very excited about what we see so far emerging from our early work in obesity. I think over time you've got the sense of this from Dave Reese. This is likely to be a heterogeneous disease, they're probably going to be a number of different ways to have to go at it. But what encourages us right now is, what we think as an emerging differentiated profile for our approach versus the competition. And maybe, Murdo, you want to just jump in and remind Gregory about the basis of differentiation that we see so far in our data from the competition and why we think that gives us a good foothold for entering the markets.

Operator:

Thank you, Gregory. Our next question comes from Geoff Meacham from Bank of America. Please go ahead. Your line is open.

Murdo Gordon:

Thanks for the question, Geoff. Yes, it's been a bit of a journey. And the COVID pandemic didn't help us in our efforts to educate and convince cardiologists that they needed to do more to be more aggressive in treating their patients; LDL, cholesterol. I do think we've reached a tipping point in cardiology and I do think we've reached a tipping point with payers. We now have over 90% commercial lives covered. We anticipate being able to continue to progress our Medicare Part-D coverage, and we're seeing, you know, the PCSK9 category driven primarily by our 80% share of that category. Really, really starting to move now. Our new patient volume growth is good, not just in the US, but around the world. We are now seeing more and more primary care physicians using PCSK9s in combination with other drugs to more aggressively lower LDL in high-risk ASCVD patients. So the phases are pretty clear, payer coverage established, affordability for patients established, cardiologists are now prescribing with frequency and now moving into primary care. And we'll be adding direct-to-consumer campaign investment to that mix. So, yeah, I think we've reached a tipping point on Repatha Geoff and I'm bullish on what we can do to further expand that product, both from a volume and net sales perspective.

Chris Schott:

Great. Thanks so much for the question. Just a question on longer-term margins. So I guess post Horizon and I guess with the ramp of your pipeline, including some potentially very large obesity studies over time, I guess, just directionally, how should we be thinking about margins from here? I guess is this kind of 50% or slightly above 50% range a reasonable target for the company, or just any considerations we should keep in mind as we kind of balance, I guess, Horizon versus investment? Thank you

Operator:

Thank you, Chris. Our next question comes from Evan Seigerman from BMO. Please go ahead. Your line is open.

Robert Bradway:

Maybe we'll take this in two-parts. First, with respect to KRYSTEXXA, I'd say KRYSTEXXA is performing very well and we believed it would. Again, we think there is a tremendously large unmet medical need here and that KRYSTEXXA with methotrexate is serving the marketplace well. So we're looking forward to working with our colleagues on it. And overall, I'd say that the business is proceeding as we thought it would to this point. The things that we were -- that we thought were important to have in hand, like the chronic indication for Tepezza, like, international datasets that were made available with the OPTIC-J trial, like the progress we've made in Brazil, et cetera. Those were things that we wanted to have in hand and now do. And, again, UPLIZNA also performing very much in line as we expected it would. So we see three growth opportunities there and we see ways for the Amgen-based business to add value to what Vikram will be running now in our rare business area. And then, with respect to the question on diabetes, I’ll ask Dave, [Multiple Speakers]

Robert Bradway:

Now, operator, I think we have two more calls in the log here. So why don't we take two more and then we'll thank our colleagues and let them get on with the day.

Tim Anderson:

Thank you. On AMG 133, maybe this is a silly question, but is it at all possible that you can start Phase 3 in 2024? The main way to do this would be to do an early or interim look of sorts at the Phase 2 trial before the primary completion date. And I know you're guiding for top-line on that in late '24. Thank you.

Robert Bradway:

And let's take our last question.

Colin Bristow:

Hi. Good morning, and thanks for taking the questions. Maybe just a quick follow-up on 133. Just as we think about this from a commercial perspective, this is obviously an antibody backbone. It's going to be an injectable. Just in light of margin that's achievable with this, just help us think through that. Thanks.

Operator:

Thank you, Colin. I would now like to turn the call back over to Bob Bradway for closing remarks.

Operator:

This concludes our 2023 Q3 earnings call. You may now disconnect.

Operator:

My name is Julianne and I’ll be your conference facilitator today for Amgen’s Second Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speakers prepared remarks. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question during the Q&A session. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood. You may now begin.

Bob Bradway:

Okay. Thank you for joining our call. It was an excellent quarter across the board for Amgen and one that demonstrates why we remain very confident about our ability to deliver attractive long-term growth in sales and earnings. We delivered $7 billion in quarterly revenue, up 6% from a year ago, along with record non-GAAP earnings per share of $5 a share, up 8% over the prior year. Volume growth globally was 11% in the quarter, and that reflects all three of our therapeutic areas and all three of our geographic regions contributing to performance. For example, volume in our general medicine business grew by 21% in the quarter, while volume in our Asia Pacific region, which we have previously identified as a key source of growth for us, was up 46%. At a time of product shortages in the industry, our world-class manufacturing capabilities have enabled us to meet growing demand for our products and continue our longstanding tradition of serving every patient every time. Nine of our medicines generated record sales in the quarter. This is consistent with my comments from our first quarter call in April when I said we see the potential for many of our currently marketed products to reach significantly more patients over time and to contribute substantially to our long-term growth. In April, I spoke about Repatha and the growing contribution it’s making in the fight against cardiovascular disease. Today I’ll highlight Prolia, which achieved $1 billion in quarterly sales for the first time, up 11%. Prolia is one of the first biologics to be widely prescribed by primary care physicians to treat a chronic disease, something we expect to see replicated over time in other categories like cardiovascular disease. For all of Prolia success though we know that osteoporosis remains an underdiagnosed and undertreated disease placing millions of elderly women at risk for life-changing fractures. With recently generated real world data, we’ve established that Prolia is superior to alendronate, the most frequently prescribed bisphosphonate treatment in the U.S. in reducing fractures, and not by a little, but by a lot. To give you one data point, in May we announced that in a real world study, Prolia reduced the risk of hip fracture by 36% compared to alendronate. That’s superior. Prolia and EVENITY, which achieved 47% sales growth in the quarter give us a powerful one two punch against osteoporosis, a disease that will only become more prevalent as the world grows older. You’ll hear more from Murdo shortly about our very strong commercial performance through the first half of 2023. We’re seeing strong momentum in our pipeline too, as you’ll hear in detail from Dave Reese, we’re sharing positive data today for our BiTE, tarlatamab in small cell lung cancer and for LUMAKRAS in combination with Vectibix in colorectal cancer. We are especially excited about the tarlatamab readout, not only because of what it may mean for patients whose prognosis is otherwise exceptionally poor, but also because it adds to our growing conviction that bispecific T-cell engagers are an effective way to treat solid tumors as well as liquid tumors as we have demonstrated with BLINCYTO. Elsewhere in our pipeline, we continue to advance registration enabling trials for several potential new first-in-class medicines including Olpasiran in heart disease, rocatinlimab in atopic dermatitis, and of course bemarituzumab in gastric cancer. We look forward to additional readouts from our pipeline in the second half of the year. Turning to our planned acquisition of Horizon Therapeutics, we remain very enthusiastic about what our companies can achieve together for patients suffering from rare serious diseases. Horizon has certainly accomplished a great deal as an independent company. Amgen’s global commercial manufacturing and R&D capabilities, especially for biologic products, will enable Horizon’s medicines to reach even more patients more quickly than Horizon could have achieved on its own. As you know, this combination has been approved by regulators around the world, with the exception of the Federal Trade Commission in the United States. The FTC’s arguments in this case are based on speculation and hypothetical notions. Their arguments are not grounded in long established antitrust law. Notwithstanding that in choosing to pursue this case, they’ve ignored the commitments we made to address their stated concerns. Life-changing medicines that Amgen and Horizon offer treat different diseases and different patient populations. Simply put, there are no competitive overlaps and no incentives to bundle our drugs with theirs. We look forward to making our case in court in September and I’m confident rather that we will prevail. In the meantime, we’re working closely on integration plans with Horizon, so we can hit the ground running by mid-December, which is when we anticipate being able to close the deal. And let me just reiterate one more point before I hand over to Murdo. As the second quarter illustrates, Amgen’s business is performing very well and our organic outlook for growth is strong, adding Horizon will serve to enhance our growth prospects even further. And let me close by thanking my Amgen colleagues around the world for their unwavering commitment to patients and to our business. We’re excited about the future and our ability to serve many, many more patients than we do today. Murdo?

Dave Reese:

Thanks, Murdo. Good afternoon everyone. For R&D, the second quarter was one of high quality execution as we progressed our innovative pipeline with two important data readouts, multiple registration enabling studies on track and additional exciting data coming later this year. Beginning with oncology, we are exceptionally pleased to announce positive top line results from the global Phase 2 DeLLphi-301 trial evaluating tarlatamab, a first-in-class DLL3 targeting BiTE molecule in patients with relapsed or refractory small cell lung cancer that progressed after two or more prior lines of treatment. Tarlatamab demonstrated an objective response rate at the primary endpoint that substantially exceeds what was previously reported in the Phase 1 study. Responses were durable and longer than what is expected with standard of care chemotherapy. Safety and tolerability were also more favorable compared to the Phase 1 study. This is the first time the device-specific T cell engager has shown unequivocal activity in a common solid tumor, a real milestone in the field. We look forward to discussing these data soon with the FDA and other regulatory agencies and presenting detailed results of this potentially registrational Phase 2 study at an upcoming Medical Congress. Based on the data we have observed, we are moving tarlatamab into earlier lines of therapy with DeLLphi-304, a Phase 3 study underway comparing tarlatamab with standard of care chemotherapy and second-line small cell lung cancer. We are also planning to initiate two additional Phase 3 studies of tarlatamab in earlier lines of small cell lung cancer. From my personal vantage point, as an oncologist, I believe this molecule can be transformative and can’t wait to share these data with the field. Turning to LUMAKRAS, we continue to execute on our comprehensive clinical program designed to generate the breadth of data necessary to understand KRAS biology and the role LUMAKRAS can play in non-small cell lung cancer, colorectal cancer, and other solid tumors. We are delighted to announce that the global Phase 3 CodeBreaK 300 trial evaluating LUMAKRAS combined with Vectibix in chemo refractory metastatic KRAS G12C mutated colorectal cancer met its primary endpoint of progression-free survival for both the 240 milligram and 960 milligram doses. At comparable doses, efficacy results were consistent with what was previously observed in this setting with no new safety signals. We look forward to sharing these results with global health authorities and presenting the detailed results at an upcoming Medical Congress. The FDA recently granted breakthrough therapy designation to LUMAKRAS in combination with Vectibix for the treatment of patients with metastatic KRAS G12C mutated colorectal cancer as determined by an FDA approved test who have received prior chemotherapy based on data from the prior CodeBreaK 101 study. Beyond these data, we continue to explore novel combinations as we seek to move LUMAKRAS into the first-line setting. Recently presented data from the SCARLET study provide the rationale to initiate a Phase 3 trial of LUMAKRAS combined with chemotherapy in first-line non-small cell lung cancer patients with PD-L1 negative tumors and Phase 1b data in combination with Vectibix and chemotherapy support the initiation of a Phase 3 study of LUMAKRAS with Vectibix and FOLFIRI in first-line G12C mutated colorectal cancer. In June, the FDA approved the supplemental biologics license application for BLINCYTO for the treatment of adults and pediatric patients with CD19-positive B-cell precursor acute lymphoblastic leukemia in first or second complete remission with minimal residual disease greater than or equal to 0.1%. The approval converts BLINCYTO’s accelerated approval to a full approval. Global regulatory submissions are on track for E1910, a Phase 3 trial conducted by the National Cancer Institute, Eastern Cooperative Oncology Group and the American College of Radiology Imaging Network, Cancer Research Group that demonstrated superior overall survival with BLINCYTO treatment added to consolidation chemotherapy over standard of care consolidation chemotherapy in newly diagnosed adult patients with Philadelphia negative ALL who were MRD negative following induction and intensification chemotherapy. Three important updates were made to the National Comprehensive Cancer Network clinical practice guidelines in oncology in B-cell ALL. These included listing the BLINCYTO E1910 regimen as the only preferred regimen for the first line treatment of Philadelphia negative adult patients adding BLINCYTO to multi-agent chemotherapy as consolidation in MRD negative disease. And lastly, moving BLINCYTO in combination with a tyrosine kinase inhibitor to the top of the treatment algorithm or MRD negative Philadelphia positive disease. Finally, in April, data were published in the New England Journal of Medicine demonstrating that BLINCYTO added to chemotherapy improved two-year survival in KMT2A-rearranged B-ALL in infants as compared to historical data, BLINCYTO two-year survival was 93% versus 66% or chemotherapy alone. If you look at the totality of the data, it is clear that BLINCYTO is changing the paradigm for the treatment of B-cell ALL in late-stage disease, in early disease, in young patients and in older patients. We remain excited about its future potential and are focused on further investigating BLINCYTO in earlier lines of treatment and improving patient convenience through subcutaneous administration. As the first BiTE [ph], BLINCYTO also provides a roadmap for the development of molecules such as tarlatamab, which could have enhanced activity in settings of lower tumor burden. Two additional early oncology programs to watch are Xaluritamig and AMG 193. Xaluritamig is a first-in-class steep one targeting bispecific being studied in advanced prostate cancer where steep one is expressed on almost all tumor cells. We are observing significant anti-tumor activity with this molecule and are rapidly enrolling dose expansion cohorts. Xaluritamig provides another example of a bispecific T-cell engager demonstrating activity in a solid tumor setting. AMG 193 is a first-in-class small molecule MTA cooperative PRMT5 inhibitor being studied in patients with advanced MTAP-null solid tumors. The overexpression of PRMT5 in the absence of MTAP leads to the accumulation of MTA and we leverage this biology in the unique design of AMG 193, which requires the presence of MTA to effectively inhibit PRMT5. Alterations in this pathway occur approximately 15% of solid tumors are often associated with a poor prognosis and historically have been very hard to drug. We are currently enrolling a Phase 1b/2 study of AMG 193, and while it is early, we are encouraged by the anti-tumor responses we’ve observed in multiple tumor types. We look forward to sharing data from both Xaluritamig and AMG 193 this fall. In general medicine, we are advancing our cardiovascular franchise and emerging portfolio of obesity molecules with a focus on clinical trial execution. The Phase 3 outcomes study of Olpasiran are potentially best-in-class Lp(a) targeting small interfering RNA molecule and atherosclerotic cardiovascular disease is enrolling well as is a Phase 2 study of maridebart cafraglutide formerly known as AMG 133 in patients with obesity with or without diabetes and related comorbidities. The goal of the Phase 2 study is to generate data that will provide broad optionality to design a Phase 3 program leveraging the unique properties of maridebart cafraglutide that will deliver strong sustainable weight loss. In May, as mentioned, we presented data from a real world study of nearly half of a million post-menopausal women with osteoporosis in the United States Medicare program showing Prolia substantially reduced fracture risk in patients versus oral alendronate. In addition, the same study showed that longer duration of Prolia treatment was associated with a greater reduction in major osteoporotic fracture risk. These data are a great demonstration of the importance of Prolia in treating post-menopausal osteoporosis and the ability to study treatment effects in large patient populations using real world evidence. In inflammation beyond severe asthma, we are investigating multiple additional indications with TEZSPIRE including separate Phase 3 studies in chronic rhinosinusitis with nasal polyps and eosinophilic esophagitis. We also have two Phase 2 studies, one in chronic spontaneous urticaria and the other in COPD. The CSU study is complete with top line data anticipated in imminently. The COPD trial is fully enrolled and has recruited a broad population of COPD patients, including patients with both high and low eosinophil counts. We look forward to the readout of this study in the first half of 2024. Rocatinlimab first-in-class anti-OX40 monoclonal antibody being investigated in patients with moderate to severe atopic dermatitis. Recruitment is off to a strong start on the ROCKET Phase 3 clinical development program. We are also planning to initiate a Phase 2 study in moderate to severe uncontrolled asthma as we explore rocatinlimab in this additional indication. Rounding out the clinical summary, we’ve continued to execute those on time and on budget with our biosimilars portfolio, including the recent initiation of a pivotal study evaluating the pharmacokinetic similarity of ABP 206 compared with OPDIVO one of six planned new biosimilars. In closing, I’d like to highlight our recently announced collaboration with TScan Therapeutics. This is a multi-year collaboration that will use TScan’s proprietary target discovery platform, TargetScan to identify the antigens recognized by T-cells in patients with Crohn’s disease and represents a novel approach to investigating this tough to treat illness. I’d like to thank Amgen staff around the world for their relentless focus on execution as we work hard to meet the needs of the patients we serve. I’ll now turn it over to Peter.

Bob Bradway:

Okay. Thank you, Peter. And now we’ll open the line for callers so they can ask questions. And I just ask our operator to remind you of the procedures for doing that, please.

Mohit Bansal:

Great. Thank you very much for taking my question and congrats on the quarter. Maybe one question on OX40. There are some concerns and people are talking about the safety of OX40. Like one concern is regarding the autoimmune phenomena, and I’m reading some literature and suggests that in OX40 – lacking OX40 animal models, there is an impairment of interferon gamma. So just trying to understand how are you managing that risk in this particular drug? And how is it – what we mean phenomena? Is it a concern at all there? Thank you.

Operator:

Thank you, Mohit. Our next question comes from Michael Yee from Jefferies. Please go ahead. Your line is open.

Bob Bradway:

Yes. Sure, Mike. We can answer in two parts. Maybe I’ll kick it over to Murdo in a moment. But let me just reiterate that we remain very excited and of course, we’re watching carefully developments in the marketplace and talking as appropriate with our friends at Horizon about that. And again based on our view of the clinical data and our view of the international opportunities and ability to expand the reach of the product, we’re very excited about what we think we can do there. But Murdo, why don’t you elaborate further.

Operator:

Thank you, Michael. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Dave Reese:

Yes, Salveen, thanks for the question. Very, very excited about this small molecule. If you step back, I think, it represents what we had hoped to see in the BiTE platform and substantial clinical effects in a major solid tumor. To put the data in the context in comparison to a Phase 1, as noted, we substantially exceeded the 23% response rate that we reported in Phase 1. We are planning to present these data at a Fall Conference on embargoed in terms – of course, in terms of providing more specifics. But I can tell you that it couldn’t be more pleased with the response rate data, the duration of response, and overall survival. For context in patients with small cell lung cancer in the third-line response rates are typically well under 50%, but importantly, they are vanishingly brief in most instances, often a matter of weeks or a few months. And so, based on what we’re observing, I think we really have a chance to change the natural history of this disease, particularly as we march towards earlier lines of therapy where the activity of the BiTE in a lower tumor disease burden setting should be enhanced as we have observed with BLINCYTO. So all of our efforts now are focused on executing earlier line trials. So, this is one to I think pay attention to as we go forward and we’re really looking forward to presenting these results this fall.

Dave Reese:

I’m sorry. And in terms of the safety, I think we have learned a lot in the development program about the clinical management here. We’re quite pleased with the rates of principal side effects, like cytokine release syndrome and we’re – we’ll look forward to sharing those details as well when we present the data this fall. But exceptionally happy with the tolerability and safety profile as well.

Jay Olson:

Oh, hey, congrats on the quarter and especially the tarlatamab and LUMAKRAS results. And happy birthday to Arvind.

Jay Olson:

For the LUMAKRAS Phase 3, in colorectal cancer. Can you just talk about the filing strategy and timeline, and maybe a little bit about the market opportunity in CRC for LUMAKRAS? Thank you.

Operator:

Thank you, Jay. Our next question comes from Chris Raymond from Piper Sandler. Please go ahead. Your line is open.

Arvind Sood:

Sure. Yes. Do you want to take that, Murdo?

Operator:

Thank you, Chris. Our next question comes from Umer Raffat from Evercore ISI. Please go ahead. Your line is open.

Dave Reese:

Yes. What I can say Umer, without getting into specifics on the number being under embargo is that I’m very happy with the overall – the efficacy package – overall response rate, progression-free survival, duration of response, and overall survival. And we’ll have presentation of all of those data at an upcoming medical Congress. But to me this is – it’s a very, very compelling efficacy package.

Operator:

Thank you, Umer. Our next question comes from Yaron Werber from TD Cowen. Please go ahead. Your line is open.

Bob Bradway:

Thanks Yaron for the question. Yes, you’re right. Enbrel has – did have a strong quarter and is benefiting from quite frankly, the best access we’ve ever had on Enbrel, where we’re covered across all the major PBMs now. So we’re seeing really nice new patient growth on Enbrel, so more new patients coming onto treatment with Enbrel, and we think that that will support sustained volume through the course of the year. We did give up a bit of price to do that, so that’s also flowing through Enbrel. But overall, I think there was some concerns perhaps last quarter that the biosimilar activity in this category was somehow impacting Enbrel. And I was pretty clear last quarter that wasn’t what we were seeing. And it’s definitely now clear in second quarter that biosimilar competition for Humira is not negatively impacting Enbrel. So we’re – we see stability in Enbrel going forward. For OTEZLA, we’re actually seeing some strength in OTEZLA. We are pleased with what new patient acquisition looks like. We think we can do better and we – as I mentioned in my prepared remarks, are investing more in OTEZLA through the backend of this year. And Peter also mentioned that. And the reason we’re optimistic is we’re gaining momentum in helping those post topical first systemic patients. And the epi here is pretty significant as there’s 1.5 million of these patients in the U.S. that persist with topical treatment. That would be better being initiated on a systemic agent. And OTEZLA is really the ideal for a systemic agent. We have great commercial coverage with OTEZLA with very little prior authorization requirement. We have no testing requirement for initiation. And the affordability and out-of-pocket is very good. So OTEZLA is an attractive option for PBMs and pairs to maintain on their formularies. And it’s an easy option for dermatologists as the first systemic agent that they would choose for a patient coming off the topicals and being treated. And again, this is milder form of disease and no one else has indicated for that mild population from a systemic perspective. So overall, the thesis is good. Now, I think, SOTYKTU coming into the market clearly put pressure on us where there were patients who were probably on our oral and didn’t have full resolution of their psoriasis symptoms and they would’ve switched to SOTYKTU. What we’re seeing is that, that has slowed. We are losing less to SOTYKTU in our current mix of patients that we have on Otezla. And we think that the other – the other dynamic that put pressure on us in the first part of the year was the topical treatments also had free goods programs out there, and they were getting trial, and that has abated, they flattened out. So we’re getting less pressure from topicals and much less patient movement away from Otezla to SOTYKTU. So I think we really have to see into 24 how the access will evolve for the novel agents, but we’re very confident with our current access and the current perception of the safety and efficacy of Otezla, we can further penetrate that population of patients. So going forward, we’re feeling good about it.

Bob Bradway:

Well, again, I think I would reiterate what I said in my prepared remarks, right, which is that they, we don’t believe that their case is based on any established antitrust law. We think it’s based on hypotheticals and speculative notions. And we look forward to having a chance to assert that in court. And again, we expect to prevail in court. And I think what – what’s implicit in your question is the recognition that we live in a very fragmented industry, and that there are a lot of innovators in particular that are a size that makes it difficult for them to capitalize on the full potential of their innovation, especially globally. And so there is a role for companies like ours to play in bringing value to companies like Horizon. We’ve talked about it repeatedly, but we think the capabilities we have with our global commercial organization that demonstrated expertise we have in manufacturing, research and development for products like this, I think will enable us to reach far more patients than the company would be able to on its own. So this is an industry that has flourished by being able to capitalize on the innovation ecosystem that exists for biotechnology companies, for the most part in the United States. And again, we expect that that will continue and think that were it not possible for companies to combine to benefit from each other’s strengths, the result would be fewer innovation, reaching fewer patients. So that would be an unfortunate outcome.

Evan Seigerman:

Hi guys. Thank you so much for taking my question. Maybe one for you, Dave; can you just expand on the biologic rationale to target steep one versus PSMA and prostate cancer? And I’m asking this in context of an update you we had from a competitor today, whereas their PSMA program different than yours, they had to modify significantly due to safety issues? Thank you very much.

Operator:

Thank you, Evan. Our next question comes from Colin Bristow from UBS. Please go ahead. Your line is open.

Bob Bradway:

Yes. I think in light of what we’ve seen in the field, we would love to see something that is competitive with that. Just to level set everyone, the rationale for this study is that the target of TEZSPIRE, TSLP is expressed in bronchial mucosa. Sputum can be detected in bronchoalveolar lavage fluid in patients with COPD. The pathway may be a contributor or driver of exacerbations and that’s really the hypothesis that we are testing here. So we’ll look at the totality of the clinical data, but I think some of the things you’ve seen recently published give us benchmarks as to what we’ll hope to see.

Dane Leone:

Thank you. Maybe just two quick ones for me; firstly, in terms of the rebound in Otezla and the good strength that seems to be coming out of some of those trialing periods for competitive products on the topical side and also oral side. Can you just maybe provide whatever response makes sense to your competitors’ analysis on the oral side suggesting they’ve achieved over 40% TRx share and whether you think that share could go back in favor of Otezla during the back half of this year, or is that something you would see steady state from here on out? And then secondly, just regarding the Phase 2 tarlatamab, is there anything we need to be aware of that maybe the patient population in this Phase 2 small cell lung cancer study, was maybe less heavy or pre – less heavily pretreated as opposed to what was seen in the Phase 1 study, which is sometimes the case? Thank you.

Bob Bradway:

Yes. Dane, I’ll attempt to answer your Otezla question. As I said, we are encouraged by what we’re seeing in the market here. It’s really hard for me to comment on market share claims from other companies, particularly when that they’re adding what we can see versus what we can’t see in their free drug program. So they’re giving a lot of product away, and I think they’re including that in their denominator when they’re providing share. I actually don’t think that’s going to be reflective of what their ultimate in market performance will look like, because we’ve seen that in many categories where free programs or bridging programs are not representative ultimately of the final access picture and the final effect that new access picture will have on demand. So, I think that given our very good access coverage with little to no prior authorization requirements across many of those plans, we are definitely in a position should some of those free drug patients end up getting rejected for sustained actual insurance coverage. Because of the broad coverage, we have not factored that into our go-forward, but it could happen.

Operator:

Thank you, Dane. Our next question comes from David Risinger from Leerink Partners. Please go ahead. Your line is open.

Bob Bradway:

Yes, in terms of the oral obesity program, it’s moving through, it’s Phase 1, which includes, single dose and short-term multiple dose. We expect probably now to have data in the first half of next year. Behind that we have multiple programs looking at orthogonal mechanisms of action, many of them non-incretin based. And as some of those progress towards the clinic, we’ll start to talk about them and give you insights into our portfolio approach here. So thank you.

Operator:

Certainly. Our final question will come from Robin Karnauskas from Truist Securities. Please go ahead. Your line is open.

Arvind Sood:

Sure. Let me start with the tarlatamab [ph]. I’m extremely enthusiastic about this molecule, you know, as always, I’ll let others talk about their molecules. But, this one is one that we’re really putting muscle behind to sort of level set everyone here. As you start to think about the unmet medical need, there are roughly 240,000 cases of lung cancer in the United States each year. Roughly 15% of them are small cell lung cancer, comparable numbers in Western Europe for example. So that gives you a sense of the patient numbers. The clinical development program overtime is going to be designed to look at really that broad swath of patients. Of course, we’re starting in third-line therapy, but our goal here is to quickly advance into second and earlier lines of treatment. And, we’ll talk more about those clinical studies as we get through later in the year. But this is one again, where I think when we get into settings of lower tumor burden as we’ve observed with BLINCYTO, we can really affect the natural history of the disease. Recall that upon initial diagnosis, only 7% of patients with small cell lung cancer will be alive five years later. And that’s the opportunity to change that, I think is in front of us now.

Arvind Sood:

Great. Thank you everybody. And we’ll keep in touch.

Operator:

My name is Julianne and I'll be your conference facilitator today for Amgen's First Quarter Full Year 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speakers prepared remarks. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood. You may now begin.

Bob Bradway:

Okay. Thank you, Arvind, and let me thank all of you for joining our call. I'll begin by calling your attention to the 14% volume growth we delivered in the first quarter. That illustrates two points worth keeping in mind when thinking about the remainder of the year and beyond. First, on the COVID front seem to have finally turned the page on the pandemic in terms of its impact on the overall health care system. For example, we've seen year-over-year prescription growth across most specialties in the US, including cardiology and oncology, and that's good news because it suggests that patients are returning to their pre-pandemic routines with doctor visits once again enabling appropriate diagnoses and treatments. It's obviously something that bodes well for our portfolio of medicines. Second, we're seeing that the demand for medicines is resilient despite the current macroeconomic challenges. Repatha, EVENITY , BLINCYTO and KYPROLIS, for example, all delivered record sales in the quarter, driven by extremely strong growth in volumes of 33%, 55%, 49% and 18% respectively. We don't see this volume driven growth as a single quarter phenomenon either, rather we see this as the potential for these medicines and others in our portfolio to reach many more patients over time and contribute substantially to our long-term growth. Take Repatha. We believe there's tremendous upside opportunity for Repatha at a time when most high risk cardiovascular patients still never reach their recommended LDL levels or do so only for a brief insufficient period of time. The global public health crisis and heart disease demands that all players in the system work together to drive change, and with Repatha, we've proven we have a proven innovation that we know can be an essential part of the solution. Two of our newest medicines, TEZSPIRE and TAVNEOS achieved quarter-over-quarter volume growth in the US of 28% and 27% respectively. TEZSPIRE has enjoyed strong adoption in the US by both allergists and pulmonologists and recently approved, excuse me, a recently approved pre-filled pen gives patients the option for self-administration. A few quarters into our ownership of TAVNEOS, we are convinced that our deep experience in rheumatology and nephrology will enable us to bring this first-in-class medicine to many more patients who can benefit from it. Outside the US, volumes grew more than 20% in the quarter. In the Asia-Pacific region in particular, we generated nearly 50% volume growth, as we expand the number of patients we serve in Japan and China, two of the world's most rapidly ageing nations with medicines like Repatha and Prolia. Amgen's R&D investment was up 12% in the quarter. That growth reflects the investments we are making in registration enabling trials for several potential new first-in-class medicines, including Olpasiran in heart disease, Rocatinlimab in inflammation and bemarituzumab and tarlatamab in cancer. All four of these medicines are quintessentially Amgen. Innovative molecules that deliver large effect sizes against serious diseases for which new treatments are very much needed. We are pursuing a number of significant new indications for TEZSPIRE, BLINCYTO and LUMAKRAS as well. We look forward to several data readouts from our pipeline, mainly in the second half of the year. We continue to invest heavily in early research where we've built a differentiated set of capabilities over the past decade that position us well to take advantage of the rapid convergence of biology and technology that we see happening today. At a time when the world marvels at ChatGPT, we've been deploying artificial intelligence and machine learning in our research labs for some time now, giving us dry lab capabilities that, when applied to biologics development, have already yielded proof success rates and reduced cycle times beyond our initial expectations. This is indeed an exciting time for biologic innovation. We remain optimistic about our announced acquisition of Horizon and similar to our experience with TAVNEOS, the more time we've spent with the team at Horizon, the more excited we've become about the potential to bring Amgen's capabilities and global presence to bear on Horizon's portfolio of first-in-class innovative medicines and its pipeline. It's an exciting time for all of us at Amgen, and the demand for innovative medicines is proven to be resilient and growing around the world. At the same time that our ability to innovate has never been greater. Always, I'm grateful to my Amgen colleagues around the world for their commitment to patients and to our business. Now, let me turn it over to Murdo.

David Reese:

Thanks, Murdo, and good afternoon, everyone. For R&D, last quarter was one of high quality execution as we progressed our innovative pipeline with multiple registration enabling studies on track. In general medicine, we advanced our cardiovascular franchise in emerging portfolio of obesity molecules with a focus on clinical execution. Let's start with Olpasiran. Phase 3 outcome study in atherosclerotic cardiovascular disease is enrolling well. In March, we presented additional data demonstrating that Olpasiran markedly reduced Lp(a) concentration irrespective of baseline levels in individuals with atherosclerotic cardiovascular disease and Lp(a) levels greater than 150 nanomoles per liter. We also initiated the African-American heart study in collaboration with the Association of Black Cardiologists and the Morehouse School of Medicine. This study will measure the association between Lp(a) and atherosclerotic cardiovascular disease in 5000 African-American individuals. African-Americans show a higher average Lp(a) concentration than white individuals, but Lp(a) research to date has primarily been conducted in those of European descent. We are collaborating on the African-American Heart Study to bridge this gap. Turning to obesity, we are rapidly enrolling a Phase 2 study of AMG133in patients with obesity with or without diabetes and related comorbidities. The study will investigate different dosing levels and regimens with the overall goal of generating data that will provide broad optionality to design a Phase 3 program that will deliver strong, sustainable weight loss. A Phase 1 trial of AMG 786, a small molecule targeting non-incretin pathways in obesity is enrolling patients. Multiple preclinical molecules, all with different mechanisms of action than GLP-1 or GIPR based therapies are also advancing towards the clinic. In inflammation beyond severe asthma, we are investigating multiple additional indications with TEZSPIRE, including separate Phase 3 studies in chronic rhinosinusitis with nasal polyps and eosinophilic esophagitis. We also have two Phase 2 studies, one in chronic spontaneous urticaria and the other in COPD. The CSU study is complete with top line data anticipated in mid-2023. The COPD trial is fully enrolled and has recruited a broad population of COPD patients, including patients with both high and low eosinophil counts. Emerging evidence suggests that TSLP is involved in chronic inflammatory disorders, including COPD and that TSLP may be a key driver of the severe exacerbations experienced by COPD patients. We look forward to the readout of this study in the first half of 2024. Rocatinlimab potentially first-in-class anti-OX40 monoclonal antibody being investigated in patients with moderate to severe atopic dermatitis. Recruitment is off to a strong start on the ROCKET Phase 3 clinical development program. This program is a suite of seven studies that will establish safety and efficacy in a broad population of patients with atopic dermatitis, including biologic naive, biologic or JAK experienced, diverse ethnic groups and adolescents and also testing different dosing regimens, including the potential for monthly or less frequent dosing. We were encouraged to see Horizon report on the statistically significant and clinically meaningful top line results from a Phase 4 clinical trial of TEPEZZA. As revised FDA label states TEPEZZA is indicated for the treatment of thyroid eye disease regardless of clinical activity score or disease duration. Phase 2b studies in systemic lupus erythematosus of rozibafusp alfa and efavaleukin alfa were stopped for futility. These studies utilize novel adaptive designs, which enabled us to generate decision making data more quickly, and cost effectively. SLE remains a challenging area for drug development, one that will be an area of focus for us as we further explore these data sets to advance our knowledge in the field. In addition to our organic pipeline, we look forward to incorporating the Horizon molecules upon deal close to further enhance our efforts to address inflammatory disease. In oncology. global regulatory submissions are planned in the second half of 2023 for E1910, a Phase three trial led by the ECOG ACRIN Cooperative Group, demonstrating that addition of BLINCYTO to standard of care consolidation, chemotherapy significantly increased overall survival versus standard of care in MRD negative adult patients with newly diagnosed B-cell ALL. Beyond this study, we are investing to move BLINCYTO into earlier lines of treatment and to improve patient convenience through subcutaneous administration. DeLLphi-304, a Phase 3 study comparing tarlatamab, BiTE molecule targeting DLL3 with standard of care chemotherapy in second line small cell lung cancer will be initiated this month. We'll have top line data from a potentially registrational Phase 2 study of tarlatamab and heavily pretreated patients with small cell lung cancer in the second half of 2023, potential milestone for patients with small cell lung cancer. As you are aware, we are exploring novel combinations with LUMAKRAS. Phase 3 study of LUMAKRAS in combination with Vectibix in third line colorectal cancer is fully enrolled with data readout anticipated in the second half of 2023. We plan to initiate a Phase 3 study of LUMAKRAS and chemotherapy in first line non-small cell lung cancer in PDL-1 negative patients. At ASCO, data will be presented from studies of LUMAKRAS in combination with standard of care, chemotherapy and non-small cell lung cancer and in combination with Vectibix and standard of care chemotherapy in colorectal cancer. We also completed submission of the LUMAKRAS code break 200 data along with data from the Phase 2 dose comparison Substudy to the US FDA and to the European Medicines Agency or EMA. For AMG 509, a steep one targeting bispecific now named Xaluritamig. We have determined target doses and open monotherapy expansion cohorts in patients with advanced prostate cancer. We look forward to sharing initial data in the second half of 2023. To add to our growing biosimilars portfolio, we are pleased to announce that the European Commission granted marketing authorization for BEKEMV our biosimilar to SOLIRIS. BEKEMV is the first biosimilar to SOLIRIS approved by the EC and is approved only for the treatment of adults and children with paroxysmal nocturnal hemoglobinuria or PNH, a rare life threatening bone marrow disorder. We have also submitted the US Biologics license application to the FDA for this product. Additionally, Phase 3 switching study to support an interchangeability designation in the US using an investigational high concentration formulation of AMGEVITA met its primary endpoint of similarity for the primary pharmacokinetics endpoints. In conclusion, I would like to thank Amgen staff around the world for their relentless focus on execution as we work hard to meet the needs of the patients we serve. I'll now turn things over to Peter.

Bob Bradway:

Okay. Thank you, Peter. All right, Julianne, if you could remind our callers of the process for asking a question. I know they've had a long day already, so ask them to hold their questions to one each and do our best to get to everybody who has one for us.

Salveen Richter:

Good afternoon. Thanks for taking my question. For TEZSPIRE you've highlighted the broad clinical program and given the Phase 2 data sets we're expecting this year and next year, could you just comment on the indications where you have the most confidence in. Thank you.

David Reese:

Yeah, thanks, Salveen. All of the indications that we're pursuing have some mechanistic basis. Chronic spontaneous urticarial is an eosinophilic driven disease in part as is eosinophilic esophagitis. And given the mechanism of T-cell inhibition that underlay the thinking behind pursuing those indications. As I've mentioned briefly in COPD as another example, the -- there is accumulating evidence that triggers such as viral infection, smoke particles from pollutants can trigger TSLP release from bronchial epithelium. These are consistent with data showing that in patients with COPD, TSLP levels are elevated in sputum, bronchoalveolar lavage fluid and bronchial mucosa. And so as I mentioned that trial is fully enrolled. We expect a data readout, given the duration of therapy that one wants to see in these patients in the first half of next year. So I think there's good mechanistic basis. We're in clinical trial execution mode now and really waiting data readouts.

Michael Yee:

Thank you. Following on the pipeline maybe for David. I think what's interesting is that you obviously had AMG 133 obesity data and now you are emphasizing AMG 786. And I think it's enrolling in treating people now. Can you just talk a little bit about why you'd be excited about that? Is that synergistic? Is there an angle with that to be excited about, given all of the things going on in obesity? Thank you.

Operator:

Thank you, Michael. Our next question comes from Umer Raffat from Evercore ISI. Please go ahead. Your line is open.

Murdo Gordon:

Yeah, thanks, Umer. You're on to some of the fact pattern. Let me just go through kind of the elements of Enbrel specifically. First off, we were up 1% in volume in the quarter. So the leading indicators of Enbrel volume performance all look quite good. And that's a function of strong demand for the product in the market, good quality execution and an additional pharmacy benefit formulary win starting in January of the year. So we would expect continued low-single digit volume growth throughout the course of 2023. So that's the kind of high quality leading indicators of the volume performance of the product. The inventory component is pretty substantial. As you highlight, it is a function of both wholesaler inventory levels being down as well as specialty pharmacy. And I think it's partly a function of the fact that we did have volume increase and there was also a pretty significant work down through the quarter. We would expect those inventory levels to return to normal inventory levels throughout the course of the year. And then the last piece of Enbrel is an out-of-period adjustment, an unfavorable adjustment of about 9% related to prior period. And that's a function of things like state Medicaid, true ups coming in, as well as some other price adjustments from prior period. So overall, again, the leading indicators for Enbrel are good, low-single digit volume anticipated for the year, a little bit of price concession to get that formulary win. But then the other two events in the quarter are likely to improve over the course of the year as well being inventory and prior period adjustment.

Murdo Gordon:

Thank you, Peter.

Murdo Gordon:

Yeah, there is a big piece of that prior period that's also PHS and given the program that we're running for PHS patients. We expect that to be a lower impact throughout the course of the year as well.

Chris Raymond:

Hey, thanks. I have a question on the biosimilar business. I'm not sure I heard this correctly or not, but from Murdo's comments, it sounds like Amgevita revenue might be fairly frontloaded given the inventory build that I think you guys described. I know you guys don't give quarterly granularity. But maybe talk about the outlook for the rest of the year, especially given that you have a bunch of other launches, other biosimilar launches happening in that specific space. And then maybe just more strategically, just given the expectations have been kind of tempered here with Amgevita, you guys still seem pretty committed to this business with SOLIRIS, EYLEA, STELARA launches. Just maybe talk about why these won't maybe see a similar tempering of expectations. Thanks.

Bob Bradway:

The only thing I'd add to that, Chris, is that we're running this business very efficiently, and we think when we look at the cash that we're generating on this business, we're earning an attractive return for our shareholders. So again, in order for us to continue to succeed in biosimilars, we need to execute effectively. And as you can see in the quarter with BEKEMV the progress and with the launch of Amgevita, we continue to do what we plan to do in biosimilars. And again, I would reiterate, we think we're earning an attractive return for our shareholders, some of those commitments.

Mohit Bansal:

Great. Thank you very much for taking my question. And my question is also related to biosimilar. Given that the demand so far doesn't look to be ticking up for Humira, and your comments about next quarter do not also suggest that it may be a slow launch here, do you think this would mean that you are losing the first mover advantage here? Or is there a way next year it could be more -- Amgevita could be more on a preferred side of formally rather than parity? Because it seems like parity is not cutting it just yet.

Operator:

Thank you, Mohit. Our next question comes from Jay Olson from Oppenheimer. Please go ahead. Your line is open.

Murdo Gordon:

Yes. Thank you, Jay. I think what we're pleased with is the broad access coverage we have on Otezla, we have very good coverage. We did actually add additional coverage at the beginning of the year with United Optum Part D plan coming online. And so there's a little bit of price concession to do that in the year. But beyond that, we've got good stable access for 2023, and we look forward to being able to maintain that in 2024. So I don't see more decrement on price. In fact, we think price will -- the negative price effects you saw in Q1 should abate a little bit in Q2 and beyond. So overall very stable. The one thing that you mentioned that's interesting is the free goods program that competitors have out there. I do think that, that's a little bit of a disruption in the market right now that's probably causing a bit of softness in our new patient demand. We get about 80% of our new patient growth coming from systemic naive topical patients receiving OTEZLA as their first systemic agent. I think when you have free good programs in the market, sometimes that free goods is a very easy way for a prescriber to try a novel agent. And I think that, that's taking away some of that new patient growth that we're used to seeing. I do think that will be different once those competitors contract for their market access, and that's likely to be a 24% impact.

Colin Bristow:

Hey, good afternoon, and congrats on the quarter. So one for Murdo. We've now got the chronic TEPEZZA data. I just wondered, could you give us your thoughts on the -- and does this in any way change your view on the size of the commercial opportunity? And then a quick kind of housekeeping one on LUMAKRAS. How much of the weakness this quarter was sort of net pricing versus competition from Mirati? Thank you.

Operator:

Thank you, Colin. Our next question comes from Yaron Werber from TD Cowen. Please go ahead . Your line is open.

David Reese:

Yes. Thanks. Look, the trial is fully enrolled. We're bringing in data. I think within a few months, we're going to have the data set in hand. I think I've outlined mechanistically why TSLP being upstream could be one of the triggers that, if inhibited, could serve to -- as a therapy for the disease. At this point, I think it's really just getting the data set.

Evan Seigerman:

Hi, guys. Thank you so much or taking my questions. On OTEZLA, we've noted over several quarters, we know the demand kind of issues that are playing out. Anything you can do from a commercial perspective that could help accelerate growth even in light of the free drug programs we're seeing? Or do we really have to wait until that kind of tapers off come next year to maybe see some more growth from the brand? Thank you.

Operator:

Thank you, Evan Our next question comes from Robin Karnauskas from Truist Securities. Please go ahead . Your line is open.

Murdo Gordon:

Thank you, Nicole, for the question. Look, we're really pleased with what we've been able to do with the Neulasta franchise to date. We've been able to defend our volume successfully. Obviously, we've had to concede some price to do that. And the volume on the prefilled syringe side has been under some pressure. I'm very pleased with what we've done with the Neulasta Onpro device, and we've held on to substantial share there. We think we've established good contractual commitments for this year. And we'll continue to battle with competitors if they come to market with a different device than is currently available. But we expect some continued pricing pressure there, as we've indicated. And overall, I think the team that's working on Neulasta has done very well.

Gregory Renza:

Congrats on the quarter and thanks for taking my question. At the top of the call, you spoke about your R&D and identified, I think, it was four medicines that you described as quintessentially Amgen. And just my question is for you and the team. As you look across your portfolio, but also externally in other areas, are there specific areas of opportunity that you think could benefit from the Amgen capabilities that perhaps are not represented or underrepresented in your portfolio today? Thanks so much.

David Reese:

Yes. And I would add, the other component is technology platforms. Bob mentioned briefly in his opening remarks the use of artificial intelligence and machine learning. I think we've quietly become a leader in this area. We are using artificial intelligence and machine learning across the R&D spectrum now from molecular engineering, where we've been extraordinarily pleased with -- it's the effect of dry labs or in silico design on the engineering of new protein molecules in time frames that are much, much shorter than were previously achievable with a higher success rate, success here being defined as a candidate going forward that has the molecular attributes that you want. We are using it extensively in the clinical trials arena for site selection, for example, and other aspects of trial design. So this is something that I'll talk about more as we go through the course of the year. But these sorts of technology platforms lead us to what I think is an absolute hinge moment in this industry where the union of tech and biotech will move us forward to a qualitatively different time in drug discovery and drug development. And I think we're going to be very well positioned to take advantage of this union.

Tim Anderson:

Thank you very much. On OTEZLA, I'm wondering if you have any market share or performance metrics in the mild psoriasis segment, specifically, where you've had approval for coming up on 1.5 years. I'm guessing you have some idea of the penetration you're making in that very different segment.

Bob Bradway:

Julianne, I know we're already at half past the hour. So that's the time that we had asked our colleagues to set aside for the call. But we have a couple of more questions in the queue. We'll try to get through those and then as is our custom be available if anybody has any questions for later this evening. But let's go to the next question.

Geoffrey Meacham:

Great. Afternoon guys. Thanks for eth queation Murdo, of your new launched products in the past few years, EVENITY stands out as one that had a really good progression each quarter. What does the long-term opportunity here look like? And then how do you think about life cycle management of the bone franchise overall later on as you get close to the LOE?

Arvind Sood:

Julianne, take -- let's take one last question, after which Bob will make some closing comments.

Dane Leone:

As we contemplate the updated guidance for the year, probably - two competitive questions are still unclear to me on the call. Firstly, you've had a great momentum with Repatha. Earlier in the week, Novartis really highlighted Leqvio or inclisiran, finally gaining some traction in the U.S. Love to hear your thoughts around how you view competitive dynamics in the PCSK9 class for the remainder of the year. And then secondly, kind of on a similar note, I did notice LUMAKRAS declined Q-on-Q in the first quarter in the U.S. And was just curious if you saw any impact of KRAZATI the competitive agent from Mirati. Thank you.

Bob Bradway:

Okay. Thank you, Murdo, for your response to that question. And let me again thank all of you for joining us on the call. Just a couple of quick thoughts. Obviously, we're off to a good start here in the year, as you can see from the results in the first quarter and as I said in my opening remarks, far more important than the quarter itself is the way it's setting us up for the long term. So if you think back to the things that we've talked about as being important for us, being able to deliver on our long-term growth strategy, it starts with our growth products having to perform. As you saw in the quarter, we had 10 brands achieving record performance. And performance means growing share, growing penetration. And as Murdo said, that's what we see happening now with our important growth driving brand. The other thing we said is that for us to be successful over the long term, we've got to perform in the international markets. And again, I think the volume trends that you see here early in the year are really good in the year. We're building the kinds of platforms we need to have in order to deliver long-term growth for our medicines outside the United States. We talked a lot about biosimilars on this call. We've said that, that we think is an important contributor to our growth long term as we bring new products to market and launch them in new countries. And in order for us to do that, we need to be a leading competitor, and that means we need to execute on time and be in the first wave of launches. Once again, this quarter, you see further proof points of our being able to do that consistently with the launch of Amgevita, the approval of BEKEMV et cetera. So we think competitively, we're well positioned there and a biosimilar business to capitalize on the opportunities. And then, of course, the pipeline is always critical, and we're excited about how our pipeline is very rapidly advancing, particularly on the registration-enabling trials, whether you look at tarlatimab or bema or rocatinlimab. We have a lot of important registration-enabling work underway, and we're excited to start generating results from those portfolios -- or that portfolio of products as well as some of the products that are now attracting quite a bit of attention like 133 in our mid-stage pipeline. So all-in-all, we're off to a good start in the quarter, and we remain very enthusiastic about the long term. And in the meanwhile, we're looking forward to having an opportunity to close on the Horizon transaction once regulators have completed their work. So thank you for tuning in and we look forward to being back with all of you in August.

Operator:

This concludes our First Quarter Full Year 2023 Financial Results Conference Call. You may now disconnect.

Operator:

My name is Jason and I will be the conference facilitator today for Amgen's Fourth Quarter Full Year 2022 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Mr. Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Bob Bradway:

Okay. Thank you, Arvind and hello, everyone and thank you for joining our call. So beginning the year feeling confident about the long-term growth outlook for our business and let me offer 5 reasons why. First, we have a number of innovative volume-driven products that still have plenty of room to run and we saw that in 2022. Repatha, Prolia and EVENITY each generated double-digit sales and volume growth in the fourth quarter and for the full year. We expect continued growth from these products in 2023 and beyond with Repatha, in particular, helped by important new data from the FOURIER open-label extension study and new prescribing guidelines. OTEZLA delivered 7% volume growth in both the fourth quarter and the full year, benefiting from a label expansion that gives us the opportunity to reach millions of new patients in the U.S. with mild to moderate psoriasis. LUMAKRAS and TEZSPIRE collectively contributed more than $450 million in full year sales and we're pursuing additional indications for both products. We're especially pleased to see TEZSPIRE being utilized by patients across all types of severe asthma. Murdo will share more about the performance of our in-line products in a moment. Second, we moved 6 first-in-class molecules into Phase III or potentially registration-enabling trials in 2022, including Olpasiran for LP(a), rocatinlimab for atopic dermatitis, TEZSPIRE in eosinophilic esophagitis and of course, bemarituzimab, tarlatimab in BLINCYTO in cancer. We've also begun enrolling patients in a Phase II trial for AMG 133. Based on early data, this molecule, with its unique mechanism of action, looks like it may have an attractive profile for the treatment of obesity. And more on our pipeline from Dave Reese in a moment. Third, we have an industry-leading biosimilars business that will contribute to our growth over time. In 2022, we delivered positive Phase III data for our biosimilar candidates to EYLEA, SOLIRIS and STELARA, positioning us to be in the first wave of these launches which we know is critical to success. We're also less than 24 hours into the launch of AMGEVITA in the U.S. and AMGEVITA is the leading biosimilar to HUMIRA internationally. And with a 5-month lead over the next entrant, we're well positioned for success in the U.S. All told, we have 6 more biosimilar launches planned in the U.S. and markets around the world between now and the end of the decade, making this another source of long-term growth for us. Fourth, we've often said that we would look to licensing and acquisitions in our stated areas of strategic interest. And that's what we've done, building on our decades of experience in inflammation with 2 significant transactions that will strengthen our presence in this space. Through the acquisition of ChemoCentryx, we added TAVNEOS, a first-in-class treatment for ANCA-associated vasculitis and we're off to a strong start there. Our announced acquisition of Horizon Therapeutics will add several additional first-in-class early in life cycle biologic medicines, including TEPEZZA, KRYSTEXXA and UPLIZNA that will add to our growth profile through 2030 and beyond. We're working our way through the regulatory review processes for that deal and are confident that the deal poses no anticompetitive matters. And we have received a second request from the U.S. FTC and we'll work with them to answer their questions while remaining optimistic that we can complete the deal in the first half of the year. Finally, we've stayed true to our capital allocation priorities, investing in our business to drive long-term growth while also returning capital to our shareholders through share repurchases and a growing dividend. You'll hear more from Peter on this shortly. And everything we achieved last year and everything we will achieve going forward is due to the hard work and commitment of our people. They're passionate about our mission to serve patients. They're clear on how their work contributes to our success and they're ready to seize the opportunities and meet the challenges that await us. I'm grateful to all of them. I look forward to your questions a little later on but now let me turn the call over to Murdo.

David Reese:

Thanks, Murdo. Good afternoon, everyone. For research and development, last year was one of high-quality execution and on-time delivery of results as we continued to progress our innovative pipeline. In general medicine, we strengthened our cardiovascular franchise and emerging portfolio of obesity assets, 2 areas of significant unmet need, affecting millions of patients globally. Repatha, of course, is the cornerstone of these efforts. And last November at AHA, we presented FOURIER open-label extension data. These data were recognized by the American College of Cardiology expert consensus decision pathway which indicated there appears to be no LDL cholesterol level below which benefit ceases. Additionally, LDL cholesterol recommendations were updated to reflect a reduction in target LDL levels in highest-risk patients from 70 to 55 milligrams per deciliter. This is a level that is not attainable for a large number of patients without PCSK9 inhibitor therapy. Another molecule that we are excited about is Olpasiran. At AHA, we presented Phase II data where Olpasiran dosed 75 milligrams or higher every 12 weeks reduced Lp(a) concentrations by 95% to 100% in patients with established atherosclerotic cardiovascular disease with baseline Lp(a) levels of approximately 260 nanomolars per liter. Olpasiran appeared both safe and well tolerated in this study. We are encouraged by these data, particularly our dosing frequency, safety and tolerability profile and degree of Lp(a) reduction. We have initiated a Phase III outcome study and 6,000 subjects with atherosclerotic cardiovascular disease and significantly elevated Lp(a) levels of at least 200 nanomolars per liter. Now turning to obesity. In December, we presented data from a Phase I study where AMG 133 appeared safe, well-tolerated and demonstrated a 14.5% reduction in body weight at day 85 following 3 monthly subcutaneous injections. Body weight reductions were observed up to 150 days after the final AMG 133 administration. Given these favorable attributes, we are now enrolling a 570-subject Phase II study to explore AMG 133 in patients with obesity with or without diabetes and related comorbidities. The study will also investigate different dosing levels and regimens… [Technical Difficulty]

Bob Bradway:

Okay. Well, thank you, Peter and Dave, for soldiering on despite the technical difficulties. And again, apologies to all of you who've dialed in to join us on the call and who found some disruption in the proceedings here. A number of you have e-mailed your questions to Arvind. What I'd like to suggest is that any of you who have questions, directly e-mail them now to Arvind and Arvind will read them and we'll try to answer them here in the room. And let me just assure all of you that we will rearrange our schedule and be available to answer questions if we don't get to it on this conference call, be available to Arvind and his team to answer questions you may have after we wrap up. So with that, let me turn to Arvind and we'll tackle the questions that you've already submitted.

Bob Bradway:

Okay. We do that in 2 pieces. Pete, why don't you hit the accounting question?

Bob Bradway:

Okay. And then on AMGEVITA, why don't we do a 2-parter there? Dave Reese and then Murdo, you may want to add some thoughts.

Murdo Gordon:

Yes. Thanks, Dave. We have had some inbound questions on this, as you can imagine, during the day, given that we are launching. So far, launch is progressing well. We have product making its way into the channel and we're already receiving inbound interest in AMGEVITA from payers, prescribers and patients. One thing that's important to remember is the current product that we have in the market is a lower concentration, original concentration AMGEVITA or adalimumab but it is citrate-free, meaning that the patient experience here is still 1 where we minimize the injection site pain by having a citrate-free formulation. And patient experience here has been positive in our clinical trials and we anticipate that not having a high concentration will not be a barrier in the market. These are very low volumes that are injected through an auto-injectable pen. And we've seen very, very good reliability of patients being able to administer. In addition, of course, we provide nurse support for patients. And then while it wasn't asked, I think it's also important to note that we are providing financial assistance, support and reimbursement support for both prescribers and patients as we launch the product. So really a full suite of services and support that you would expect for a branded launch being applied to the launch of the first biosimilar, adalimumab, to launch in the U.S., that is AMGEVITA.

Arvind Sood:

So the next question is from Geoff Meacham [ph] from BofA Merrill Lynch. And his question is, he said, I know you have AMGEVITA but are you expecting an indirect impact in the second half of '23 or the first half of '24 from all the HUMIRA biosimilars and STELARA, on Otezla and ENBREL mainly? And he is interested in the volume and price impact.

Murdo Gordon:

It's hard for me, obviously, to comment on what competitors may do as other biosimilars of adalimumab enter the market beyond July. But what we have seen coming into 2023 is a good cycle of reimbursement negotiations and we've been able to secure a very broad coverage for both ENBREL and Otezla. We expect that insurance coverage to continue throughout the course of 2023. And as is usual, we had small concessions on net price to secure that broad reimbursement but nothing unusual compared to prior years.

Murdo Gordon:

Okay. So first on Otezla, I would start with the fact that we are the only systemic product indicated for a broad range of psoriasis patients without regard to the severity and really makes us the ideal first-line first systemic post-topical choice of therapy. And that is the positioning of the brand. The size of that market is very large. There's 4 million patients with a mild to moderate form of psoriasis. About 1.5 million of those patients would be regarded as not doing as well as they could on topical treatment by potential switching to a systemic like Otezla. As I mentioned just a few moments ago, Otezla also enjoys very broad frontline access, that is it doesn't require that you step through another systemic therapy. And it also means that prescribers can make it the first choice. And these are busy dermatologists. They want something that's easy. They don't want a lot of prior paperwork. And they want to be able to provide an ability for patients to start quickly on their therapy. Only Otezla offers that in the psoriasis market. I think what we're seeing right now is an effect of a number of free goods programs that were launched at the end of last year and continue into this quarter. When physicians have free goods programs or sometimes referred to as bridging programs, usually used at the beginning of a product launch when there hasn't been an opportunity to secure access with pharmacy benefit managers, physicians will sometimes use those to try novel therapies coming into the market. However, as those novel therapies go through the negotiation process with PBMs and payers, oftentimes, it becomes more difficult to try those novel therapies because of the nature of the access that they result with. And I think that's really where the sustained advantage of Otezla in that first-line systemic post-topical prebiologic patient population really allows us a long-term growth opportunity. And we continue to feel confident in the long-term growth of this brand. And we have a very strong commercial presence in a number of markets around the world and we continue to feel good from what we're hearing from our prescribing base of dermatologists. I will say that the short-term impact of these free good programs, we're watching it very closely and we're making sure that we continue to be competitive in the marketplace.

Murdo Gordon:

Well, maybe I can answer the second part first. We don't comment on product-specific pricing and so I really can't answer the net price. I think it's fair to say that as additional entrants come into the market, net prices usually go down. We've seen that in our other biosimilars business but we would expect that to happen here. With respect to the 2 list price approach that we've employed here at this launch, this is really to address the complexity of the U.S. market. Pharmacy benefit managers have a business model that requires that they negotiate rebates with manufacturers and so they would prefer a high list price and negotiate rebates to net the price down and then pass those rebates through to their upstream employer clients. There are other stakeholders and customers in the health care system that prefer a net price-based model and don't care about the difference between list and net or gross price and net price. And so for those, we have the lower net price product available. So just a reminder, we have a high list price at 5% below HUMIRA and then we have a low list price at 55% below HUMIRA. We also intend to ensure that AMGEVITA is an affordable medicine for patients by providing co-pay assistance as well as helping patients secure reimbursement through the insurer. We are also pleased to report that we enjoy broad access out of the gate on day 1 of launch with the 3 national pharmacy benefit managers, so broad parity coverage alongside HUMIRA.

Arvind Sood:

Yes. The next question is from Colin Bristow for UBS. And here's a question on the obesity pipeline. What update should we expect to get this year? Will we see data from the remaining 3 cohorts from the Phase I study? And then on AMG 786, when should we expect updates, more disclosure on this asset and program?

Bob Bradway:

Okay. Thanks, David. Arvind, let's go to the next question.

Murdo Gordon:

Yes. I'm not sure we have a slowing overall volume growth. I think what we saw and I mentioned this, it might not have come through clearly on the audio but in the quarter, we did see a price effect based on reaching reimbursement decision finalization in France. And so we had a $12 million charge in the quarter against LUMAKRAS. It grew 7% volume in the quarter. But I think we anticipated the opportunity for LUMAKRAS in second-line being limited to the incident population. And we are commercially and medically sized appropriately for that opportunity. I think as we expand into earlier lines of therapy or other tumor types, we will continue to invest behind the product.

Peter Griffith:

Arvind, let me start by working our way from the tax question. So on the tax side of it, the 18% to 19% is increases by the amount. Although, as I have highlighted both last year and this year, we have a small carryover effect of about $125 million that's currently capitalized in cost of goods sold that will be released that -- excuse me, currently capitalized in inventory that will be released in the cost of goods sold, primarily during the first quarter without a corresponding tax benefit. So the answer is, going forward, after that $125 million works its way through cost of goods sold, it will be roughly equivalent to move from the Puerto Rico Excise Tax or the PRET which was recorded in cost of goods sold down to the actual income tax rate. The question on guidance. And I think the question was, what's included from BeiGene and what's not. As I said earlier to Yaron's question, what won't be included now is our share of either losses or gains in BeiGene's income. So we will include, on a mark-to-market basis in our GAAP income statement, the results of BeiGene and then the movements in the security but not in our non-GAAP income statement. We will no longer record our share of losses or their income.

Arvind Sood:

Okay. Then we have a second question from Salveen asking, could you put the upcoming TEPEZZA Phase IV data and chronic context for us? What do you need to see? How would positive data expand the opportunity for the drug?

David Reese:

Yes. I mean, I think we're restricted, of course, by Irish takeover rules here. What we can say is that it's worth reminding everyone that the current label is broad and encompasses patients with thyroid eye disease, the -- due to autoimmune thyroiditis. This is primarily a study that will generate data in a population that we believe will help with reimbursement and with payers. And let me ask Murdo to comment on that. I would point out that mechanistically, there is no difference between chronic thyroid eye disease and the acute form of the disease. In fact, it's a semantic definition as to when the disease progresses to the chronic form but the underlying pathogenic mechanism of being driven in large part by IGF1R [ph] is intact. And therefore, based on prior data and mechanistically, we're optimistic about that study. Murdo?

Bob Bradway:

Okay. Thanks, Salveen, for your question. Let's go to the next one, Arvind.

Murdo Gordon:

Yes. It's a similar question to 1 asked earlier but perhaps I can elaborate a little bit for Chris. It's fairly clear that dermatologists want to use the easiest product and safest and well-understood product when moving to a first systemic treatment post topically. Many of these topical patients are hesitant to try a systemic agent. And so I think this is where Otezla's profile studied extensively with over 700,000 patients globally having experienced this product, the safety and efficacy of Otezla is extremely well understood. As I mentioned earlier, the frontline access coverage that we've secured in the U.S. without a lot of prior authorization requirement, the convenience of that for dermatology practices is very clear and it makes it a really good first-line treatment, systemic treatment, especially for a patient with milder or more moderate disease. For moderate or severe disease, it is likely that you're going to need to use something like a biologic or a second-line agent. And we think that given that [indiscernible] has yet to go through the market access process and secure payer reimbursement, we're not really seeing how it's actually going to be used longer term in the marketplace. And I think sometimes, these free good programs can distort what the actual uptake curve will be for a product.

Murdo Gordon:

Well, as I mentioned before, we're primarily through our 2023 cycle and we've secured very good access. We've had to concede a bit of price, as I mentioned but not anything that looks precipitous compared to prior years. So we're pleased with that. ENBREL is an important product for many indications. We see that the safety and efficacy profile of ENBREL is well understood. I think physicians also want choice. And I think that's where PBMs are also open to having more than 1 TNF product on their formulary. And I think that's really what we've been able to secure and what we continue to think we'll be able to achieve in the future.

Arvind Sood:

The next question is from Mohit Bansal from Wells Fargo. And his question is, could you talk a little bit more about your HUMIRA biosimilar negotiations thus far? Seems like AbbVie has parity access with majority of them and the pricing is different for the first half versus the second half and there's more competition. Are your contracts similar? And how should we think about the cadence of launch as the year progresses?

Bob Bradway:

I know a number of you have submitted questions, so we're continuing to work through the list. Anybody who hasn't yet shot Arvind an e-mail, we're going to go through those and we've got couple of handfuls still to go. So let's, Arvind, go to the next question.

David Reese:

Yes. Thanks, Greg. What I view this is as another modality in our toolkit. We've been watching the antibody drug conjugate technology quite closely for the past several years. It's advanced, so what we feel is that we'll use ADCs on appropriate targets. I view it as an addition and an extension of our modalities. These collaborations bring together our experience on target identification and validation as well as, of course, antibody generation with some of the newer conjugation technology. So as that progresses, more to come but you should view this as additive to our armamentarium.

Murdo Gordon:

Yes, we don't give product-specific guidance. And this is a new event in the U.S. biosimilar market, given this is the first big pharmacy benefit product to go up. So we will continue to update all of you as the launch progresses. We have said we think this will be gradually slope on this launch and I'm going have to keep you apprised as we go forward.

David Reese:

Yes. Thanks, David. This is a year where certainly my focus, my team's focus will be on execution, a huge amount to carry forward in the pipeline. So things that I would keep an eye on, how well are we enrolling the Phase III Olpasiran trial? How well are we enrolling the AMG 133 Phase II trial? In the general medicine portfolio, in inflammation, how are the suite of rocatinlumab trials enrolling? How are we delivering on TEZSPIRE additional indications? And then finally, in oncology, things to keep an eye on are the tarlatumab program, not only the Phase II potentially registrational trial readout in the second half of the year but also initiation of a Phase III trial in second-line disease. These are some of the top line things that I'll be paying attention to. And then there are, of course, a host of others earlier in the pipeline and in discovery research.

Arvind Sood:

Okay. The next question is from Umer Raffat from Evercore and he has 2 questions. The first 1 is for you, Dave, on OX40 and the monthly dosing in Phase III. He said and I don't see an arm investigating extended intervals quarterly or biannually. I'm just trying to tie the Phase III dosing interval versus the durable efficacy seen through 6 months post last dose. And the second question is for you, Peter, that the tax rate stepped up from 14% to 18% to 19%. Just wanted to get some additional color.

Peter Griffith:

Umer, good question on tax. Again, it's just a change in what I would say the real estate on the P&L which is the PRET moves from the cost of sales line down to income tax expense in connection with the change in Puerto Rico for us from a PRET to the actual income tax in Puerto Rico which began here in 2023. So that's the nature of that change and that's where the 18% to 19% comes in from where we've been here historically.

Murdo Gordon:

Yes, we are actually very pleased with the expansion internationally of the Amgen footprint being in over 100 markets. We continue to launch products and secure reimbursement around the world. I talked about LUMAKRAS. And most recently in China, we've been able to secure national reimbursement drug listing for both Prolia and Repatha. Our Japanese affiliate is growing well. In the recent history, I think what you're seeing is a function of just timing of launches coming a bit earlier in the U.S. and also some of our partnering products. I think longer term, what we've got is a very interesting portfolio of products that will continue to make their way around the world. The announced Horizon acquisition has a very large opportunity internationally. And we see our JPAC region is actually our fastest-growing potential opportunity longer term. So I wouldn't look at short-term movement from quarter-to-quarter. The long-term prevailing trend is that we will grow quickly outside the United States.

Murdo Gordon:

Yes, I think we remain quite confident in our long-term growth of Otezla. We are in a period where there's a lot of new product entrants in the market competing for new patient starts. I think the unique positioning of the product, as I mentioned, allows us to source a very large pool of patients. And our coverage around the world and particularly in the U.S. from an insurance reimbursement perspective allows us to penetrate that market. So we feel very good about the continued prospects to grow Otezla.

Bob Bradway:

So Robyn, maybe I'll start on the last piece and then Pete, you can reiterate what we said about '23. But as I said in my remarks, Robyn, we have 6 further similar launches planned between now and the end of the decade in the United States and other countries around the world. And it is the launch of those molecules through time which will enable us to continue to grow that franchise. So I would reiterate what I said earlier in my prepared comments. I think you've heard Murdo address as well the attractive opportunities that we think we'll have here, in particular, with AMGEVITA though we're in the first day of launch. And with respect to '23, Pete, I don't know whether you want to say anything in addition to what you already have about the outlook for the year.

Arvind Sood:

Okay. The next question is from Matt Phipps of William Blair. And Matt's saying the oncology biosimilar 2023 guidance suggests a year-over-year decline of 38% versus a 30% year-over-year decline from '21 to '22. Is the rate of erosion in the oncology biosimilars expected to continue to get larger beyond 2023 or will this eventually hit something of a floor?

Arvind Sood:

Yaron calling. He said I'm confused by the tax rate going up to 18% to 19% while COGS are 16% to 17%. Hence, I don't see any offsets in the COGS line. What am I missing?

Arvind Sood:

Okay. The next question is from [indiscernible] from Credit Suisse. Thanks for the comments on Otezla and ENBREL. So can you add a bit more color into the dynamics in immunology? Are there any changes in the channel and mix of patients? Has there been any formulary disruptions?

Bob Bradway:

I think we're down to our last question, Arvind, if you want to...

Peter Griffith:

Yes, Brian, I think, as you know, we don't give long-term guidance on tax rates. And so we won't go beyond this year, so 18% to 19%. And go back to your own just to make sure we understand the change in the PRET. The PRET is a percentage of its cost of sales as opposed to the income tax rate which is pretax income. So that's a little bit of the difference to that Yaron asked about. So 18% to 19% this year is where we're at and that's where we'll -- that's what we'll give you for now.

Operator:

Thanks for using Webex. Visit our website at www.webex.com.

Operator:

My name is Jason, and I will be your conference facilitator today for Amgen's Third Quarter 2022 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Bob Bradway:

Okay. Thank you, all of you, for joining our call. In the face of both macroeconomic and industry-specific challenges, Amgen remains laser-focused on delivering for patients and shareholders. Benefit of that focus was evident in the third quarter with volumes up a healthy 8% and 16% outside the United States. These results reflect the strong underlying demand for our medicines and the value they bring to patients even in challenging economic times like those prevailing at the moment. Revenues for the quarter were down 1%, reflecting a 5% net price decline consistent with what we communicated earlier in the year and a 2% impact from foreign exchange. All told, 11 of our products generated record sales in the quarter, and non-GAAP earnings per share increased 15% with free cash flows reaching $2.8 billion for the quarter. Looking forward, we remain focused on several growth drivers. With the recent closing of the ChemoCentryx acquisition, we're excited to have TAVNEOS in our portfolio. TAVNEOS is the first new treatment for ANCA-associated vasculitis in more than 10 years, and we're confident that we can leverage our decades of experience in inflammation and nephrology to bring this innovative medicine to many more patients moving forward. Two recently launched products, TEZSPIRE and LUMAKRAS, are off to solid starts. TEZSPIRE is performing well in asthma, and we have studies underway for several other indications for that product as well. LUMAKRAS is performing well globally with patients, payers and prescribers recognizing the importance of this innovation. With combination studies underway, we're exploring the many different ways this product may benefit patients through time. We have a number of key products led by Repatha, Otezla, Prolia and EVENITY that we know can benefit millions more patients globally than they do today. And let's not lose sight of the fact that these 4 products collectively generated $2 billion in third quarter sales with volume growth of 17%. We've built an industry-leading biosimilars business, having now launched five products in markets around the world, and we're months away from being the first company to launch a biosimilar to HUMIRA in the U.S. AMGEVITA is already the most prescribed HUMIRA biosimilar in Europe, giving us confidence as we prepare to enter the U.S. market. Looking forward, our next wave of biosimilars to STELARA, SOLIRIS and EYLEA are well positioned with our having now successfully completed Phase III trials for all three of these molecules. We have many potential new medicines advancing through our innovative pipeline, including Olpasiran, tarlatamab, rocatinlimab, bemarituzumab and AMG 133. These five molecules and several others that you'll hear about shortly from Dave Reese are vintage Amgen, which is first-in-class medicines that make a big difference for patients suffering from serious diseases for which there remains a real need for new and better treatments. Finally, we have a highly engaged and committed workforce, and I want to thank them, as always, for their great work. With that, let me turn over to our CFO, Peter Griffith.

Murdo Gordon:

Thanks, Peter. We saw strong volume growth in the third quarter with an 8% increase year-on-year. We delivered record quarterly sales for 11 products, including EVENITY, TEZSPIRE, AMGEVITA, Vectibix, KYPROLIS, Nplate and BLINCYTO; and double-digit volume growth for several additional products, including Repatha and LUMAKRAS. Excluding the impact of foreign exchange, third quarter global product sales grew 1% as our volume increases were offset by a 5% decline in net selling price, consistent with our prior estimates. Including the 2% negative foreign exchange impact, product sales declined 1% year-over-year. I'll start now with our general medicine business, which includes Prolia, EVENITY, Repatha and Aimovig. Overall revenue for this portfolio grew 14% year-over-year driven by 20% volume growth. In bone health, Prolia sales grew 7% year-over-year driven by 8% volume growth. EVENITY, which complements Prolia in our bone portfolio, had record sales of $201 million for the quarter driven by 45% volume growth in the U.S. and 30% volume growth outside of the U.S. Repatha sales increased 14% year-over-year driven by 52% volume growth, which was partially offset by lower net selling price. In the U.S., we generated 32% volume growth aided by broad adoption of Repatha by cardiologists and increasing adoption by primary care providers. We also saw declining net selling prices in the U.S. as we offered higher rebates to support broad Medicare Part D and commercial patient access. Looking ahead to 2023, we expect less year-over-year U.S. price erosion than we saw in 2022. Outside the U.S., sales of Repatha grew 26% driven by 73% volume growth. Net price declines outside the U.S. were primarily a result of Repatha's inclusion on China's National Reimbursement Drug List as of January 1, 2022. Overall, we remain focused on addressing leading cause of morbidity and mortality by bringing Repatha to patients in need all around the world. Moving to our inflammation portfolio. Otezla sales increased 3% year-over-year for the quarter. Otezla saw 9% volume growth, partially offset by lower inventory and unfavorable foreign exchange impact. In the U.S., Otezla remains the leader in bio-naive psoriasis patient share, and we see broader adoption of Otezla among patients with mild-to-moderate psoriasis. Looking forward, we expect continued strong volume growth given Otezla's established safety profile, strong payer coverage and unique position as the only systemic oral that can treat a broad spectrum of patients with psoriasis regardless of the severity of their disease. ENBREL sales decreased 14% year-over-year for the third quarter driven by lower net selling price, unfavorable changes to estimated sales deductions and a 3% decline in volume. ENBREL remains an important product for patients due to its long track record of efficacy and safety. I'm very pleased with our strong U.S. launch of TEZSPIRE, which generated $55 million of sales in the third quarter. Allergists and pulmonologists have prescribed TEZSPIRE across a broad range of patients with severe uncontrolled asthma. We're also seeing initiation in both biologic-naive and previously treated patients. Physicians acknowledge TEZSPIRE's unique differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled without requiring any phenotypic and biomarker testing. We recently completed our acquisition of ChemoCentryx, which adds TAVNEOS to our portfolio. TAVNEOS recently launched as a first-in-class treatment for ANCA-associated vasculitis, or AAV. This is a serious systemic autoimmune disease that leads to inflammation and eventual destruction of small blood vessels. This inflammatory disease can lead to permanent organ damage and, in some severe cases, can be life-threatening. TAVNEOS represents a significant advance in treatment for the 8,000 to 10,000 U.S. patients a year who develop severe active disease or experience major relapses of AAV. AAV is often managed by rheumatologists and nephrologists, where Amgen has a strong market presence and successful track record. We look forward to applying our deep expertise and inflammation experience to help many more patients manage AAV with TAVNEOS. Moving to our hematology and oncology business. Our 6 innovative products grew 8% year-over-year with 10% volume growth. For Vectibix and Nplate, strong volume growth in the quarter benefited from timing of shipments to our partners in Japan. Our launch of LUMAKRAS is progressing well with revenues of $75 million in the third quarter. Quarter-over-quarter sales declined 3% driven by lower net selling price due to a $12 million unfavorable price adjustment resulting from our reimbursement approval in Germany. This was partially offset by 15% volume growth. In the U.S., LUMAKRAS has been prescribed to over 3,700 patients by over 2,200 clinicians in both academic and community settings. Outside the U.S., LUMAKRAS has now been approved in over 45 countries. We've launched in 30 markets and are rapidly pursuing reimbursement in the remaining markets. As we've noted before, near term, the market for LUMAKRAS is focused on the 7,000 U.S. and 20,000 ex U.S. patients in the second-line setting. Longer term, we expect LUMAKRAS growth to come from earlier-line therapy and the potential of LUMAKRAS to treat other tumor types. Sales of our oncology biosimilars declined 25% year-over-year. While our biosimilars for MVASI and KANJINTI both hold leading shares, we expect continued net selling price deterioration and accelerating volume declines driven by increased competition. The most recently published average selling price for MVASI in the U.S. declined 37% year-over-year and for KANJINTI declined 38% year-over-year. Over time, we expect long-term growth in our biosimilars business to be driven by the addition of new molecules and additional launches. We're preparing ourselves for the upcoming launch of AMGEVITA, our HUMIRA biosimilar, in the U.S. in early 2023, followed by the next wave of biosimilar launches to STELARA, EYLEA and SOLIRIS. Overall, I'm very pleased with our execution in the quarter. Our international presence and diverse portfolio of products position us well to deliver on the execution of our long-term growth strategy. And with that, I'll turn it over to Dave.

Bob Bradway:

Okay. Thank you, David. And Jason, why don't we now open the line up for questions. If you would remind our callers of the procedure, we can get started.

Salveen Richter:

Good afternoon. Thanks for taking my question. On AMG 133 in obesity, could you just help us understand how you'll evaluate the data in the context of existing therapies to make a move forward decision and how you're thinking about differentiation here? Is it just a matter of taking a piece of the market given size? Or do you think there's other aspects here to the program?

David Reese:

Yes. Thanks, Salveen. We know there's a lot of interest in this program. And as we mentioned, we'll be showing the data in full in the first week of December at the hybrid conference. Obesity is a large, very heterogeneous disease. It's a global public health problem. The things that I would look for in evaluating this molecule going forward will be the dosing; dosing interval; what are the kinetics of weight loss; how rapid is that weight loss; what is sustainability. And then finally, the overall tolerability. We do plan on using our extensive capabilities in human data to help shape our thinking and guide this development program as we move forward.

Arvind Sood:

Jason, we'll take the next question.

Matthew Harrison:

Great. Good afternoon. Thanks for taking the question. I wanted to ask a question now that you've been through - or hopefully been through most of the contracting season for next year. I think one of the key investor concerns is obviously with biosimilar HUMIRA coming next year, what impact that could have to ENBREL and ENBREL pricing dynamics for next year. So I'm wondering if you can just comment on how to think about the potential impact to ENBREL and its pricing next year? Thanks.

Arvind Sood:

Okay. Next question please?

Umer Raffat:

Hi, guys. Thanks for taking my question. I have a two part question on what everybody wants to talk about, which is obesity. So Lilly and Novo, the two lead players in the GLP space, they both have early-stage programs. I'm talking Phase I stage programs on triple agonist, et cetera. And one thing they always emphasize is that they have certain predefined thresholds for moving any of those programs forward. And those thresholds are off of incremental efficacy beyond the current most competitive products out there. And my question is, I imagine you're thinking about some of those thresholds too relative to Manjaro, perhaps Carsem, as you think about the progression of your program. And I'm curious if you could speak to that. And secondly, if you could just clarify for us, the low- and the high-dose data from single ascending dose you showed at your business review early in the year, was that an average of the first three and the highest three of the six cohorts in Phase I? Or was it the first two out of the six cohorts? I wasn't quite sure with the low and the high meant within the single ascending dose. And I remember, there were 6 different cohorts within single ascending. Thank you very much.

Operator:

Our next question comes from Michael Yee with Jefferies. Your line is now open.

David Reese:

Yes. No, I don't believe we announced we had started Phase II, Mike, but rather that we're in planning. We do expect to initiating the Phase II trial in the relative near term. And once that gets launched, of course, we'll talk about design and give guidance in terms of expected data availability. I wouldn't over think the GLP-1 component, and I'm not sure that's on point. I think, again, when we share the data in a month, you'll get a look at that.

Operator:

Our next question comes from Jay Olson with Oppenheimer. Your line is now open.

Bob Bradway:

Do you want to - yes, jump in.

Bob Bradway:

And Jay, let me just add, don't forget, we've - in the slides that we shared with you tefan [ph] we have the outside U.S. data available for you on all the different products. You'll see the current contribution from the international business there.

Unidentified Analyst:

Hey, this is Charlie on for Geoff. Thanks for taking the question and congrats on the results. I just have questions regarding the, I guess, the EYLEA as well as STELARA kind of potential launch timing. I think given you mentioned that you already submitted the STELARA data to the FDA, I'm wondering you're expecting to see the product launch kind of second half of next year and whether you anticipate any pushback from J&J? And I guess similarly kind of for EYLEA, were like launch timing is in the 2024 time frame and if you anticipate kind of any pushback from Regeneron? Thank you.

Operator:

Our next question comes from Evan Seigerman with BMO Capital. Your line is now open.

David Reese:

Yes. Thanks, Evan. Look, we understand there's a lot of interest in the dose comparison data. We're just getting the top line results to the FDA and other regulatory authorities. So it's premature to share these data prior to their review and the appropriate conversations. In regards to the combination trial, I believe you're referring to with checkpoint inhibitors, we're doing a lower dose lead-in, as I've mentioned before, and then layering on top of that dosing the checkpoint inhibitors. So they are then given concurrently going forward.

Operator:

Our next question comes from Mohit Bansal with Wells Fargo.

Murdo Gordon:

Thanks for the question, Mohit. I think what's important to remember when you're thinking at least about U.S. biosimilars is products in the buy and bill or medical benefit side will continue to see price declines over time because of the way in which the average selling price calculation works. Products on the pharmacy benefit side, so think Medicare Part D products or commercial-insured retail pharmacy products, they are likely to have slower declines in the slope of their net price over time. Now both of those conditions depend on how many competitors for each molecule. So everyone is a little bit different. But I would hesitate to put a time frame on the class of products. I think you need to look at each one of the molecules. One thing I will say is we've been very clear on where we're going to get growth in our biosimilars portfolio, and that's by launching successive new biosimilars on top of our continuing base of business. Outside the U.S., biosimilar pricing tends to come down fairly rapidly and then can hold in some of the larger, what we call retail markets. In markets where it's a heavy tender business, prices will continue to decline as long as there are competitors in the market.

Yaron Werber:

I got just a couple maybe. David, the first one on 133, can you comment it's an antibody? Can we assume it's monthly dosing? And then secondly, for 938 against EYLEA, now that there's going to be high-dose EYLEA, the 8 milligrams approved, it's obviously the same underlying drug, just a different formulation. How does that impact what you need to do to bring in a high-dose 938 to market and how that jives versus the fiscal year '25 potential launch?

Murdo Gordon:

Yes. Yaron, we continue to want to be able to have a full complement of competitive biosimilar products that compete effectively with their innovative parent products. And we've, I think, done that very successfully, thanks to the talented team in our formulation and process development organization. So we feel confident that we'll be able to bring various concentrations across the portfolio as needed. So we're working on that one.

David Risinger:

Great, thanks very much. So my question is on biosimilars timing for 2023, please. Regarding AMGEVITA, in light of your interchangeability study, which has an estimated completion in January, assuming that succeeds, when in 2023 do you think FDA will add interchangeability to the label? And then is Amgen planning to launch biosimilar STELARA in September at risk if patent litigation remains outstanding?

Operator:

Next question comes from Robyn Karnauskas with Truist.

Murdo Gordon:

Yes. Robyn, thanks for the opportunity to clarify. I didn't say that we don't expect continued price declines on ENBREL. I said we don't expect the current price declines to be dramatically different going into next year. So we do expect to continue to concede price on ENBREL as the category is quite competitive, but we don't see the slope of that changing dramatically. And ENBREL is used across a broad range of patient types in rheumatoid arthritis as well as in psoriatic arthritis. I think what we see is we see a lot of frontline usage still, and we do see some post-TNF frontline usage. So I think that will continue. Not every patient is going to respond to TNF inhibitor, and many clinicians prefer the well-demonstrated safety and efficacy profile of ENBREL, and we think that will continue despite biosimilar options in the market. So that hopefully clarifies your question.

Colin Bristow:

Hey, good afternoon. Congrats on the quarter. So I'll take another one on 133, if I may. As we think about time line, it took Lilly and Novo around 5 to 6 years to move their lips from sort of Phase I initiation to the market. Is there any reason at all for us to think that there's any sort of abbreviated path here that you could explore? And just with those sort of aforementioned time lines in mind and the fact that this efficacy bar that we see now could be raised by what are the competitor assets is ahead of you, does this raise the bar for progression to Phase II from your side?

Operator:

Our next question comes from Carter Gould with Barclays. Your line is now open.

David Reese:

Yes. Thanks, Carter. That's a question we'll address it as we go forward. But I don't feel that it's essential that this be a diabetes medication. As I said, this is -- obesity powers a large number of diseases, and we're going to guide our development to where we think we get the most effect size.

Unidentified Analyst:

This is Ted on for Michael. We have [won] LUMAKRAS coming out of World conference with updated data on different combinations you presented, I mean, PD-1 and SHIP2. How do you think these different combo regimens can be positioned to develop each other? Do you have any updated view? And would you prioritize one over the other with data so far?

Arvind Sood:

Jason, I see one more participant in the queue. So let's take one last question, after which Bob will make some closing comments.

Tim Anderson:

I wanted to ask a two part biosimilar question related just to the U.S. market, and that's what you think uptake will be like in 2 disease areas that are a little different than most. So in the rare disease space, where you'll have a biosimilar SOLIRIS and then in the eye space with your biosimilar EYLEA, how do you think those will compare to disease areas where we already have precedents, such as in oncology? I know the ice pace is buy and bill. I think rare diseases is not buy and both, but if you could compare those, please.

Bob Bradway:

Okay. Well, again, let me thank all of you for joining our call. We appreciate your interest in Amgen. And let me just end by saying that we remain focused on ending the year strong and positioning ourselves for a good '23 and beyond. We look forward to having a chance to engage with you again here in a few short weeks or Monday and then in a few short weeks thereafter, at various conferences. So thank you and we'll look forward to seeing you soon.

Operator:

This concludes our 2022 Q3 earnings call. You may now disconnect.

Operator:

My name is Jason and I'll be your conference facilitator today for Amgen's Second Quarter of 2022 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Bob Bradway:

Okay. Hello, everyone, and thank you for joining our call. Today, we'll be discussing our second quarter performance, as well as our planned acquisition of ChemoCentryx which all of us here are very excited about. Starting with our operating results, we delivered strong volume driven growth in the second quarter, with unit volumes increasing 10%. Our innovative products performed well globally. Repatha, Otezla, Prolia and EVENITY, all delivered double-digit sales growth in the quarter. Our KYPROLIS, Nplate and BLINCYTO in our innovative hematology oncology portfolio, all generated record quarterly sales. Our two newest products LUMAKRAS and TEZSPIRE are both off to a strong start. LUMAKRAS is now being prescribed for patients with non-small cell lung cancer in 25 countries around the world. TEZSPIRE has made a big impact in a short period of time for a broad population of patients with severe asthma in the U.S. With our planned acquisition of ChemoCentryx, we will be adding another newly launched innovative product to our portfolio, TAVNEOS, which is for ANCA-associated vasculitis which is a serious and sometimes life threatening autoimmune disease. TAVNEOS is a terrific medicine, the first innovation in this space in more than 10 years and very much needed given the harsh side effects of the older treatments and the seriousness of the disease. This product also fits right in Amgen's strategic sweet spot. Our decades of leadership in immunology and nephrology will enable us to add value to the TAVNEOS launch, reaching many more patients and much more quickly than would otherwise have been possible. You'll hear from Murdo in a moment, but let me just say that opportunities like this don't come along that often. We're really looking forward to working with the highly skilled and committed team from ChemoCentryx to realize the full potential of this very innovative product. We think we can make a difference for patients and own an attractive return for our shareholders from this investment. Dave will talk about the pipeline shortly and our innovative and biosimilar molecules are proceeding well through the pipeline and the highlights of course include the really encouraging data for our cardiovascular molecule Olpasiran which we expect to move into Phase 3 testing. On the oncology side, data from our BiTEs or bi-specifics in several solid tumors are giving us growing confidence in the role these molecules can play in diseases where there are still really big unmet medical needs like small cell lung cancer and prostate cancer. Across the board our biosimilars are advancing to plan setting us up for the growth of that business from future launches. Let me now turn to the current drug pricing debate in Washington. By now it won't surprise you to hear that we're disappointed by the proposed legislation. For some time, we've been advocating for reforms that respect innovation and provide improved access to it. The proposed bill does neither. The bill will impose price controls and price controls will stymie innovation. At a time when our nation needs more innovation, the result of this bill will be less of it adding to the problem to bill those precious little to improve the affordability of medicines for patients. So, when it comes to innovation and affordability, this bill is a little lose for patients. Recent developments are no surprise however, we've been positioning our business for some time for a world of compressed lifecycles and prices and if adopted this legislation will accelerate those trends and we will adapt accordingly. We continue to believe that the world needs more innovation, not less and our focus will remain on advancing more of it. Across inflammation, oncology and general medicine, we have a broad portfolio of innovative and biosimilar products meeting the needs of patients globally and we remain encouraged by the prospects for our long-term growth. Through the first half of the year, our team performed well meeting the needs of the patients we serve. I'm grateful to them for their dedication to our mission. And let me turn now over to Peter.

Murdo Gordon:

Thanks, Peter. Second quarter product sales increased three percent year-over-year driven by a 10% volume increase. Excluding the impact of foreign exchange, global product sales grew five percent, we delivered record quarterly sales for Prolia, EVENITY, AMGEVITA, KYPROLIS, Nplate and BLINCYTO and delivered double-digit volume growth for several additional products including Repatha and LUMAKRAS. Our ex-U.S. business grew five percent, with volume growth of 20% year-over-year. In addition to the strong second quarter, I'm also personally excited about our announcement to acquire ChemoCentryx and the opportunity to help patients with severe active ANCA-associated vasculitis, a serious and potentially life-threatening autoimmune disease. I'll say more about TAVNEOS as I comment on the performance of our inflammation portfolio. I'll start with our General Medicine business, which includes Prolia, EVENITY, Repatha and Aimovig. Overall revenue for this portfolio grew 17% year-over-year driven by 24% volume growth. In bone health, Prolia sales grew 13% year-over-year. Volumes grew 12%, driven by an increase in both new and repeat patients. EVENITY had record sales of a $191 million for the quarter, driven by 60% volume growth in the U.S. and 37% volume growth outside of the U.S. Enbrel sales decreased eight percent year-over-year for the second quarter, primarily driven by declines in net selling price and volume. Enbrel remains a frequently prescribed therapy due to its long track record of efficacy and safety. Our launch of Tezspire is off to a very strong start with $29 million in sales in the second quarter. I'm encouraged to see that both allergists and pulmonologists have prescribed Tezspire across a broad range of patients with severe uncontrolled asthma. We're also seeing initiation in both biologic naive and previously treated patients. On the access front, Tezspire is a medical benefit product for which we received permanent reimbursement coding as of July 1. Physicians acknowledge Tezspire's unique differentiated profile and its broad potential to treat the 2.5 million patients worldwide with severe asthma who are uncontrolled or biologic eligible without any final phenotypic and biomarker limitation. Now, our agreement to acquire ChemoCentryx brings a compelling opportunity into our leading inflammation and nephrology portfolio with TAVNEOS, a recently launched first-in-class treatment for ANCA-associated by Vasculitis or AAV. Let me take a minute to talk about how important I think TAVNEOS will be for patients. AAV is a serious systemic autoimmune disease that leads to inflammation and eventual destruction of small blood vessels. This inflammatory process can lead to permanent organ damage and in some severe cases can be life threatening. TAVNEOS represents a significant advance in the treatment options for the eight to 10,000 U.S. patients a year who develop severe active disease or experience major relapses of AAV. We are looking forward to meeting and working with the talented team at ChemoCentryx and I'm confident that by applying Amgen's deep experience in inflammation and nephrology and substantial market presence, we can help many more patients with AAV with TAVNEOS. Moving to our hematology and oncology business. Our six innovative products grew 14% year-over-year with 11% volume growth. This was driven by strong volume growth for KYPROLIS, Nplate and BLINCYTO which we expect to continue throughout this year. XGEVA volume declined two percent in Q1 and was flat year-over-year in Q2. Our launch of LUMAKRAS is progressing well with revenues of $77 million in the second quarter, representing 24% quarter-over-quarter growth. In the U.S., LUMAKRAS has been prescribed to over 3,000 patients by over 1900 physicians, and we've seen broad adoption in the community setting where the majority of non-small cell lung cancer patients are treated. Unfortunately, while 85% of patients in the U.S. are tested for their KRAS G12C status, only 50% of the time do oncologists have these test results available to support second-line treatment decisions and our teams are removing barriers to ensure that the oncologist is able to review KRAS G12C status when the patient progresses beyond first-line therapy and we've seen that when the KRAS G12C status is known in the second line setting, 85% of patients receive LUMAKRAS. Outside the U.S., LUMAKRAS has now been approved in over 40 countries and we're actively launching in 25 markets and rapidly pursuing reimbursement in the remaining countries. Sales of our oncology Biosimilars declined 24% year-over-year, while our biosimilars for inviting KANJINTI both hold leading shares. We expect continued net selling price deterioration and volume declines driven by increased competition. In total, our Biosimilars portfolio has become an industry-leading franchise, which has contributed $5.5 billion of product sales cumulatively. Looking forward, we're excited about the upcoming launch of AMGEVITA in the United States in January of 2023, followed by the next wave of Biosimilar launches to STELARA, EYLEA and SOLIRIS. Overall, I'm very pleased with our execution and volume growth in the quarter. Our expanding international presence and diverse portfolio of products, including the exciting addition of TAVNEOS position us well to deliver on our long-term growth strategy. And with that, I'll turn it over to Dave.

Bob Bradway:

Okay. Thank you, Dave. Jason, could you remind our callers of the process for asking a question?

Jay Olson:

Thanks for taking the question and congrats on the ChemoCentryx deal, it looks like a really exciting opportunity to treat patients with high unmet medical need in AAV. Can you just talk about the synergies, in particular our revenue synergy potential, and then the strategic fit for ChemoCentryx within your organization? Thank you.

Operator:

Our next question comes from Chris Raymond with Piper Sandler. Your line is now open.

Bob Bradway:

Murdo wanted to start on the first question.

Bob Bradway:

And with respect to Washington, Chris, obviously we evaluated this in the context of the legislation, the potential legislation that's making its way through the Senate at the moment and well, as you point out, this is a small molecule product, we don't expect that there's any particular risk for this product as compared to other small molecules that could become subject to the price controls implied or pluses in the legislation so again, we think this is an attractive product, the clinical profile looks really well suited to the needs of the marketplace and we're excited to be joining the team with them.

Salveen Richter:

Good afternoon. Thanks for taking my question. Maybe just a follow-up here. I'd like to dig a little deeper into what you said in the prepared remarks about the passage of this legislation, accelerating trend to reposition the business and manage lifecycles. Do you think this increases the urgency for M&A, given your financial strength and if so, what types of targets probably would make sense given the debate about non-orphan products versus orphan products and just a second question here on AMGEVITA being first to market, maybe you can just give us a sense of how that positions you and an early payer discussions here. Thank you.

Murdo Gordon:

And Salveen on AMGEVITA, obviously we're pleased that we're first out of the gate with the AMGEVITA launch in the U.S. at the end of January next year, we were pleased with our performance outside the U.S. with AMGEVITA where we've established market leadership at the higher share and we've been able to hold that despite competition. Obviously, the U.S. market is a different market given payer in reimbursement structure, but we feel confident that we'll be able to establish good access and coverage for AMGEVITA early in the launch lifecycle and we think that PBMs and payers are interested in ensuring their patients and members have biosimilar availability and option. So, all going well and according to plan. Thanks.

Umer Raffat:

Hi guys, I'll ask two today, if I may, one on your deal and one on the quarter. Maybe starting with the quarterly update, I saw your partner as well as your press release talked about the lack of safety issue on the OX40 program. However, the need to perhaps change the dosing regimen. I guess my question is, if there is no safety issues that, is it fair to assume there is a biomarker change maybe a severe TH drop in a subset of patients, which could be prompting this regulatory feedback. And if you could remind us what dose were you currently using every two weeks in Phase 3. And then on ChemoCentryx deal. I think it's an interesting case study on sort of where the clinical data stood versus how good the commercial receptivity has been, but is it fair to assume that you wouldn't have moved forward with the deal, unless they were already yet perhaps 700 plus patients by now and their peak patient guidance was 6,000. Thank you very much.

David Reese:

Yes, thanks Umer. In regards to OX40, yes, no safety issue, no biomarker issue either, no change in any kind of patient subset. As I said in my prepared remarks beginning this is really driven by ongoing discussions with the FDA to explore broader range of doses and we took that opportunity to we think improve patient convenience. I wouldn't overthink it or read anything more into it than that and we don't think that this will affect overall program timelines.

Murdo Gordon:

Yes, Umer, we've been following the TAVNEOS journey for a while and I think what everybody has to remember here is that the nature of this disease. I mean this is a severe acute autoimmune inflammation that involves the lungs, the kidneys, sometimes skin and other organs and can cause permanent end organ damage if not treated effectively and efficiently and quickly and the current standards of care are difficult treatments for patients to tolerate and if you can intervene and improve that patients potential to remain relapse-free over the first 52 weeks as a rheumatologist or a nephrologist, if you all you have to do is add TAVNEOS to their base regimen, you're going to do that. So I think the behavioral change here is one that many physicians are choosing to do and that as you alluded to, that's been encouraging to see in the early phase of this launch. But the reason we like TAVNEOS is it helps reduce the potential relapse for patients by adding TAVNEOS to the current standard of care and potentially reducing glucocorticoid use. So this is a disease area that if we were doing the development on our own it would fit squarely in our strategy and so it comes in, into a strong inflammation portfolio and it's one that we think our scale and commercial and medical capabilities will allow us to accelerate what has already been a good launch.

Operator:

The next question comes from Michael Yee with Jefferies. Your line is now open.

David Reese:

Yes, sure. So in terms of Lumakras PD-1 combination, obviously I can't say much because of the embargo we're presenting these data Sunday afternoon in Vienna. As we think about development in first-line I'd like to think of kind of three buckets of patients are those whose tumors are PD-L1 negative, those who are PD-L1 low to intermediate and those that are PD-L1 high expressers. As I mentioned and as you picked up on in the PD-L1 negative population, we're moving forward with a Lumakras plus chemotherapy Phase 3 trial and then we will disclose the results of the checkpoint inhibitor data in Vienna and outline our plans for further development in this space, I think that's probably all I can say right now, but I would really think about this as different groups of patients where the therapy will be tailored to their particular tumor based on PD-L1 expression. On AMG 133, very pleased with our progress there as I mentioned, we completed enrollment in the Phase 1. We hope to present that we are submitting, in the process of submitting that to a medical congress and we're very actively planning what the Phase 2 program will look like and we'll have more to say about that as our plans are finalized over in the coming months.

Operator:

Our next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Bob Bradway:

Matt, I don't think anything has changed, we continue to look for ways to invest in the business and our focus is on trying to find the best innovation and to try to advance particularly in the areas where we've been clear about our stated interest. So implant oncology and then the general medicine area. So we continue to look, there are obviously many more opportunities in the small and medium size and there are in the large size. But as I've said consistently through my tenure Matt, we feel responsibility to look at all the options to add value for our shareholders and we'll continue to do that.

Operator:

Our next question comes from David Risinger with SVB Securities. Your line is now open.

Arvind Sood:

Thanks, David for the question. I would say right now in our conversations with payers and insurers and for that matter, physicians interchangeability has not been a barrier to have them consider AMGEVITA as an option and an alternative to the innovator. We are pursuing interchangeability with AMGEVITA and we'll expect those data to readout later on in the launch. So I think our incumbent position being first to launch will help whether additional competition as they enter if they have interchangeability and our expectation is at least a couple will but we'll follow quickly with our own interchangeability data. So, it will be a short period in time where that competitive advantage may exist or persist in the market. As for ABP 938, I won't speculate on what the FDA might say about that. Thank you.

Mohit Bansal:

Great, thanks for taking my question and maybe a question on LUMAKRAS Phase 3 study. So, Dave, what do you think could be clinically meaningful benefit forward docetaxel in this particular study. And the other part of the question is basically if you think about a chemo post-IO chemo tends to do well. Do you think placebo response could be better than historical in this particular trial? Thank you.

Operator:

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

Murdo Gordon:

Yes, thanks for the question, Geoff. I would say it's less about peak testing in the U.S. where we've already got about 85% of frontline patients being tested and receiving a KRAS G12C status. Right now what we know is only half of the tested patient population in second line has the test result available when they're progressing. So that's really what we're focused on, we are focused on where is that test result for that progressing patients so that that treating oncologist can give the patient the benefit of LUMAKRAS and when they have that test is again half the time, 85% of those patients get LUMAKRAS. So we're getting a very high percentage penetration of those second line patients when the prescribing physician knows their test results. So, we are not picking yet. We've got headroom for more improvement there, currently about half of those patients are not getting their KRAS G12C test result reviewed upon progression. So that's an important thing that it seems are focused on. That's what we think we can do to continue to drive some revenue growth in the U.S. and outside the U.S., what we're seeing is really again a tale of two types of markets in markets like Germany, Switzerland and France where biomarker testing is very well developed and their clinical information systems are also very well developed, so that test is available and retrievable upon progression in second line. We're seeing very rapid lift and uptake in places where that's not quite as well developed I think Spain, Italy, to some extent, the U.K., the uptake resembles more what we've seen in the U.S.,

Murdo Gordon:

In our expanded access programs where we've seen clinical utilization, but I'm also talking about other experience with other targeted therapies, you're going to see a slower uptake in some markets than you will in others because of that testing infrastructure. So, we're working on that with those markets, we're changing that behavior with clinicians. And I think we'll be able to successfully grow this product in second line and of course, if we get confirmatory data in Phase 3, what that does is it makes it easier to promote because we're no longer on an accelerated approval and hopefully the datacenter compelling and continue to reinforce the value of LUMAKRAS.

Operator:

The next question comes from Yaron Werber with Cowen. Your line is now open.