Amgen Inc Morgan Stanley 24th Annual Global Healthcare Conference

Terence, thank you so much, and it's really good to be here. Before we get into Q&A, I'd like to take some time to introduce myself and share a few thoughts on how we see the business today. As many of you know, this is my second chapter at Amgen. I spent nearly a decade here earlier in my career and worked with Bob and the rest of the Amgen team back then. Since leaving, I've had the opportunity to serve as CFO of three publicly listed companies, where my remit extended beyond traditional finance to strategy, transformation, and operations. I gained experience also in a more consumer-oriented healthcare environment and before that, actually, in a rare disease environment. So I come back to Amgen knowing the company well, but also looking at it through fresh eyes informed by my experiences over the last 12 years.

Also, given my recent background with a private equity-led IPO of a fast-growing company in a more consumer-focused healthcare environment, my focus will be on working together with my fabulous colleagues at Amgen as one team, driving execution and financial discipline to enable growth acceleration commercially as well as of the pipeline. I'll focus on cash on cash returns, which is very consistent with Amgen's long-standing approach to capital allocation. Onto the second quarter, our second quarter results were really driven by the breadth and depth of the portfolio, and once again demonstrated our ability to grow through patent expirations and increased competition. Our six growth drivers, Repatha, EVENITY, TEZSPIRE, our rare disease portfolio, innovative oncology, and biosimilar portfolios, really delivered. Together, they grew 26% year-on-year in the quarter and represented nearly 70% of second quarter product sales.

Overall, in the quarter, total revenues exceeded $10 billion, up 10% year-on-year, and 22 products delivered double-digit sales growth. So these results, including strong margin and earnings performance, were achieved while we increased the investment in innovation, reflecting the really solid financial structure that Amgen has. Here's the point, many of our medicines address large under-penetrated disease areas, and that gives us confidence that there are significant opportunities ahead to reach many more patients as we move forward. We're adding new indications to some of our products like TEZSPIRE, UPLIZNA, and IMDELLTRA, while also broadening our geographic reach for those and other medicines. We have recently announced exciting phase III results from two of our approved medicines. First, we announced landmark phase III results from DELPHI 305, evaluating IMDELLTRA in combination with durvalumab as first-line maintenance treatment for patients with extensive stage small cell lung cancer.

The study demonstrated statistically significant and clinically meaningful improvement in overall survival, progression free survival, and objective response rate compared to durvalumab alone. We view these data as important inflection point for IMDELLTRA. As you know, in the first line setting, IMDELLTRA is already becoming a standard of care supported by strong survival benefit, clear clinical differentiation, NCCN recommendations, and rapid adoption across sites of care. These landmark results from DELPHI 305 suggest IMDELLTRA will further revolutionize the standard of survival earlier in the treatment journey and meaningfully shift the treatment paradigm for people facing this devastating disease. Therefore, we are advancing IMDELLTRA through a broad phase III program across first-line extensive stage and limited stage SCLC, while also pursuing more convenient administration. Together, these programs represent a combined addressable population of approximately 28,000 U.S. patients.

Yesterday, we also announced that the FDA has approved an update to the IMDELLTRA label that substantially reduces the recommended monitoring time for the first two doses of treatment in an appropriate healthcare setting. What does this mean? This means the patients receiving IMDELLTRA should now be monitored for 6-8 hours from the start of the first two doses compared with the previously recommended 22-24 hours, an important step in simplifying care for people living with and treating extensive stage small cell lung cancer. We believe IMDELLTRA has the potential to become a foundational medicine across the small cell lung cancer continuum and will continue to be an important growth driver for our innovative oncology portfolio.

We also recently announced positive top-line results from the phase III study of TEZSPIRE in people living with eosinophilic esophagitis, EoE, and positive phase III data for TEPEZZA in Japanese patients with chronic thyroid eye disease. Beyond these programs, our late-stage pipeline is progressing well and provides additional opportunities for growth, and we are advancing MariTide, for instance, dazodalibep, and xaluritamig in phase III development. All of those programs have the potential to address areas of significant unmet medical need and to drive long-term growth. We continue to develop olpasiran targeting Lp(a) for cardiovascular risk reduction. Recently, a competitor announced top-line results from their phase III program targeting Lp(a), raising many questions for the field. We look forward to seeing the detailed presentation of these data to better understand the potential implications for the field and to our ongoing clinical research with olpasiran.

Now, moving on to our biosimilar portfolio, we are advancing a third wave of biosimilar candidates to KEYTRUDA, OPDIVO, Ocrevus, and EYLEA HD. We recently completed a phase III study of ABP 234, our biosimilar candidate to KEYTRUDA, which met both primary and secondary endpoints. The full results will support our planned regulatory submissions in the second half of this year. For ABP 206, that is our biosimilar candidate to OPDIVO, our biologics license application with the FDA has been submitted and accepted for review. There, we expect an FDA action on this BLA by the end of the year. As we look ahead, our business continues to perform well. We are excited about the future and our ability to drive durable growth well into the next decade. With that, Terence, happy to take your questions.

Yeah, Terence, I'll take that and then ask Jay or Thomas to add. Thus far, it's early days going into the midterms. Obviously, we don't know the outcomes of the midterms yet. There's a lot of conversations going on in D.C. around reimbursement, pricing. 340B is a particularly hot topic at the moment, and just generally value of innovation. We're also seeing a pickup in policy work outside the U.S. as countries around the world respond to some of the policies from last year when we were with you. So we stand ready to engage with both sides of the aisles on each of these matters.

Our focus is trying to make sure medicines remain accessible and affordable, and that there continues to be a good environment for innovation, and as a U.S. domiciled company with a hefty U.S. domiciled manufacturing network, continue to be incentives to manufacture in the U.S. But beyond that, too early to tell given what's coming up in about 60 days now.

Yeah, I am going to take that in two parts. Generally, on the macro side of 340B, we still see that program with substantial growth. If you look at last year, there were $100 billion of purchases in the program, $80 billion of incremental discounts across the board, grew 23%. That is the fourth straight year of over 20% year-over-year growth. Program has tripled in size since 2020. That is driven by this lack of meaningful safeguards within the program that allow hospitals to buy at very low government prices and then resell to insurers, employers, patients, everyone in this room, at a substantial markup. Without reform of the core program, we do not see that incentive really changing or the dynamics changing on that overall growth.

Now, within that program, and I have been around it for 20 years, you do see from time to time, quarter to quarter variability, year to year variability along those lines. There were some buying patterns that we had detected late last year when enforcement looked like it was picking up that has not really materialized. We are not in a position to call it going forward other than to say reform needed, and without reform, you could expect that growth rate from a macro standpoint to largely go unchecked. In terms of the pilot, there is a rebate model specific for MFN drugs "negotiated" by Medicare. That will help one of our medicines going forward, potentially ENBREL, and in the future, Otezla, considering it was negotiated last year. But too early to tell at this point, Terence, on exactly what it means outside of those particular products.