The Bristol-Myers Squibb Second Quarter 2023 Earnings Conference Call has begun, with Tim Power, Vice President of Investor Relations, introducing the other participants on the call. During the call, forward-looking statements about the company's future plans and prospects will be discussed, as well as non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on the company's website.

This paragraph provides details on the company's updated outlook for 2023, which was driven by a significant change in expectations for Revlimid and Pomalyst. The in-line and new product portfolios remain on track and the company is confident in its ability to roughly double revenue from its new products this year. The revised guidance reflects a $1 billion decrease for Revlimid and a $300 million impact for Pomalyst. The company is also executing a $4 billion accelerated share repurchase in the third quarter.

BMS provides co-pay support to commercially insured patients, but cannot do so for government insured patients, such as those with Medicare. To help these patients, BMS provides donations to independent third-party charitable foundations, which provide free medicine to qualified patients. This year, funds at these foundations closed for a period of time, resulting in an unusual increase in utilization of free drug, which impacted Revlimid and Pomalyst revenues in Q2.

The collective funding from donors for co-pay assistance for multiple myeloma patients was not sufficient, leading to an increase in patients requesting free product from the Independent BMS Patient Assistance Foundation. This caused a financial impact of approximately $330 million for Revlimid and Pomalyst in the second quarter, with an estimated $1 billion and $300 million for the full year, respectively. This will cause a step down in revenue of approximately $1.5 billion in 2024 and $2 billion in 2025. The speaker then moves on to discuss the company's new products.

In the second quarter, the company achieved strong growth and is on track to double its revenue. David will provide more details soon. The company is continuing to build on its nine recently launched products, expecting to reach $10-13 billion in revenue by 2025 and $25 billion by 2030. They are also making progress derisking their new products and accelerating their pipeline, with exciting data for their LPA1 agonist in idiopathic pulmonary fibrosis in the second quarter showing a 60% reduction in the rate of decline in lung function.

Celgene is rapidly moving to Phase 3 trials for their asset in progressive pulmonary fibrosis and presented strong data for Opdivoin first line classical Hodgkin lymphoma and GPRC5D cell therapy program in multiple myeloma. They are also looking forward to the opportunities from their scientific research and have a rich and broad pipeline. With 60% of the Revlimid erosion behind them, they are on track to grow their revenue low to mid-single digit CAGR from 2020 to 2025 and have the financial flexibility to continue to invest in their future.

Bristol Myers Squibb's total company sales in the second quarter were $11.2 billion, driven by the strength of their in-line and new product portfolio. The new product portfolio grew 79% in the quarter, and there are four important levers which will enable the company to renew their portfolio in the second half of the decade. These levers include the continued growth of the nine medicines in their new product portfolio, the potential launch of six registrational stage assets, progress with their early stage pipeline, and potential external innovation through business development.

In the second quarter, the portfolio generated $862 million in sales, which annualizes to approximately $3.5 billion. This was driven by key products such as Opdualag, Reblozyl, Breyanzi, Abecma, Camzyos, and Zeposia. Opdivo sales grew 11% globally, with 2% growth in the US and 10% growth outside the US. Opdualag sales grew significantly over prior year, with revenues of $154 million and a 25% market share in first line melanoma. Eliquis generated $3.2 billion in global sales, with 7% growth in the US.

In the second quarter, unfavorable gross to net adjustments are experienced as patients enter into the [indiscernible]. Sales outside of the US are impacted by generic entries and government pricing measures. Camzyos generated $46 million in the quarter and is seeing healthy increases in patients being treated, with strong adherence and minimal drop off. Reblozyl had a strong quarter with revenues of $234 million, growing 35% due to continued total prescription share growth in the US and doubling internationally due to reimbursement in additional countries.

Celgene is making progress on expanding manufacturing capacity for their cell therapy products Abecma and Breyanzi, with Abecma booking sales of $132 million globally and Breyanzi generating sales of $100 million globally. They are also looking forward to the upcoming PDUFA date for Abecma in December. Additionally, Zeposia has seen a 52% increase in global sales from the prior year to $100 million.

In the second quarter, sales of $11.2 billion were driven by demand for multiple sclerosis in the US and abroad, and the launch of Sotyktu. Gross margin was 75%, and operating expenses increased 2% year-over-year. Acquired in-process R&D was $158 million, partially offset by $20 million of licensing income, resulting in earnings per share of $1.75. Cash flow generation remained strong.

Celgene reported cash flow from operations of $1.9 billion in the quarter, with $8.7 billion in cash and marketable securities on hand as of June 30th. The company is prioritizing business development and balance sheet strength, and has repaid $240 million of debt and $1.9 billion year-to-date. Celgene plans to execute a $4 billion ASR in the third quarter and has updated their 2023 non-GAAP guidance, expecting a low single digit decline in revenues and gross margin of 76%. They also expect total operating expenses to be similar to the second quarter and a 17.5% tax rate, with earnings per share in the range of $7.35 to $7.65. Despite Revlimid dynamics, the robust growth of their new product portfolio is expected to roughly double versus the prior year.

David has highlighted the success of the company's teams in executing their plans to bring transformational medicines to patients around the globe. Chris Shibutani from Goldman Sachs asked about the company's objectives for 2025 and 2030, particularly in terms of Camzyos contributing to the $4 billion range. Christopher Boerner responded by highlighting the macro level of the new product portfolio, and Adam provided specifics on the timing of the inflection to build confidence in achieving the goals.

Adam Lenkowsky provides an update on Camzyos, a new product from the company's portfolio. He reports that it is on track with launch expectations, with growth in patients coming into the hub and commercial patients. Patient and physician feedback has been positive and the VALOR approval has further strengthened the product profile. The approval in Europe is also exciting, and the company is confident that this will lead to sustained growth in the future.

Giovanni Caforio and Timothy Power answered a question about the rationale for an accelerated share repurchase. Caforio explained that the decision was driven by the company's confidence in their future and their strong financial position. Geoff Meacham then asked about the risks of recurrence of co-pay assistance for Revlimid and Pomalyst and the demand and share for Sotyktu in the second half of the year and going into 2024.

Celgene expects the dynamics of Revlimid and Pomalyst to be limited to this year due to three drug applications returning to normal levels and changes to the Part D design, which will improve patient affordability. Celgene is pleased with the Sotyktu launch, as its oral market share is nearing 40% of the oral new demand market and it has doubled the volume of TRx equivalents from the second quarter to the first quarter. CVS has also moved Sotyktu into preferred position, covering 30 million lives. Celgene is negotiating with payers to secure improved commercial access in January.

Adam Lenkowsky and Samit Hirawat of Bristol-Myers Squibb answered a question from Terence Flynn of Morgan Stanley about their confidence in Reblozyl securing a broad label in first line MDS. Samit Hirawat noted that the efficacy of the drug is most important for patients, and that the data consistently showed that those who benefit, benefit for a long duration. Adam Lenkowsky added his thoughts on the matter.

Adam, the CEO of the company, is excited about the growth of Reblozyl, both in the US and internationally, due to the COMMANDS approval. The PDUFA is in four weeks and the US team is ready for the launch. Opdivo has also demonstrated superiority in a head-to-head study at ASCO and oncologists are saying that the data is practice changing. The CEO also mentioned that he expects to see NCCN guidelines as an option in the coming weeks to months. Chris Schott asked if anything else changed in the revenue outlook beyond the update for Revlimid and Pomalyst, and if there is any insight on the capacity ramp for Breyanzi and Abecma.

Giovanni Caforio and David Elkins discussed the guidance related to Revlimid and Pomalyst while Adam Lenkowsky answered Chris' question about the next leg up for capacity for these products. They explained that they have increased capacity with successful ramps at their existing sites, and are building new state-of-the-art facilities which will come online in 2025. Additionally, they are internalizing and externalizing vector in their fastest path to increase capacity, with a new vector manufacturing plant in Libertyville, Illinois, and existing partnerships with external third parties.

Giovanni Caforio commented on the IRA and Samit and Adam answered Seamus Fernandez's question on LPA1, a promising program. Caforio mentioned the potential for a preliminary injunction to be issued due to the 5th amendment and the positive influences of the IRA in 2024 and 2025.

Giovanni has mentioned the positive elements of IRA, such as improved affordability for patients and expansion of the definition for LIS eligibility. Samit Hirawat then talks about LPA1, a new oral drug that is effective in improving outcomes for IPF and PPF patients in terms of decreasing the reduction of FVC. Data for LPA1 and IPF has already been presented and data for EPF will be presented later this year.

Adam Lenkowsky of Alexion Pharmaceuticals discussed the commercial potential of their LPA1 asset, which is intended to treat IPF and PPF. He noted that the current treatments have significant limitations in efficacy and toxicity. Alexion is confident that they will be able to launch two Phase 3 trials for the asset later this year or early next year. Additionally, Lenkowsky discussed the potential of the drug Opdualag to become the standard of care in melanoma, and the potential market share it could achieve.

Giovanni Caforio and Adam Lenkowsky discuss the success of Abecma and Opdualag. Abecma saw a year-on-year growth of 50%, though there was a quarter-on-quarter decline due to pricing dynamics in Germany and manufacturing maintenance. Opdualag has become the standard of care in the US, with a 25% share from PD-1 monotherapy and Opdivo-Yervoy combination. Abecma has favorable perceptions from physicians due to its durable responses and high manufacturing success rates.

NCCN recently updated their guidelines, changing Opdualag from category 2A to category 1 in BF-mutant patient populations, resulting in an increased market share of over 55%. Samit Hirawat discussed the large program behind the approved indication in metastatic melanoma, such as the adjuvant study and Phase 3 study in colorectal cancer MSS. Tim Anderson asked a question about the Part D redesign which will kick in in 2025, which will involve manufacturers picking up a portion of catastrophic spending that was not previously part of the equation.

Giovanni Caforio and Christopher Boerner respond to a question about Part D redesign and Opdivo. Boerner explains that the impact of the redesign will depend on the product and the patients being treated. Lenkowsky adds that Opdivo is still experiencing strong growth internationally, due to the growth of the core business and new indications.

Opdivo has seen 11% growth year-to-date, with 15% share in first-line lung and 50% share in gastric indication first line. In the second quarter, the US demand growth was offset by unfavorable customer buying patterns, but this is expected to normalize and continue to grow based on the strength across multiple tumors.

Adam discussed upcoming catalysts for Opdivo, including a stage 2 melanoma indication with a PDUFA date of October 2021, and a readout for CheckMate-901 in first-line cis-eligible bladder. Steve asked a question about Revlimid, and Giovanni explained the dynamics at play that led to the expected decline in the drug. He also asked about Takeda's reported weakness in the US GI market, to which Giovanni did not respond.

At the end of Q1, there was some softness in Revlimid revenue, and there were a few dynamics that could have been the cause. Generic volumes increased in March, and the BMS Patient Assistance Foundation provided free drug to patients, causing the impact on Revlimid and Pomalyst revenue to accelerate during Q2. The generic dynamics do not account for the decrease in revenue, and the step down for Revlimid revenue is expected to be lower next year.

Adam Lenkowsky discussed the growth of Zeposia in the GI market, noting that it is seeing 28% quarter-over-quarter growth and 50% growth versus same time last year. They are seeing a shift to using Zeposia in the first-line setting, with 60% of the business being in the first-line use. Additionally, 40% of lives have either zero or one step at it and they are working to continue to improve that in 2024. Giovanni Caforio also noted that they expect continued growth for Zeposia in the back end of this year and into 2024.

Christopher Boerner and Adam Lenkowsky both expressed their confidence in the growth of their new product portfolio, which has seen a nice uptake on Camzyos, access wins on Sotyktu, and continued growth with Breyanzi. They anticipate roughly doubling revenue for the portfolio this year, and have a number of catalysts coming with Abecma to help drive that growth in the second half of the year.

Eliquis total sales declined for the first time this quarter, and Adam and Matt discussed the PDUFA date for COMMANDS, the PBM for Sotyktu, and Camzyos. They are also increasing supply for Abecma in advance of the KarMMa-3 launch and ramping up Breyanzi in the back end of the year. Samit Hirawat discussed the Phase 2 study for Opdualag and the data set for early 2024. Timothy Power concluded the question-and-answer session. Credit Suisse asked about the dynamics of the gross to net in the US and faster EU erosion of Eliquis.

Adam Lenkowsky discussed Eliquis' performance in the US, where it has a 75% market share and is experiencing strong growth. He noted that international demand is being offset by price erosion in some European markets. David Elkins then discussed Revlimid, noting that there were higher than expected volumes in March of this year, with two more inflection points expected in March 2024 and February of the following year.

David provided an update on the forecast for Revlimid, which changed from $6.5 billion to $5.5 billion with a step-down of $1.5 billion next year and $2 billion in 2025. Giovanni and Adam then discussed the in-line portfolio and reaffirmed the guidance for 2025. Yihan then asked a question about the growth trends of the in-line portfolio.

Chris Boerner and Samit Hirawat discussed the upcoming R&D Day on September 14, which will include an update on the pipeline and discussion of the programs and platforms that the company is most excited about. Samit also mentioned that the Phase 1 trial of the CAR-T CD19 therapy has just started, and additional indications may be added later this year, with earlier data readouts and data sharing prior to the completion date in 2028.

Giovanni Caforio and David Elkins answer Dane Leone's question about the conversion from free drug to commercial pay drug for patients in Sotyktu. They explain that the ASR agreement is included in their EPS guidance, and Adam Lenkowsky adds that their objective is to continue to grow market share and surpass Otezla by the end of the year.

Adam Lenkowsky addresses the question of Abecma's manufacturing capacity, stating that the shutdown in June was planned and routine for maintenance purposes, and that they are making progress to increase capacity for both Abecma and Breyanzi. He also states that the shutdown is only related to Abecma and that they have accounted for it in their capacity plans. Lastly, he mentions the strategy and timing for moving into registrational studies for LAG-3 in lung.

In this paragraph, Giovanni Caforio provides an update on the company's outlook for the year and speaks optimistically about the future of the company. He cites the success of the in-line products, the performance of the launch portfolio, and the strength of the pipeline as the reasons for his optimism. He also mentions that the Abecma sales are expected to accelerate in Q4 and into 2024, and that the Phase II study for LAG-3 non-small cell lung cancer is combining Opdualag with chemotherapy and the Phase 3 trial will compare the combination to nemolizumab plus chemotherapy. He concludes the presentation by thanking everyone for their participation.

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This summary was generated with AI and may contain some inaccuracies.