In the conference call for Amgen's Second Quarter 2023 Financial Results, Julianne, the conference facilitator, welcomed Arvind Sood, Vice President of Investor Relations, who then introduced Bob Bradway, Chairman and CEO, to discuss the strong unit volume growth during the quarter and an improved outlook for the rest of the year. Bradway reported that Amgen delivered $7 billion in quarterly revenue, up 6% from a year ago, and record non-GAAP earnings per share of $5 a share, up 8% over the prior year.

In the quarter, volume growth globally was 11%, with 21% growth in the general medicine business and 46% growth in the Asia Pacific region. Nine medicines generated record sales. Prolia achieved $1 billion in quarterly sales for the first time, up 11%. Real world data has established that Prolia is superior to alendronate in reducing fractures, reducing the risk of hip fracture by 36%.

Prolia and EVENITY achieved strong sales growth in the quarter, and Amgen is excited about their pipeline, including BiTE tarlatamab for small cell lung cancer, LUMAKRAS and Vectibix for colorectal cancer, Olpasiran for heart disease, rocatinlimab for atopic dermatism, and bemarituzumab for gastric cancer. Amgen is also enthusiastic about their planned acquisition of Horizon Therapeutics, which has been approved by regulators around the world, except for the Federal Trade Commission in the United States.

Amgen is confident in its case against the antitrust law and is looking forward to presenting it in court in September. The company is also working closely with Horizon on integration plans to close the deal by mid-December. Amgen's business is performing well, and with Horizon, their growth prospects will be further enhanced. In the second quarter, the company achieved record quarterly sales for nine brands, and global product sales grew 8% excluding the impact of foreign exchange. Volume growth was 11%, with 9% in the US and 8% in Europe, Latin America, Middle East and Canada.

Amgen's Asia-Pacific region is its fastest growing region, and its general medicines business, which includes Repatha, Prolia, EVENITY, and Aimovig, saw revenue growth of 19% in the second quarter. Repatha sales increased 30%, driven by record numbers of new patients in the US and increasing adoption in primary care providers. Prolia sales grew 11%, reaching a record $1 billion in the second quarter. Amgen is increasing investment to engage with healthcare providers, bring its message directly to patients, and drive urgency around LDL cholesterol testing and adherence to treatment guidelines.

The Prolia drug has been shown to significantly reduce fracture risk when compared to alendronate, and sales teams are actively helping physicians understand this. EVENITY had record sales of $281 million in the quarter and has achieved a 42% share of the bone builder market in Japan. Otezla sales increased 1% year-over-year, but have been impacted by free drug programs for competitors. Despite this, there is still a compelling opportunity to invest in Otezla growth and awareness.

Otezla has an established efficacy and safety profile, broad payer coverage with minimal prior authorization requirements, and easy administration. Enbrel sales grew 84% quarter-over-quarter in the U.S., with 6% growth in new patients due to improved payer coverage. Test buyer sales increased 39% due to the introduction of a new, self-administered pen. TAVNEOS sales were $30 million in the second quarter, with 28% growth in U.S. volumes due to an increase in new patients. Amgen is looking to bring TAVNEOS to more patients with ANCA associated vasculitis.

AMJEVITA sales increased 29% year-over-year, driven by 60% volume growth. U.S. sales decreased 63% sequentially due to inventory drawdowns. Six innovative products in the hematology and oncology business reported 12% volume growth year-over-year. BLINCYTO sales grew 48%, while Vectibix sales increased 20%. KYPROLIS grew 9%, while LUMAKRAS reported flat sales year-over-year. Strong commercial execution and exciting new clinical data is driving growth and exemplifying dedication to serving patients.

R&D had a successful second quarter, with positive top line results from the Phase 2 DeLLphi-301 trial of tarlatamab, a DLL3 targeting BiTE molecule, in patients with relapsed or refractory small cell lung cancer. The study showed an objective response rate that exceeded the Phase 1 study, with responses being durable and longer than expected with standard of care chemotherapy. The safety and tolerability were also more favorable. Based on the data, tarlatamab is being moved into earlier lines of therapy with the Phase 3 DeLLphi-304 study, and two additional Phase 3 studies are being planned.

The oncologist believes the molecule can be transformative and is excited to share the data with the field. The 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 doses. The FDA granted breakthrough therapy designation to LUMAKRAS in combination with Vectibix for the treatment of patients with metastatic KRAS G12C mutated colorectal cancer. Data from the SCARLET study and Phase 1b data in combination with Vectibix and chemotherapy support the initiation of Phase 3 studies of LUMAKRAS with Vectibix and FOLFIRI in first-line G12C mutated colorectal cancer.

The FDA approved BLINCYTO for the treatment of CD19-positive B-cell precursor acute lymphoblastic leukemia in June. The National Comprehensive Cancer Network clinical practice guidelines were updated to include the BLINCYTO E1910 regimen as the preferred first line treatment for Philadelphia negative adult patients. Data published in the New England Journal of Medicine demonstrated that BLINCYTO added to chemotherapy improved two-year survival in KMT2A-rearranged B-ALL in infants. BLINCYTO is changing the paradigm for the treatment of B-cell ALL in late-stage and early disease, in both young and older patients.

Amgen is excited about the potential of BLINCYTO and is looking into using it in earlier lines of treatment. Two other early oncology programs that Amgen is looking into are Xaluritamig and AMG 193. Xaluritamig is a first-in-class bispecific targeting steep one being studied in advanced prostate cancer and AMG 193 is a first-in-class small molecule MTA cooperative PRMT5 inhibitor being studied in patients with advanced MTAP-null solid tumors. Amgen is also advancing its cardiovascular franchise and emerging portfolio of obesity molecules. Data from Xaluritamig and AMG 193 will be shared this fall.

Olpasiran is enrolling in a Phase 3 study targeting Lp(a) and atherosclerotic cardiovascular disease, while a Phase 2 study of maridebart cafraglutide is underway to generate data for a Phase 3 program. Prolia has been shown to reduce fracture risk in post-menopausal women, and TEZSPIRE is being investigated in multiple indications, including chronic rhinosinusitis, eosinophilic esophagitis, chronic spontaneous urticaria, and COPD. Rocatinlimab is also being studied in patients with moderate to severe atopic dermatitis in the ROCKET Phase 3 clinical development program.

In the second quarter, Amgen saw record-breaking revenues of $7.0 billion, an 8% increase in product sales, and a 7% increase in total revenues, excluding foreign exchange rates. Operating expenses also increased 7% year-over-year. Amgen is continuing to invest in research and development and is confident it will meet or beat its 2023 objectives. The company also recently announced a collaboration with TScan Therapeutics to use their target discovery platform to identify antigens in Crohn's disease patients.

In the second quarter, the company saw a non-GAAP operating margin of 52.6%, driven by higher spending on late stage programs and marketed product support. Non-GAAP cost of sales increased 2.4 percentage points to 17.1%, and non-GAAP SG&A expenses decreased 6% year-over-year. Non-GAAP other income and expenses were a net $307 million expense, and the non-GAAP tax rate increased 1.7 percentage points to 16.4%. The company is continuing to prioritize investments in innovation and business, with capital expenditures at near peak levels.

Amgen is expecting a decline in annual capital expenditures starting in 2024, and they are returning capital to shareholders with a 10% dividend increase. They generated $3.8 billion of free cash flow in the second quarter of 2023 and are raising their 2023 revenue guidance to $26.6 billion to $27.4 billion. However, they expect third quarter sales to be lower due to the impact of the Medicare donut hole and certain favorable changes to estimated sales deductions in the second quarter.

The company is increasing its investments in internal innovation and priority marketed products, and is revising its non-GAAP EPS guidance to $17.80 to $18.80. Neulasta sales for 2023 are expected to be around $800 million, and other revenue is expected to be between $1.1 billion and $1.3 billion. Non-GAAP operating expenses are expected to increase by 3%, and the non-GAAP operating margin as a percentage of product sales is expected to be around 50%. The non-GAAP cost to sales as a percentage of product sales is expected to be between 16% and 17%.

Amgen's Chief Financial Officer Peter Kim concluded the financial update and Bob Bradway opened the line for callers to ask questions. Wells Fargo's Mohit Bansal asked a question about OX40, a drug from Amgen, and Dave Reese answered that there are some concerns about the safety of OX40, particularly regarding the autoimmune phenomena. He asked how Amgen is managing the risk and what the phenomena is.

Bob Bradway reiterates that they remain very excited about the Horizon deal, and are watching the developments in the TED market closely. In response to the question about their confidence in regrowing the business, Bradway states that they are confident in the clinical data and their ability to expand the product's reach internationally. They have also been in dialogue with Horizon about the market for TED.

Murdo Gordon of Horizon and Mike discuss the strong execution of Horizon in the US and the catalysts for growth. These include expanding their commercial footprint, positive trial results, international market launches, improved medical policies, and replicating the registrational data for thyroid eye disease in OPTIC-J. They remain excited and confident about the future potential of TEPEZZA, KRYSTEXXA, and UPLIZNA.

Dave Reese from BiTE platform is excited about the Phase 2 data for tarlatamab in small cell lung cancer, which substantially exceeds the Phase 1 response rate of 23%. He plans to present the data at a Fall Conference on an embargoed basis, but noted that the response rate, duration of response, and overall survival are all very positive. He believes that the BiTE platform could change the natural history of the disease, and is now focused on executing earlier line trials. He also mentioned that he will be discussing safety at the Fall Conference.

Bob Bradway discussed the filing strategy and timeline for the LUMAKRAS Phase 3 trial in colorectal cancer, noting that the G12C mutation is present in 4% of colorectal cancer cases. He also mentioned that, based on the strength of the data, they are advancing a Phase 3 trial in first-line disease. Lastly, he offered to provide guidance about next steps after having conversations with the FDA and other regulatory authorities. Chris Raymond then asked a question about AMJEVITA and its uptake in the US.

Arvind Sood and Murdo Gordon discuss the split in scripts between the high and low priced SKUs of the AMJEVITA biosimilar. They state that the high is mostly used in PBM utilization, while the low is used in IDN utilization due to its low net cost. They also mention that they are waiting to see what happens in the next payer negotiation cycle in 2024. Lastly, they explain that AbbVie's strategy is not surprising, but the clarity of how pharmacy benefit works with biosimilar uptake is becoming clear.

Dave Reese is pleased with the efficacy package of the DL3 study, including the overall response rate, progression-free survival, duration of response, and overall survival. He believes the results will be presented at an upcoming medical Congress. He also mentioned that the company is committed to the Horizon deal, and that Tepezza sales have been lower than expected.

Bob Bradway of Amgen is confident in the outlook of Enbrel and Otezla despite the competition from biosimilars. Enbrel is benefitting from the best access it has ever had, leading to strong new patient growth and sustained volume. Otezla is also showing strength, despite the competition from SOTYKTU.

OTEZLA is an attractive option for PBMs and pairs to maintain on their formularies due to its great commercial coverage with minimal prior authorization requirement, no testing requirement for initiation, and affordability and out-of-pocket costs. The company is gaining momentum in helping those post topical first systemic patients, and the competition from SOTYKTU and topical treatments has slowed. They are losing less to SOTYKTU in their current mix of patients, and the pressure from topicals has abated.

Bob Bradway of Amgen believes that the case against the Horizon deal is based on speculative notions and not established antitrust law. He is confident that they will prevail in court and sees the importance of larger companies like Amgen to bring value to smaller innovators who may not be able to capitalize on their full potential.

Dave Reese explains the rationale behind targeting Steep One over PSMA in prostate cancer. He states that Steep One is almost universally expressed on advanced cancer cells and does not have extensive high-level normal tissue expression, which allows for a therapeutic window. He also notes that PSMA has been challenging to target and that multiple molecules such as their own have gone into and then fallen out of clinical development, which may be due to the target itself.

Bob Bradway discusses the upcoming clinical data for TEZSPIRE, a program they are accelerating. The target of TEZSPIRE, TSLP, is expressed in bronchial mucosa and the study is testing the hypothesis that the pathway may be a contributor or driver of exacerbations. Bradway hopes to see results competitive with recently published data. Dane Leone then asks about the rebound in Otezla and the strength of competitive products on the topical and oral side.

Arvind Sood and Bob Bradway addressed two questions: one about Otezla's competitors claiming they have achieved over 40% TRx share, and the other about the Phase 2 tarlatamab study. Bradway commented that it is hard to comment on the competitors' market share claims, as they are including their free drug program in their denominator. He believes that given the good access coverage with little to no prior authorization requirements across many of those plans, they are in a position to benefit should some of those free drug patients end up getting rejected for sustained actual insurance coverage. Sood added that there are no substantive differences in the Phase 2 tarlatamab study, and that it is a very heavily pretreated population. Details will be provided this fall.

Bob Bradway provides an update on the oral obesity Phase 1 trial, which is expected to have data in the first half of next year. Arvind Sood then takes a final question from Robin Karnauskas about tarlatamab, a molecule that is being put a lot of effort into. Robin inquires about the competitive landscape and the cadence of the Phase 1 trials, to which Arvind responds enthusiastically about the potential of the molecule.

Arvind Sood, who has been Head of Investor Relations for nearly 19 years, will be transitioning his role to Justin Claeys, Amgen's Treasurer. Arvind will remain a VP in Finance and help Justin transition into the new role. Arvind is a legend in the IR world and has worked with Bob Bradway for over 20 years. Small cell lung cancer affects 15% of patients, with only 7% surviving five years after initial diagnosis. Amgen's clinical development program will look at this broad swath of patients and work to advance into earlier lines of treatment in order to change the natural history of the disease.

The speaker is wishing Justin well on his birthday, as he transitions into a new role at Amgen, and wishing Arvind a good celebration later that evening. They conclude the call by thanking everyone for attending and letting them know they will be in touch after the next quarter.

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