The operator introduces the conference call and the speakers, including Justin Claeys, Vice President of Investor Relations. Bob Bradway, CEO of Amgen, will lead the call and be followed by other executives. The company has recently acquired Horizon Therapeutics and will provide updates on their performance and pipeline. The speakers will make forward-looking statements and use non-GAAP financial measures. Bob Bradway expresses excitement for the company's progress and future biosimilar launches, but will first focus on the recent acquisition of Horizon Therapeutics.

The acquisition of Horizon and ChemoCentryx has greatly strengthened Amgen's rare disease business and fits perfectly with their overall strategy of innovation. Amgen's experience in inflammatory diseases will benefit their rare disease portfolio and their global presence will help bring these medicines to patients worldwide. In the third quarter, Amgen saw a 4% increase in total revenues and a 6% increase in earnings per share, with double-digit volume growth and record sales for seven of their medicines, including BLINCYTO with a 55% increase in sales.

In the third quarter, Amgen saw potential for continued growth in their product BLINCYTO, as it is being used in earlier lines of therapy and recognized in practice guidelines. They also have a promising pipeline of potential first-in-class oncology assets, with three earning Breakthrough Therapy designations from the FDA. Additionally, they have completed enrollment in a Phase 2 obesity study and the FDA has accepted their BLA for a biosimilar to EYLEA. Amgen believes they have the necessary portfolio, pipeline, and people to achieve strong sales and earnings growth through the end of the decade and beyond. The company credits their success to their dedicated employees.

The company experienced strong execution and record quarterly sales for seven of their brands, with robust volume growth across general medicine, inflammation, and hematology/oncology portfolios. Overall product sales increased by 5%, with 11% volume growth in the U.S. and 8% in the Europe, Latin America, Middle-East, and Canada region. The company's general medicine business, including Repatha, Prolia, Evenity, and Aimovig, saw a 21% increase in revenue and 20% volume growth. Repatha specifically had a 31% increase in sales, driven by a record number of new patients starting treatment. The company is investing and executing to increase awareness among physicians and patients, with expanded sales forces and direct-to-consumer media efforts. Prolia sales also saw a 14% increase, driven by volume growth and higher net selling price.

The company expects Prolia's sales to increase due to its effectiveness in reducing fracture risk compared to other treatments for post-menopausal osteoporosis. EVENITY's sales have been strong, but there is still a low diagnosis and treatment rate for osteoporosis. Otezla's sales have declined due to lower net selling price and competition from other treatments, but the company remains confident in its growth potential due to its unique indication and convenient administration.

The company has increased their investment in educating physicians and patients about the safety and efficacy of Otezla for treating psoriasis. This has led to an increase in patients seeking information and taking action on the Otezla website. The company has also increased their dermatology sales force to further promote Otezla. Enbrel sales decreased due to changes in estimated sales deductions, but volume and new patient numbers increased. Tezspire continues to show strong growth, with sales increasing due to the launch of a self-administered pen and coverage by pharmacy benefit managers. This has helped the company penetrate and grow the U.S. asthma biologics market.

In the third quarter of 2023, Tezspire's share of the asthma biologics market has increased by 20%, with Tavneos sales reaching $37 million and Amjevita sales increasing by 30%. The hematology-oncology business, which includes LUMAKRAS, KYPROLIS, XGEVA, Vectibix, Nplate, and BLINCYTO, saw a 15% increase in volume due to strong commercial execution and new clinical data. BLINCYTO sales reached a record $220 million, and LUMAKRAS sales declined due to ongoing reimbursement negotiations in France. However, there are future growth opportunities for LUMAKRAS through new market launches and a global clinical development program.

The paragraph discusses the sales performance of various products from Horizon, a biopharmaceutical company. Vectibix, a cancer treatment, saw a 2% increase in sales due to higher prices and volume growth. KYPROLIS, used for multiple myeloma, had a 10% growth in sales, while Nplate, for treating low platelet count, saw a 45% increase due to a large order from the US government. The company is optimistic about its hematology-oncology products and new positive data on its oncology pipeline. They are also excited about their rare disease portfolio and their partnership with Amgen, a company with expertise in inflammatory diseases. In the third quarter, Horizon's overall sales grew by 2%, with Tepezza, a treatment for thyroid eye disease, generating $453 million in sales.

The company is confident in their progress and plans to continue building the market for their thyroid eye disease product. They have seen a significant increase in prescribers and are educating physicians on new data and indications. They have also obtained favorable policy changes from payers and are working to minimize the time between patient identification and treatment initiation. With a large number of potential patients and support from physicians and payers, the company sees a significant opportunity for growth.

The company is confident in the growth potential of Tepezza in the U.S. and sees international expansion as a long-term opportunity. KRYSTEXXA had record sales in the third quarter and is now annualizing at a $1 billion run rate. The FDA approved a label change for KRYSTEXXA in combination with methotrexate, leading to increased uptake. UPLIZNA also had strong sales and is now launched in multiple international markets. Additional indications in development support UPLIZNA's long-term growth potential.

In the third quarter, Horizon's portfolio generated $173 million in sales, mainly from their ultra-rare medicines. The company is confident that these products will continue to bring in strong sales. Amgen and Horizon are looking forward to working together to reach more patients with rare diseases. In terms of R&D, Amgen made significant progress, including completing enrollment in a Phase 2 study for maridebart cafraglutide and enrolling well in a Phase 3 study for Olpasiran. They expect to see top-line data from the maridebart cafraglutide study in late 2024.

The company is actively investigating the use of Tezspire in various inflammatory conditions, including chronic rhinosinusitis with nasal polyps, eosinophilic esophagitis, and COPD. They are also progressing with their Phase 3 clinical development program for Rocatinlimab, a first-in-class anti-OX40 monoclonal antibody for moderate-to-severe atopic dermatitis. They will be presenting data from their expanded rheumatology portfolio at a conference in November. In the oncology portfolio, BLINCYTO has received Breakthrough Therapy designation and the company plans to advance tarlatamab and Xaluritamig into earlier lines of therapy. Experts are optimistic about tarlatamab, a BiTE molecule targeting DLL3.

At the ESMO conference, new data from a Phase 2 study of tarlatamab in small-cell lung cancer showed promising response rates, durability of response, and overall survival. The FDA has granted Breakthrough Therapy designation for tarlatamab in this indication, and the company is rapidly advancing it into earlier lines of treatment with multiple Phase 3 studies underway or planned. Based on emerging data, the company has decided to discontinue development of AMG 340 and focus on advancing Xaluritamig in metastatic castrate-resistant prostate cancer. The company also provided an update on their financial results for the third quarter, with total revenues and non-GAAP earnings per share both showing growth compared to the same period last year.

In the third quarter, the company focused on advancing their pipeline and investing in growth opportunities while maintaining a non-GAAP operating margin of 52%. There was an increase in non-GAAP cost of sales due to higher profit shares and changes in product mix. Non-GAAP R&D expenses decreased due to lower spending in research and early pipeline activities, but increased year-to-date due to higher spending in later-stage clinical programs and marketed products. Non-GAAP SG&A expenses also increased slightly. The company continues to prioritize investments in innovation and long-term growth, including the construction of new manufacturing facilities.

The company is expecting to obtain licensure for its Ohio facility in 2024 and is investing in Generative AI opportunities. They have a history of returning capital to shareholders and have increased their dividend by 10%. The company generated $2.5 billion in free cash flow in the third quarter of 2023 and is expected to continue generating strong cash flows. The company has closed the acquisition of Horizon Therapeutics and is updating their 2023 revenue and earnings guidance to include Horizon's financial results. They expect Q4 results to be lower due to planned investments in their business, but anticipate minimal non-GAAP EPS dilution from adding Horizon's business.

The company expects to see an increase in non-GAAP EPS and other revenue for 2023 due to the Horizon acquisition. The full year non-GAAP operating expense is expected to increase by 10%, with Horizon accounting for 5 percentage points of this increase. The operating margin is expected to be around 50%, while non-GAAP cost of sales is expected to be between 16% and 17%. R&D expenses will also increase by 10%, with Horizon accounting for 3 percentage points. The company expects non-GAAP SG&A to decrease slightly, while non-GAAP OI&E expenses will be in the range of $1.4 billion to $1.5 billion. Q4 OI&E is expected to be $700 million, driven by interest expense related to the Horizon financing. For 2024, the company expects OI&E to be consistent with the Q4 run rate, with higher interest expense due to the debt raised for the Horizon acquisition.

The company expects to end 2023 with $65 billion in long-term debt and $11 billion in cash. They anticipate a lower tax rate and an increase in outstanding shares. The capital expenditures for 2023 are projected to be higher than previously stated. The addition of Horizon's rare disease team is expected to help the company achieve its long-term growth objectives. The company is focused on innovation and serving patients. The operator then opens the lines for Q&A, and the first question is about the company's confidence in their obesity drug and how it compares to other leading products.

The company is discussing their product 133, which has a differentiated mechanism of action and is currently in a Phase 2 trial. They are also working on another molecule, AMG 186, and will present data on it next year to determine the path forward. The company also has a suite of preclinical molecules in development. The $700 million run rate mentioned is for interest expense only.

The speaker answered two questions during the conference call. The first question was about the revenue guidance raise for the year and whether it was solely from the Horizon portfolio or if there was any contribution from the base business. The speaker confirmed that the increase was from the Horizon portfolio and that they will continue to invest in later clinical and in-market opportunities. The second question was about the 2024 tax rate and the speaker stated that there are various factors that will impact it, including legislation and the Horizon deal closing, but they are unable to provide a specific rate at this time.

The speaker mentions that they will give guidance on the implementation of the global minimum tax and Pillar 2 at the beginning of the year. They assure that they will optimize their position on this matter and provide more information next year. In terms of revenue, they do not break it down, but they have seen strength in their business with record sales and growth in their base business. They are also excited about their rare disease business and are focused on getting more medicines to patients. They have seen 11% volume growth, with the fastest growth in the JPAC region. The company has raised its revenue forecast for the year.

The Horizon transaction has closed and the company is not providing long-term guidance for 2024. However, they remain confident in meeting or exceeding their objectives for 2030 and may provide a comprehensive review of the business heading into next year. The outlook for Horizon's assets, including Tepezza, KRYSTEXXA, and UPLIZNA, is positive with initiatives underway to expand the patient population. The company is focused on building the U.S. market for Tepezza following label updates.

The company has seen positive results for Tepezza, with more payers updating their policies to make it more accessible for patients. There has also been an increase in new prescribers and international growth. The company is optimistic about the potential for growth with the combined forces of Amgen. KRYSTEXXA and UPLIZNA have also performed well, with KRYSTEXXA driving immunomodulation and UPLIZNA being the fastest-growing biologic for NMOSD. This momentum is expected to continue in the U.S. and globally.

The speaker believes that their company is in a strong position due to their portfolio and recent combination with another company. They are excited about the potential of AI technology in drug discovery and development and have invested in this area. They believe this will have a significant impact on their work and have the largest datasets in the industry. They caution against overhyping AI, but see it as a powerful tool.

During a Q&A session, a question was asked about AMG 786, an oral medication for obesity. The speaker, David Reese, addressed a concern about the exclusion criteria for suicide ideation being intensified, stating that there is nothing to read into there. He also mentioned that the dosing for the medication is constantly adjusted as they move through Phase 1 trials and that they will have updated data next year to determine the potential path forward for AMG 786. Another question was asked about how Amgen plans to grow their business with Tepezza, a medication for thyroid eye disease. The CEO, Robert Bradway, and other executives, Vikram Karnani and Murdo Gordon, will address this question.

The company has focused on expanding the prescriber base for their product, Tepezza, by targeting endocrinologists and ophthalmologists. They have also worked on gaining access to more patients by updating medical policies with payers. Similar strategies were used when the company acquired Tavneos, resulting in increased utilization.

The core team at Amgen is promoting the attributes of their product and educating physicians, while a broader group is working to build general awareness of the product. The company is looking to expand their reach to endocrinologists who treat thyroid eye disease, as well as increase international markets for their product. It takes time for the benefits of the ChemoCentryx acquisition to kick in, but the company is confident that they can add value to their new rare disease molecules. It is not an immediate process, but through collaboration, the company hopes to be successful in the marketplace.

The speaker, Dave Reese, is hopeful about the momentum of the combined organization's products in 2024. He also addresses a question about the potential of Phase 1 candidate 786 for oral obesity treatment, stating that it should be viewed as a Phase 1 molecule with a novel mechanism of action. He also mentions that the company has a suite of oral preclinical products and that they will provide guidance as those molecules advance towards clinical trials. Reese emphasizes that the field of oral obesity treatment is still in its early stages.

The company is focused on understanding the complexities of obesity and addressing it as a major public health challenge. They are not commenting on specific inventory and product wind-down plans. The company remains focused on driving demand and expanding the use of Tepezza. In regards to their dermatology strategy, they have been facing competition from a free drug program, but are investing in their sales force. It is expected that once the competitor program ends, Otezla volume will increase. If it does not, the company may need to consider additional offerings in their dermatology portfolio.

At the beginning of the year, there were several new launches in the market, including a novel topical and oral treatment, which offered generous free drug programs. This affected Otezla, as some patients opted for the new treatments instead of moving to a systemic option. However, the growth of these new treatments has slowed down and their free drug offerings have decreased. As a result, Otezla expects to continue sourcing growth from topical patients and does not need to offer as many free drug programs. The impact of these programs is expected to decrease, allowing Otezla to grow. Additionally, investments in expanding the field force, including a 20% increase in the derm team, will also contribute to Otezla's growth in the future.

In the third quarter, Amgen's direct-to-consumer spend has increased and they are optimistic about the potential for their product Otezla in the dermatology market. They have made investments in their dermatology portfolio and expect continued growth from products like Repatha, EVENITY, Prolia, and BLINCYTO. However, there were some adjustments on net sales in the quarter.

The company's adjustment on LUMAKRAS was due to changes in price negotiations in France. The company has seen strong unit volume growth but some price effects and donut hole impact. The company is excited about the potential for their obesity program and believes they have a differentiated approach compared to the competition.

Murdo Gordon responds to a question about competition and differentiation in the weight loss market by emphasizing the potential for a highly efficacious and convenient product like 133 to bring about real improvements in outcomes. He notes that the market is still young and there is room for a product that can achieve strong and sustained weight loss. He also mentions the durability of 133 between doses and the goal of improving outcomes for people carrying extra weight.

Murdo Gordon, the speaker, is answering a question about the progress of Repatha, a drug submission. He mentions that it has been a journey, and the COVID pandemic did not help their efforts to educate and convince cardiologists to be more aggressive in treating their patients. However, they have now reached a tipping point in cardiology and with payers, with over 90% commercial coverage and progress in Medicare Part-D coverage. The PCSK9 category, driven by their 80% share, is starting to move. New patient volume growth is good globally, with primary care physicians using PCSK9s in combination with other drugs. The phases are clear: payer coverage, affordability for patients, and now cardiologists prescribing with frequency and moving into primary care. They will also be adding a direct-to-consumer campaign. The speaker is bullish on the potential for further expansion of Repatha in terms of volume and net sales. The next question is about longer-term margins.

The speaker, Robert Bradway, is not giving updated margin guidance but expects the margins to remain attractive in the Horizon business. He mentions the potential impact of R&D spend on overall margins, but assures that they will communicate any changes in advance. He also notes the company's consistent ability to manage costs and maintain a leading efficient position in the industry. The question from Evan Seigerman asks about the $1 billion run rate and how it compares to expectations going into the deal.

In this paragraph, the speakers discuss the performance of KRYSTEXXA, a drug used for gout, and the broader gout market. They note that KRYSTEXXA is performing well and meeting unmet medical needs. They also mention other factors that are contributing to the growth of the business. When asked about a JAMA article linking type 2 diabetes to gout, the speakers emphasize the importance of reaching patients with severe uncontrolled gout and improving their quality of life, rather than getting distracted by potential associations.

The speaker, Robert Bradway, mentions that there are two more calls in the log and they will take them before ending the call. The operator introduces Tim Anderson from Wolfe Research who asks a question about AMG 133 and the possibility of starting Phase 3 in 2024. David Reese responds that they will give guidance on when the Phase 3 program will launch as they go through 2024 and will take an interim look at the Phase 2 trial. The FDA also requires a certain safety database before launching Phase 3 trials. The final question comes from Colin Bristow from UBS who asks about the commercial perspective of AMG 133, which is an antibody backbone and injectable.

The speaker discusses the properties of a new therapy that could potentially be more effective and require less frequent dosing than current therapies on the market. They also mention their plans to conduct Phase 3 experiments and establish a strong position in the market. The call concludes with the speaker thanking the participants and looking forward to reporting on the fourth quarter in the future.

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