The paragraph is an introduction to the Bristol-Myers Squibb Third Quarter 2024 Earnings Conference Call. The operator welcomes participants and hands over to Chuck Triano, Senior VP of Investor Relations, who introduces the event. Triano mentions that the call will include forward-looking statements and notes the availability of non-GAAP financial measures on their website. He then introduces key executives participating in the call, including Chris Boerner, the CEO, and David Elkins, the CFO, before handing over to Boerner.

In the third quarter, the company focused on executing near-term goals and laying the groundwork for sustainable long-term growth. They experienced strong demand in both their growth and legacy portfolios, with growth portfolio revenues rising 20%. The legacy portfolio provided cash flow for strategic investments. Significant achievements included the approval of Cobenfy in neuroscience and FDA approval for an Opdivo-based treatment for lung cancer. They advanced their oncology pipeline by presenting data on new opportunities and clinical data for potential treatments. The acquisition of Karuna Therapeutics and the FDA approval of Cobenfy are highlighted as key developments in strengthening future growth.

The paragraph discusses the significant progress made in leveraging the Karuna acquisition, particularly through the introduction of Cobenfy, a new treatment for schizophrenia. This novel mechanism addresses major unmet needs in mental health by providing effective treatment without the side effects common with older medications. The company has prepared for a successful launch by building a seasoned sales and medical team and securing payer access, while continuing clinical programs in related areas with data expected in 2025 and 2026. Additionally, they plan to start registrational trials for conditions like Alzheimer's and bipolar disorder. The broader strategy prioritizes innovative medicines in hematology, cardiology, and oncology, with ongoing development of promising assets like Milvexian, addressing considerable unmet needs and offering commercial opportunities.

The paragraph provides an update on a Phase 3 trial for atrial fibrillation, noting strong recruitment and an increase in patient enrollment due to lower-than-expected event rates, allowing for a planned 2027 data readout. The company continues to advance other programs, including cell therapy, radiopharmaceutical, protein degradation platforms, and additional indications for Cobenfy. They emphasize driving operational excellence by reviewing spending, prioritizing high-return investments, and aiming to save $1.5 billion by 2025 to reinvest. The company seeks continuous productivity improvements and is focused on strategic capital allocation for long-term growth, with an immediate goal to delever their balance sheet.

In the third quarter, the company made progress towards reducing its debt by $10 billion by 2026 and remains committed to maintaining its dividend and investing in growth, both internally and externally. Notable upcoming events include the presentation of promising Phase 1 data for the CD19 NEX-T cell therapy at an upcoming conference and the anticipated FDA decision on the subcutaneous formulation of nivolumab in late December, expected to launch in early 2025. The company also plans to share Phase 3 data for Sotyktu in psoriatic arthritis by the end of the year. Due to strong results so far, they are raising revenue and EPS guidance, with further details to be provided by David. Overall, the company's business mix is transforming with a focus on growth, highlighted by the U.S. approval of Cobenfy, which has potential for significant revenue generation.

The paragraph discusses the progress made by the company, focusing on expense management and preparing for long-term growth, with upcoming milestones in 2025 and 2026. There is an expression of gratitude to employees for their efforts. David Elkins then presents the quarterly financial performance, highlighting strong commercial results in the third quarter. The company saw a 20% growth in its growth portfolio, driven by key brands like Reblozyl and Breyanzi, while the legacy portfolio experienced mixed performance. The introduction of Cobenfy in the U.S. is expected to further diversify and strengthen future sales.

The paragraph discusses the company's financial strategies and performance in the third quarter. They plan to use cash flow from their legacy portfolio to invest in growth opportunities. Third quarter sales were affected by reversing a $150 million inventory build from the second quarter, impacting brands like Opdivo, Opdualag, Camzyos, and some immunology products. Despite this, Opdivo saw increased global sales due to strong demand outside the U.S., with expectations of mid-single-digit growth for the year. They anticipate FDA approval for a new formulation of nivolumab, which could enhance their immuno-oncology portfolio. Opdualag achieved double-digit growth and solidified its position in the U.S. melanoma market, with strong international uptake. The cardiovascular portfolio, particularly Eliquis, also saw double-digit sales growth, driven by U.S. market demand and gains. Camzyos sales more than doubled due to robust U.S. performance.

The article discusses the significant growth in pharmaceutical sales and patient adoption across various regions and therapy areas in the third quarter. There was a notable increase in commercial drug usage and patient starts, with a 20% rise in patients and doubled numbers compared to the previous year. Outside the U.S., Europe saw sequential sales growth due to increasing demand. Hematology sales, particularly for Reblozyl, grew by 81% due to demand in first-line settings and recent reimbursements in Europe and Japan. Cell therapy sales, especially for Breyanzi, more than doubled, driven by new indications and improved manufacturing. In the U.S., Breyanzi sales grew over 40%, fueled by demand in newly approved lymphoma indications. Modest growth is expected to continue. Despite a competitive market, another therapy, bema, also showed solid growth. In immunology, Sotyktu saw a near doubling in sales due to international market launches. However, anticipated increases in rebates may stabilize fourth-quarter sales, though long-term demand growth is expected to counterbalance these pressures.

In the third quarter, the company demonstrated strong commercial execution and financial discipline, making progress on a $1.5 billion cost savings initiative to counterbalance increased operational expenses from recent deals. This program includes reducing clinical trial expenses, consolidating sites, and cutting roles and headcount, with most savings expected this year. The company is reinvesting these savings in high-potential growth and innovation areas. Despite a 130 basis point decline in gross margin due to product mix, operating expenses were partly offset by the savings. The effective tax rate rose to 18.5% due to a 2023 IRS adjustment. Earnings per share for the quarter were $1.80. The company ended the quarter with $8.4 billion in cash and equivalents, a $5.6 billion operating cash flow, and is actively reducing debt, having cut it by $5.9 billion. The company remains dedicated to maintaining its dividend.

The paragraph discusses the company's financial outlook and guidance for 2024. They anticipate a revenue increase of about 5% as reported and 6% at constant currency, largely driven by Revlimid's strong sales, despite expected declines in other legacy brands due to generic competition. They project slightly tighter gross margins due to the U.S. sales mix and operating expenses are expected to rise by 4%-5% because of increased spending in the fourth quarter, balanced by savings from productivity initiatives. The company aims to maintain an operating margin of at least 37% and has adjusted their OI&E estimate to reflect $125 million of income from better royalty and interest returns. An acquired R&D charge influenced their tax rate, but excluding this, the non-GAAP tax rate is expected to be around 18% for the year.

The paragraph discusses an update on non-GAAP EPS guidance, raising it to a range of $0.75 to $0.95 due to strong third-quarter sales and financial discipline. The company is enthusiastic about the U.S. launch of a new neuroscience product, which they believe has significant long-term growth potential and patient benefits. Looking forward, they anticipate further pipeline advancements and have increased full-year guidance confidence. Evan Seigerman from BMO Capital Markets asks about future access plans following Cobenfy's approval for schizophrenia treatment. Adam Lenkowsky highlights Cobenfy's unique attributes and anticipates its 2025 launch, expecting sales to ramp up in the year's latter half, with field teams already promoting the product.

The paragraph discusses the strategies and expectations for increasing access to a particular healthcare product, primarily for patients covered by Medicare and Medicaid. It highlights that they anticipate achieving 80% to 85% access within a year, with efforts to accelerate this in Medicaid, noting progress in a few states already. For Medicare, it mentions that coverage decisions have a 90-day timeline with expected mandatory coverage in the first quarter of next year, allowing physicians to file medical exemptions in the meantime. It also notes positive responses from payers following review meetings. The focus is on maximizing the product's launch and long-term success. Following this discussion, Chris Shibutani from Goldman Sachs asks about the expected trajectory of operating expenses and revenues for 2025, and Chris Boerner responds by asking David to address the question.

The paragraph features a discussion involving David Elkins and Chris Schott regarding the progress of a $1.5 billion savings initiative and operating margin guidance, which is on track to achieve significant savings this year. Elkins notes that more guidance for 2025 will be provided during the fourth quarter earnings call. Chris Schott from JPMorgan then asks about the potential market ramp-up for a new schizophrenia drug upon reimbursement approval, considering historical launch patterns and unmet needs. He also inquires about the confidence level regarding bipolar 1 disorder as a market opportunity. The response from Adam Lenkowsky indicates that there is no perfect comparison for this launch due to the unique aspects of the drug and previous approvals.

The paragraph discusses the approval and accessibility timeline for a medication related to schizophrenia, first as monotherapy and then as adjunctive therapy, anticipating full access within 12 months post-approval. Samit Hirawat mentions the potential of xanomeline in treating symptoms of bipolar mania, citing previous Alzheimer's and schizophrenia studies. There is no evidence of worsening depressive symptoms in related studies. They plan to initiate a bipolar mania program in 2025 and expect results from the ARISE schizophrenia trial. Additionally, two new indications in Alzheimer's disease agitation and cognition are planned for 2025. Luisa Hector from Berenberg inquires about the pricing and outlook for Sotyktu and the Psoriatic Arthritis Trial, with Chris Boerner and Adam expected to respond.

In the paragraph, Adam Lenkowsky discusses the progress of Sotyktu, highlighting that access has improved from 25% in the first half of the year to approximately 50% by Q3. Efforts to secure broader access and adoption are underway, albeit with significant rebating and gross net impact, which is expected to be offset by increased volume over time. The market remains highly competitive, but Lenkowsky anticipates an improved position by the end of the year. Samit Hirawat adds that they have accelerated the readout of a second study related to arthritis, expecting results by the year's end and into 2024. The data generated will aid in evaluating Sotyktu's competitive standing against Otezla, and if the safety profile remains positive, a filing is planned for 2025.

The paragraph involves a discussion with Geoff Meacham, Chris Boerner, and Samit Hirawat regarding the Milvexian program, focusing on its potential benefits in treating atrial fibrillation. Chris highlights the need for improved anti-coagulation treatments, as 40% of atrial fibrillation patients remain under-treated due to bleeding risks despite the success of Factor Xa treatments like Eliquis. Encouraging results have prompted an increase in the sample size of the trial, aiming for a 2027 readout. Chris and Samit express optimism about Milvexian's potential to meet unmet patient needs and emphasize the impact of dosing on trial outcomes.

The paragraph discusses the Milvexian program and its progress in Phase 3 studies involving AF, ACS, and SSP. Initially, the event rate was lower than expected, prompting an increase in the sample size, with updated numbers to be posted on centrals.gov. A previous related study was halted due to high event rates, but the current study has ongoing support from the DMC. The ACS and SSP programs are set to report results in 2026, and the study criteria will remain unchanged despite increased enrollment. The paragraph concludes with a transition to a question about KarXT's development plans concerning cognition.

The paragraph features a conversation with Samit Hirawat discussing upcoming clinical trials and recent data regarding certain medical treatments. Hirawat mentions the initiation of three Phase 3 programs scheduled for the next year, targeting Alzheimer’s disease (AD) agitation, bipolar mania, and AD cognition, with a focus on the dual mechanism of action involving M1 and M4 agonism associated with xanomeline. He addresses Serena's question about dosage, confirming a shift from 3x a day to BID (twice daily) dosing for AD psychosis patients. The conversation then shifts to Trung Huynh's inquiry about recent PMRT5 data, where Hirawat notes promising efficacy and discusses focusing on particular tumor types that showed encouraging results. Overall, Hirawat is positive about the program's progress and is looking forward to the ARISE study's readout next year.

The paragraph discusses positive outcomes from a study on non-small cell lung cancer treatment, which shows a 31% overall response rate with significant durability, noting that patients experience sustained disease control over a long period, with a duration of response of 10.5 months. It highlights that stable disease trajectories are similar, and promising results were also observed in pancreatic cancer at certain doses, with some patients maintaining responses for almost a year. The report anticipates further updates on the trial's later phases. Additionally, during a Q&A session, Steve Scala asks for clarifications about Bristol's revenue growth and its attribution to Revlimid, as well as concerns regarding the Milvexian trial's event rate, which Chris Boerner delegates to David Elkins and Samit for response.

The paragraph discusses a financial update and some pharmaceutical developments. It mentions strong performance in the company's growth portfolio, leading to a raised revenue guidance for Revlimid to $5.5 billion and an improved full-year outlook with a 5% growth. However, it notes challenges from generic entries for Sprycel, Abraxane, and Pomalyst, which could affect fourth-quarter models due to expected generic erosion. Samit Hirawat addresses a study comparing event rates of asundexian, apixaban, and Milvexian, expressing optimism about the results and plans to increase the sample size. The paragraph ends with a question from Courtney Breen about the Covent launch, specifically concerning patient prescriptions, doctor choices, and context on warnings and precautions related to liver issues.

The paragraph discusses the positive reception and efficacy of Cobenfy, an antipsychotic medication, compared to Zyprexa. Adam Lenkowsky mentions that while Cobenfy lacks a box label warning, it has fewer adverse effects like dyslipidemia and EPS sedation. Monitoring requirements, particularly lab assessments, align with standard practices and are not expected to hinder adoption. Samit Hirawat adds that long-term studies (EMERGENT-4 and EMERGENT-5) have supported Cobenfy's safety and efficacy, boosting confidence in its profile. The paragraph ends with the operator transitioning to a question from Seamus Fernandez about data for a CD19 asset at an upcoming ACR event.

The paragraph discusses the evolution of markets for intensive immunologic treatments such as CAR T cell therapies and compares them to other treatments like T-cell engagers or bispecific products, which may have similar target profiles but potentially less efficacy. It highlights that CAR T cell therapies are considered transformational for treating autoimmune diseases and is preparing to present data from recent studies at a conference. Key points to be noticed in the data include the severity of the enrolled patients' diseases, the effects on B cell dynamics post-treatment, the impact on remission and treatment cessation, and the safety profile, especially given that many patients have underlying organ damage. Additionally, it notes the potential for volume increases in response to neutral influences on the market dynamics by 2025, particularly in the context of IRA.

The paragraph discusses future updates on data for a small number of patients involved in a study, with further insights expected at the ASH conference. It highlights the promise and considerations of T-cell engagers and bispecifics, particularly BCMA-directed therapies, compared to CAR T cell therapies. The need to determine the optimal treatment approaches and duration for T-cell engagers is emphasized. The speaker mentions the cessation of a BCMA T-cell engager development but plans new studies for 2025. Adam Lenkowsky comments on changes related to the IRA's impact on benefit design, noting a favorable outlook for Eliquis due to the CAR T redesign, though this is offset by increased responsibilities for drugs like Revlimid and Pomalyst. Overall, these changes are expected to be net neutral for their portfolio.

The paragraph captures a Q&A segment from a conference call. Matt Phipps from William Blair asks about the market potential of the GPRC5D CAR T therapy compared to Abecma, and whether it will compete with or follow BCMA CAR T therapy. Adam Lenkowsky responds that they're advancing their GPRC5D agent to Phase 3 trials and are optimistic about its potential, highlighting its positive toxicity profile as a key advantage, and suggesting it would be used after BCMA CAR T treatment. Another participant, David Risinger from Leerink Partners, inquires about Bristol-Myers' sustainable growth strategy in light of upcoming revenue pressures and loss of a diabetes royalty stream. Chris Boerner, the CEO, reiterates their focus on short-term execution and building long-term growth and shareholder value, aiming for strong growth by the end of the decade.

The paragraph highlights three key areas contributing to building confidence in the company's growth. First, the company focuses on driving performance in its young portfolio of assets, including promising products like Cobenfy, Breyanzi, Reblozyl, Camzyos, Opdualag, and nivo subcu. Second, the late-stage pipeline shows good progress, with promising developments in Milvexian, LPA1, iberdomide, and mezigdomide across various indications. Finally, the company maintains financial discipline, ensuring a solid balance sheet to support ongoing growth and development efforts.

The paragraph discusses the company's strong financial position, allowing flexibility for internal investments and external acquisitions, like the recent purchase of Karuna. A question from Akash Tewari of Jefferies touches on potential renegotiation of a partnership with J&J due to reports of J&J shutting down a division, and how the company is handling FDA regulatory protection for subcutaneous Opdivo compared to Merck's approach with KEYTRUDA. Chris Boerner clarifies that there are no changes to the partnership with J&J, and Adam Lenkowsky provides details about their plans for the subcutaneous version of Opdivo, aiming for significant market share before loss of exclusivity in 2028.

The paragraph contains a discussion about the potential of a product with a subcutaneous (subcu) delivery method, praised for its quick infusion time and potential to extend the company's franchise into the next decade. Questions from James Shin of Deutsche Bank and Olivia Brayer from Cantor are addressed. Shin inquires about Milvexian, specifically about data separation between study arms and bleeding rates, with Samit Hirawat explaining that the study's blinded nature prevents detailed observations at this time. Brayer questions the data set for adjunctive schizophrenia treatment and potential off-label use, as well as Milvexian timelines, with Chris Boerner suggesting Samit and Adam address these queries. Samit Hirawat notes current treatment trends with antipsychotics, indicating combinations are already used despite lacking official approval.

The paragraph discusses the ongoing efforts to demonstrate the efficacy and safety of Cobenfy when used alongside existing therapies, as part of the ARISE program, with study results expected in 2025. The potential of Cobenfy as an adjunctive treatment for conditions like schizophrenia is highlighted, despite existing D2 treatments not being FDA approved for such use. The discussion also touches on a separate trial for Milvexian with an event-driven endpoint set for 2027. The potential for off-label use of Cobenfy due to its safety profile is mentioned, but the primary focus is on establishing it as a standard treatment for schizophrenia. Future data releases related to Alzheimer's psychosis are anticipated to further drive the product's growth. The overarching excitement around Cobenfy's initial indication in schizophrenia is emphasized.

The paragraph discusses Cobenfy, a dual direct agonist drug in development, focusing on its potential to enhance cognitive function in schizophrenia patients. This is due to its direct impact on the M1 component, important for cognition. The conversation, involving Sean McCutchen, Chris Boerner, and Samit Hirawat, highlights Cobenfy's differentiator as it targets M1 and M4 directly, unlike other therapies using indirect methods. The discussion also touches on its future application in Alzheimer's, addressing cognitive impairments, and considerations around dosing regimen and gastrointestinal side effects.

The paragraph discusses a program developed to address different aspects of Alzheimer's disease (AD) from perspectives of psychosis, agitation, and recognition. Adam Lenkowsky highlights the significance of the efficacy of a drug named Cobenfy, which matches or surpasses that of Zyprexa, and addresses common discontinuation issues like weight gain, infections, and sedation. The paragraph notes that people with schizophrenia often take around seven medications daily, necessitating a management approach but does not expect this to hinder the drug's uptake due to its strong efficacy and tolerability. The paragraph ends with a transition to a new topic, where a question is posed about a different program related to mavacamten, following the success of a quarter's results.

Samit Hirawat discusses the development and market potential of MYK-224, a drug for HFpEF (heart failure with preserved ejection fraction). They initially gained insights from a small study with mavacamten using biomarkers like NT-proBNP. MYK-224 is now in a Phase 2a trial enrolling well, with data expected in a few years, followed by a Phase 3 program in the next decade. Adam Lenkowsky highlights the HFpEF market's growth potential, with heart failure drugs valued at over $12 billion in 2022 and expected to nearly double by 2032, representing a significant opportunity.

In the call, Chris Boerner highlights the company's strong focus on execution and the significant contribution of their growth portfolio to overall revenue, driven by key products like Reblozyl, Breyanzi, Camzyos, and Opdualag. Boerner emphasizes the importance of the recent Cobenfy approval as a significant achievement and growth driver. He also notes the advancement of their innovative pipeline, with significant readouts expected soon, and stresses the positive impact of their commitment to operational excellence. The team is open for further questions, and the call concludes.

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