Bristol-Myers Squibb Company (BMY) — Q1 2022 Earnings Call Transcript

Thank you, Sergei, and good morning, everyone. Thanks for joining us this morning for our first quarter 2022 earnings call. Joining me this morning with prepared remarks are Giovanni Caforio, our Board Chair and Chief Executive Officer; and David Elkins, our Chief Financial Officer. Also participating in today's call are Chris Boerner, our Chief Commercialization Officer; and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can follow along with for Giovanni and David's remarks. But before we get started, I'll read our forward-looking statements. During this call, we'll make statements about the Company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Company's SEC filings. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date. We specifically disclaim any obligation to update forward-looking statements even if our estimates change. We'll also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of certain non-GAAP financial measures to the comparable most GAAP measures are available on bms.com. And so I'll hand over now to Giovanni.

Thank you, Tim, and good morning, everyone. Let's start with our first quarter performance on Slide 4. This is an important year for Bristol-Myers Squibb, and I'm pleased to share that we've had a strong start to 2022. In fact, just yesterday, the FDA approved mavacamten, or Camzyos. This is a first-in-class medicine for patients living with symptomatic obstructive HCM. It's an important milestone for patients who up until now had no options to treat the underlying cause of this disease. I'm proud that we're giving hope to patients and improving their quality of life. It's also an important milestone for BMS. With U.S. approvals of Opdualag and Camzyos so far this year, we have significantly strengthened our new product portfolio. And we are on track to potentially launch three important new first-in-class medicines this year. In addition, strong commercial execution in the quarter resulted in solid year-over-year growth from our in-line products and new product portfolio. During the quarter, we saw the first entries of Revlimid generics in the U.S. and Europe. David will comment on our first quarter dynamics. But for the full year, U.S. entry expectations remain the same, while ex-U.S. erosion is expected to be faster than previously anticipated. Overall, we grew revenue by 5% and delivered double-digit non-GAAP EPS growth compared to the same quarter last year. There is good momentum in our business, and our performance in Q1 validates that we are well prepared for the renewal of our portfolio with multiple catalysts across in-line products and new product portfolio to more than offset upcoming LOEs and drive growth through the decade. Our very strong financial position gives us significant flexibility as we continue to prioritize business development while paying down debt and expanding shareholder distributions. Now let me turn to our scorecard on Slide 5 and provide some context around the important achievements of the quarter. We are making good progress against our milestones, which are central to delivering on our long-term strategy and growth as a company. Starting with the milestones we show during the quarter. Opdivo was approved in the U.S. in March as the first I-O agent to treat early-stage non-small cell lung cancer patients before surgery. This indication strengthens its profile in line and provides additional tailwind for growth. While disappointed with the results of the bank back program, we are very pleased with the significant progress of our new product portfolio overall. Breyanzi is now approved in Europe, our second CAR T cell therapy approved in the EU. As you know, we've been planning to bring three important new products to market this year. So far, two of those new products, Opdualag and Camzyos, received FDA approval. Many of our new products have significant expansion opportunities. For Opdualag, we recently initiated a pivotal study in colorectal cancer. And for deucravacitinib, we delivered a successful Phase 2 proof-of-concept result in lupus. Looking to the future, the breadth of milestones ahead is exciting. One that we're looking forward to is the Milvexian Phase 2 data in secondary stroke prevention. We have decades of expertise in cardiovascular disease, and we believe this could be a medicine that treats an even broader population of patients than current oral anticoagulants. We expect to get Phase 2 data in-house around the middle of the year. And depending on the results, we plan to start Phase 3 trials later this year. Turning to our three new products on Slide 6. As I mentioned, in March, we received approval for Opdualag for the treatment of patients with unresectable or metastatic melanoma. Opdualag is our first-in-class, fixed-dose, dual immunotherapy combination of nivolumab and the lag-free blocking agent antibody relatlimab. The combination of relatlimab and nivolumab demonstrated a clinically meaningful PFS and OS benefit. Opdualag marks the second approved I-O combination that we've delivered and demonstrates our continued scientific leadership in I-O. While we are still in the early days, I can say that the Opdualag launch is going very well. We believe this medicine has the opportunity to become a new standard of care for melanoma patients. In addition to melanoma, Opdualag has the potential for new indications. And we are exploring important opportunities in lung, liver and colorectal cancers. Turning now to our just FDA-approved mavacamten, or Camzyos. The benefit of Camzyos for patients with symptomatic obstructive HCM was further reinforced with the exciting VALOR data presented at ACC this month. We're launching Camzyos in the U.S. and look forward to receiving EU approval and launching internationally with future indications to come. Finally, we continue to be excited about the opportunity for the deucravacitinib. As you know, we have an FDA PDUFA date in September for psoriasis. We believe that psoriasis patients need better oral options. And this asset has demonstrated superior efficacy compared to the oral standard of care with a favorable safety and tolerability profile. During the first quarter, we also delivered a successful Phase 2 proof-of-concept result in lupus, positioning us to start Phase 3 studies later this year in a disease with a very high unmet need. Importantly, the lupus data continues to show the consistent and differentiated safety profile of a selective TYK2 inhibitor. We plan to share comprehensive data with the scientific community at upcoming congress this year. With our upcoming FDA PDUFA date in the third quarter, Phase 3 trials already underway in psoriatic arthritis and a proof-of-concept achieved in lupus and additional Phase 2 trials ongoing, including in IBD, our confidence in the potential of this program continues to grow. Now turning to Slide 7. Thanks to the hard work, dedication and strong execution by our employees, I am confident in our ability to deliver on our strategy and more than offset key LOEs by continuing the growth of our in-line products with $8 billion to $10 billion in incremental sales and delivering $10 billion to $13 billion of revenue expected from our new product portfolio by 2025. Our strong clinical performance further derisks our launch portfolio. And as a result, we have confidence in our ability to deliver the $25 billion plus in non-risk-adjusted revenue in 2029. We have a strong foundation in place. And as the renewal of our portfolio gains further traction this year, I am confident in the potential of our company. Now, I'll turn it over to David.

Thank you, Giovanni, and welcome again to our first quarter earnings call. I'm pleased to turn to Slide 9 to discuss our top line performance. Unless otherwise stated, I will discuss sales performance on an underlying basis, which excludes the impact of foreign exchange translation. Total company revenues in the quarter exceeded $11.6 billion, growing 7% year-over-year. This was driven by strong double-digit sales of our in-line and new product portfolio, partially offset by our recent LOEs. Let's take a closer look at our new product portfolio performance on Slide 10. In the first quarter, the new product portfolio contributed $350 million in revenue, more than doubling revenue versus prior year. With the combination of factors, including the usual year-end buying patterns impacting sequential performance, we remain confident in the growth potential of the new product portfolio. The first-in-class approvals of Opdualag and yesterday's FDA approval of Camzyos further strengthen our confidence in the new product portfolio. We also look forward to our upcoming PDUFA date for tacravacitinib in September, which would deliver another first-in-class medicine for patients with the opportunity to deliver more than $4 billion in non-risk-adjusted revenue in 2029. These initial approvals are just the beginning as many of these new medicines have significant expansion opportunities into additional indications. Now let's look at our expanded more diversified business by therapeutic area. Turning to our solid tumor performance on Slide 11. Opdivo and Yervoy continued their growth trajectory, growing double digits versus prior year. This is driven by continued demand for our newly launched indications and our core indications. In the U.S., Opdivo grew double-digit versus prior year, driven by demand in first-line lung, renal and gastric cancer as well as adjuvant esophageal and bladder cancers. Outside the U.S., first quarter year-over-year revenues increased double digits. This strong growth was primarily driven by expanded access in emerging markets as well as demand for new indications in developed markets as we continue to secure reimbursement. Looking forward, we expect continued growth of Opdivo from our new and expanding indications. With the launch of Opdualag in mid-March, we are pleased to be the only company with three approved I-O agents. While early days in the launch, we generated approximately $6 million in sales, half of which was demand and the other half stocking. We are encouraged by the initial feedback suggesting the potential for Opdualag to be the new standard of care for patients with metastatic melanoma, and I look forward to providing more updates as the year progresses. Now let's move to our growing cardiovascular portfolio on Slide 12. I'll start with Eliquis, which continues to grow globally, with revenues up 14% year-over-year. In the U.S., sales increased 12% versus prior year, driven primarily by total prescription growth of 10%. Internationally, sales were strong, up 17% versus a year ago. This strong double-digit growth was primarily driven by increased share across key markets, and the brand continues to be the number one OAC in multiple countries. Turning to our expanded portfolio. I'm really excited about the approval of mavacamten, now known as Camzyos, for patients with symptomatic obstructive hypertrophic cardiomyopathy or oHCM. We plan to leverage BMS's existing CV leadership, building our strong expertise and relationship, focused initially at top HCM centers. Our field teams are excited to bring this product to patients in the U.S., and Chris can provide more details on our go-to-market strategy in the Q&A session. Now let's turn our attention over to a few of our hematology products on Slide 13, starting with Revlimid. Sales in the quarter were nearly $2.8 billion. Revenues were primarily impacted by generic entry. During Q1, we saw generics enter the U.S. later than expected, and so far at a modest pace. As mentioned last quarter, we expect the uncertainty of how generic players will enter the market, though there is no change to our outlook for the U.S. Revlimid this year and beyond, we expect favorability we saw in Q1 to reverse in Q2. And internationally, generics launched broadly across Europe in mid-February, and erosion has been faster than expected. As a result, we now expect full-year global sales to be approximately $9 billion to $9.5 billion. Based upon U.S. phasing and ex-U.S. dynamics, we expect second-quarter global revenues to be approximately $2 billion. Global revenues grew from 9% versus prior year. Global revenues continued to be driven by volume and market share gains as patients move to earlier lines of treatment and extending the duration of treatment. Now moving to Reblozyl, which generated revenues of $156 million in the quarter. Sales were up 41% versus prior year, primarily driven by continued demand in ESA refractory MDS patients. In the U.S. to date, we have robust on-label share in RS-positive patients. We're seeing encouraging trends in the reduction of time in the switch from ESA failures, which is also supported by NCCN guidelines. We have also made progress in physicians uptrading a patient's dose to ensure sustained duration and benefit. Our focus remains on patient identification and dose titration for optimal outcomes. And outside the U.S., Reblozyl continues to grow with increased share in both MDS and beta-thalassemia associated anemia. We have now launched in six countries moving to cell therapy launches of Abecma and Breyanzi. Abecma generated revenue of $67 million in the first quarter. As expected, sales were largely similar to the fourth quarter of 2021 as demand continues to be robust, tracking to expand capacity in the middle of this year to be able to help more patients with highly refractory multiple myeloma. As it relates to Breyanzi, sales in the quarter were $44 million. Sales were driven primarily by demand in the U.S., while physicians continue to recognize Breyanzi's best-in-class profile. We are very pleased with the recent EU approval for Breyanzi in third-line plus large B-cell lymphoma and look forward to launching in select markets in 2022. Additionally, we are preparing for the U.S. launch of Breyanzi in second-line large B-cell lymphoma in June and are ramping up capacity in order to treat more patients. Moving to our immunology product summary on Slide 14. Orencia sales grew 6% versus prior year due to expanded U.S. sales, driven by increased market share in the U.S. As it relates to Zeposia, global sales in the quarter were $36 million, doubling sales compared to prior year. Sequentially in the U.S., we saw encouraging demand growth that was offset primarily by buying patterns from prior quarter and higher gross-to-net impacts related to patient access and ulcerative colitis. We are pleased with the awareness and perception of Zeposia in UC and are encouraged by the strong increase in new patient starts. We continue to work further expanding volume while strengthening access and reimbursement and expect to have increased contribution from UC in the second half of this year and expanding in 2023. Internationally, Zeposia continues to secure reimbursement in other markets for MS as well as obtain additional reimbursement for the newly approved UC indication last quarter. Lastly, as we continue to broaden our immunology portfolio, launch plans are already underway to prepare for deucravacitinib our P&L on Slide 15. As noted recently, we changed the presentation of our non-GAAP results. Along with other pharmaceutical companies, we no longer exclude significant research and development charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights. These charges have been included in our GAAP results, and there's no impact on the economics of our business. Going forward, we will now include these previously specified charges in both GAAP and non-GAAP results as a new line item called acquired in-process research and development as well as capture the previously specified income in our OI&E line item. In the quarter, operating expenses, excluding acquired in-process research and development, increased versus prior year, primarily due to increased MS&A driven by differences in timing of spend in the prior year, as well as investments in our new product portfolio. Net charges of $280 million in income are primarily driven by upfront milestone payments associated with the Immatics and Dragonfly licensing agreements. The first quarter effective tax rate was impacted by earnings mix. Even with this new financial presentation and the $0.10 impact from the inclusion of acquired in-process R&D and previously specified income, our strong performance in the quarter allowed us to grow non-GAAP EPS 13% versus last year. Excluding this, the new presentation chain of non-GAAP EPS would have grown 18%. Now moving to the balance sheet and capital allocation on Slide 16. Cash flow generation for the Company remained strong. Cash flow from operations in the quarter was approximately $3.8 billion. We ended the quarter in a strong liquidity position with approximately $15 billion in cash and marketable securities. Our capital allocation priorities remain unchanged. Business development continues to be a top priority, and we remain committed to continued debt reduction and returning capital to shareholders. In the quarter, we executed a $5 billion accelerated share repurchase program. Approximately 65 million shares or 85% of the $5 billion aggregate repurchase price were delivered to the Company in the quarter. The ASR will settle over the next couple of quarters, and we remain opportunistic about future share repurchases. Now turning to our 2022 non-GAAP guidance on Slide 17. As you know, we guided based upon prevailing exchange rates at the time we reported results. We're updating our top line guidance to be in line with the prior year, primarily due to movements in foreign exchange, reflecting the spot rate of the dollar today and faster erosion of Revlimid outside the U.S. Recent LOE product guidance is also being changed to reflect the updated Revlimid outlook in the range of $9 billion to $9.5 billion. So FX headwinds impact our entire portfolio. The outlook for in-line products and the new product portfolio remains unchanged in our future growth drivers. We now expect total operating expenses, excluding in-process R&D, to decline in the low single digits versus prior year, driven primarily by cost discipline and the impact of foreign exchange. Excluding the change in financial presentation that we've adopted for non-GAAP earnings, there is no change to our outlook for non-GAAP EPS for the year. With the impact of certain non-GAAP EPS, our new range is $7.44 to $7.74. This change is driven by the previously announced $0.10 impact from the actuals in the first quarter, and an additional $0.11 related to the buyout of future royalty obligations from mavacamten that occurred in April. Before we move on to Q&A, I want to thank our colleagues around the world to continue to deliver strong commercial, clinical and financial results. I'm really excited for what lies ahead. I'll now turn it back over to Tim and Giovanni for Q&A.

Thanks, David. Sergei, could we go to our first question, please?

Two for me. First, can you maybe talk about Camzyos, if I'm pronouncing that right, and the echo monitoring requirement there? It seems like it's a fairly kind of long program. I'm just wondering how you see that impacting any uptake the drug could have? And the second question for me was on Milvexian and just the read across from the Bayer Factor XIa data we saw last month. I guess specific question would be, can you just talk about the attractiveness of Afib as a category for the Factor XIas? And is that a focus for Bristol? Or is your focus more on markets where there currently isn't, I guess, Factor Xa usage? So any color there would be appreciated.

Thank you, Chris. I'll ask Chris to answer your question on Camzyos. And then, Samit will comment on Milvexian.

Thanks for the question. Since this is the first question on Camzyos, let me just say at the outset that we're incredibly excited to be launching Camzyos. This is an important new medicine for obstructive HCM patients. And for those of you who were at ACC, there's palpable excitement and anticipation of this drug. So this is a great opportunity for patients. Let me say a couple of things on just the REMS in general, and then I'll get to your question on the echo monitoring. We've been working with Samit's team and the FDA on the design of these REMS and with customers on how we would execute against it for a number of months. We view obviously the REMS as important because it ensures that patients are able to be treated safely, that they get on the right dose and that they're able to ultimately get the full benefit from Camzyos. There are two key components as you think about the REMS. There's a titration period, which is all about monitoring patients to ensure they get the right dose. This is largely again conceptually to how cardiologists manage hypertension. And then the second component is ensuring eligibility and driving the background medications. As we look across both of these two key components together, we see the requirements for the REMS as manageable, generally fitting, as I referenced earlier, to the treatment approach for cardiac patients, and we don't see them as a barrier to adoption. Now with respect to the echo monitoring period specifically, we obviously consulted customers as we were working through the design of the REMS, and they don't see it as a concern for a couple of reasons. First, the requirements of this monitoring period are relatively minimal. You have to get an LVEF and an LVOT reading. That can be done with your local physicians. So for those patients who are being treated in centers of excellence, they can go back to their cardiologist, local cardiologist's office to fulfill those requirements. Second, you have to remember, patients would be coming back a couple of times anyway for echos. And a number of patients would be coming back much more frequently for symptom management. So physician visits every three months is not seen as particularly burdensome. And the last thing I would highlight is a very important point, which is that patients are going to be highly motivated to work their way through this period. As we saw with the four study patients, they are highly motivated to stay on the drug; they feel better on Camzyos. And so we think there's going to be strong motivation on their part to work through these requirements. So net-net, this is something we'll be obviously educating customers on, but we don't see this as a barrier to use.

Thanks, Chris. Thanks for that. And Chris, from JPM, for your question on Milvexian, I think first of all, we are truly excited about that medicine as well. And we look forward to getting the data in-house in the middle of the year. The read-through from the Bayer presentation, I would say is that it further strengthens our confidence in the mechanism of action as well as provides a further proof-of-concept that inhibiting Factor XIa is a safe way to provide further anticoagulation or antithrombotic therapies for patients who really need it. As it comes to what indications we'll be pursuing, we'll continue to work with our partner, Janssen, to really define those once the data are in-house. And we can look at the data, the dose, the ways of administering the drug. And all in all, we'll be able to share that with you once we are ready with the data and the read-throughs. Thank you.

Thanks, Samit. Sergei, can we go to the next question, please?

Congratulations on the approval of Camzyos as well. Perhaps can you talk about two issues: one, relating to access and the other in terms of timelines for which you feel that the physicians are going to get more comfortable with dosing? Perhaps can you update us on your expectations for access timing relative to this approval and with the early phases of the rollout and again, on timing on when they're going to be educating physicians and expecting them to get more comfortable with the regimen and the REMS?

Thank you, Chris. Chris?

Sure. So, two very good questions. So let me start with access. In general, we anticipate the majority of the Camzyos patients are going to have very good access for this therapy. Remember, about half of the patients who are obstructive HCM are covered commercially and medically. We think access in this patient population is going to be particularly good. And we expect initially a disproportionate share of our use is going to come from this patient population. Now remember, virtually specialty medicines, Camzyos is not going to be on formulary day one. We will plan to cover these patients on bridge programs for the roughly four to six weeks that are going to be required to work through the exceptions process. But we've built strong patient support programs to assist these patients during that time, and we expect minimal barriers for these patients during the initial period. And then, of course, once Camzyos is on formulary, we would expect access to be much more straightforward. Now for Medicare patients, we expect that share is going to grow over time as any affordability challenges there get resolved. Initially, the opportunity will be mainly in the low-income subsidy patients. But then the broader population will expand as additional support becomes available to address any affordability challenges. With respect to your second question on timelines for dosing education, we actually think that's going to be relatively rapid. A few things to keep in mind. Number one is we work through this label. I referenced that working with customers on how we would execute against the REMS. Many of the customers, particularly in centers of excellence, which will be the primary focus at launch, are already roughly familiar with the dosing requirements here. And obviously, the initial focus of our commercial efforts is going to be in these centers of excellence. So, we think the understanding of the dosing requirements and the REMS more generally are going to be very good at launch there. And then, we're going to be targeting a much broader audience. In fact, potential obstructive HCM patients with our launch efforts, we're staffed to do that, and those education efforts are underway beginning today.

Thanks, Chris. Sergei, can we go to the next one, please?

I recently had a few updates on the new product launches. First, regarding Breyanzi, I would like to know your thoughts on what could lead to a significant change in its performance. Additionally, any updates on the manufacturing front would be appreciated. For Zeposia, could you discuss the challenges related to access, particularly in terms of when it will be added to formularies? I'm curious about the factors that could drive improvement for that brand as well.

Thank you, Geoff. Chris?

Sure. So Breyanzi, we're happy with the continued performance that we saw in the quarter. We were up obviously sequentially. We're seeing within our existing indication continued strong interest from physicians in using the product. Patient enrollments from activated accounts were up nicely in the quarter. We saw a nice increase in patients, and that translated into growth in Breyanzi's overall class share, which is now roughly 20% to 25%. Particularly important from my perspective is that Breyanzi continues to be seen as the best-in-class asset here. And so that gives us confidence not only in our existing indication but obviously, we're very much looking forward to a label expansion into the second-line setting for this asset, which continues to be on track, and Samit can speak to that in the second half of the year. With respect to manufacturing, as we've said previously, our focus is to have capacity by the middle of the year to be ready for that second-line launch, and those efforts continue to be on track. As for Zeposia, again, I think we are happy with the continued progress that we've made with Zeposia. As David referenced, we had a few dynamics in the quarter with respect to gross to net and inventory. That said, as we look at that product, particularly in UC, which is obviously important for the long-term growth of the product, there are two things that are going to be critically important for the success of the product. First, we've got to, as you referenced, improve access; and second, we've got to drive volumes. Since both of those things go travel, maybe I'll just give you a quick update on both. With respect to access, we have very broad formulary access today. In fact, we've seen the quality of that access improve this year relative to last year. But as we expected, the majority of patients using Zeposia in UC still have multiple step edits. And so we've got to continue to improve access for these patients. The way we would do that is by driving volume. On that front, we made good progress in the quarter. Patient starts were up about 30% in Q1 relative to Q4. We continue to expand our user base nicely. And importantly, we continue to drive intent to prescribe, all of which we think sets us up for continued volume growth. The majority of those patients when they come on therapy are going to initially be triaged to our bridge program. So what we've got to do this year is, first, we've got to convert those patients on commercial drug where possible. For patients who have better access, we need to convert them over from our bridge program onto commercial drug, and there's a big focus this year to do that. Then second, obviously, we've got to continue to drive new patient starts. So as I look at the quarter, I think we made good headway. We've got more work to do. But as we begin to achieve success, particularly in moving those patients from bridge to commercial, you'll see greater volume of sales coming from UC, and that will set us up for continued success later this year and into 2023.

Sergei, can we go to the next one, please?

Great. So the first one really is on Milvexian. I wanted to drill into your comments earlier on the call with regard to the opportunity in SSP and your knowledge there. Feedback that we have gotten from thought leaders and experts in the space, a bit of a riskier indication, more in the context of the patients that get recruited and the interactions that can occur between clopidogrel and aspirin that perhaps could confuse the data as it relates to Factor XI. So I wanted to just get a better understanding of how you guys are controlling for that. There are genetic factors that impact clopidogrel, bleeding risk, things like that as well as the efficacy of clopidogrel. So just wanted to get a sense of how you are managing for that, whether you're stratifying for it or perhaps looking at that after the fact. And then the second question on mavacamten. Obviously, I think the price may be surprised to the upside a little bit at $90,000 annually. That's quite a wide spread between that result and the ICR evaluation of less than $15,000 a year. Obviously, can you just comment on that differential and how you hope to get beyond that with additional clinical studies?

Thank you. Thank you, Seamus. So let me just make a comment at the beginning. We've been very clear with respect to the ICER assessment of mavacamten with the fact we didn't think it was scientifically accurate and not based on solid data and methodology. So Chris will give you his perspective on mavacamten value and price. Before that, though, Samit would answer your question on Milvexian SSP.

Thank you, and thanks, Seamus, for your question. On Milvexian, as you know, that SSP trial is ongoing. It's more than 2,000 patients that have been enrolled in the study. And we'll have a readout in the middle of the year, as I said earlier. We have the background therapy of clopidogrel, and as well as aspirin. Clopidogrel is given in the first month, and ASA continues for the next up to three months. With that data, we will be getting all of the PK data as well as the safety data, and we'll be able to then analyze if there are any interactions. Having said that, we've done quite a number of DDI studies, and we do not see drug-drug interactions as an issue. Of course, the overall safety that we will get from this study, combined with the data from the TTR study that we've already done, will define how we proceed further. Since the data are almost around the corner, let's wait for that and not speculate on how the application will be in the SSP study. Certainly, when the data are available and presented at medical conferences in the future, we can have a further dialogue on that. Thank you. And Chris?

Thanks, Seamus. I think Giovanni addressed the question on ICER. So as it relates to the specific price for Camzyos, we price this product very much consistently with how we price products generally, which is looking at a variety of factors and, notably, the value that the drug brings to patients in the healthcare system with a strong focus on ensuring that we are providing rapid and sustained access for patients. Remember with Camzyos, this is the first drug that effectively targets the source of obstructive HCM. So there really aren't any clinically comparable therapies here. You've got largely ineffective, nonspecific products like beta and calcium channel blockers that are relatively old and inexpensive. And then you've got more effective, but highly invasive procedures like myectomy and septal ablation. These procedures alone can be upwards of $150,000. And then you've got ancillary costs associated with those. Remember, they don't cure the disease. So you've got ongoing multiyear costs associated with these products as well. So it's a fairly broad range of prices. Where we netted out here, we think, is a price that, as I mentioned before, reflects the value of the product. We don't see any incremental concerns with respect to access. As I referenced in the previous question, we have a robust suite of programs and resources that are in the market to help address any patients or caregivers to support access for this product.

Let's go to the next question, Sergei.

Congratulations on the approval last night. I wanted to discuss Revlimid. David, you mentioned some insights during your prepared remarks. Besides foreign exchange, can you identify any other potential risks to the guidance for the rest of the year? I'm trying to understand the erosion curve outside the U.S. and what we should consider. Now that we're in the quarter, could you describe what you're observing outside the U.S. and provide more details? Also, regarding the royalty obligation you repurchased for mavacamten, should we expect any impact to consider in our models?

Yes. Thanks, Evan, for the question. On Revlimid, you really need to think about it in the context of the two markets, the U.S. and O-U.S. As I said in my prepared remarks, for the U.S., the generic entry was later than we had anticipated, and the erosion has been modest. So as a result of that, we think that will come out in the second quarter, and that's why we provided guidance on the second quarter for Revlimid overall of $2 billion in Q2. As you think about the full year, outside the U.S. multiple generics entered in Europe in mid-February, and that erosion has been faster than we anticipated. As a result, we now expect full-year global sales to be approximately $9 billion to $9.5 billion. Based upon U.S. phasing and ex-U.S. dynamics, we expect second-quarter global revenues to be approximately $2 billion. Global revenues grew from 9% versus prior year. Global revenues continued to be driven by volume and market share gains as patients move to earlier lines of treatment and extend the duration of treatment.

Thanks. Can we go to the next one, please, Sergei?

A couple of questions please. Assuming positive data, I'm curious as to which clinical settings you'd actively avoid with Milvexian, given that it inhibits one of the pathways in terms of pathways, sales and use all in mechanical heart valves. I'm just looking for some guidance, not go where you would be disinclined to go. And then second, given the accumulating long-term follow-up on deucravacitinib as the indications expand, I wonder whether to comment on any imbalances for zoster or thrombosis in that collected data that I'm sure you shared with the agency.

Thank you, Andrew. Let me ask Samit to answer both of your questions.

Thank you, Andrew, and like the new flavor of the question on the indications of Milvexian, asking the same question in a different way, but I think the answer will remain the same for you that we're not disclosing at this time what indications we are going to pursue or exclude. We will have to make those decisions once we have the dose as well as our conversations with our partners, and of course, in conversations with the regulatory agencies in terms of how we will conduct the studies, what control arms will be used, etc. So certainly, we'll be happy to have that dialogue once we are there with the data as well as the decisions. On deucravacitinib, you're absolutely right. We are continuing to be very confident in the profile of the medicine. We have the data, of course, from POETYK 1 and POETYK 2 with long-term follow-ups now. We've conducted studies in psoriasis in China and Japan as well, which continue to support the overall profile. Additional data, of course, from psoriatic arthritis Phase 2 studies, the SLE study that we've talked about as well, all continue to support the overall safety profile that we have seen in terms of the very specific inhibition of the TYK2 pathway without an impact on the JAK pathway. So the differentiation continues. Those are the data that we have provided from the psoriasis perspective to the agencies, and we look forward to that launch in moderate-to-severe psoriasis in September of this year.

Sergei, can we go to the next one?

I'd like to follow up on the Revlimid trajectory. It looks like the second-half Revlimid revenue is expected to be about $4.2 billion to $4.7 billion. That implies flat to up performance versus the second quarter. Can you discuss why it will be up in flat to up in H2 if pressure has intensified in both the U.S. and O-U.S.? That's the first question. The second question is, and I apologize for splitting hairs, but Milvexian data was expected in the first half. Now it's midyear. That is a modest change. But has there been some sort of delay maybe because of events? This isn't necessarily meant to be directed at Bristol, but it seems in this industry, mid-year is always the third quarter, and the third quarter is always September. So any color would be appreciated.

Thank you, Steve. Let me answer the second question, and then I'll ask David to answer your question on Revlimid. There is no change in the timelines for Milvexian. So, the study is on track, and we look forward to updating you as soon as the data is in-house, David?

Yes. And Steve, thanks for the question on Revlimid. The thing that’s important to remember in the U.S., we only have one generic entry in the first half of the year. And then we have multiple generics that will be entering in the second half of the year. So, that's why the phasing is from quarter to quarter. It can shift, as I was saying, because the generic entry will be in the September timeframe. Depending on how quickly that comes into the market will impact the phasing of the product quarter to quarter. But you will see more generics in the U.S. in the second half of the year.

Thanks. Can we go to the next question, please, Sergei?

I wanted to ask you whether we can compare and contrast the Zeposia ramp with the potential ramp of deucravacitinib. Do you anticipate a similar sort of challenge, I guess, in terms of access and volume as you bring that product to market? And really, it's a question about how we should moderate our ramp or launch ramp for deucravacitinib. And on M&A, your comments still consistent commentary. But given some of the changes to valuations of other targets, I just wondered whether any of this dialogue is also shifting. Are you more companies approaching you? Is there more dialogue around collaboration on early-stage pipeline, just any shift in the dialogue.

Let me address the second question regarding M&A before Chris answers your question about deucravacitinib. I want to emphasize that our focus on M&A has always been a key part of our capital allocation strategy and our innovation strategy. We have completed several deals in the past few months, demonstrating our proactive approach to business development. This will continue to shape our future direction. Regarding your inquiry about any changes, we have noticed that when there is a realignment in market values, it takes some time for biotech companies to reassess their valuations. Historically, values have been very high and have now adjusted somewhat. It's important to remember that each company has a unique story, so we must evaluate them individually. However, we are confident in our ability to bring innovation into the company through various business development strategies, including partnerships, collaborations, licensing, and potential acquisitions. Chris?

Yes. So thanks, Luisa, for the question. Just a couple of things. I would say at a high level, there are some important similarities between UC and psoriasis. Volume is going to be important to gain access over time. This is a market that, while it is less competitively intense than what you see in UC, particularly in the oral setting, it is a market that has been historically heavily managed. Now there are some important differences as well. While psoriasis is heavily managed, we have seen a number of national payers move from highly restricted access to more open formulary management over the last few years. That's for new entrants. We also know that many patients are going to be covered on plans that have open access when we launch. Again, that's an important opportunity for a new entrant like deucravacitinib. But for the remainder of covered lives, it's going to be, as we've been discussing with Zeposia, to build volume over time so that we can work with payers to gain more of a favorable access position. There are some similarities between the two and then a couple of important differences as well.

Sergei, can we go to the next one, please?

This is Adam on the house of Tim. So first on TYK2, can you talk about the commercial potential in psoriasis under two different scenarios? The first being, if you get a black box warning and the second is without that warning. If you do get a black box warning, would it be safe to assume that sales in psoriasis could be something like half of what they would be if you had a clean label? And then secondly, just real quick on Line 3. When will we get the next round of important data that will inform our success outside melanoma not just Phase 3 results but also any next earlier trials ongoing?

Thanks, Adam. This is Giovanni. So let me just start by saying we are increasingly confident in the potential of that program as I mentioned earlier with a PDUFA date in September for psoriasis, ongoing Phase 3 study citing arthritis. And then, of course, the SLE proof-of-concept readout earlier this year, together with ongoing Phase 2 studies in a number of other indications, including IBD. So the prospects for the program continue to strengthen as we go forward. We've answered that question on regulatory outcomes, specifically with respect to the label a number of times. But let me ask Chris to give you his perspective again. And then Samit will comment on the Line 3 program.

Sure. Thanks, Adam, for the question. So first, I'm not going to speculate on the black box scenario. As we've said consistently, we're going to continue to operate under the perspective of the most likely scenario and the scenario that we believe is most supported by the data, which is that deucravacitinib has a unique mechanism of action consistent with all of the preclinical and clinical data that we have. And so focus from a commercial standpoint, while we, of course, scenario plan various versions of a label that's going to be the operating plan that we go as the most likely case. We are still very much focused on leveraging the data from the two Phase 3 studies that we have that show clinical data that is superior from both an efficacy standpoint and safety superiority to Otezla, which is the only branded oral in the market today. Given that efficacy, we believe we have a very strong case for establishing deucravacitinib as the branded oral of choice here. Launch preparations are well underway. We have a great team already in the field from a medical standpoint. The home office team has been staffed and is up and running. We're in the process of hiring the sales force. So our going position continues to be consistent with deucravacitinib as a unique mechanism of action. We think we have the clinical profile and the team in place to deliver on establishing this product as the branded oral of choice.

Thanks, Chris. And Adam, just on the Opdualag, because LAG-3 is being developed as a fixed-dose combination with Nivolumab, we have several studies ongoing not only as BMS-sponsored trials but also through investigator-initiated trials. Through those investigator-initiated trials, there will be continued data that will be coming through, including from this ASCO itself. So you will see the data continuing to come out at various conferences through either our trials or through the ICERs that are being conducted. Of course, the Phase 3s will start to read out over the coming years.

Sergei, can we go to the next one, please?

Maybe two for me. A follow-up on Opdualag. I know it's still early in the launch, but just wondering what types of patients you're seeing receive the drug? I know your initial focus was going to be on the PD-1 monotherapy setting, but is that pretty consistent? Or are you seeing broader use? And then in terms of Abecma, what percentage of demand are you able to supply now? And can you help quantify how much additional supply will come on later this year?

Chris?

Sure. Let me start with Opdualag. We're very pleased, as David noted, with the approval and the reaction from physicians has been very positive. Based on the early read that we have, and again, it's only a few weeks of data, what we're seeing in the marketplace is entirely aligned with our expectations. So number one, the profile is very well received, given the 2x improvement in PFS, the strong trend toward OS, with similar safety relative to PD-1 monotherapy. The excitement we've seen around the profile is as we hoped and expected for this asset. Second, what physicians are playing back to us is they see using this product in the segment initially of the market that we had anticipated. Remember, first-line metastatic melanoma is a market that essentially divided into thirds. One-third of patients are getting dual I-O therapy, one-third of patients are getting PD-1 monotherapy, and one-third are getting targeted therapies, notably BRAF mutants. Our initial focus has been on the PD-1 monotherapy segment, and that's where physicians have begun to use the product. Now it's possible that over time, that could expand into other segments. But keep in mind that Opdivo/Yervoy has a strong presence there just given the long-term survival benefit. So we anticipate, and what we're hearing right now, is that the initial use is going to be in the PD-1 monotherapy as expected. With respect to Abecma, what I can tell you is that the demand continues to be very strong. We have utilized every manufacturing slot that we have for Abecma over the quarter. Our focus continues to be on building demand to the middle of the year in anticipation of continued strong demand for this asset over time. Remember, this is a space in which we've had a competitive agent enter. We've still seen very strong demand for Abecma, which is also in line with our expectations. While I won't give specific guidance as to exactly what that ramp will look like, I can tell you that our focus continues to be on making sure that we make more slots available for Abecma. We're in line with our expectations on being able to be in a much better position by the middle of the year.

Okay. Can we go to the next one, please?

Two questions from me, please. Mavacamten, the premise for the acquisition MyoKardia was obviously predicated on the opportunity to develop not just in obstructive HCM, but potentially non-obstructive and have past as well. The question we've been getting a lot since the approval last night and the review of the label, no real surprises in terms of the handhold they needed to get a patient on drug and then monitor the patient while they're on drug given the pharmacodynamic and PK properties of mavacamten. But really, the discussion comes down to how an embark, which is your study that I think will read out maybe next year, can the dosage and treatment algorithm be modified to make the drug and its properties more accommodative to preserve fraction patient population or non-obstructive patient population? And should we expect to have maybe lower doses be viewed as potentially effective in those populations that might resolve some of the handhold they needed for the drug? And then the second question is actually on Abecma. We will have a readout, I think, coming out of the Phase 2 study that should be fairly informative. Can you just give us your expectations of what you need to see there to feel confident moving forward in any topic here in the backdrop?

Thank you, Dave. Let me ask Samit to answer both of your questions.

Yes. Thanks, Dave. The line was getting off, but I think I got the gist of it. So when we think about mavacamten, you very correctly said that now that the drug is approved and obstructive our intent, of course, is based on the data from the Maverick Phase 2 study and the long-term follow-up from there. We are initiating the Phase 3 program later this year in non-obstructive hypertrophic cardiomyopathy. Now of course, the study is a small Phase 2 study which is a proof-of-concept trial looking at a dose of 2.5 days up to 5 milligrams dose. That data, when we have the proof of concept, will then open the door for future indication expansion. At that time, we'll be able to have a decision around what dose and how to manage the overall profile in terms of dosing these patients in that indication. So more to come as the data evolves, and we understand it better the application of this medicine in that disease.

For cendakimab, we have two studies that are ongoing, as you know, a Phase 3 study in eosinophilic esophagitis. And then, of course, as you said, later this year, we'll see the data from the atopic dermatitis. Now that is the field where we understood quite well because of the competition that is out there and the data that are out there. The data that need to evolve from the Phase 2 study needs us to be in a place where we can ultimately understand the applicability of this drug and the population that it should be used. So again, let's wait and watch. When the data evolves, we'll be able to discuss that and give more specifics if those needs are significant and clinically meaningful to go into Phase 3 studies.

Sergei, can we go to the next one? We're out of time at this point. Maybe we should wrap up the call, Giovanni.

Yes. I'm sorry for the last-minute issue. Let me just thank you all again for joining our call. Obviously, our teams are available to answer any additional questions you may have. In conclusion, let me just say we're really pleased with the two approvals this quarter, the continued progress we've made with our pipeline, and our strong commercial performance. That makes me really confident in our ability to continue to execute, but we are very well positioned for growth. I just want to thank our employees for their continued hard work and dedication. With that, we'll close the call. And again, Tim, Nina, and the rest of the team remain available for any additional questions you may have. Thanks, everyone.