Bristol-Myers Squibb Company (BMY) — Q1 2025 Earnings Call Transcript

Thank you, and good morning, everyone. Appreciate you joining our first quarter 2025 earnings call. Joining me this morning with prepared remarks are Christopher Boerner, our board chair and chief executive officer, and David Elkins, our chief financial officer. Also participating in today's call are Adam Lenkowsky, our chief commercialization officer, and Samit Hirawat, our chief medical officer and head of global drug development. Earlier this morning, we posted our quarterly slide presentation to BMS.com that you can use to follow along with Christopher and David's remarks. Before we get started, I'll remind everybody that during this call, we will make statements about the company's future plans and prospects that constitute forward-looking statements. Actual results may differ materially from those indicated by those 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. And 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 most comparable GAAP measures are available at bms.com. Finally, unless otherwise stated, all comparisons are made from the same period in 2024, and sales growth rates will be discussed on an underlying basis which excludes the impact of foreign exchange. All references to our P&L are on a non-GAAP basis. And with that, I'll hand it over to Christopher Boerner.

Thanks, Chuck. Good morning, and thank you all for joining our first quarter earnings call. We had a strong Q1 driven by solid execution across the business and continued focus on our strategic priorities: maximizing our growth portfolio, accelerating our R&D pipeline, driving operational excellence, and strategically allocating capital. Our plans to transition the portfolio to deliver long-term sustainable growth are underway. Today, I will begin with some comments on our first quarter performance and highlight our recent accomplishments. Then I will discuss our pipeline and upcoming catalysts that can further strengthen our long-term growth potential. I'll end by addressing the current operating climate. Starting with performance on slide four, our growth portfolio again delivered double-digit sales growth driven primarily by strength in key marketed products, including our IO portfolio, Breyanzi, Reblozyl, and Camzyos. As expected, our legacy portfolio performance primarily reflected the impact of generic entries for certain older brands. Turning back to our growth portfolio, let me speak to our recent launches. As you'll recall, in October, we launched Cobenefit, the first truly novel mechanism for the treatment of schizophrenia in decades, and we are pleased with the early prescription trends. Patient and physician feedback is very positive, reflecting its favorable tolerability and efficacy profile and noting that patients are observing cognitive benefits. In January, we launched OpdivoCuvanti, the subcutaneous formulation of nivolumab, which is also receiving promising early feedback from practices and patients. Based on our performance in the first quarter, we are increasing our top and bottom line guidance. David will provide more detail shortly. We continue to advance our pipeline during the quarter, with several recent announcements. Opdivo plus Yervoy received FDA and EMA approvals for the treatment of first-line liver cancer and FDA approval for use in MSI high colorectal cancer in the US, further solidifying its leadership in immuno-oncology. Breyanzi was approved in the EU for treatment of follicular lymphoma, expanding our cell therapy presence in blood cancers. Camzyos received approval in Japan and a favorable label update in the US, which reduces the REMS echo monitoring requirement in the maintenance phase. In addition, Milvexian reached an important milestone in the quarter with the completion of enrollment in the Librexia atrial fibrillation trial. This event-driven study remains on track to read out in 2027. Turning to slide five and our two recent top-line readouts, while we're disappointed that the Camzyos Odyssey study in non-obstructive HCM and the Cobenfi Arise study in adjunctive schizophrenia did not meet their primary endpoints, I want to put the results in proper context. Although these are not the results that we had hoped for, neither outcome meaningfully alters our strategy or growth trajectory. For Camzyos, the study strongly suggests that non-obstructive and obstructive HCM behave distinctly. We do not expect these data to significantly impact peak sales, and our focus remains on our existing obstructive HCM indication, which represents the vast majority of the market opportunity. For Cobenfi, while it did not demonstrate a statistically significant improvement as an adjunctive treatment in the Arise trial, these data are encouraging, showing a noteworthy improvement for the majority of patients as well as a tolerable safety profile. As we noted earlier this week, we will complete a full evaluation of the phase three trial data and will plan to engage with the medical community and regulators to discuss these results and potential next steps. It's important to remember there are no currently approved adjunctive therapies for schizophrenia. Our commercial strategy remains focused on monotherapy, which accounts for 70-80% of the market, where our goal is for Cobenfi to become the foundational treatment. As I mentioned earlier, Cobenfi's differentiated profile is resonating. We're seeing strong early uptake. Looking ahead, we're confident in the strength of our portfolio and the breadth of opportunities in our pipeline. We expect several of these opportunities to come this year, such as the first look at one of the phase three trials for Cobenfi in Alzheimer's disease psychosis, where there is significant unmet need. We also plan to initiate several new pivotal studies this year, including seven phase three studies for Cobenfi across three indications: Alzheimer's agitation, Alzheimer's cognition impairment, and bipolar one, all expected to be underway by midyear. At the same time, in oncology, we're advancing two next-wave solid tumor programs. First, our EGFR PER three antibody drug conjugate Isobren is expected to begin enrollment in a pivotal study in first-line triple-negative breast cancer in the coming months. Second, our androgen receptor degrader program in prostate cancer has begun enrolling patients in a pivotal study. We also expanded our registrational program for a glaukatomide, a potential first-in-class CELMoD for lymphoma. The Goal Seek four study in second-line plus follicular lymphoma will explore the combination of gulcotamide with rituximab, where we know effective chemo-free regimens are needed for patients. In total, we believe these programs represent significant opportunities over the back half of the decade given the unmet medical need. The numerous pivotal data readouts in the coming years have the potential to meaningfully enhance the long-term strength of our growth portfolio. Our commitment to innovating for patients remains strong as we advance first and/or best-in-class medicines both through internal discovery and business development, which remains a top priority. In terms of BD, we're actively pursuing opportunities that can enhance our growth profile, there's strong strategic alignment and financial rationale. With our renewed organizational agility and balance sheet in a solid position, we have the flexibility to act decisively when we find the right opportunities. As we've said, maximizing long-term growth starts with strong execution this year and over the midterm. The growth portfolio is performing well and our pipeline is advancing. At the same time, we're taking deliberate actions to rightsize our cost structure and become a more efficient company. Overall, I'm confident we will deliver on disciplined execution as we position the company for top-tier growth by the end of the decade. Before I turn it over to David, I'll just say a few words on the current global operating climate. There's a lot of uncertainty, whether related to tariffs, a potential economic downturn, or restructuring at the FDA and HHS. This backdrop notwithstanding, our focus continues to be on building a strong and resilient company that can navigate and manage through operating complexities. We remain confident in our ability to deliver for our patients, employees, and shareholders. Our strategy is clear, and we're executing. We have a rich pipeline with strong growth potential. We act swiftly when we see opportunities, whether it's business development to bring in great science or pursuing efficiencies in our business. And finally, we are laser-focused on execution as you can see by our strong performance this quarter. With that, I'll turn it over to David.

Thank you, Chris, and good morning, everyone. Our performance in 2025 is off to a strong start. We're executing our growth strategy in terms of driving revenue for key products while also rightsizing our cost structure. Our persistent focus on execution is strengthening our foundation and positioning the company to deliver long-term sustainable growth. This morning, I'll provide highlights of our performance in the first quarter and then review our outlook for the year. Now turning to the first quarter on slide seven. Total company revenues were approximately $11.2 billion, reflecting strong demand across our growth portfolio, including the launch of Cobenfi, offset by the impact of generics and Medicare Part D redesign, primarily in our legacy portfolio. Global sales of the growth portfolio increased approximately 18%, led by key brands, including our IO portfolio, Breyanzi, Reblozyl, and Camzyos. Turning to key product performance on slide eight. Opdivo had a solid first quarter, with global revenue up 12%, driven primarily by volume growth. Separately, initial sales of Opdivo plus Kuventig were approximately $9 million in the quarter. The US launch is progressing well, with early adoption across multiple tumor types. We continue to believe that physicians will convert approximately 30% to 40% of patients to this new product. Let's turn to hematology on slide nine. Reblozyl global sales reflect the continued strength across first and second-line MDS-associated anemia. Higher sales in the US were related to increased use in the first-line setting. Outside of the US, Reblozyl's strong double-digit sales were driven by demand across newly launched markets in Europe and Japan. In cell therapy, Breyanzi was another key contributor to our strong growth portfolio performance in the quarter, driven by demand across all indications. US sales more than doubled and international sales tripled. Moving to cardiovascular on slide 10, let's start with Camzyos. Sales in the first quarter nearly doubled, benefiting from strong global demand. Brand momentum in the quarter was driven by new patient starts and a 9% increase in total prescriptions for the three months ended March 31. We continue to expect steady growth of Camzyos in 2025 due to its compelling efficacy and safety profile in obstructive HCM. Turning to Eliquis, global sales were down 3% in the quarter, mainly due to the impact of Medicare Part D redesign in the US. We continue to expect total Eliquis revenue to be stronger in the second half of the year, primarily due to the Part D redesign and elimination of the coverage gap. Moving to immunology on slide 11. Across our immunology portfolio, we saw higher commercial rebates, as previously discussed, related to improved access and Medicare Part D redesign. First-quarter Certiktu sales reflected demand growth and gross-to-net impacts related to higher commercial rebates. We will continue to leverage our broader access position to drive further demand growth. Now moving to slide 12, in its first full quarter on the market, Cobenfi is off to a solid start with sales of approximately $27 million, driven primarily by demand. During the quarter, weekly total prescriptions remained strong, tracking ahead of all branded schizophrenia launch benchmarks. Now let's move to the P&L on slide 13. Gross margin was approximately 73%, primarily due to product mix. Operating expenses were more than $500 million lower compared to the same period last year, primarily reflecting the results of our strategic productivity initiative. Our effective tax rate in the quarter was 15.1%, primarily driven by earnings mix. Overall diluted earnings per share were $1.80. Turning to the balance sheet and capital allocation highlights on slide 14. Our financial position remains strong, with approximately $12.1 billion in cash equivalents and marketable securities as of March 31. We generated cash flow from operations of approximately $2 billion in the first quarter. In terms of capital allocation, we maintain our strategic and balanced approach. As Chris highlighted earlier, business development remains a top priority. We continue to actively assess opportunities in line with our strategy. We remain on track with our plan to pay down $10 billion of debt relative to our 03/31/2024 balance. Our capital allocations also include rewarding shareholders through the dividend. 2025 marks our ninety-third consecutive year of dividend payments. In addition to strategically allocating capital, we are also driving operational excellence through our previously announced strategic productivity initiative. With respect to our 2025 expansion, we expect to realize approximately $2 billion in annual cost savings by the end of 2027. We remain on track to deliver $1 billion of these savings by the end of this year. Now turning to our outlook starting with revenue on slide 15. We are increasing our full-year revenue guidance to a range of $45.8 billion to $46.8 billion, reflecting strong performance of our growth portfolio, better-than-expected legacy sales in the first quarter, and a favorable impact of approximately $500 million related to foreign exchange rates relative to our previous 2025 guidance. Additionally, we now expect the legacy portfolio to decline approximately 16% to 18% for the year, a more moderate rate than previously anticipated due primarily to Revlimid's strong Q1 performance. We now project full-year sales of Revlimid to be at the top end of our previously guided range, $2 billion to $2.5 billion. We maintain our gross margin guidance at approximately 72%. We continue to expect underlying operating expenses to be approximately $16 billion, with an additional impact of about $200 million due to foreign exchange rates. Expenses are now anticipated to be higher in the second half of the year compared to the first half, reflecting the timing of investments. Our operating margin target of approximately 37% for the full year remains unchanged. For OI and E, we now expect annual income of approximately $100 million due to higher-than-anticipated royalties and favorable interest income. Although the first-quarter tax rate was slightly lower than our full-year projection, we're maintaining our full-year tax rate guidance of 18%. As a result of these changes, we are raising the midpoint 2025 non-GAAP EPS guidance by 15¢ per share, with an expected range between $6.70 and $7. Our revised guidance includes the estimated impact of current tariffs on US products shipped to China but does not account for any potential pharmaceutical sector tariffs. In summary, our strong performance in the first quarter reflects our focus on disciplined execution. We are well-positioned to manage the near-term uncertainty in the macro environment while advancing our long-term growth strategy. And with that, I'll now turn the call over to Chuck for Q&A.

Thank you. We will now begin the question and answer session. And the first question will come from Christopher Schott with JPMorgan. Please go ahead.

Great. Thanks so much. Maybe just two ones for me. Just first, bigger picture, as we think about tariffs and the dynamics going on right now, can you just provide any color on the company's US manufacturing footprint ability to shift manufacturing to US over time, just in general, your ability to navigate dynamic? I know the details are lacking right now, but just help frame out how you're thinking about this. Second question for me was on Cobenfi just in light of the adjunctive results we saw. Talk a little bit about what this does for your outlook on Cobenfi. And just how you think about kind of use in adjunctive given the negative trial results we saw? Thanks so much.

So thanks for the questions, Chris. I will start with your tariff question. I'll turn it over to Adam to address Cobenfi. First, let me just say at the outset that we certainly appreciate the administration's efforts to enhance US manufacturing. As we think about the pharma sector though, obviously that needs to be done in a very thoughtful and deliberate way. As you can appreciate, there's a lot that we don't know here. We don't have specifics on the outcome of this investigation. But our hope is that wherever this lands, we ultimately end up enhancing the competitiveness of US companies like Bristol-Myers Squibb Company. We are a significantly US-based company today. We have been investing in core infrastructure in the US for many years. So we need to ensure that ultimately our trade policies enhance the sector and support efforts like the ones we've been making. In terms of our exposure, again, we've said the tariffs that have gone into place namely around China, have been reflected in the guidance that we provided today. It really is simply too early to provide a lot more on pharma-specific sectors. So we'll have to wait for the specifics there. And once we have them, obviously, we'll continue to update you. Adam, do you want to talk about Cobenfi?

Sure. As Chris stated in his opening remarks, we don't expect these data to have a meaningful impact on Cobenfi sales, Chris. Recall, about 70% to 80% of patients are treated with monotherapy. Clearly, that's the most significant commercial opportunity. And it's also the treatment goal for psychiatrists. In the real world, psychiatrists exhaust monotherapy options before trying adjunctive use, which typically occurs after several failed monotherapy treatments, often in later lines of therapy. Our focus is moving Cobenfi earlier in treatment. That’s exactly what we've been seeing in the market. In fact, roughly 40% to 50% of the Cobenfi prescribing today is now in second line and third line. Physicians have also told us both in research and through advisory boards that missing the endpoint of the study will not impact monotherapy usage or their willingness to use Cobenfi, particularly when you look at the safety of the study results. There's a significant unmet need that still exists for patients with schizophrenia, and Cobenfi fills the need with its efficacy and safety profile. That's why we're seeing strong uptake in the market since launch, with positive feedback from both physicians and patients. So we're going to continue to execute our plan for Cobenfi to become the foundational monotherapy treatment and we have a clear opportunity to continue to drive significant growth.

Thanks, Adam. Operator, can we take our next question please?

So, Chris, a big picture question for you. I mean, given that there has been a lot of cost rationalization over the last couple of years. How are you thinking about R&D here? I mean, there have been a couple of setbacks here with melanoma and all. But as you go forward, I mean, when you think about taking bets, is there a change in the thought process? And how are you thinking about the future pipeline and riskiness of it? Thank you.

Let me say a few things and then obviously just given the focus on R&D, Samit, you can certainly weigh in here. As you noted, we've been spending a lot of time over the last eighteen months focusing on a few key things. First, making sure we're driving strong execution. That strong execution in commercial, but really across the enterprise. I think you've seen the fruits of those efforts in terms of our performance last year and continuing into Q1 performance. Second, as you know, we've spent a lot of time focusing on making the organization more efficient and more agile. That was reflected in the cost optimization efforts we had last year as well as in the $2 billion initiative that we announced in our Q4 call. Third, we are committed to driving additional productivity coming out of R&D, delivering on the breadth of new opportunities we have coming out of our mid-late stage pipeline. That will continue to be our focus. As I step back and look at the opportunities for the company, my confidence that we can deliver on our growth ambitions remains strong. While the two studies that read out over the last couple of weeks were certainly not the results we had hoped for, they have no or modest financial impact on the company and do not impact our growth prospects. We're going to continue to stay focused on delivering against that pipeline. We're going to continue to invest in strong areas of science where we have the opportunity to add significant value, and we can deliver on our mission for patients and shareholders. Also, keep in mind that we're in a very strong financial position. That gives us strategic flexibility to continue to source innovation externally, which will also be very much focused on from a capital allocation standpoint.

Maybe, Samit, do you want to add?

Yeah. Just to add a couple of things, Chris. Thanks, Mohit, for the question. If we just put this into context, what has happened over the last five years since I've been here at least? We've had 43 major approvals. Since that time. That speaks very loudly of the productivity of this organization, this is in the top quartile ninetieth percentile, actually. You look across the industry from a KMR data perspective. Certainly, the three setbacks that you mentioned are very notable, and we've taken those into account from an R&D perspective. We've learned from these experiences. But what it does is emphasize the need to look forward to 10 plus new molecular entities that we want to bring forward by the end of the decade, and 30 plus new indications that we have planned for by the end of the decade. They will start reading out soon, and they are just getting underway. Yes, there’s a small opportunity in myelofibrosis that will read out later this year. There is also ADAPT, which is very eagerly awaited. In 2026, there are many readouts for new molecular entities. We are well-planned for those and looking forward to growing the portfolio from there.

Right. Thanks, Samit. Let's move to our next question please.

Thank you. Maybe just another question on Cobenfi. Just wondering how the readout from ARISE impacts your levels of confidence in Alzheimer's psychosis readout and perhaps any additional trials that you may be planning? Thank you.

Thanks, Luisa. I'll ask Samit to take that.

Yes. Thanks, Luisa, for the question. ARISE data has no impact. When we think about Alzheimer's disease psychosis, there are a few reasons for that. One, the disease is very different. Two, Alzheimer's disease overall plan in psychosis well as future cognition impairment and agitation are based on the data that have already been generated many years ago, a couple of decades ago, for zenomeline, which showed statistically significant benefits in the behavioral patterns in patients with Alzheimer's disease. Also, from a design perspective, in Alzheimer's disease psychosis, there's a longer duration of treatment of up to twelve weeks, which is beneficial as we think about observation of output for primary and secondary endpoints. We're confident in the conduct of our studies, and as you know, we are initiating several studies as Chris spoke about earlier, seven different Phase III trials this year. We're really looking forward to the initiation of that program.

Great. Thank you.

Let's move to our next question.

Hey, guys. Good morning. Thanks for the question. Chris, just got a couple for you. Another one on tariffs. If you could just talk about at a high level the flexibility of transfer pricing assumptions from an IP or tax perspective regarding manufacturing. I wasn't sure also about your ability to step up inventory as a potential strategy as well. Then second on BD, how do the recent deals for Chinese assets factor into your strategy, urgency, etcetera? Thanks so much.

Thanks for the questions, Jeff. Hope you're doing well. I will start and then I will ask David to chime in a bit on the transfer pricing component of your tariff question. Obviously, as I said earlier, we've got a lot that we still have to wait and see that comes down with respect to the impact of any pharma industry sector tariffs. We appreciate the fact that the administration is taking time to study this issue. You know well, Jeff, that in this industry, our manufacturing networks are incredibly global supply chains, with inputs coming from all over the world. There are long lead times in terms of making changes to the supply chain, and manufacturing processes are highly complex. Certainly, with respect to Bristol-Myers Squibb Company, the medicines that we make are critical for patients and can't be easily substituted. Having said that, in anticipation of potential tariffs, we continue to execute mitigation efforts. We have a broad global manufacturing network where we're looking for opportunities to optimize with tariffs in mind. As I mentioned, we already have a significant presence in the US, and we're continuing to invest. We've already undertaken efforts to reduce risk of disruption and shortages from efforts like onshoring, and we're going to continue those efforts. We're also going to continue to engage with the administration to ensure that ultimately whatever comes down is well thought through and deliberate in terms of how we move forward. But David, anything you want to comment on transfer pricing, then I will come back to BD.

Yes. Jeff, thanks for the question. You know, Bristol-Myers Squibb Company has a broad manufacturing network, both in the US and globally, and we're not overly reliant on any single country in terms of our supply chain. The situation related to tariffs continues to evolve; we're closely assessing that. We have a cross-functional team in place that's evaluating the flexibility, and we have a tremendous amount of flexibility to move our manufacturing around should any potential tariffs come up. As we learn more and as there are more specifics, we will update you when that becomes known. But as Chris said previously, we're continuing to ensure that the administration as well as policymakers understand the impact of these tariffs and any potential future actions on both patients and the industry.

Then Jeff, with respect to business development, it is our top capital allocation priority. That includes both partnerships and acquisitions. As you note, we're going to source that innovation from wherever it comes from, and there's certainly exciting innovation in China. We'll be focused on a few things though. We're focused on strengthening our position in core therapeutic areas that we operate in by bringing in promising areas of science assets where we can improve the growth profile of the company. It's important that we like the science, we feel we're the rightful owners, and that the financials make sense. Again, that's about strengthening the growth profile in key areas. We believe we can drive value for the company and shareholders. If we hit those criteria, we have the financial ability to execute and move quickly.

Thanks, Chris. Next question please.

I wanted to touch on the rumblings we're hearing about the potential implementation of most favored nation's pricing in regard to drug price negotiation in the IRA. What are you hearing? And more importantly, what's your stance on how that could impact negotiations for IRA drug prices going forward? Secondarily, I'd love to touch on the potential positive impact of relaxed cardiac monitoring for Camzyos and how this could help accelerate sales with that franchise. Thank you so much.

Let me start, Evan. Thanks for the questions. Then I will turn it over to Adam on the second part of your question. Clearly, with respect to MFN and international reference pricing, there's a lot of focus here. I think the president and the administration are rightfully focused on the differential between US and ex-US net pricing. The way we think about it is you have to look at both sides of that equation. With respect to ex-US net prices, we actually agree with the administration: countries outside of the US need to allocate more healthcare spending on innovative medicines. So we're engaging directly with the administration, working with our pharma partners, and supporting their efforts to leverage any tools necessary to get ex-US countries to allocate more healthcare spending to the types of innovative medicines that we develop at Bristol-Myers Squibb Company. In terms of the US pricing environment, our perspective here is unchanged. We have to address the complexity of the US healthcare system. 65% of every dollar spent on pharmaceuticals in the US goes to middlemen. These entities neither discover, develop, nor deliver medicines to patients, yet they control what patients pay in terms of out-of-pocket costs. There are ample opportunities for making that system less complex and ensuring that ultimately any rebates that we provide as an industry improve patients' costs for medicines. Beyond that, we continue to be focused on addressing other aspects of healthcare: fixing some of the more egregious aspects of the IRA, like the pill penalty and addressing the spillover risk, is top of mind. We also remain very concerned about abuses in the 340B program, which will be a big focus area for us as well.

Evan, thanks for the question. We've continued to deliver strong growth for Camzyos. We virtually doubled sales versus the prior year in the quarter. Our goal has been to ease the burden of ECHO requirements for both patients and physicians. Based on long-term clinical data and our robust data collection, our label change reflects the FDA's confidence in the safety and efficacy of Camzyos, now with over 15,000 patients prescribed Camzyos in the United States. The label has been updated to reduce the frequency of echo monitoring for patients taking Camzyos from every twelve weeks to once every six months in the maintenance phase. This will simplify processes for both patients and physicians, open up additional capacity at the centers of excellence, and allow physicians to treat more patients. It also reduces the burden on patients and physicians' time and alleviates resourcing at the centers of excellence. We're just in the early stages of launch, but initial customer feedback has been very positive since the label change. Taken together, we’re seeing good momentum for Camzyos, and we expect continued strong growth.

Thanks for the background, Adam. Next question, please.

Great. Thanks for taking the questions. Two for me. First on the Cobenfi launch, Adam, I was just wondering if you could elaborate a little bit on what you're seeing with the prescriber base right now, in terms of kind of breadth and depth. I know the slides also mentioned a one-time gross-to-net impact in the first quarter. So just wondering if you could elaborate on that and how we should think about the cadence of gross-to-net over the course of the year? And then David, I know you're not going to give 2026 guidance yet, but again, you reiterated the 37% op margin for 2025. How should we think about 2026 considering there are still many moving pieces as we think about next year? Thank you.

Thanks, Terence. We're very pleased with Cobenfi's launch performance. The launch is off to a strong start. We're now over 1,600 TRxs per week, and it's tracking ahead of all branded schizophrenia launch benchmarks. We've made very good progress achieving Medicaid and Medicare access. We're now at virtually 100% access across both channels. We're making good progress with commercial payers. Because of this access, it is allowing us to move Cobenfi up earlier in treatment, which is critical. Importantly, we are hearing very encouraging feedback from both patients and physicians around Cobenfi's efficacy and safety profile, with physicians noting efficacy in positive symptoms, negative symptoms, and improvement in cognition and clarity of thought. A critical metric for us is growing the number of new trials, and we’re observing consistent growth week over week in new trialists since launch. We have an opportunity to continue to expand and reach the 30,000 psychiatrists on our target list. We expect to see strong uptake over 2025, with a ramp in the back half of the year after we increase the frequency of calls to our customers to break those reflective habits. We know the work we need to do to maximize this launch, and will work to make this a very big product for the company over time. Regarding gross-to-net, as you saw in the slides, we delivered $27 million in net sales for the quarter, which was inclusive of $9 million in the gross-to-net benefit. Underlying demand for Cobenfi is strong, and at launch, we made assumptions around payer mix and discount. Q1 was essentially a true-up for favorable gross-to-net in Q4. Our discretionary spending has remained disciplined, and we expect increases in gross-to-net for the full year given our strong access.

Great. You know, Terence, look, as far as 2026 goes, we're not going to provide guidance on this call. But the way I would think about it is we remain very financially disciplined by the strategic productivity initiatives that we've rolled out. As we've said, we're well on our way this year to delivering $1 billion in savings relating to that and on track for that $2 billion by '27. That gives us flexibility. We continue to leverage AI and look to automate further, which is making us more efficient. We see greater opportunity there as well. As we've shown in the past, we're constantly looking at our portfolio and prioritizing it accordingly. That being said, we feel we have a lot of levers to manage this business while investing in long-term growth, which is critically important to strengthen our position. Our cash position remains strong, and business development remains a priority, so we look to bring in new assets that we can invest behind.

Great. Thanks, David. Next question, please.

Hi, guys. Thanks for the question. Just a couple on Camzyos for me. So one on the Alzheimer's psychosis trial. What's your expectation for the bar for that study? What's a meaningful reduction in hallucinations and delusions we should be thinking about? And then second, just a clarification on the Camzyos gross-to-net question. If you back out the Cobenfi numbers ex that one-off, it looks like gross-to-net is 35% to 40%. Should we expect this to increase? Have you been more aggressive on rebates for traction?

Let me have Samit take the first part of your question regarding Cobenfi. Adam can take the second part about gross-to-net.

Yes. For the Cobenfi ADP trial, remember these are trials comparing to placebo. What we need to show is statistical significance in the primary endpoint for NCI hallucinations and delusions in this patient population. We are not pre-defining what the real number needs to be to be clinically meaningful. I think, over here, there are no drugs approved, so any improvements are good. We do know from the prior studies of zenomeline that there have been remarkable improvements not only on these symptoms but also on elements such as cognition. We will continue to monitor that. The data will read out for the first trial in the second half of this year, at which point, we can share more.

As it relates to growth in that, we do not share specific discounting rates. But as I mentioned earlier, we've been very disciplined in discretionary gross-to-net spend. What we saw for the first quarter was just a true-up for a projection we made that was favorable in Q4. We expect to see an increase in gross-to-net for the full year because of our 100% access in both Medicaid and Medicare.

Thank you, Adam. Let’s take our next question, please.

Hi, all. Thanks for taking the question today. A couple from me. First, as it relates to tariffs, we've seen several companies make statements about their capital investments within the US in terms of manufacturing and R&D. I wonder if you could provide comments on Bristol's perspective there in terms of committed capital expenditure going forward? And then the second question is just as we think about M&A, you have some upcoming key data readouts like Milvexian as well as subsequent Cobenfi trials. Can you talk about how you're approaching M&A decisions in the context of these internal success rates and timing of these data reads?

Sure. I'll take both of those. First, as I mentioned earlier, we're a company that is significantly based in the US today. If you look back over several years, we've been investing in core infrastructure related to R&D, technology as well as CapEx. We plan to continue investing in those same areas in the US in the coming years. Ultimately, trade policies should enhance the sector and support efforts like those we've been making and support the competitiveness of US companies. Regarding business development, it's remains a priority for our capital allocations. We don't think about it in terms of specific data readouts of our internal programs. Clearly, long-term R&D is a part of how we will source innovation. When I look at it, we were clear last year that we were going to focus on digesting the deals done at the end of 2023, and most importantly, ensuring that we got Cobenfi off to a strong launch. For this year, there are no internal constraints to execute on business development. We still want to be conscious about ensuring the science looks good, and that we believe it adds value to our growth profile. You'll see us continue to look for opportunities aligning with those criteria.

Thanks, Chris. Let's move to the next question please.

Thank you for the questions. I have a question on long-term guidance. Chris, when you took over, you kind of stopped providing guidance. Can we expect you to revisit this at some point? I know on trough guidance, you said end of the decade. I think the key there is the absolute level of the trough number. Wondering if you can assure us that it won't go lower than $6 a share. That's where a lot of analyst numbers bottom out. Then second question is just transfer pricing. Companies commonly set these up with major brands, not all brands, and levels of disclosure are almost non-existent. Any color you could share regarding which particular brands Bristol has transfer pricing arrangements in place? The tariffs that could ensnare us are a concern.

Thanks for the questions, Tim. I'll start and then I'll turn it over to David to talk about transfer pricing. We're not going to provide long-term guidance as a standard course. This is a philosophical point of view for us. Our focus has been to drive sustained top-tier growth into the decade. We discussed how we will deliver on that and how we think about guidance is through elements that we can hold ourselves accountable for. We're going to provide annual guidance and update it as business conditions warrant. On the trough, that will align with that philosophy. Rest assured, we will do everything to shorten the depth of the trough and move it as close as we can so we can return to sustained long-term growth by the end of the decade.

Yes. Tim, on transfer pricing, I know this question has come up a few times. Transfer prices are determined by tax law, both in the US and in other jurisdictions where we operate. So from a tariff perspective, I would not be thinking transfer pricing. They are determined by tax laws in the jurisdictions where we operate.

Thanks, David. Let's move to the next question operator.

Thanks very much for the updates. I have two questions. First is a high-level question, and one is on Cobenfi. The industry faces numerous government threats in the US. Could you comment on how Bristol's leadership team and board are engaging differently today with Washington to defend the industry and the company? Regarding the Cobenfi adjunctive trial failure, could you discuss the disappointing results in the risperidone subgroup and whether you believe that risperidone DDIs with Cobenfi may have the efficacy in that subgroup and how you may evaluate Cobenfi in combination with other therapies in the adjunctive setting in the future?

Thanks for the questions, David. I'll ask Samit to start with the second part, and then I’ll address your more general questions.

Sure. Thank you, David, for your question. For Arise, certainly, as Chris has already mentioned, we observed notable improvement in terms of band scores. We'll evaluate data on the non-risperidone antipsychotic therapy subgroup and assess all avenues related to understanding the data in the risperidone population, as well as DDI potentials and PGP in CYP2D6 pathways. Following this, we will define next steps, which could include engaging with the regulators as well as conducting additional studies moving forward.

Regarding your industry question, we fully agree that America has a significant advantage in the biopharmaceutical sector. Over 70% of R&D occurs here. What drives this is a healthy ecosystem that supports innovation and rewards it, ensuring companies can deliver innovative medicines to patients. Americans benefit by having faster access to more innovation than anywhere else globally. The ecosystem's core includes strong government support for research and a clear regulatory framework. We have not seen a notable impact on our business from changes in Washington to date but will monitor implications closely. We're committed to strengthening the ecosystem for innovation in the US and will engage the government on pricing, supporting payments for innovation. Importantly, we aim to improve the complex aspects of the IRA, working on issues like the pill penalty and addressing spillovers. Additionally, we are focused on getting countries to allocate more healthcare dollars towards innovative medicines.

Thank you, Chris. Let's take our next question please.

Hi, good morning. Thanks for taking the question. The BD messaging is coming through clearly, and the focus on endogenous events won’t be a stage gate. My question is on exogenous events and the extent to which uncertainty around tariffs and the FDA drug pricing environment are stage gates to pursuing drug pricing, either on your side or on the target side?

I think you mean how those exogenous factors impact our ability to engage in business development. We've focused on securing a strong financial position through executing the business, as you've seen in this quarter. We've also targeted making the company more efficient, which gives us financial flexibility to engage in business development. I believe this flexibility is more crucial than the exogenous factors referenced. Again, we'll keep business development as our top priority, ensuring we have the financial position to move ahead while remaining disciplined in our focus.

Thank you, Chris. Let's move to the next question.

Thank you so much. Two questions, probably both for Samit. Firstly, just to clarify your prepared remarks and responses. Bristol seems to see a path to positive regulatory outcomes on the existing ARISE data. Is that correct, or is there no such path? And secondly, to what extent did the Milvexian Phase III trial benefit from the competitor Phase III stoppage? For instance, did enrollment jump 10%, 20%, and given that, why hasn't timing of the primary endpoint changed?

Yes, thank you, Steve, for the questions. For Arise, we would not speculate at this moment. We need to review the complete data set, including all other endpoints. While we will engage with regulators to decide the next steps, we are tracking the totality of the data diligently. As for Milvexian, we monitor the events from our side closely. Our overall event rate remains low for the atrial fibrillation trial. We haven't modified timelines; we'll continue working with J&J to communicate any changes. Look forward to readouts for the ACN SSP trial in 2026 and AF in 2027.

Right. Thanks, Samit. Next question, please.

Hi, this is Zach Dunn on for Seamus Fernandez. Thank you. A few questions on Camzyos and your CMI portfolio. How defensible is your first-in-class position with Camzyos, especially with the establishment at HCM centers and updated REMS in light of AfriCampton potentially coming to market this year? Regarding non-obstructive HCM and myosin inhibition, what read-through, if any, might there be to your development efforts in HFpEF? How do you characterize prospects for success in HFpEF with MYK-224?

Thanks, both great questions. Adam, you can start.

Let me start. Thanks for the question. As I mentioned, we continue to deliver strong growth with Camzyos, establishing a strong revenue base and expect continued growth from expanding our prescriber base. We're seeing high persistency, ensuring long treatment durations while adding new patients weekly. We're focused on increasing our depth of prescribing in the large centers of excellence, and the label change we mentioned earlier should help accelerate that. We're also making good progress expanding into the community of cardiologists, seeing solid growth in the number of trialists week over week. Competition, we've always anticipated competition in the space. We don't note any significant differences clinically with AfriCampton. We've interacted with many thought leaders, and most have indicated that the data they presented appear undifferentiated. We'll be ready when they come to market. We expect to maintain our leadership in this space.

Thank you for the question on the NHCM results and HFpEF for MYK-224. We need more analysis of the data as Chris mentioned. There seems to be a distinct behavior between obstructive and non-obstructive HCM. We had hoped those biomarker changes would translate into clinical benefits in NHCM but did not happen. In HFpEF though, those biomarkers have historically tracked well with drugs that worked in HFpEF, so it's early to define what the outcome may look like. We're currently enrolling a large cohort of patients in the Phase IIb study for MYK-224, and once results are available, we'll be able to give more insight into the impact on the HFpEF program.

Thanks, Samit. Let's move to our next question please.

Thanks for taking the question. Going back to capital allocation, I know a lot has been asked already, but could you unpack what's driving this renewed emphasis on business development? What's your view on the current landscape considering structural challenges and uncertainties? Any comments on size and what you're looking to solve for as you scan the landscape of external assets? Are you focused on near-term revenue growth or earlier stage assets? What therapeutic areas are of interest?

Certainly. Our capital allocation focus has not changed. Business development is a top priority. We emphasized that last quarter and previous ones. We're focused on strengthening our key market areas and improving the company's growth profile. We've consistently said we evaluate opportunities without regard to size. What matters most is whether it strengthens our therapeutic areas. We're looking at areas with innovation we can add value to and whether the financials align with our strategy. Our overarching priority continues to be to strengthen the growth profile of the company entering the decade and into the 2030s; we will continue to search for early-stage programs that meet those criteria.

Thanks, Chris. Let's move to our next question, please.

Hi, thanks for taking my question. Two quick ones. I know it’s early days, but are there any particular indications or physician settings where you're seeing more adoption or interest in Cobenfi so far? Can you provide insight into how meaningful the market opportunity expansion is and provide any sense of what would be a clinically meaningful benefit in transfusion independence?

Matt, thanks for the question. We're making good progress with Opdivo and QVANTAKE. We're three months post-launch, and feedback has been positive. Most use so far has been in the community setting, about 80%, as expected. We’re focused on increasing breadth in both community and academic settings. Encouragingly, we're seeing physicians apply Opdivo plus Yervantes across multiple tumor types, tracking as per our expectations. One detail I would mention: we issued a temporary J code like all part B biologics impacting reimbursement timing, meaning some accounts wait for a permanent J code. Therefore, subcu conversion will take time to ramp. We anticipate a J code by July 1, and expect a ramp-up in the second half. Overall, we’re pleased with the early launch.

As for the overall market opportunity of myelofibrosis and anemia associated with MDS for Reblozyl, it shows modest commercial promise. The majority of the business for Reblozyl is driven by first-line indication. Our teams are focused on driving this first-line opportunity and we're making good progress in the United States while unlocking reimbursement outside. We expect continued growth. The next critical readout for Reblozyl, non-transfusion dependent, could open another part of the marketplace. Nonetheless, we’re focused on current indications that we possess.

Thanks, Adam. Great. Let's move to our next question, please.

Hey, guys. Thanks for the question. For the EXALIBER study with MRD negativity readout later in the year, do you anticipate obtaining approval based on that MRD negativity outcome as an intermediate endpoint? With CAR T moving into the second-line and later settings, how might that shape the opportunity and the threshold for utilizing iveratomide in the triplet if it shows benefit over DVD? Thanks.

Thanks for the question, Sean. Samit, you can start, and then Adam may want to weigh in.

Certainly. Remember the trial is designed around MRD and then includes PFS and overall survival endpoints. The study is critical for the second-line plus population. As we look at the MRD data, we must ensure that the other endpoints are moving positively, as this will be needed from a regulatory perspective to support approval. Once the readout occurs, we can provide more clarity about its regulatory potential.

As you know, the market is very competitive. But as Samit noted, it's quite fragmented. While cell therapies are moving up in treatment lines, they are limited to academic centers, leaving a significant community market needing novel small molecules. We support the introduction of these novel agents due to their tailored efficacy, manageable toxicity profiles, combinability, and convenience. We've ongoing pivotal trials across Iver and Mezi for triple combinations with Dara, even looking head-to-head versus Revlimid in maintenance after transplant. The upcoming ACCALIBER readout for MEVI also excites us regarding the potency of sacitamab, with possibilities for early readouts in 2026.

Great. Thanks, Adam. Let's move to our next question, please.

I have one on your radio franchise and then a big picture question. Can you talk about expectations from RACE101 in first-line cell lung cancer that's expected later this year? Additionally, any thoughts on the FDA commissioner’s vision for changes at the FDA at different levels? Was there anything particularly impactful for timelines or drug development and post-marketing surveillance?

Thanks for the question, Kripa. Perhaps Samit can take both those questions.

Yeah. Thank you, Kripa. We look forward to the RACE study readout in extensive stage small cell lung cancer. The radial ligand therapy is combined with standard chemotherapy, and we expect to analyze safety primarily, and efficacy secondarily. Overall, historical controls will provide context. Chemotherapy efficacy is notable, but durability is often challenging. Now regarding the FDA, we have seen timely approvals this year, including for first-line HCC and MSI high colorectal cancer. Meetings across therapeutic areas have been timely and even switched to in-person. We will work constructively with regulators to prevent delays for the transformational therapies we aim to deliver.

Thanks, Samit. Let's take our next question.

Good morning, guys. Thank you for the question. One for Chris. I totally understand the backdrop is fluid, but is there an initial data point or policy decision that will inform next steps? For example, would visibility on US corporate tax reform be a starting point, or would you need the actual pharma tariff rates or any color like that to budget accordingly? And then the second for Samit: What are your thoughts on the recent PD-1 and VEGF datasets? Does the data seem consistent or competitive to PD-1? Just wanting to get your views there.

There are multiple aspects to the policy environment that are in flux; we’ll monitor each and every one. There isn't a singular event raising significance. A major aspect of the policy that we shouldn’t overlook is the importance of tax policy—making the US corporate tax rate competitive is vital. The reduction in 2017 to 21% had a positive impact on investment in the US for R&D. Focusing on tariffs should not detract from this point.

From a PD-1 and VEGF perspective, the data continues to evolve positively. The recent Phase III study showed a benefit for progression-free survival. We're awaiting overall survival data to assess the implications further. Safety appears comparable between arms based on the preliminary data which was released. In our portfolio for non-small cell lung cancer, we’re actively building upon existing precision-driven therapies with Io-based additions like the high-dose and latumab combination with Opdivo, keeping our competitive edge as we proceed.

Thanks, Samit. Let's take our next question, operator.

Thank you. With RACE101, can you please elaborate on what pivotal data will be reported later this year? Are there any other combinations you are excited about for presentation? And what sort of analysts’ expectations should we be thinking about in the near-term?

Thanks, Seamus. I’ll ask Samit to respond.

RACE101 is indeed pivotal, and we are looking for safety as a foremost measure as well as efficacy. These will be baseline comparisons with historical controls. We will keep you posted as new insights emerge.

Thank you, Samit. I think we have time for one last question, operator.

In addition to tariffs, can you share any thoughts about the impact of executive changes in Washington and the potential implications for your pipeline programs, especially how changes could affect R&D or clinical trial approvals?

Thank you, Trung. I want to clarify that regulatory meetings and interactions have remained productive and timely, and we appreciate continued collaboration from regulators. If we observe any delays or major trends, we will look to adapt efficiently.

Thanks, Chris. At this point, I will turn it over to Chris for closing remarks, then we'll wrap up the call.

Thank you, Chuck. We know that you all have busy schedules. Given the number of companies reporting today, we appreciate everyone's attention. Throughout, we want to ensure the priorities for our company remain consistent. The growth portfolio is delivering, and we're achieving alignment between our cost structure and revenue base. Key pipeline readouts are approaching. We're in a strong financial position affecting capital allocation priorities and business development. We will stay committed to reshaping and optimizing Bristol-Myers Squibb Company to deliver top-tier growth by decade's end and provide attractive returns for shareholders. Thank you all for tuning in today, as always, the team is available for follow-ups. Enjoy the rest of the week.