Amgen Inc. (AMGN) Earnings Call Transcript & Summary

All right. Good morning, everyone. My name is Cory Kasimov. I'm the senior large-cap biotech analyst at JPMorgan, and it's my pleasure to introduce our next company, which is Amgen. Here to present is their company's Chairman and CEO, Bob Bradway. And please note that following Bob's presentation, there is a breakout across the hall in the Borgia room. With that, I turn it over to Bob.

Okay. Thank you, Cory, and good morning, everyone. Thank you for being here. Heading into 2020, we're feeling confident at Amgen and excited about accepting the challenges of the future. Speaking of the future, my remarks this morning are qualified by the elements of the safe harbor statement. As we think about 2019, we feel we made significant progress on executing our strategy for long-term growth. And in each of our therapeutic areas, we have growth drivers that will be based on growth in volume demand for our products. As well as innovative pipeline opportunities that give us hope that those are franchises that will grow long into the future. So we feel we have a strong hand, and we're excited to play it. In real estate, it's location, location, location. And at Amgen these days, it's execution, execution, execution. And we are trying to construct that virtuous cycle between innovation and execution, where one feeds and supports the other. So in 2020, we will be very focused on our recently launched growth drivers, Repatha, Aimovig, EVENITY and of course now Otezla, continuing to expand our international footprint in order that we can continue to make significant investments in our innovative research and development pipeline. In addition, and what is, I think, a hallmark or I hope is now a hallmark of our execution, we will continue to be focused on returning capital to our shareholders in the form of growing dividend and buyback program as well. Now I said at the beginning of my remarks that we are feeling confident about the future. And one of the reasons that we're feeling confident about the future is the strong progress that we're seeing in international markets, in particular. I hope that you recognize this as an example of our having done what we said we were going to do. We committed to expand, for example, in the Asia Pacific region, and we're really excited about the partnership that we entered into or the collaboration we entered into in 2019 with BeiGene in China. And of course very pleased as well with the performance of our collaboration with Astellas, and looking forward to having responsibility for that partnership returning to us in 2020. So we look at the next decade. And for the first time in our history, we expect that the Asia Pacific region will be a growth driver for Amgen. And in fact, as much as 1/4 of our growth is expected to come from that region over the next 10 years. Our research and development investment is the core of our strategy, and in particular, our focus on innovative medicines that have the potential to be first-in-class and have a large effect size in serious disease is what we focus on. And when it comes to trying to help patients suffering from serious illness, we feel their sense of urgency. We are focused and made significant progress on expanding our commitment to human genetics. We consider that we are the industry-leading company when it comes to integrating human genetics into our discovery research, and we significantly expanded those efforts through collaborations completed in 2019. In addition, we're very focused on using next-generation proteomics technologies to enable us to combine information with our genetics portfolio to characterize the pathways in biology that we think are relevant for disease. And then of course we look forward to continuing to apply what we believe are world-class molecular engineering capabilities as we discover new pathways of relevance. 2020 should be a data-rich year for us with our innovative portfolio of new medicines. There's a fair amount of interest in our project, AMG 510, which is a molecule that we're exploring in non-small cell lung cancer. We have a Phase II trial underway as many of our investors are aware in that setting. And I'm pleased to report that the interest in that trial was considerable, and we completed enrollment of the trial very quickly in the fourth quarter. So we have completed that study and would expect to have data from it later this year. In addition, we're expecting to generate combination data, as you know, from a variety of different trials that we also now have underway related to 510. Tezepelumab is our innovative Phase III molecule that we're studying together with our partners at AstraZeneca for uncontrolled asthma, we expect to have data on that this year. Omecamtiv is our innovative first-in-class, I suppose, only-in-class molecule for heart failure. And again, we expect to have data from the outcomes trial there in 2020. We expect to have data from our Otezla mild-to-moderate psoriasis study as well this year. And finally, we would expect to be reporting first-in-human data from our long-acting bispecific against BCMA, AMG 701 during the course of the year. So oncology is going to be one of the data-rich areas for us this year, and it's obviously an important franchise for Amgen. Our recently launched hematology and oncology products are annualizing revenues greater than $5 billion, and we expect to generate more than $5 billion from these products in 2020, and they continue to grow at near double-digit rates. While there's a lot of focus on AMG 510 that is not the only egg and not the only basket. When we look at our oncology portfolio, we think we have a lot of eggs in a lot of different baskets. And in particular, we are excited about continuing to focus on a range of first-in-class molecules that include our bispecific T-cell engaging programs as well as some differentiated precision medicines that we are advancing into the clinic during the course of the year. We think -- when we look at our bispecific platform, in particular, we think that we're well positioned to compete against cell-based therapies, and we look to extend the record that we've begun to create with our approved product BLINCYTO, a product which has established overall survival advantage versus standard of care for patients suffering from relapsed/refractory acute lymphoblastic leukemia. So again, we're excited about the progress that we're making in the area of bispecific T-cell engaging therapies, and we expect we'll have a lot to talk about in that area during 2020. KYPROLIS, we expect will remain a mainstay in the treatment of multiple myeloma. And we're enthusiastic about the data that we generated in our most recent study, the CANDOR study, which showed the efficacy of KYPROLIS when used in combination with Darzalex. We think these data, which were reported as a late-breaker at ASH have the potential to be practice-changing in the field of multiple myeloma. Cardiovascular disease, as you know, is another focus area for us at Amgen. And it is a focus area for us because it is the leading problem facing society today. It's the #1 killer of people on the planet, and it's also the #1 item when it comes to health care costs in the developing world. Our product, Repatha, has proven its ability to reduce the risk of heart attack and stroke. We've made considerable progress during the course of the year on improving access to Repatha, we've made considerable progress in both the commercial patients as well as prospectively for the Medicare Part D eligible patients. When it comes to reducing the risk of heart attack and stroke, LDL is the issue. And during the course of the year, I think it was more clear than ever that when it comes to LDL, lower is better, and perhaps, lowest is best. And we're encouraged by the recently released guidelines from the European Society of Cardiology, which advocate for patients who are at risk, having their LDLs below 55 milligrams per deciliter and in the case of those who are at very high risk, having those levels below 40 milligrams per deciliter. And I would point out that what that means effectively is everybody who's at risk or high risk should be on a PCSK9 therapy like Repatha. And in fact, when you look at our clinical data from our outcome study, fewer than 5% of the people who were treated in the standard therapy arm were able to achieve the European Society of Cardiology guideline target without the benefit of a PCSK9 therapy like Repatha and further fewer than 1% of those who were at very high risk were able to achieve below 40% without the addition of Repatha. So the European Society of Cardiology guidelines make it clear that lower is better. And today, the right answer for patients who are at high risk is clearly a product like Repatha. Heart disease is the 800-pound gorilla, and we think the answer to deal with the challenge of this 800-pound gorilla is more innovation and more innovation, more broadly available to patients who need it. We think we have good ideas. In atherosclerosis. We're excited about the work that we're doing with AMG 890, which is an siRNA product designed to inhibit lower levels of Lp(a) in those who have genetically high levels of that lipoprotein, making them at risk of cardiovascular disease. This is a risk that is not modified with other existing therapies today. It's not modifiable with diet and exercise. And so we look forward to rapidly advancing this product through clinical development, and we expect to advance this into Phase II shortly. Heart failure is a devastating condition still in the United States and around the world. We look forward to having our Phase III data from omecamtiv. And in addition, we're looking forward to advancing a novel Phase I molecule, which is a troponin activator during the course of the year. Moving to inflammation, where we've been an industry leader for nearly 2 decades now. We think the stars really aligned for us in 2019 when we were able to acquire Otezla. Otezla is a great medicine. It has a great fit with our established experience in the inflammation area and it came for us at a perfect time. So we look forward to building on the great work that our colleagues at Celgene did in launching this product. We expect to have opportunities to launch it in markets around the world where it hasn't yet been launched. And we're looking forward to receiving Phase III data this year on the product in mild-to-moderate psoriasis patients. We have other studies underway and expect that there are other opportunities to expand this label again in the United States and international markets. With respect to Enbrel, we will continue to invest in Enbrel, and we enjoyed improved performance in 2019 as a result of those investments reflected in improved share performance versus prior year trends as well as improved pricing for Enbrel related to our progress on contracting. Beyond Enbrel and Otezla, we have a cascade of opportunity in inflammation. In Phase III, I've already talked about, our innovative approach to treating uncontrolled asthma with tezepelumab. In addition, we have a Phase II program designed to address lupus and a Phase I program, which is an IL-2 mutein being explored in a variety of different inflammatory conditions. In bone health, we are a world leader with 2 very important innovative products, Prolia, which prevents the resorption of bone and EVENITY, which promotes the building of bone. Osteoporosis is a global epidemic, and this is an area where it feels like we have every mega-trend working with us, aging, growth of opportunity in Asia, and our products, Prolia and EVENITY are very well suited to addressing the needs reflected in these mega-trends. We're excited about the early performance of EVENITY and look forward to having the opportunity to report on that product during the course of 2020. Shifting to migraine, our first-in-class product, Aimovig, which is an antibody to CGRP, has changed the game in the treatment of migraine. And the feedback that we receive every day from patients is a reminder of just what a game-changer this is for those who suffer from the disease of migraine. So we're excited about not just the patients that we've already reached with this product, but by the many more that we expect to begin to reach in 2020. Part of the reason for our excitement is the benefit of the 4-year data now, the clinical data that shows us the durable safety and efficacy without any evidence of attenuation that comes with long-term use of the product. As our investors are aware, we committed to developing a portfolio of biosimilar markets -- molecules, rather, in 2012. And in 2019, we began to see the fruits of our labors with a portfolio of products that as of the third quarter was annualizing at about $750 million. So we're off to a strong start with biosimilars as it reflects the success we've had in executing on time, on budget and then delivering high quality, reliable products to the marketplace. We are able to achieve our performance so far with a very efficient operating expense structure, reflecting the fact that we're commercializing our oncology and inflammation biosimilars through the business units that we have established globally for the benefit of our innovative brands in those areas. So we expect that, as we've said in years past, that this business will become a multibillion-dollar growth opportunity for Amgen and our shareholders. I said earlier that capital allocation, I hope, in the minds of our investors, has become a hallmark of our execution at Amgen. And I have said many times before, we'll repeat this morning that at Amgen, capital allocation is a forethought, not an afterthought, and that's reflected once again in our performance through 2019. If you look back through 2011, we invested about $64 billion in our business in research and development, acquisitions and capital investment. And that $64 billion compares to $66 billion, which, after the benefit of tax reform, we were able to return to our shareholders, again, in the form of buyback and growing dividend. And that, in part, has enabled us to continue to deliver attractive total shareholder return for our investors. So again, I said at the outset that we were confident, ready to accept the challenges of the future. But I don't want you to think that we are complacent. We're not complacent. We're certainly not going to settle with what we have achieved so far. We're focused on continuing to execute. And in 2020, that means on our growth products, continue to focus on delivering growth from our recently launched growth products as well as continuing to build out our international launches. We will continue to invest heavily to advance rapidly our first-in-class programs in our innovative research and development pipeline. International growth has come to the fore, it's now a reality. So again, we will continue to invest in expanding our international business, particularly in regions like Japan and China. We're excited to continue to proceed with biosimilars and looking at other molecules that we might seek to bring into that bucket of business for us. We retain significant financial flexibility, even after having invested more than $16 billion last year in business development. And we think we remain poised to deliver attractive returns to our shareholders again through buyback and dividend. And we do this, and of course, our greatest asset are the 22,000 staff members who are talented, engaged and come to work every day, hoping that they can make a difference for patients who are suffering from serious illness. So I'll end where I started, which is by saying that we remain confident, excited about the hand that we have, and we're looking forward to playing it in 2020. Thank you.

Okay. Good morning. I hope you all had a chance to hear our remarks a few moments ago in the main auditorium. If you did, what you heard from us was that we'll be focused on 2020 on execution, execution, execution. And we have a number of products in an early stage of their growth life cycles, and we look forward to continuing to invest in the growth of those products. We're also growing, as you know, internationally. We look forward to continuing maintaining investment in that international growth. We think that execution, execution, execution is helping us to create a virtuous cycle between execution and innovation. So the better we're able to execute, the more we expect to be able to invest in innovation and when it comes to innovation, 2020 will be an exciting year for us. We have some important data readouts in oncology and inflammation and in cardiovascular. So we'd be happy to take any questions you have, and let's open it up, Cory.

All right. I can start, but everyone in the room, feel free just raise your hand, well, you can ask questions as well. A lot of moving parts of the story. One of the key items that's new, the guy sitting right next to me is CFO transitioned. So I guess first question I have is do Amgen's capital allocation priorities change at all with Peter at the helm versus what we saw with David?

Go ahead, Peter.

Well, thank you, Cory. Happy to take the question, and good morning, everyone. It's great to be here. It's great to be part of a great team, too, as Bob said at the end of his last slide, Amgen is absolutely blessed with an enormous amount of talent. On capital allocation, I would be pleased to share with you that David, my predecessor, who's here in the front row and has been a tremendous partner to me in the transition, and we're continuing to transition in the typical Amgen world-class way and that's very enjoyable, I would say. And we are focused on what we have been, which is, number one, Amgen will continue to focus on investing in innovation internally. Number two, an external business development opportunities. And in the external business development opportunities, we're going to continue to be very patient as we look for opportunities where we're the best or one of the very best buyers. We're going to look for opportunities to invest and allocate our capital where it's a prudent return for us, it's above our weighted average cost of capital. We're going to continue to be precise and we're going to continue to invest externally in situations that fit into our therapeutic areas. And finally, we're going to look for situations where we can promptly or timely integrate them and achieve those returns. After we allocate capital outlay, which is the way we've been doing it. As you know, we optimize our balance sheet in order to minimize our weighted average cost of capital. And we will continue to return capital to shareholders, as Bob shared with you during the main presentation, first, through growing dividends; and second, through share repurchases. So I think, Cory, an answer to the question, it's going to remain the same. I think it's worked extremely well, and I look forward to working with the investors and shareholders in Amgen.

All right. Great. So 2020 looks like it's going to be a big year on the pipeline front. I promise I won't spend all 20 minutes talking about or asking about KRAS, but I will start with a few there. One of the newer -- the new updates this morning is you completed enrollment in your pivotal study and expect to have data before the end of the year. Do you also anticipate providing any further updates from the pilot program? Are we just going to wait on pivotal at this stage?

Yes, thanks, Cory. So as you mentioned, Bob mentioned in his main presentation that we completed enrollment in the Phase II single-arm potentially registration trial that enrolled in about 3 months. So it enrolled remarkably quickly. It is a global trial. We will look to have a minimum of 6 months of data on all patients on that trial, so that we have robust estimates of duration of response and progression-free survival. And we anticipate sharing those data over the course of the year. We will and we do anticipate that a publication with updated data from the Phase I program should be available at some point over the course of the year that is being put together now as well. And then lastly, we are enrolling a variety of combination study programs and expect perhaps later in the year to have data from those studies as well.

Okay. And then KRAS is obviously a very rapidly evolving dynamic marketplace. A lot of other companies trying to play catch-up with you guys. So how do you see this evolving landscape and 510's place within it?

We like our chances here. We like our molecule very much based on its biochemical characteristics and what we've seen in the clinic so far. We are executing the clinical program, I think, about as quickly as you can. Recall, it's only been 16 or 17 months since the first patient was enrolled in the first-in-human study, and we've now completed enrollment in Phase II. So our job right now is to continue to press that development program and really let the molecules show us what it can do.

Okay. And how is progress on the combination front?

We are enrolling the PD-1 combination. We have other combinations with targeted therapies that have either just started or just about to launch. And over the course of the year, we'll provide guidance as to when we can anticipate data from those.

Okay. And then the last KRAS question from me, others in the audience might have some, but maybe it's for Murdo or Peter. Just kind of -- can you put into context for us, what you see is the initial market opportunity for 510 in non-small cell lung cancer?

Yes. I think, as David said, we have to wait on data emerging. Clearly, the sequence would be the potentially registrational trial in non-small cell lung cancer and the epidemiology there is 12% to 13% of patients express KRAS G12C. We are on the ground right now with our medical teams, ensuring that people can understand, newly diagnosed lung cancer patients can understand their KRAS G12C status so that as data emerge and as the product moves through the regulatory process and ultimately, approval, that patient pool who may be progressing on other front-line agents would be eligible and would know their KRAS status. So we're investing significantly in ensuring wide testing and wide patient awareness is there.

Okay. To switch over, ask a question about Otezla. Now that you have that asset officially in your hands and what's the strategy here with it to kind of advance and take it beyond where Celgene had? I saw my first Otezla ad the other day on TV.

Yes. As was mentioned by Bob, this is a great time for the addition of Otezla with Enbrel's IP being clearer. And I think the strength of Amgen's knowledge in inflammation, that's a really nice portfolio of products to have. We had reduced our investment in dermatology on Enbrel over the last few years, so now we are back in, in a very large way with the addition of Otezla. Clearly, we're looking at ways to help patients in their care continuum. Most patients with psoriasis step through Otezla and then on to a biologic. Right now, we source less than 7% of those refractory Otezla patients with Enbrel. We think we can improve on that. We're also talking to insurers, payers and provider customers about how we can optimize that portfolio. And the last thing I'll say is we've also got the advent of biosimilars in the inflammation category as well with AVSOLA, our REMICADE biosimilar and also down the road, our biosimilar to Humira.

Okay. And Bob talked about in his presentation, the pending Phase III data for Otezla in mild-to-moderate patients, can you kind of frame that study a little bit and set the stage for that pending [ requirement? ]

Yes. I mean it's got a relatively similar design to previous Otezla trials. We're relatively confident in the results based on all the characteristics of the product that we've seen so far, and we expect that data readout this year. We have absorbed those clinical trials, they've continued without a hitch and are moving along seamlessly.

Okay. And on the CGRP front, what's the key for maintaining or driving additional share gains for Aimovig in 2020? And how much do you see as a longer term -- how much do you see the oral CGRPs as a longer-term threat?

Yes. We've been pleased with the Aimovig launch. We're still total prescription market share leader. We added additional access coverage this year with the advent of CVS covering us last year, we did not have that PBM. That's a large percentage of total coverage. And if you look at the new prescription share trends, we were actually losing in the switch market share because as we started patients on free drug, if they were a CVS beneficiary, they were switching to one of the other agents that were covered at CVS. So we will see our switch share rise. On new to CGRP category share, we were actually leading there still. So I think we're well positioned for that NBRx share to improve. That should further buoy our TRx leadership position. And then going forward, it's really about ensuring that the few large neurology migraine specialty clinics are advancing the use of CGRP earlier in the continuum for people who are chronic migraine suffers. We think there -- there's still a little bit of a holdback on CGRPs as kind of the last line of defense so we're moving that. We're seeing that progress. And then of course primary care prescribing. We've got about 10,000 primary care physicians that prescribe CGRPs with some regularity. We're looking at expanding that base of prescribing. Right now, the CGRP category is running at about 7,000 or 8,000 new patients a week, and we're working on focusing on growing that.

Okay.

Well, Cory, get some questions from the audience here.

Yes, everybody?

Anybody in the room have questions for us. Crickets.

It's quiet so far. So I can keep going. So I guess transitioning over to biosimilars, you had a lot of success on that front. How do you think about your long -- the initial guidance you laid out having roughly $3 billion in biosimilar sales. Is it -- is that still a fair number or you think it's time to rethink that?

We're not going to update that today, Cory. What I said in my remarks is that we're in a good shape. We're in a good spot with biosimilar franchise. We're annualizing about $750 million through the first 9 months of this year or through the third quarter anyway. So we feel good about where we are, the uptake that we've seen so far, I think reflects the strategy that we've taken, which is we want to be on time, we wanted to have quality, reliable supply biosimilars for customers in the marketplace globally, and that's what we're achieving. In Europe, we're #1 with AMGEVITA for -- which is our biosimilar, Humira, and we're off to a strong start here with the oncology pricing. We're not going to -- with all respect, we're not going to update you today on the question about whether that multibillion-dollar target we've made is still appropriate. I did reiterate on the stage, we think this would be about $1 billion-dollar growth opportunity for us. Go ahead, what have you got?

Please, thank you.

If I could ask 2 questions. One is on the biosimilar front. Can you please comment on the biosimilar Soliris, especially given the new data that we recently saw from C5 and also, let's say, potential acquisition of factor D.

Sure. We have a Phase III trial that's up and running. We expect that we will have a quality biosimilar to Soliris, and we look forward to reporting the data when we have it. Dave, anything you want to add?

Yes. No, the trial is moving along, and we'll provide guidance over the course of the year as to when you'll see data and how that program will advance. It's a very high-quality molecule.

We still think there's demand in the marketplace for an alternative to the branded product.

And if I could have one more question on the EPO franchise.

Yes, great franchise.

How do you see that potentially evolving with potential approval of the HIF alfa, the orals?

Yes. Our red blood cell franchise, EPOGEN and Aranesp, great franchise as you know. We have a terrific legacy of strength, and clinicians and providers understand the safety and efficacy profile of those products. And to the extent that there's an approved competitor, I'm sure they'll have to weigh the evidence of the competitor against the track record of experience that they have in using EPOGEN and Aranesp. Dave, you want to offer any incremental thoughts on the HIF question?

No, I think we've looked at the data with interest. We'll continue to look at long-term safety data. And from a clinical perspective, to me, one thing, one question that we need to see play out is how an oral therapy will do in the -- particularly in the dialysis population. These patients have a very high pill burden and even simple medicine such as iron or vitamin D, which can be given orally are often given intravenously to both ensure compliance and to reduce the pill burden. So that's one thing that I would keep an eye on as well.

Others from the audience? On the cardiovascular front, 2 questions. One on Repatha and how maybe expectations for this program may be evolving as you head into 2020. And then on the development side, omecamtiv mecarbil, can you just kind of frame that Phase III study and maybe the hurdle you would have for any interim analysis that would be conducted there?

Yes, sure. I can start with Repatha. October of 2018, made a bold decision dropped the price by introducing the low list price Repatha. We also announced at the end of '19 that we would be pulling the original list price of Repatha off the market. In the time frame between the decision to lower and the decision to withdraw the original list price, we've significantly opened up access in the commercial insurance space as Bob mentioned in his talk earlier. So that reduces the burden on prescribers in terms of getting approval for their prescriptions for commercial patients, so those approval rates have gone up substantially. And then of course we also worked on opening up Medicare Part D access as this is largely a senior population that we're addressing with these high cardiovascular risk rates, and we've been able to secure very wide Medicare Part D coverage at a $50 co-pay or lower. And so this is really retail available, affordable medicine for cardiologists and primary care physicians alike to treat their at-risk ASCVD patients for their high cholesterol. And that's the message we can now focus on. So we've systematically unwound the barriers to the adoption of this product. It's an affordable medicine, and it's a necessary medicine, as Bob mentioned, given current treatment guidelines and the high risk of these cardiovascular patients. So that's the effort in 2020. And I feel confident that we've got the right field teams deployed and they show up in medical and in my organization in sales and marketing to drive that growth curve forward. We've seen a nice acceleration in '19 in terms of volume. We've actually grown through our net price reduction. And I think as net price stabilizes, and this access opens up, it should be a good growth story for us going forward.

Yes. And in terms of omecamtiv, as you mentioned, there's an interim analysis for efficacy that will occur in the coming months. And then, as Bob indicated, based on our current event rate projections, we expect to have the primary analysis data available by the end of the year. With regards to the interim analysis, I would point out that there's a very high bar to stop the trial early for efficacy, which is pretty typical in terms of study design for these sorts of trials. This is over 8,000 patients enrolled. It will be one of the largest, and I suspect, best-conducted trials in heart failure that the field has seen. That field is evolving with some new data over the past year or so. SGL2, for example, we still believe that it will remain very significant residual unmet medical need. There's a global epidemic of heart failure, and we look forward to seeing the data over the course of the year.

Okay. So Peter alluded to business development in the first question, but I wanted to ask more specifically on the business development. And business development and M&A looking forward, you're obviously very busy in the back half of 2019. Should we be expecting a pause on this front? Or is Amgen going to remain pretty aggressive like you've been?

Well, we invested $16 billion last year, but we were the beneficiaries of the announced merger between Celgene and Bristol, which led the FTC to force divestiture of Otezla. First time in my 35 years, doing deals in this industry, I've seeing anything like it. So if there's another Otezla coming as a result of one of your other deals, we'd be happy to look at it but those are hard to plan for. And then similarly, we were able to enter into a collaboration with BeiGene in part because of the Celgene-Bristol deal. So it shows the importance of being patient, as Peter said earlier, the importance of being clear about what would be of interest to us strategically and then being opportunistic. So we have the flexibility on our balance sheet to continue to invest externally and where we see opportunities that line up with our stated areas of interest. We will be very thoughtful about look at them.

And so a follow-up on the BeiGene deal. I just wanted to ask, can you talk more about your thoughts on the Chinese marketplace? And how close you think we might be to this turning into a major opportunity for pharmaceuticals?

I think it already is a major opportunity. I think for me, personally, and for many of us, when Celgene announced its original collaboration with BeiGene, that was a watershed moment in the industry. A watershed moment because the deal was focused on innovation arising from China. And we shouldn't be surprised that the innovation was arising from China. There's a tremendous amount of capital that's being invested in biotechnology in that country and there are world-class scientists like Xiaodong Wang, who is the founder of BeiGene, who is a member of the U.S. National Academy of Science as well as the Chinese Academy of Science. One of the most distinguished scientists of his generation. He was here for many years in academia, returned to China, created this company and no surprise, it was very attractive to us and others. So we saw that transaction when it was initially announced. And as I said, I think that was a watershed moment. We were very fortunate that as a result of the Bristol-Celgene transaction, BeiGene needed to find another collaborator, and we were able to step into what we hope will be a very productive partnership and is certainly something we're excited about. So when you think China, I think you need to have respect for the innovation that's arising there. I think you need to think about it as a place for developing new drugs. And then obviously it is a market in its own right, that's attractive as the government makes access more available to a broader number of patients, particularly those suffering from cancer. So all in all, it's already the second-largest market, it's growing rapidly. Hard for me to imagine if you're looking at a 10-, 15-, 20-year horizon, that you can be a world-leading biopharmaceutical company without a substantial, sophisticated infrastructure in that country.

Yes?

In terms of your comment on the CGRP class, you mentioned something about getting into the CVS formulary I guess. What's going on with pricing that it would -- to get access to the [CVS] formulary.

Yes. As you know...

Can you repeat the question?

Yes, sorry. The question was related to the advent of access changes in CGRP category and what's happening to pricing as a result of that access. We are pleased with the way we priced Aimovig when we launched at a subspecialty tier in order to ensure open access, both on the commercial side and in government channels. I think we've been able to move very quickly to open up that access. Obviously, we had large free pay -- free drug program for starting new patients. We're now at 80% paid prescriptions for Aimovig. So that's a high ratio in a short period of time in a category like this. So that pricing decision at launch, I think, has worked well. There are some step changes as you go from noncontracted patients to contracted. So the paid percentage is a positive, but the noncontract to the contract that is a drag. So there's still some volatility in net pricing as you look at Aimovig in particular. And then there will be some step drag as a result of the CVS listing at the beginning of the year. But in Q2, Q3, Q4, that should stabilize.

And Bob, I think I'd be remiss if I didn't ask you for your thoughts on the election, the potential for a health care reform. So how engaged...

Who's going to win the presidential election first of all?

There you go. For start, what have we got here. How engaged is Amgen on the kind of the lobby in front from a reform standpoint? And how confident are you that health care ultimately ends up in a, let's say, someplace in the middle that's more or less good for all parties involved?

Well, I think we are active in the debate. We think that there are some common-sense changes that need to be made to the way prescription drugs are made available to citizens in the U.S. So we think there's some things that should be done differently. We will continue to advocate for those things that enable, in particular, seniors to have access to the medicines that they and their physicians think they need. Too many patients can't afford their co-pays today, we'd like to try and do something about that. Too many patients find that they're paying disproportionately for their drugs out of pocket. Again, we'd like to try and advocate for the changes that will help address that. So the system that exists today isn't perfect, but we -- this is the world's leading market for innovation and we want to make sure that whatever happens in Washington, it doesn't undermine the opportunity to innovate. What we think as a company, society needs is more innovation, not less, and we want to make sure that there aren't changes that undermine our ability and that of our industry to continue to invest in risky R&D.

Okay. And then in our last minute or so here, I want to revert back to the pipeline. Ask David about the BiTE platform. And at this juncture, how you think the platform more broadly and maybe HLE more specifically stack up to what you're seeing on the bispecific front or is it still too early to know.

I think, Cory, this year will be an important year. We've got across a range of solid tumors and hematologic malignancies. BITEs in the clinics are now 12 or 13 in the clinic. This year, I think, is going to give us a lot of information about the performance of the half-life extended BITEs, and we expect data flows throughout the course of the year.

Thank you, Cory. I appreciate it.

Thank you, guys, very much.

[indiscernible] conference. Thank you.