Amgen Inc. (AMGN) Earnings Call Transcript & Summary

Hello. And welcome, everyone, to the SunTrust Robinson Humphrey Live, virtually live, Life Sciences Summit. And it's my pleasure this morning to have from Amgen, David Reese, the Executive Vice President of R&D; and Arvind Sood, Vice President of Investor Relations. As a reminder, if you have questions that you'd like to ask management, please e-mail me at [email protected]. And before we begin, I have to read a disclosure statement, so bear with me. This call has been arranged by SunTrust Robinson Humphrey research department for use by institutional investors as defined under FINRA rules as well as issuer clients of the firm. If you are not an institutional investor or issuer, please disconnect at this time. David Reese and Arvind Sood at Amgen, a biotech company, are not members of the SunTrust Robinson research department, and unless otherwise indicated, their views are their own and may differ from the views of SunTrust Robinson Humphrey research department and from views of others within SunTrust Robinson Humphrey. Please see our website for further details and disclosures. So with that, I thought I'd turn it over to Arvind and David to maybe say a few words, and thank you for taking the time during this very, very busy time at Amgen and unique time in the world.

Okay. Robyn, thank you very much for inviting us to participate in this virtual conference. It goes without saying that with this current COVID-19 pandemic, we are facing an unprecedented global health care disruption that none of us have ever seen. Despite this disruption, our teams are responding to customer needs. We have remote interactions. We are identifying innovative solutions to help patients, and we are supplying product reliably and consistently. Our supply chain is solid, and we have had no disruptions. After 40 successful years, our mantra internally is every patient, every time. As you know, Robyn, we just reported our Q1 results. Our execution was solid, with revenues up 11% and earnings per share up 17%. Our revenue growth was driven by strong unit volumes with 10% growth in the U.S. and 32% ex U.S. with strong performance for new growth drivers like Repatha and biosimilars, which are now annualizing at more than $1.2 billion. Although the COVID-19 situation is still evolving, we took a very deliberate and a methodical approach to assess the situation with internal experts and external sources, and we expect to see the greatest impact later in Q2 with stabilization and then partial recovery occurring in the second half of the year. Now based on this assessment, we reaffirmed our revenue and non-GAAP EPS guidance, although I would note that there are puts and takes across the portfolio as we currently see them. We could see volatility across quarters but feel good about the year, and we'll provide an update on how we see things as we learn more and certainly on our Q2 call in July. With $8 million in cash on the balance sheet, we have a strong liquidity position with very good access to capital markets, and we continue to generate strong cash flows with $2 billion in the most recent quarter. With respect to clinical trials or pivotal studies, including for AMG 510, Otezla, tezepelumab and omecamtiv, they're all fully enrolled and expecting to read out this year. As a matter of fact, you've seen this morning that we recorded the Phase III data from the Otezla study in mild to moderate psoriasis. So with that, I'll turn the call over to David to make some comments, and then we can get to your questions. Dave?

Well, thank you, Robyn, for having us. And thanks, Arvind, for your remarks. What I'd like to focus my remarks on primarily is what we're doing in our clinical trials portfolio as we manage through the challenges posed by the epidemic, and then I'll speak a little bit about our research activities, which are starting to ramp up again, some of our collaborations and then some of the efforts that we are bringing to bear directly on COVID-19. In our clinical trials portfolio, we made the decision very early that we would take things on a study-by-study and site-by-site basis. I think that has served us well as we have managed the portfolio. And I think there are a couple of key takeaways at this point in time. First, the key studies, late-stage programs that are fully enrolled, remain on track for readouts on time in 2020. Those trials include the potentially pivotal Phase II trial of monotherapy AMG 510, now known as sotorasib, in non-small cell lung cancer, which we expect to read out in the second half of the year; the tezepelumab Phase III study in severe asthma that we'll read out later in the year; and the omecamtiv mecarbil Phase III trial in heart failure also slated to read out by the end of mid-year. All of those are on track. We expect high-quality data. While there have been scattered challenges in those studies, we do not anticipate any compromise of trial integrity or our ability to bring the data in on time. And then as Arvind mentioned, we were able to deliver the Otezla Phase III trial in mild to moderate psoriasis which we announced earlier today. Those, in my view, are very strong data, and we're quite pleased with them and looking forward to engaging with discussions with regulatory authorities in filing that particular package. Earlier in the pipeline, we have continued to allow enrollment in certain studies, for example, in some of the BiTE programs, including our prostate cancer, multiple myeloma and small cell lung cancer BiTE programs, where patients have life-threatening illnesses and where sites have been able to continue to safely enroll and manage our patients. We're also continuing study start-up activities wherever possible across the portfolio. And one of our real goals here is to enable a very rapid ramp-up of enrollment to minimize or blunt any impacts on time lines once that enrollment reinitiation becomes feasible. And I would say, in the last few weeks, we're starting to receive a lot of inquiries from sites and investigators who are ready to get going again, and so those activities are picking up a lot of steam. In addition, I would like to commend the FDA for the guidance that they released on study procedures and study conduct in the time of the epidemic. We have found that guidance to be pragmatic, flexible and very useful, and we've implemented many of those procedures in our portfolio in the U.S. sites. I know many of you are interested in, as these studies proceed, how we will release data given that many medical conferences have either been canceled or have moved to a virtual format. We've been in close contact with the leadership of almost all of the major medical societies and sponsors of conferences, and we will commit to continued timely dissemination -- on-time dissemination of our important data in a timely manner. We're also exploring things like direct publication, for example, which some journals are moving to with expedited reviews to allow data dissemination given that conferences are compromised in some instances. In terms of our research activities, we are beginning to ramp up research activities in the laboratories. This varies by geography based on local government guidance and the state of the epidemic in various geographies. But those are starting to come up, and we do anticipate increasing laboratory week in the weeks ahead. And then finally, on COVID-19 itself, as I think many of you are aware, we are engaged in a strategic partnership with Adaptive to identify effective antibody therapeutics. I'll be happy to discuss that further in the course of this conversation. And then we anticipate that Otezla will be introduced in the clinical studies in the coming weeks as part of some of the platform trials to be investigated as an immunomodulatory therapy as we -- as the epidemic unfolds. And I'll be happy to talk a little bit more about Otezla and what our belief is scientifically as to why that may have some utility against COVID-19. And then finally, I'll conclude by saying we are participating in a number of the various group or consortia -- groups or consortia that are -- have mobilized against the epidemic, including the NIH's ACTIV program as well as a number of others that I'm happy to expand further on that as we go forward. So with that, maybe I'll turn things back to Robyn, and we can move on with the rest of the discussion.

Okay. Great. So I know a lot of you have e-mailed me questions following the earnings call, just on some clarifying questions on BiTE. I'm going to get to those later. I thought I would switch it up a little bit and talk a little bit about the pipeline, especially stuff that's coming to market first. Talk -- maybe, Dave, can you talk a little bit about BD strategy now that Otezla is generating revenue? It's doing well. How are -- I know you guys have talked about how you do BD and what the priorities are, but do you think that next, we should be looking for smaller deals or early-stage assets to be additive to what you already have as a company?

Thanks, Robyn. So I would say that, as Arvind pointed out in his opening remarks, with our balance sheet, we remain, we think, in a very favorable position, and our business development strategy hasn't really changed and that we are willing to look at assets across the spectrum. And generally, those will reside within our therapeutic areas of interest and fit within our core strategy in oncology, inflammation, cardiometabolic diseases. In addition, we always remain interested in platform technologies, and the acquisition of Nuevolution last year, I think, is an example of that. And so that will also remain a focus going forward. Arvind, I don't know if you'd like to add anything.

No. Dave, I think you have covered that well. The only other thing -- I think the only other aspect I would add, Robyn, is that from a business development standpoint, of course, we allow these decisions to be driven by the strategy of the company, so to the extent that this is something that's complementary with one of our key therapeutic areas that Dave outlined. And secondly, it also has to be a value-creating for -- a value-creating transaction for our shareholders, not just the shareholders of the selling company. And I think if you look back to 2 of the main or 2 of the principal deals that we announced last year, Otezla and the collaboration with BeiGene, we think that those -- both of those transactions adapt to the criteria very well.

That's really helpful. And maybe we could start off with the data today and we'll go about Otezla before we go into some of your core technologies you have to develop drugs. So -- and then we'll get to 510. I've got lots of more questions on the investment pipeline, I promise. So the Otezla Phase III data was positive this morning in mild to moderate psoriasis patients with the stat sig on the primary end point at 16 weeks. So can you just help us understand how much this could expand the market and start off with that?

Sure. So as I mentioned in my opening remarks, this is a -- I think the data are quite strong. We're working with the key investigators to see what the most appropriate venue will be for a presentation and publication of those data. The trial was conducted, as noted, in patients with mild to moderate psoriasis, which is a very large population of patients in the country in the order of 5 million to 6 million patients with mild to moderate disease. Now of course, only a subset of those, i.e., those who are not controlled with topical therapies would be appropriate and eligible for Otezla. But we do think this affords an opportunity to deliver a convenient oral therapy to a patient population where there's actually not a huge amount beyond topicals, which can be quite inconvenient depending on the percentage body surface area that is affected by the disease. So again, this is, I think, something that will provide a real treatment option for patients, and we're quite pleased with the data and look forward to upcoming regulatory interactions.

And then you mentioned earlier, obviously, COVID at the top of the list. How mechanistically does Otezla act on the airways in the lung? And so how might that be helpful in a COVID patient?

Yes. Thanks, Robyn. And what I would say is that while this would not be presumably a direct effect on the lung, meaning the lung epithelial cells, the cells that line the lung, but rather directed at the inflammatory reaction that appears to be quite severe in some patients and may contribute to worse outcomes. Otezla is a PDE4 inhibitor with complex effects as an immunomodulatory agent. But one of the things it does is blunt the production of certain cytokines, including IL-6 and TNF alpha that appear to be some of the drivers of the overexuberant inflammatory reaction that occurs in some patients. So our decision to offer it and enter it for clinical testing was made after actually extensive discussions with scientists and investigators around the world. And one of our real principles here is to study it in a controlled fashion, and which is why -- and to study it quickly, which is why we are moving forward with some of the platform trials. And we hope that we'll be able to generate with those collaborations' informative data in the coming months.

Give a sense, just a follow-up there, given Dr. Fauci [ said when investors ] should be backbone and that is actually affecting the virus, these drugs are affecting and helping with the inflammatory stress as long like IL-6 as well. Do you -- will you have to use these in combination with remdesivir? Or can you do anything independent, especially in patients who are more late stage? How are you thinking about -- how -- what are you hearing about how this drug will be evaluated in COVID patients?

Yes. I think it's potentially both. And we also intend to study Otezla in a range of patients from those who are, for example, hospitalized but not in an ICU and not in the ventilator, so those who have perhaps more serious disease to those who have -- or potentially even earlier or with milder forms to see if we can prevent the transition to more serious forms of the disease. So again, based on the mechanism of action, it's oral administration. I think there are a number of settings where there's a reasonable clinical hypothesis that the drug might have some utility, and that might be in combination with antivirals or ultimately other agents.

And last question on this just because I'm curious. You hear about people don't -- getting to the hospital with a very, very low oxygen level. And so if you're sitting at home and if you'll be evaluating patients with early forms of the disease that maybe have higher oxygen levels, is there any way you think mechanistically this drug, by reducing inflammation, can reduce that progression for the severe state while your body fights off the virus? So could it work in really healthier patients preventing them from getting to a hospital?

Yes. I think that's one of the questions that over time, we're actually going to try to address. And can you prevent this progression from milder forms of the disease to more serious forms of the disease. And so as we get details on the clinical data as they emerge and as these studies really start to enroll large amounts -- larger numbers of patients, of course, we will provide appropriate updates.

Okay. And then going with COVID theme, how about Adaptive Biotechnology? You have a partnership with them. Maybe let us know when we'll hear about an antibody candidate enter the clinic, and where in the process you are with this.

Yes. Let me start with the latter first. We are up and running in the laboratories. And again, just as a reminder to everyone, what this involves is taking B cells, isolating B cells from recovered patients, and we actually have a selection process for the types of patients based on their antibody response from whom we will collect B cells then screening those B cells using a combination of Adaptive and Amgen technologies to try to identify those that are producing very high-quality neutralizing antibodies. Then -- and of course, we can obtain antibody sequence through Amgen's antibody engineering and manufacturing capabilities. We'll hopefully be able to produce a therapeutic antibody or a cocktail of a small number of therapeutic antibodies. So it's in the preclinical phase work right now. And as that moves forward, I'll be able to provide, I think, more insights into time lines and when we might have potential clinical candidates.

Great. I thought next we go into teze, your Phase III pipeline product for asthma, with the NAVIGATOR trial in severe uncontrolled asthma, and I think it's still tracking as of now for late 2020. And as a reminder for investors, it's administered subcu and showed good data in Phase II, the PATHFINDER trial, which had a reduction in exacerbation. So just a couple of questions on NAVIGATOR. Talk us -- let me put this in the context of the fact that I know Regeneron's Dupixent was also available for asthma. It's sort of doing well because you don't have to go to the hospital necessarily. So how are you -- to get your drug or see a doctor. You can administer yourself. How are you dealing with this trial, NAVIGATOR, keeping it going in the COVID-19 pandemic? And are the visits still happening? Are you really using like people to go to someone's house and administer it at home?

NAVIGATOR, I would say, is largely on track and we, with our collaborators, AstraZeneca, had been able to adhere to the protocol. Again, I would say there are sort of minimal challenges with missing data, missing visits. But we feel that trial integrity is quite solid for NAVIGATOR right now and we fully expect that to read out towards the end of the year on schedule with high quality.

And for asthma trial, the trial for this, how do you deal with a missed visit from statistical analysis point of view?

There are various techniques. And in fact, with many sponsors, we're also in discussions with the FDA and the FDA will be issuing some guidances on how you deal with that, what I would call more broadly the question of missing data, whether it's assessment, visits, adverse event assessment, et cetera. And there are sensitivity analogies and a variety of statistical techniques that can help manage those particular issues that may arise. Again, we're not seeing, on major late-stage programs, a degree of data disruption that is worrisome at this point.

That's good to hear. And maybe you can help us understand. In the landscape for asthma, there are -- there is really unmet need in various buckets as well as having drugs that could be administered at home subcu. Talk to me about where you think, if successful, in NAVIGATOR where this drug could fit in.

Well, I think there still is a large amount of residual unmet medical need in severe asthma for patients who have not controlled with current -- with available therapies. And then I think one of the things that has intrigued us about tezepelumab from the start -- and this drug is quite a favorite of mine because I was running our early development program when it first went into the clinic and have been able to be a part of the development of this since it first went into humans. But we're seeing effects in patients who don't have the high eosinophil or allergic form of asthma, and that's, of course, something that we'll be looking carefully at as we unveil the Phase III data. And in that population of patients with severe asthma, there's quite a bit of unmet medical need. Another advantage of the drug is that because it potentially works across a spectrum of patients regardless of the eosinophil count, it doesn't require testing for eosinophil levels and can potentially be available for this broad spectrum of patients. All of this, of course, is contingent on the Phase III data readouts.

That's helpful. And when -- and the going question when you designed the trial, I remember with the Dupixent trial, they tried to look at low E and it didn't work. There weren't as many events. Like how did you ensure that you're going to get low-E patients that have enough events to see a delta in the NAVIGATOR trial?

Yes. I mean, so the statistical design of the study attempted to -- through sample size and stratification and standard techniques, to account for that.

So do you think it could use more broadly, like -- just like even where Dupixent is used today not just in low-E patients? Do you think it will have a very broad -- a successful, very broad use?

Our hope is that the data support use broadly in a population of patients with severe asthma. And of course, as I said, all of that's contingent on the data package which we're evaluating.

, We'll have to wait. Then turning to omecamtiv. I think this is a trial or a drug that people forget about. It's going on forever. GALACTIC, it's still expected 4Q '20, the interim analysis that continued. It moved up a little bit. Just give us some sense of like how confident you -- are you that we'll continue to see that data in 4Q '20. And any COVID-related impacts that you think could delay it in some form.

Yes. Thanks, Robyn. Yes. Omecamtiv, as well, we -- while we've experienced minor glitches here in terms of patient visits, again, it hasn't risen to a level at all of anything that is worrisome in terms of trial integrity. We expect that trial to read out by the end of the year. And we're on track for that. The team is working very, very hard. This is one of the largest studies ever conducted in advanced heart failure. It will, I think, be definitive -- be a readout on omecamtiv, and we're on track to deliver at the end of the year.

And when you think about launching a heart failure drug, we've seen other launch -- heart failure drug launch very slowly, and even other drugs in the space, just a lot of challenges is getting uptake. What are you doing internally to sort of think about learning from ENTRESTO and learning from other heart failure drugs to help launch this drug, if successful, doing it a little differently? What are the teachings that are going into -- what you're doing at the company?

Well, I think where I would start there is by pointing out that omecamtiv, it should be a differentiated product. It has a unique mechanism of action. They're the first drug to reach this stage of clinical investigation that directly acts on the myocardial cell, the heart muscle cell, to improve contractility. And so I think that unique mechanism of action, of course, will be important as we go forward with the omecamtiv program. In addition, it's a drug that -- and the trial was designed to allow it to be added on top of other therapies for heart failure. And so it, in theory, shouldn't require titration or swapping out other drugs in the treatment paradigm, and that's something that we hear from -- that may be an advantage as we talk to our key investigators and leaders in heart failure around the world.

Then what do you -- go ahead.

And Robyn, let me just add that through the commercialization now of Repatha, of course, we have established a very good rapport with the cardiology communities. We, of course, have observed that ENTRESTO, it was off to a slow start. But as Dave pointed out, I think one of the fundamental differences is that with ENTRESTO, which was trying to essentially replace existing [ acute ] therapies, generic therapies, with omecamtiv, this is going to be added to the standard of care. And also given the lack of drug-to-drug interactions that we have observed in the clinical trial so far, we believe that it's very conducive for add-on to other therapies.

That's helpful. And then if you -- can you remind people of the hazard ratio that the trial is powered for? And then when you talk to doctors who are on the ground treating heart failure patients, what is clinically meaningful for them? What do they want to see from this trial? And...

Yes. I think without going into details on the statistical analysis plan, I mean they were typically going to want to see a 15% or 20% improvement on the primary and key secondary end points, and that's certainly how we design the trial. We want this to be a substantive result that will produce meaningful outcomes to patients with advanced heart failure. I would point out that advanced heart failure continues to have a huge unmet medical need, in my view. The -- if you look at things like 2-year and 5-year survival rates for patients with advanced heart failure, they're worse than many solid tumors now. And so this has remained a global major public health challenge, and we hope that the data we generate with omecamtiv will be able to contribute to combating that, what I would call, public health epidemic of heart failure.

Do you have any economic data on like the burden? I think some people think of this market is small or it's -- a lot of people earn but they don't understand like how hard it is from a payer point of view.

The economic burden on health systems around the world from heart failure is enormous and measured in the tens to hundreds of billions of dollars. It is one of the most common reasons for hospitalization in many societies now. It is almost inevitably, in most countries, the most common reason for rehospitalization within 30 days of discharge. So this advanced heart failure poses a huge burden on health care systems around the world. It's not only economic but social as well.

And what are the challenges as far as reimbursement with when it comes to heart failure drugs? And is there any learnings from Repatha on how to gain reimbursement quickly? Maybe in the design of your trial, for instance, trying to put a sense of any hurdles you could see post data if the trial is successful.

Arvind, maybe I'll ask you to comment on that.

Yes. Sorry. Absolutely. I think one of the key learnings, Robyn, from the Repatha experience is that inasmuch as we demonstrated very profound reductions in LDL, outcomes was -- the outcomes data was important. And particularly, on the peer front, they said, "Look, it's terrific that you're demonstrating such profound reductions in LDL. But is there a reduction in heart attacks, in strokes, in other words the outcomes related to Repatha therapy?" And I think that's going to be important with omecamtiv as well, and that's the reason we are running those 8,000-patient study. It's a very large study. As Dave pointed out, it's very well-powered. The study design was actually published with a lot of details, including the powering of the trial because the trial is powered at 90% to detect a 20% reduction in heart failure death, which is the major secondary end point. And to Dave's point earlier, this is a very unique mechanism in that is a direct cardiac myosin activator. And when you compare this to other agents, the inotropic agents which are used in this particular setting, be it beta-adrenergic agents or PDE4 inhibitors, they have a lot of [ baggage ] attached to them. So that's potentially one advantage that we can bring to the market with omecamtiv. But ultimately, I think the data will have to speak for itself. And fortunately, we'll see the data here by the end of the year.

And I assume -- I was just saying about this now. It's a massive data set. And so I assume the data will be done -- or the trial will be done much earlier than that, and it still will take a considerable amount of time to walk the data and go through. I guess it's probably one of the larger trials I've dealt with as an analyst because I don't cover pharma. But is it a long time to analyze the data before we get it?

Yes, I think so. What I would say there, Robyn, is we have a very well-developed process for bringing in the data, doing all of the data cleaning, which is extensive as you're applying for 8,000-plus patient study, and then locking the database and then quickly generating the statistical analysis. All of those sorts of things are encompassed within the sorts of time lines that I outlined for you.

Okay. Great. All right. I want to get going, move along to deCODE. I don't think that even came up on your last quarter call. So I want to check in on the platform. We know with AMG 890, that emerged from the platform. Walk me through the status of what's coming out of that program. What do you think of 890? And along with deCODE, along with Adaptive, you're identifying other antibody therapeutics. Maybe just give us some sense of what's coming out of these programs and then how are those 2 companies working together.

Yes. Well, first of all, I would point out that we are one now, that deCODE is a wholly owned subsidiary of Amgen. It's a very, very tight working relationship. I speak with Kári Stefánsson, I would say, most days of the week, as do many members of the team in California. We're quite pleased. Let me just start by saying that deCODE has contributed, I think, to inform a global public health perspective on the COVID-19 epidemic. Iceland -- and the work that was done in Iceland, that -- and we're, of course, aware of the New England Journal publication that emanated from that work, which occurred literally weeks after we had started the project that I think is an illustration of the remarkable capability that they have. I will also point out that deCODE is now getting back up to normal operations as conditions in the lockdown are eased in Iceland, and we are sequencing again at full steam and we're quite pleased with what is coming out of those projects. We -- to specifically address 890 that you brought up and for those who don't know the numbers, that is a program directed against Lp(a), lipoprotein(a), in cardiovascular disease, specifically atherosclerotic cardiovascular disease. Lp(a) probably accounts for a decent fraction of the residual driver or risk for atherosclerosis in patients where it does not appear to be primarily driven by LDL. There's extensive genetic and epidemiologic evidence that correlates high Lp(a) levels with risk of cardiovascular disease, myocardial infarction specifically. And we have a program that has passed through Phase I involving an siRNA, small interfering RNA. We're quite pleased with what we've seen there. And this year, we will be launching the Phase II program for AMG 890. That is one of the studies that we delayed initiation or enrollment for a couple of months after discussions with the key investigators on the trial and their needs of bringing patients into institutions that were in the middle of the epidemic, but we do hope to get that trial going in the not-too-distant future and we look at the Phase II results as we're able to generate those. I'll finish my comments on 890 by saying that we are also using insights from deCODE and some of the proteomic work done at deCODE and Amgen to inform the design of the Phase II trial and to look at things like polygenic risk scores and other factors. And over time, I'll be saying more about some of those features of the trial and insights that we may glean.

Will I still be a biotech analyst when the data -- the pivotal data reads out from 890? I'm asking how you'll do that.

Yes. I don't want to speculate on time lines on that because, of course, it's entering Phase II. But one of the things we're hoping to do with some of the additional study design elements that I described is really, say, it's zero in on highest risk population of patients and determine who may derive the greatest benefit from a therapy that lowers Lp(a), and hopefully, that can make a more efficient development program.

You have been a biotech analyst for a long time, Robyn, so you're past peak, don't you think?

Don't remind people my age. I'm 20. So let me go one more question and I'll get to 510 and then hopefully get to BiTE. So you acquired Nuevolution, as you mentioned earlier in your remarks, last July. It's a small molecule discovery platform. And there were 2 programs, if I recall, that you opted into. Remind us what they were because I think a lot of investors have forgotten about this program and they -- it's a program that helps target protein degradation for therapeutics. Talk to me about this program, just reminding of where we are with Nuevolution.

Yes. Thanks, Robyn. And I think that has been a wonderful addition to the research portfolio. The team at Nuevolution is absolutely crackerjack. The integration is essentially complete. We now call Nuevolution, Amgen Research Copenhagen, ARC. And they are actually one of the sites that are up and running again as the Netherlands has started to -- excuse me, as Denmark has started to open up the -- and Copenhagen is easing restrictions. Their core technology is in generating DNA-encoded libraries, which are basically a way to look at billions of chemical fragments and starting material as you're starting to search for molecules that bind to a specific receptor or, in our case, to design what we call multi-functional molecules. And one of the things that really propelled our interest in Nuevolution is something that we call the induced proximity platform, which is basically a notion of developing multi-specific or multifunctional drugs, and you can think of these as having one hand that reaches out to a target, the other that reaches out to an effector. That effector might be in a cell. It might be another cell and brings them together and creates new biology. We don't have the time in this discussion to go through all the details. I would urge anyone who's interested. Ray Deshaies, our Head of Research, who's one of the real pioneers in developing new sorts of technologies, published a nice article in Nature a couple of weeks ago. I'd urge you to read that. But we are getting that platform up and running and are quite enthusiastic about its possibilities over time because you're not necessarily looking at developing a drug that in itself directly affects the function of the target but could, for example, simply target it for degradation, which you alluded to. This, we believe, will open up the universe of druggable targets. Currently, roughly 20%, give or take, of targets of interest are druggable with current technologies. We think that things like the induced proximity platform could dramatically expand that universe of druggable targets, and that's our real goal here. We've got, I think, all of the pieces in place, and one of the things we're really eager to get back in the laboratories for is to push that platform forward.

Great. Thank you. And now I'm going to appease the investors and ask some 510 questions. So I know going into this call, there was just some confusion around 510 from just the trials and stuff ongoing. So as I understand it, you expect to have at least 6 months of response data in patients with the last patient in year-end 2019. So we do expect data from Phase II and monotherapy data in lung cancer, and that would put the data sometime in the summer. So is that correct, first of all? And then what are you looking -- remind us what you're looking for in this data set. What's the PFS and survival? I know it's Phase II, but people are going to want to ask what does that have to look like. Maybe set some parameters for investors.

Yes. Thanks. And of course, there's, of course, intense interest in sotorasib or AMG 510. In terms of the timing of the Phase II potentially pivotal non-small cell cancer readout, for clarity, we want at least 6 months of follow-up in patients from time of response. And so if you imagine, patients -- the last patients were enrolled towards the end of the year. Most of the responses occur by the second set of scans, which is 2 or 3 months on therapy. Add 6 months to that, and that puts you into the second half of the year. And then that, I think, is what will be -- that will enable us to generate a robust data set in terms of not only the response rate but duration of response and progression-free survival and to have first views of overall survival in this patient population. So we're right on track. This is a sort of time line that we had anticipated, and I don't see any real deviation from that.

Okay. And then a question from an investor today on response rate. The data at WCLC at 960 milligrams were very impressive for all those responses of the 7 responses seen ultimately confirmed -- I think he said, I believe, 2 out of 7 were confirmed at that update.

Yes. So what I would say to that is we are going to be presenting updated data in the coming months on the Phase I experience, where we'll talk about the confirmed response rate, and of course, many of those responses were confirmed. I won't get into the specific numbers here out of deference to our investigators who are working on these presentations and publications. But we remain, I would say, quite bullish on AMG 510, and it's full steam ahead on this program.

Okay. The other question is, you've highlighted the importance of duration of response and PFS for 510. What has your longer follow-up shown in terms of duration of response from the Phase I experience? I think you were saying you'll need more updates. But I think you -- do you continue to think 6 months' duration of response continues to be a fair bar?

Yes. So again, duration of response, progression-free survival, these are the sort of data that we're providing as we roll out the updates. What the bar is, I think it would be a discussion with regulatory authorities as we generate the large Phase II data set that -- and that I think will be a definitive look here. I'm reluctant to draw a line in the sand. One of the things that we are doing is also embarking on studies, looking at real-world data, real-world evidence, for example, to understand much more precisely the natural history of the disease in patients with the G12C mutation and in particular, those that have been treated with chemotherapy and a PD-1 inhibitor, which the vast majority we'll have in the Phase II trial.

From that -- a bit of segue, there -- the question is like, if approved, where in the treatment paradigm would it fit. And there are a lot of companies developing more broad-based KRAS inhibitors that work in patients who don't just have mutations, like just what is your thought of where it will be fit in, big picture and the paradigm ultimately, given the types of trials that you're doing right now to look at in combination? And what about these next-generation compounds that are beginning to emerge? We don't really have data yet though. So they're early.

Yes. So these are a wide range of compounds. They have varying mechanisms of actions, some of which affect KRAS mutant tumors through indirect -- what I would call, indirect mechanism. Of course, we'll watch those data carefully as they emerge. I think that we're interested in studying sotorasib across the spectrum of patients with G12C mutated non-small cell lung cancer. And so we'll, of course, be very interested in exploring it in earlier lines of therapy as well.

And if you're going earlier, so NCCN guidelines include KEYTRUDA monotherapy and KEYTRUDA chemo combo as a guideline standard. So what are the -- do you know what the PD-L1 expression levels are like in patients with KRAS G12C mutations? Are they similar to the overall population?

What I would say is that we've got a very extensive biomarker program. We are minutely characterizing to the greatest extent possible tumors. We're starting to amass larger data sets. The aims here, I would say, are broadly to understand if there are patterns of response and resistance that predict who's likely to benefit from the drug. That may be mutational patterns. It may be things like PD-1/PD-L1 expression as you're alluding to. And so I think as we amass larger numbers of patients who are either responders or nonresponders, we'll be able to address that question. And I think the Phase II study is going to provide a lot of insight into some of the molecular underpinnings of response or resistance.

Okay. Great. I've got some more, but I also want to get to the BiTE because some people were asking me about that and I also had questions as well. The BiTE platforms are becoming more prevalent as people start to walk -- turn away from CAR-T and focus more on other therapeutics. And obviously, you have the next generation that might be more commercially viable. Maybe you could just talk a little bit about what BiTE are you most excited about. Which ones are your favorite children? Because I think -- I'm looking at my list here. You've got quite a few. What are the ones you think are most underappreciated by The Street?

Well, first of all, I love all my children. And so we like -- if we take a BiTE into clinical testing, it means we have a high degree of confidence. We have a very extensive preclinical platform that we've developed for -- ranging from target identification and validation to generation of the clinical candidate. So once you see something and see it entering the clinic, that already implies some level of confidence in what we've seen in the science. I would point out, as I mentioned on our earnings call, that we expect to be able to present data from the AMG 160 program later this year. That is a half-life extended BiTE directed against PSMA in advanced prostate cancer; AMG 757, a half-life extended BiTE directed against DLL3 in small cell lung cancer; and then finally, AMG 701, which is a half-life extended BiTE targeting BCMA. And then there are, as you imply, a large number of other BiTEs in the portfolio, including some, for example, that will be entering clinical testing or haven't -- or recently have entered clinical testing for targets such as gastric cancer, where we expect that our collaboration with BeiGene will be quite important given the prevalence of that disease in Asia.

And can you just talk quickly about 701 HLE, the construct and how it different from -- differed from 420 with the BCMA, for investors, BCMA BiTE?

Yes. So I mean it has -- I would say that it's -- while I won't speak to the specifics on the scaffold or the platform, it's got the sort of pharmacokinetic properties and other properties that we're shooting for when we designed a half-life extended BiTE platform. And as we generate data over the course of the year, we'll make a determination as to whether we feel it can provide a substantive addition to the treatment armamentarium for these patients. As you know, there are now an almost uncountable number of BCMA-targeting agents in the clinic, and we want to always make sure that we are bringing something that's going to add unique value.

We also now understand -- I think most investors understand that binding affinities really matter both for the CD3 and the target antigen. So I'm just curious, when we're looking at your BiTEs, are the binding affinities of CD3 that you're using for second-generation different from the first generation? Or is it just the construct that's different?

Yes. So we've done a huge amount of work changing binding affinities and other properties on the BiTE on both the target and the CD3 side. On the CD3 side, we -- I would say we lean towards not dialing down that sort of engagement. We do have concerns that it may compromise efficacy, but we continue to refine the platform as we move forward and as we learn from the clinic. Perhaps that's all I'd say on that particular topic.

That's helpful. That's good color. When you think about BiTE and comparing them to BiTE specifics or in other different -- there's all sorts of different things. There are similar [ responses with funding ]. What's the advantage? Talking about like solid tumors, who do you think is going to be the winner as far as getting some efficacy with a broader base of solid tumors and why? What gives your BiTE platform an advantage?

Yes. I mean it's hard to me to speculate about others, but I'm quite pleased with what we're seeing in the half-life extended program now. And I think as we generate and present the data from, in particular, the prostate cancer and DLL3 small cell lung cancer programs, they should be informative.

Okay. We only have a few minutes. So maybe I'll ask one last question and then maybe turn it over to you to maybe bring up the one thing that you wish someone would ask that no one ever asked you. I just would ask about a little bit more on the BeiGene collaboration. People always ask, what does that provide? Just a big picture, what does your BeiGene collaboration, when you first initiated that, provide you as a company? And talk a little bit more about what you can get out of that, that people don't appreciate.

Yes. I would say we are quite pleased with the collaboration. It is moving forward. It's operationalizing. There's a very good and a high tempo working relationship between the teams now. We're beginning to transition some responsibilities to BeiGene, and we're really looking to them for a couple of things: one, to accelerate our clinical trials work in China. We think they're really the best with an extensive network and relying on the huge in-country experience from the development to the regulatory to the commercial realm. So I would say we're quite happy with that working relationship, and we expect that to really start to gather a huge amount of momentum in the coming months.

Great. And to wrap it up, maybe just one thing you wish investors would ask more about or you think that they're missing from the R&D side and the development side. I know there's a good fixation on KRAS, and now we're moving toward later-stage assets. But what is the one thing you might guide investors to, to focus on or do their work on that no one is doing.

I probably would revert there and talk about the induced proximity platform and say put that on your radar. We'll talk more as we begin to build that out. But for a long-term investor, I think that's something to watch very, very carefully. I think that those sorts of technologies have the ability to transform therapeutics just the way, for example, monoclonal antibodies did some time ago. And if we can really expand the druggable universe, that is just going to open up enormous new possibilities.

Great. I think that's a great way to end the call and I -- David and Arvind, thank you so much for doing this call. Stay safe. Take care of yourselves. Stay sane. And for those of you who are in the office or in your home offices, feel free to e-mail us with any follow-up questions. Thanks again. I really appreciate you taking the time.

Thank you, Robyn, for having us.

Thanks much for having us and take care.