Amgen Inc. (AMGN) Earnings Call Transcript & Summary

Good afternoon. My name is Do Kim. I'm one of the biotech analysts here at BMO. For our next presentation and fireside chat, we're happy to have with us, Elliott Levy, Senior Vice President of R&D Strategy and Operations; and Arvind Sood, Head of IR at Amgen. To start, maybe, Elliott, you could have some opening comments and talk to Amgen's priorities for clinical development.

Great. Thanks for giving me the opportunity to speak today. At Amgen, our focus is on development of first-in-class therapies in areas of high unmet medical need. We look for areas where we can bring value based on our established capabilities in protein discovery and development, in immunology, in unique platforms like our BiTE platform. And we focus on 3 therapeutic areas: hematology and oncology, inflammation and cardiovascular disease. We have a number of key data readouts later this year. These include our potentially pivotal study with AMG 510, or sotorasib, our KRAS inhibitor; the pivotal Phase III program from tezepelumab, our TSLP1 inhibitor for asthma; and finally, the pivotal Phase III trial, GALACTIC-HF, for our cardiac myosin modulator, omecamtiv mecarbil. As I have mentioned, we expect these readouts all later this year. Despite disruption in clinical trial execution caused by the pandemic, these readouts are on schedule and we expect the data to be of high quality. Although we experienced some delays in other programs, we are continuing to vigorously advance our pipeline. And I'll be happy to answer questions around specific programs. We've, I think, followed through on some critical business development activities from the preceding year. We're far along in the integration of Otezla, which, as you may know, completed a key Phase III study in mild-to-moderate psoriasis quite recently with positive results. And I'm happy to announce that our collaboration with BeiGene is also on track. We are working collaboratively with other biotech companies to accelerate efforts to prevent or treat COVID-19. These efforts include our strategic partnership with Adaptive Biotechnologies with the strong support from our deCODE Genetics affiliate. We are also exploring use of Otezla as an immunomodulatory therapy in patients with COVID-19 pulmonary disease. And finally, we are very active on collaboration with the public entities, including the National Institute of Health on the active program and operation work speed. I'm going to stop there. Arvind, I don't know if you'd like to add anything before we move to questions.

No, I think that's fine, Elliott. Do, let's go ahead and switch over to your Q&A.

Okay. Fantastic. Thanks for that intro, Elliott.

Maybe if we could start on AMG 510. What is the development plan -- clinical program for AMG 510? Can you go over the current Phase II study in lung cancer? And what we should expect for the data to meet requirements for a filing? And then where do we go from there?

So as you noted, we've -- we are running a Phase II study in non-small cell lung cancer, which is potentially registrational in the United States. This study completed enrollment about the end of last year. And so allowing for some months for patients to exhibit a response, and then another 6 months or so to assess durability in responders, we would expect to have data from this trial sometime later this year. And our goal is to present it at an appropriate scientific forum, depending on the evolution of schedules for those events, and as we have more detail around filing time lines, we will share them with you. The -- we've also initiated enrollment in a Phase III study in previously treated patients -- in patients previously treated non-small cell lung cancer. This study would serve as the confirmatory trial should we gain accelerated approval based on Phase II results. And we continue to explore the use of AMG 510 or sotorasib in a number of other tumor types. We have an ongoing Phase II study in colorectal cancer with the patients under active follow-up. We expect that the data from this study will inform the forward planning in colorectal cancer to help us to understand whether a monotherapy approval is possible or whether the treatment path -- the development path will favor combination therapies. We also have an ongoing protocol in patients with tumor types other than non-small cell lung cancer and colorectal cancer, which is looking at activity at currently in 11 other tumor types. We have an active master protocol, exploring a variety of potentially interesting combinations with sotorasib, including PD-1 and PDL-1, MEK, SHIP2, EGFR plus or minus chemo and the pan-erbB tyrosine kinase inhibitor. We started dosing patients in several of those arms, and we'll provide guidance over the course of the year in terms of when we can anticipate data presentations. So let me stop there and ask if there are any follow-on questions.

Yes. For colorectal cancer, what will be the important factors in determining whether monotherapy data will be sufficient for filing or having to move to a combination in order to get approval? What have you seen in the early Phase I trial? And what more do you need besides response rate?

So I think we presented data in colorectal cancer recently, and the data suggests that the response rate is low but that a significant proportion of patients may have prolonged stable disease. Overall, the progression-free survival with AMG 510 monotherapy was about twice what's been observed with existing standard of care, STIVARGA or LONSURF. And the overall survival was also, at least apparently, potentially meaningfully prolonged. Now I think this is useful information. And the additional information from the ongoing Phase II colorectal cohort as well as longer follow-up from the initial cohort will help to inform our thinking about the optimal development path forward. We do believe that, ultimately, to achieve the most meaningful therapeutic benefit, in all likelihood, will be less necessary to study AMG 510 in combination with the therapies for which there's a biologic rationale, and we have encouraging preliminary data.

Maybe we could move to tezepelumab now. Could you remind us of the significance of the Phase II data that you reported in severe asthma 2, 3 years ago? And what that could mean about the addressable population? Who's being treated now? And what's tezepelumab's role in the treatment landscape would be if the Phase III is successful?

So for context, I'll just remind the listeners that the approved biologic therapies for asthma are limited to patients with eosinophilic disease. And these agents either warrant study or failed to exhibit a treatment effect in patients with a noneosinophilic phenotype who make up 30% to 40% of the population of patients with severe asthma. Tezepelumab was studied in a broad population of both eosinophilic and noneosinophilic patients in Phase II. A reduction in the asthma exacerbation rate of some 70% to 80% was observed in both populations. We found this very encouraging. It is consistent with the biologic side of action of the drug, which is quite early in the inflammatory cascade. Secretion of TSLP is one of the earliest events that occur in the asthmatic airway in response to infectious or particulate challenge. And so it makes sense that by acting so far upstream in the inflammatory cascade, you might have the potential to affect the disease in a broader spectrum of patients. We designed the Phase III program to provide meaningful evidence of the activity of tezepelumab in both eosinophilic and noneosinophilic patients. If it works in both these populations, it would be the first biologic therapy that could be used in both populations without regard to the eosinophilic status of the patient. The program is on track with our collaborators. We've been able to adhere to the protocol. Despite the challenges of the pandemic, we feel the trial is on schedule and that the trial integrity is quite solid. And we fully expect to read out towards the end of the year on schedule and with high-quality data.

And you had a Phase II study in atopic dermatitis previously that didn't meet your expectations. Could you talk about what you learned from that study? And what adjustments you made in the new Phase II that you're currently running?

So there's quite a strong base of translational evidence in support of the importance of TSLP in atopic dermatitis. We ran a rather small Phase II study, which was not successful. In retrospect, there were several features of the study which may have contributed to the failure to demonstrate a statistically significant effect, although there was clearly some evidence of activity. We -- again, based on the strength of the translational evidence, we launched a new Phase II trial, which utilizes a 16-week primary time point, which is more typical in the field. And is -- it incorporates certain other modifications to the study eligibility criteria in order to ensure that the patients are those who are most likely to respond to a drug with this mechanism of action. The trial is ongoing and we expect final data in 2021.

Okay. Great. So the other pivotal study readout we're expecting this year is for omecamtiv. Could you just talk about how the Phase III program is structured there? And the pivotal trial is an outcome study, how important is it to show that the drug has an outcomes benefit? And what's the minimal improvement meet statistical significance?

So we are nearing the end of the omecamtiv mecarbil pivotal Phase III study, GALACTIC-HF. In fact, we've already initiated certain closeout activities to ensure that we're able to close the trial, and produce a high-quality data set on schedule later this year. GALACTIC-HF was -- is one of the largest and, we believe, best-conducted Phase III global outcome studies in the field. It enrolled over 8,000 people. It is designed with a primary endpoint, a composite of heart failure events and mortality. But it is sized to demonstrate a statistically significant effect on the mortality component, the composite endpoint alone. It's a study that's designed to have the ability to demonstrate a robust statistical finding with an improvement in the primary composite endpoint. And in mortality, it's some 15% to 20%, which we believe would be a clinically meaningful improvement in this very high-risk population. It has certain other unique features that I think are worth mentioning. First, it was deliberately designed to include a meaningful number of patients enrolled during a hospitalization for heart failure exacerbation. We believe that this is a setting in which it is -- in which many patients experience intensification of their therapy. And therefore, it was important for the study to provide information on the effect of the drug when initiated in the hospital. The drug itself, in contrast to certain other recent launches, is one that is -- should be relatively easy to use. The existing therapies present challenges in patients with impaired renal function, elevations in serum potassium, low blood pressure or slowed heart rate. As a result, majority of patients, even well-managed patients with heart failure, are not on optimal doses of every guideline-directed therapy, because omecamtiv mecarbil does not have adverse effects on blood pressure, renal function, serum potassium or heart rate. It should be a relatively simple matter to add to existing therapies, which do not need to be discontinued in order to create space in the therapeutic regimen for it. So we're quite excited about the readout of this program, end of this year. The study had enrolled rapidly, which I think indicates the high degree of interest in the field and in an improved therapy for heart failure, and we look forward to sharing the results with the cardiology community at the earliest possible time point.

Could you talk about the Phase II data? And what were the measures in those results that made you optimistic for this Phase III outcome, given that it's hard to predict whether the Phase III is going to be successful from Phase II studies in CHF?

Yes. Well, it is -- in general, it's not possible to provide preliminary outcomes assessment in a Phase II trial in heart failure. So typically, developers look at surrogate indicators of the effects of drugs on myocardial function, on myocardial anatomy, which is markedly abnormal in patients with chronic heart failure and on cardiac stress. We saw improvements in all these dimensions in the Phase II program for omecamtiv mecarbil. It produced dose-dependent increases in cardiac performance, specifically stroke volume and left ventricular ejection fraction. It produced improvements in ventricular anatomy with reductions in abnormal cardiac dimensions on echocardiography. And finally, it improved -- it produced a marked improvement in cardiac stress, as measured by N-terminal proBNP. It's -- to my knowledge, it's the only therapy that's produced large improvements across this entire panel of indicators. And these results gave us, and the leaders in heart failure with whom we work, considerable confidence in the potential for a positive result in Phase III. Of course, the proof is in the pudding, and we'll find out later this year whether our hypothesis was correct. One other point worth mentioning that we also found encouraging in Phase II was meaningful improvements in symptomatology, which are not invariably seen with effective heart failure therapies. A key aspect of the GALACTIC heart failure trial is measurement of heart failure symptoms using a validated patient-reported outcomes to all the KCCQ as a secondary endpoint.

Great. I think we're all looking forward to that study result when it comes out. Moving to the Lp(a) program. It's not one that gets a lot of mention in headlines. Could you talk about the therapeutic approach for that therapy and the collaboration that it's working under?

Yes. So Lp(a) is one of the most intriguing targets in cardiovascular medicine. It's been recognized for some years that it's an independent contributor to atherosclerosis. And with the widespread availability of genetic testing, it's become increasingly apparent that Lp(a) is a genetically determined and currently untreatable contributor to atherosclerosis. Elevated Lp(a) is often found as the sole significant lipid abnormality in patients with premature accelerated cardiovascular disease. The development of therapeutic has been difficult because of the pleomorphic nature of the lipoprotein. We are utilizing a highly rational approach to reduce Lp(a) levels. This involves administration of the small interfering RNA, which is taken up by the liver and dramatically reduces the translation of the apolipoprotein a, it's a necessary constituent of Lp(a). We've seen dramatic reductions in Lp(a) levels with this approach with the potential, we think, for a prolonged treatment effect. The Phase II program for AMG 890 will start in the second half of the year. It is one of our studies that's unfortunately delayed a bit due to the pandemic. But start-up activities are well on hand, and we expect to be in the clinic fairly soon. We also have, I think, a unique resource in our deCODE Genetics affiliate. It's helped us to broaden our understanding of the role of Lp(a) in driving atherosclerotic vascular disease. And this has influenced design choices that we've made for Phase II and that we intend to implement in Phase III, should Phase II be successful. And our hope is that by utilizing these insights, we will have a program that demonstrates a robust treatment effect and perhaps in a shorter period of time than we might be able to do without the genetic insights.

Great. So we're running down in time, about 2 minutes left. Maybe we could take the final moments to talk about your BiTE program. We're expecting some data from your half-life extended BiTE AMG 701 and BCMA. It's a very competitive field. How do you feel about that program? And do you think you'll be able to repeat what you saw in 420?

Well, let me just first say that we continue to be very excited about the potential of bispecific technology. We were the first with a clinically meaningful bispecific therapeutic with BLINCYTO. We studied a wide variety of bispecifics in the clinic, utilizing both our first generation or canonical technology, which has -- which yields our short half-life products that are delivered by continuous IV infusion as well as our half-life extended technology, which delivers products that have the potential for inter -- clinic administration. You mentioned AMG 701, which is our half-life extended BiTE. We've seen, I think, very promising preliminary data with AMG 420, which is the short half-life version of AMG 701. AMG 701 has moved quite far along in dose escalation. We expect to present data later this year. In this program, as in all our programs, we're utilizing learnings from our -- the totality of our experience with bispecific therapeutics. One of the critical determinants of success with bispecifics is the design of an optimal dosing schedule in order to maximize therapeutic efficacy while managing cytokine release syndrome, which is a near-universal finding at the initiation of therapy with these products. We've taken learnings from across the program, and we're incorporating them into our development of an optimal dosing schedule for administration of AMG 701. We're also utilizing learnings around therapeutic and prophylactic approaches to control the cytokine release syndrome. I think those who follow the field know that this is a critical problem that has to be solved in the development of bispecific therapeutics. We believe that our broad experience across a variety of targets and our long-standing scientific leadership position in this area gives us a bit of a leg up in making critical decisions around optimization of the therapeutic regimens. And so we're excited about the data that we'll be displaying -- we'll be sharing later in the year. As you mentioned, we also expect to have data on several other half-life extended BiTE programs. One of them is AMG 160, our PSMA BiTE for treatment of advanced prostate cancer. And the third is AMG 757, our DLL3-targeting half-life extended BiTE, which is in development for treatment of small cell lung cancer.

Well, thank you so much for joining us today. I'm afraid we're out of time. And Elliott, I enjoyed chatting with you. And Arvind, thank you for participating in our conference this year.

Great. Thank you so much for having us.

Yes. Thanks so much.

Thank you, guys. So we will take a short break and return for our next presentation in a few minutes.