Amgen Inc. (AMGN) Earnings Call Transcript & Summary

All right. Hello. I'm Michael Schmidt, senior biotech analyst with Guggenheim Securities, and it's my great pleasure to welcome Amgen to this year's Virtual Guggenheim Oncology Day. With us today, we have Gregory Friberg, who is the Vice President of Global Development at Amgen; as well as Arvind Sood, who most of you know, who's heading up Investor Relations at Amgen. Welcome, guys, and thanks so much for joining us this year.

Thanks, Michael.

Thank you, Michael.

I thought, in the interest of time, I will jump right into Q&A. Maybe a bigger picture question upfront. Oncology is obviously one of the biggest and fastest-growing therapeutic categories. Amgen has a significant commercial presence in this space. But the R&D pipeline looks perhaps a bit leaner compared to that of some of your peers. Maybe let's talk about how important expansion of the oncology R&D investment is as part of Amgen's longer-term growth strategy, relative to other therapeutic categories, perhaps.

Yes, Michael, thanks for the question. I will just dive right in. Again, I have the good fortune to be able to -- from the development side, oversee the oncology pipeline. And if you look -- think about Amgen oncology, we have actually a pretty rich history. Amazingly, we touch 1 in 5 oncology patients in the U.S. with our products to this day. Really over the last decade, we've been transitioning from supportive care into the therapeutic area. And we had a specific strategy that we laid out. We always said that we thought that the future of oncology was going to be a marriage of precision medicine with immuno-oncology. And so we focused in those 2 bins. On the precision oncology side, I think you've seen that we've attempted to target some of the so-called Holy Grail targets, high priority targets. Of course, sotorasib is one of the real hallmarks of that today, and I think we'll probably be talking about that more. And on the immuno-oncology side, we've been focusing slightly different than perhaps some of our peers. A big investment, going back 6, 8 years, starting with Micromet and taking the so-called BiTE portfolio, the biospecific T-cell engagers, and not only evolving them but industrializing that platform. And what you see today really is the fruits of the labor that we took along that journey. And so quite pleased to see, again, on the BiTE side, 6 different diseases where we've been able to take it off-the-shelf immunotherapy and see what we think are signs of good activity in both solid and heme malignancy. So when you wrap those together, oncology is an area where from the so-called mid-stage pipeline, I'm not sure if mid-stage really exists anymore. We often have Phase I, and then we're off to the races to see whether or not, again, we have something that's safe and effective to bring to patients. But the portfolio itself is one that's full of opportunities. And again, happy to talk about those in more detail. And ultimately, hopefully, these are going to be therapies that help patients.

Terrific. Great. We'll talk about sotorasib and the BiTEs in a little while. But maybe if you look forward longer term, within oncology, what are perhaps areas of increased internal investment? And what level of urgency does the company have to ramp up investment into oncology R&D, maybe versus staying the course within those 2 areas that you mentioned?

So on the D side, speed is the new capital, right? And so from that standpoint, we're very focused on trying to expedite our development. Of course, that means getting to the key questions, getting to the key answers. Sometimes the drugs, this is oncology. I think only neuroscience is an area that from beginning to end has a tougher hill to climb. And so we want to get to the right answers as quickly as we can, and we're deeply invested in that. On the research side, certainly, in the area of targeted protein degradation and induced proximity platforms, I think there's a tremendous opportunity to be able to perhaps target the 85%, 75% of biology that up till this day, classic pharmaceuticals haven't been able to. And from an investment standpoint, I think on our recent earnings call, our CEO and our Head of R&D, highlighted those areas as places that we're going to continue to invest quite heavily. And again, hopeful that we bring forward therapies that society wants, big effect sizes, figuring out the biology of sensitivity and resistance and ultimately, asking the right questions as quickly as we can along the way.

Great. So we'll maybe circle back on some of those areas later on. But let's maybe switch over and talk about sotorasib, your KRAS G12C inhibitor. I think most investors are probably very familiar, it's a key growth driver within your pipeline. And arguably, I think your most exciting pipeline asset overall. And so you did recently present the full Phase II registration data set in a single agent in non-small cell lung cancer at the World Lung Conference. I think most of us expected good data based on the strong top line results in the Phase I data that was released earlier. But maybe if you could talk about some of the more nuanced takeaways? I thought the biomarker analysis was particularly interesting around PDL-1 and STK11, et cetera. And maybe talk about what the implications are of those insights with respect to future development opportunities and next steps?

Yes. Thanks, Michael. And I'll just add that I am a card carrying oncologist, and it's been incredibly exciting that we've known about the KRAS pathways, as [ field, the grand way ], for almost 40 years. And so the fact that there's now chemical matter that undeniably can target these pathways and result in something that looks meaningfully for patients is pretty exciting. So we released our data at World Lung Congress. This was 126 patients. This is relapsed/refractory non-small cell lung cancer and we are quite pleased with the results. Overall response rate, about 37%; durability of response, 10 months. Those compare quite favorably to what, unfortunately, these patients, whether they have G12C or not, patients once they failed frontline therapies, have fairly limited options in this day and age. And so those numbers compare favorably. And then when you look at all the patients, not just the responders, that 6.8 month progression-free survival, again, something that we think, again, is worthy of being excited over. When you pair that with a safety profile that looked certainly different than chemotherapy and quite tolerable, this, again opens up, I think, a plethora of opportunities. What we need to remember, of course, is that this still is early days. We're about at 30 months since the first patient was dosed with sotorasib. So on that 40-year journey, we're in just a small sliver of it. And this -- it may be the end of the first chapter, but it's the beginning of, I think, many more chapters to come. And you highlighted some of the subset analysis that we showed. And there are some very interesting data there. We have to, of course, take it for what it is. We have to remember who these patients are and the numbers that we're dealing with. But again, there's probably some insights there. In particular, these are second line patients. They've -- 90% of them had, had a prior PD-1; another 90% had, had chemotherapy; 80% had both. And so the type of patient who, unfortunately, those therapies had failed them are flowing through into our study. So we see demographically, a little bit of increase in the STK11 mutations, not entirely surprising. We see a lot of PDL-1 low patients. Again, not surprising, considering that they flowed through those frontline therapies. Now when we look at the subsets of response to this single-arm study, everyone got sotorasib at once a day, [ 960 ], we saw that we did see responses in all of those categories. So there's no biology that seems to preclude responsiveness. But there were some hits, some hints that perhaps, particularly with regard to certain other switches in the tumor, other molecular markers, that we might have seen some numerically higher or potentially numerically lower response rates. STK11, in particular, and KEAP1 are areas that we're focusing on quite quickly. The one question that these studies will never be able to answer, is this idea of a predictive marker versus a prognostic marker. What we know for sure is that we're refining for the 4 prognostic markers in frontline makes sense. They're negatively selecting for those who are progressing through. But whether or not these are going to be predictive markers, that allow us to, again, target where sotorasib might have an advantage compared to patients as a whole, those are stories that we're deeply going to interrogate. We're very excited to continue that journey. And in particular, I think when we think about patients in other settings, and describing who might be poorly served by other therapies, those are going to be useful markers, but it is early days, and I would say that these right now are hypotheses and ones that we're going to continue to follow.

Okay. Very good. And then -- so it is an exciting area. And obviously, to some degree, not surprisingly, competitive as well. So there's a few similar molecules coming behind with the same target. Some investors wonder, is there an opportunity to maybe set the bar a little bit higher by optimizing the dose further? Or are you in a place where you think you already have maximized content here in terms of dosing schedule or level? And the second question was, to what degree are CNS metastases common in those patients? And what do we know about your drug to potentially penetrate the blood-brain barrier?

Yes. I sometimes say good ideas don't stay lonely very long, and this is another case of that. And so that's good for patients. The fact that there is multiple hypotheses being tested. When we focus on sotorasib, of course, we can make preclinical arguments. We were quite pleased with the exposures that we're able to achieve in patients with once daily dosing, well above the thresholds and the preclinical models that we thought were going to be really matching out our effect size. And so we then turned to the clinical data. It's important to remember that we're not doing these experiments ultimately in mice. We're doing them in people. And ask the question of the data that we see. And again, we think that the clinical data is quite nice here. We're seeing deep durable responses. The study that we performed is also not a -- this isn't a preliminary study. Everybody -- every patient's treated at the same dose. They were evaluated by really the highest bar of clinical evaluation that we have in these studies, blinded, independent, central review of CAT scans. And so we feel like these are very high-quality results. We're also -- we can look beyond just tumor shrinkage to the things that really matter to patients. Am I having a reasonable amount of time? 10 months of durability of response. And then for patients, all of them together, the 6.8 months of PFS. We think these are important endpoints. Now the question, of course, always comes up, are there certain areas where we're either seeing advantageous or perhaps less advantageous profiles. And the question that you raised with regard to brain meds is an important one. These are questions we asked even about Herceptin to this day. And so what I can say is that whenever we think about a subset of patients, we should also, again, point back to what's important, the patient and the biology. So for KRAS G12C brain metastases appear, at least in our data sets that we published, in about 23% of patients. That's a little bit more than the 18% to 20% that you see in non-small cell lung cancer patients in general, but it's not like EGFR, where again, we see sometimes factors of 2 or more in terms of prevalence. But what I'll add is that we looked at these patients, we actually had 20% of them in our Phase II study that we presented. And what we see is, again, this is a case where site disease doesn't preclude responsiveness. There's a mix of, of course, prognostic and prevalence -- I'm sorry, prognostic and potentially predictive elements here. But what I would say is that this is a question that really, is one that we're going to continue to look at. We're running a Phase II study right now, looking at a cohort of these patients. But these are the patients that were in our study, and we don't see any major drawbacks at this point that would point us to believe that we need to modify sotorasib in any way. The continued study that we're doing, again, we're hopeful, will give us more insights for untreated brain metastases, and there'll be more to come.

Very good. And the relapsed/refractory lung cancer indication is obviously already under review as part of the RTOR program in the U.S., with approval potentially coming very soon here. When you think about the commercial rollout in the U.S., do we know what percentage of KRAS G12C positive lung cancer patients are currently being routinely identified? And how much of a ramp there has to happen in order to get quick market uptake?

Yes. Great question. Our best estimates right now are about 50% of non-small cell lung cancer patients have access to a next-generation sequencing panel as part of their treatment. And of course, we would expect those people to be able to know their status for the G12C mutation. This -- increasing this number is squarely within our strike zone of what we're again focusing on. We want to be able to make sure that access to the testing doesn't preclude access to the therapy. And we've actually entered into several partnerships, both with Guardant for a blood-based assay as well as QIAGEN for a tissue-based assay, and we're hopeful again that those will bring this forward to patients in an appropriate way. Again, high-quality results at -- for the patient, where they are and for the physician at the time of these decisions is going to be our goal.

Very good. And then when you think about other or future label expansion opportunities, I think you recently noted you're seeing encouraging signals of efficacy also in the frontline lung cancer patient population. Maybe just remind us of your plans here and whether there might be an opportunity for a fast-to-market strategy in that setting?

So I think it's premature to talk about faster market strategies, but I will say that we have a planned Phase II study in frontline biomarker selected patients. Again, trying to tease apart what I was referring to earlier, which is that not all these patients are created equal. We have the beautiful set of spectacles that we can peer into tumors now and look at their genetics. And there's a complex story here with KRAS. This is not a one gene, one outcome story. We've talked about STK11 and KEAP. Of course, we're looking at other markers as well. And what we're hoping to identify again and better understand is where a drug like sotorasib, whether it's given us a monotherapy or in combination with other therapies could offer patients the most value. So more to come, but that is an area that we're actively looking at.

Right. Got it. And then I know you're evaluating also a wide range of combinations in both lung cancer, colorectal and potentially other types of cancer patients at express or that over express KRAS G12C. Remind us of your latest thinking within the colorectal indication? The initial data that we saw, the Phase I data was quite interesting, I thought, and I know we're looking forward to seeing additional data here in the first half of this year. How will that information drive your decision-making within colorectal?

Yes. So we presented some of our data from our Phase I cohorts. And as we've stated publicly, we completed a single-arm Phase II cohort as well. That data is maturing and midyear, we'll be able to digest that data with the appropriate amount of follow-up. The question ultimately will be, not necessarily can this drug have activity in colorectal cancer, it will be how do you deploy it, to try to take advantage of this biology and offer patients something of most value. Of course, the data midyear is going to be helpful for us to understand that better. But also the ongoing combination studies are going to give us insights. The reality is that colorectal cancer is a more genetically diverse disease than perhaps non-small cell lung cancer. And so again, looking at the details of who these patients are, how their genetics influence responsiveness and nonresponsiveness, these are going to be the kind of questions that we're going to try to dissect. I want to just bring us back to the fact that again, we're only 30 months into this journey. And so it's really remarkable that we have this data in our hands right now, to be able to ask these first set of questions. But we shouldn't kid ourselves. They still are the first set, and there'll be a whole another set that will come thereafter. It's an exciting prospect for a drug developer like myself. But I want to make sure again that we appropriately look at the data we have in hand and let the science take us in the direction that we think is most appropriate.

Michael, I would just quickly add that our Head of Commercial, Murdo, he has a lot of experience in lung cancer with PD-1s in particular, just considering where we came from. We know the KOLs, we know the space well, and our team is ready to launch at any point in the first half. Obviously, there is a high unmet medical need for these patients with advanced non small cell lung cancer, with few options after progression from first line. So just wanted to convey that enthusiasm.