Amgen Inc. (AMGN) Earnings Call Transcript & Summary

So good afternoon or good morning for those on the West Coast. Thanks for joining Citi's 16th Annual Biopharma Conference. I'm Neena Bitritto-Garg. I am one of the biotech analysts here at Citi, if you don't know me. And I'm really pleased to be joined for our next fireside chat by Murdo Gordon, the Executive Vice President of Global Commercial Operations at Amgen. And so today, we're going to be talking a little bit about kind of Amgen's commercial outlook as well as some higher-level topics within the biotech space and if you kind of ask that specific questions as well. And before we get into the discussion, I just wanted to note that if anybody listening does have any questions, you can feel free to e-mail me directly or you can submit questions to the online portal, and I will incorporate them into the discussion, if time permits. So now I just wanted to turn it over to Murdo to kind of give some opening remarks.

Thank you, Neena. Thanks for running the fireside chat today, and thanks to Citi for hosting us. We've had some good sessions throughout the morning, and it's a pleasure to be here today. We're excited about positioning Amgen for real long-term growth. And we continue to execute on our strategic priorities. This year, we've advanced our late-stage pipeline with early U.S. approval for the launch of LUMAKRAS for advanced non-small cell lung cancer; tezepelumab with a priority review, with the Q1 2022 PDUFA date; and of course, Otezla with a supplemental NDA for mild-to-moderate psoriasis with a December 21 PDUFA date. And we're also -- we're seeing really good response in the market. LUMAKRAS launch is going very well. Despite challenges from the pandemic affecting our ability to visit customers face to face, particularly in oncology, we've been able to get testing up to 80% for KRAS G12C status. That was from a much lower number around 60% prior to launch. And we've got many labs now making sure that G12C status is upfront in their reports as an actionable mutation. So LUMAKRAS is off to a very good start, and I'm sure we'll cover that in more detail. On the strategic side, we've been very active on the BD front with 4 transactions this year with the pending closing of TeneoBio. This expands our industry-leading protein engineering capabilities and complements the BiTE platform that we have in-house, really enhancing that multispecific development work that we're doing with high-value preclinical and clinical programs there. Kyowa Kirin, which is a long-term partner for Amgen in Japan, they announced with us a collaboration on first-in-class Phase III-ready OX40 antibody for atopic dermatitis, which given recent news in the rheumatology category -- in dermatology category, we need new agents for that disease. And then Five Prime, where we acquired bemarituzumab, a first-in-class Phase III-ready, FGFR2b antibody for gastric cancer as well as other potential indications. And Rodeo, which is an earlier preclinical transaction, added some inflammation assets. So really a very busy period for us on BD, adding to the growth drivers for the future. On the in-line side, Prolia, Repatha, Otezla, all have significant growth potential, remaining relatively underpenetrated in their respective categories. So we're focused very much on commercial execution there. Our biosimilars business is starting to mature, annualizing over $2 billion a year. Market leader with AMGEVITA in Europe. Market leaders on [indiscernible] in the U.S. We are seeing some headwinds. Important to note that price is still a net negative for Amgen, which is reflective of the current environment we're in. And as I mentioned earlier, COVID continues to present challenges for us and our ability to get patients to their physicians and diagnosed appropriately. And then, of course, for our own employees to be able to interact with their customers. So we are still seeing disruption this year. It is less than last year but we are not back to pre-COVID levels of activity with customers or pre-COVID levels of diagnoses of patients. But Amgen has a strong balance sheet. We generate significant cash flow, and we still have a fair amount of financial flexibility to continue to evaluate strategic business development opportunities. And I'll pause there.

Excellent. Thanks. That was a great overview. And we'll definitely touch on -- I think each of those topics throughout the discussion. So I guess just kind of high level on the impact of COVID. I know you just talked about how you are kind of getting back to more normal but still not at pre-COVID levels. But I guess if you could talk a little bit specifically about what you've seen so far in the third quarter. I know a number of companies have talked about how, obviously, with the Delta variant emerging and mask mandates coming back and all those sorts of things. I mean, are you seeing kind of a shift? Are you still seeing trends improve in the third quarter? Or are you seeing sort of a shift back to some of the more intensive kind of COVID-related restrictions impacting trends in the third quarter?

Yes. Thanks, Neena. I would say -- let me maybe put my answer into 2 categories. I think oncology, is a slightly different scenario than some of the other non-oncology disease areas. I think oncology is under quite a bit of pressure. Obviously, you have a vulnerable patient population in care who are immune-suppressed because of many of the treatments that they get. And I think oncology clinics, networks and especially academic centers have been quite rigid in driving protocols that make sure that industry representatives and employees do not come in to visit their staff. They're also curbing travel for a lot of their staff physicians within oncology networks, all prudent moves, I might add. But I'd say access to oncologists is tough for us. And I would say that they're still not quite at pre-COVID levels of diagnoses of patients. And that's obviously very concerning because it means we could have people who might have gotten picked up at earlier stages of their disease, advancing into metastatic setting of their disease. So that's concerning, but it is better than it was last year. So we saw improvement in Q2. And then I would say about mid-August, we saw a stabilization of that improvement, and we've seen a little bit of a dip in terms of patient movement and prescription volume. So it's definitely concerning there. It's a little better in other areas. So cardiology is quite good. We're able to see customers still, and we see patient volumes at a fairly good level. Rheumatology is a little bit in between. So I would say, overall, different by the disease area, but it's still a challenge to reach customers despite opening up a lot of digital channels and investing there and finding good content to engage customers. But my biggest concern really is this delayed diagnosis of people who are, unfortunately, not getting the screening or the early detection that they might in oncology and with -- to a lesser extent, some of the patients in the other categories.

Got it. I do want to come back later and talk a little bit more about oncology, but just kind of sticking with the higher-level questions for right now. So of course, you've seen kind of your revenue mix shift over the last few years, right, kind of from the legacy Biologics portfolio towards kind of the products with the highest growth right now in cardiometabolic, the bone programs, migraine biosimilars, as you mentioned. And you're kind of at another turning point right now, right, with LUMAKRAS and some of the I&I approvals that you mentioned earlier on. So I guess, can you talk a little about the expected impacts of this shift on both -- in the revenue mix on operating margins and cash flow generation kind of as you see moving forward?

Yes, sure. I mean our objective primarily is just to grow our after-tax cash flows for the enterprise versus saying we've got a specific operating margin or a specific OpEx growth rate that we're trying to manage to. So we do continue to make prudent investments to lead to that objective and invest in our business for that long-term volume-based growth that we've been focused on. I'd say we're encouraged by the trajectory of our innovative side of our portfolio with Prolia, our other bone product, EVENITY, Repatha and Otezla being kind of the cooler kind of higher-margin products that drive our growth. Our biosimilar portfolio still has good margins. I mean they're not quite as high as the innovative side. But there, it's more about the life cycle of a biosimilar is a little bit different, when you see a fairly rapid ramp, much quicker than an innovative product. And then you see some plateauing as your volume growth gets offset by price. And then you may see a decay as later products, later competitors, enter into the biosimilar category that you're in. We generally are in a first wave position in our biosimilar launches. So we're able to capitalize on that early growth, but the durability of that growth is shorter than an innovative product. So it's not so much a margin story, more of an area under the curve story on revenue for those. And just notably in the biosimilar portfolio, we've done well in Europe and in the U.S. In Europe, we already have launched AMGEVITA, our biosimilar to HUMIRA, and we're the market leader across Europe and that product should launch early in 2023 in the U.S. And then it's followed by a wave of other biosimilars, and that's how we anticipate growing that portion of our portfolio. As a biosimilar to STELARA, EYLEA, Soliris. Those are all in Phase III now, and they would all be launching post 2023. So really interesting time for that piece of our business to, again, help generate those after-tax cash flows. And then, of course, we continue to do business development. So we will augment the pipeline product internal innovation with some external development.

Absolutely. Great. So just on BD actually, as you mentioned, right, you have been very active this year so far. And your focus this year seems to have been mostly on oncology and I&I. So I guess, can you talk just a little bit about your thoughts on therapeutic areas of focus kind of moving forward? And then just more generally about -- obviously, biotech has been weak or weaker in the last few months. And I guess how do you kind of feel about valuations right now and -- yes.

Yes. At Amgen, we've got a very disciplined approach to business development, in fact, a very productive one. It's actually very well defined, highly collaborative. I work closely with Rash [indiscernible] and David Piacquad, our Business Development group, with Dave Reese, our Head of R&D; and of course, with Peter Griffith, our CFO. And we look at a lot. As you rightly point out, we are more active and have been more active recently in oncology and inflammation. These are 2 areas of a lot of innovation, probably 2 disease areas where our granular or molecular understanding of disease is just greatest. And so a lot of target identification and drug development happening there. But we would also prioritize cardiometabolic disease as a third major area of evaluation for business development. And then, of course, we still look at bone metabolism and nephrology and neurology because we have commercial presence in those disease areas. So there's 6 areas, 3 kind of more strategic and then 3 more experienced areas that we continue to look at. The other thing that we say to ourselves frequently is, are we the best buyer of this technology, this company, this asset? And do we have to buy it? Can we partner? Can we license? So we're fairly open to different structures. We look at all opportunities. And we do this to add assets, and we sometimes do it to add geographic strength. If I go back to the Astellas deal in Japan, we formed a joint venture. We had really good presence in the market, then we took our controlling share of the joint venture and bought out our Astellas partners. And now we have a fully owned, fully independent affiliate in Japan, and it's got very good annual turnover and is launching lots of Amgen products in that market now. And we're doing something similar in China with our oncology portfolio with our partners at BeiGene. So I'd say, overall, our business development process, well-defined, mature. We have high hurdle rates. So back to your question on valuations. You have to look carefully for things that perhaps, in our hands, have more upside than in perhaps other hands. If I take Five Prime as an example, bemarituzumab fits very nicely into our solid tumor portfolio, an FGFR2b mechanism, highly differentiated in gastric or gastroesophageal cancer with potential to go into other solid tumors. Five Prime for various reasons, we're not able to scale the clinical development of that product as broadly as Amgen will be able to. And so we'll be able to move a little faster and a little more broadly to fully interrogate where that product might benefit patients. So that's one where we said, "Hey, in our hands, we could drive more value than if they persist with it." So that's kind of the skinny on the process, but we look at opportunities regardless of size. We're open to a variety of structures, as I've said. And that includes collaborations, partnerships, licensing or outright acquisitions, and we've kind of pursued them all.

Great. So then just on biosimilars because you did -- we did talk about that a little bit earlier. Obviously, a debate kind of around the biosimilar market in general has been around sustainability kind of the pricing, right? And some people believe that there may ultimately be a race to the bottom on biosimilar pricing. And I guess what are your thoughts kind of on that? And how do you see the biosimilar market evolving in the U.S. potentially differently than it has in Europe?

Yes. It's a good question, and I don't think the answer has played out yet. The biosimilar market in the U.S. is still relatively young. I used to get questions as recently as 2 years ago about do you really think you can make a goal of biosimilars in the U.S. given that the market is dysfunctional. And I said, "I don't think the market is dysfunctional." I think that the market will be fairly efficient and will drive competition, and patients, health care systems will benefit from that. So that is how it's playing out, how it's playing out in the biosimilars that have launched so far in the U.S. I'd say the rate of change is the question is how fast will biosimilars be adopted, particularly on the Part D benefit side, where there are reimbursement complexities that might have -- might favor the incumbent originator product in some scenarios. But I think even that will evolve and change. I think employers, payers and even patients will be more demanding of more affordable options in the biosimilar arena. So I think in oncology, recently with AMGEVITA and biosimilars to Avastin and Herceptin, we showed fairly rapid penetration being first movers always an advantage. And I think that's really where Amgen is positioning itself with our other biosimilar entrant is to be in that first wave so that you can capitalize on that early conversion at a reasonable net price reduction from the originator. And then the rate of change of that price over time, I think, is going to be different than in Part B than it will be in Part D because of ASP calculations, and other things in the reimbursement mechanisms. But overall, it's still a very attractive business. And the other thing that we've done is we've taken these products and we haven't created a new biosimilars unit. We've taken these products and we put them into our innovative teams, so the same team that's out selling LUMAKRAS or XGEVA or KYPROLIS is representing our biosimilar portfolio. So we didn't have to build a lot of commercial or medical infrastructure to do that. So it makes it very efficient from a commercial model. So we think it's an attractive business. We continue to launch biosimilar products around the world. Some markets, price erosion is steeper than in others, depending on whether it's a tender-based market or whether it's a government kind of retail reimbursement model. But overall, I think it will continue to be a good strategic portion of our business for a while.

Great. So now I want to just shift over a little bit to talking specifically about kind of oncology. And clearly, you have a very broad oncology portfolio. And I guess just at a high level, I'm just kind of curious how you see the oncology pipeline, Amgen's oncology pipeline kind of evolving over the near and long term and which assets, in particular, aside from the commercial assets, are particularly exciting kind of to you from a commercial perspective and then also kind of scientific kind of within the company, right? What does science leadership kind of see as the most exciting kind of opportunities.

Yes. Thanks, Neena. Look, the oncology team in our research and development organization at Amgen is a really outstanding group of people. They've done some amazing work in identifying new immunotherapies, new small molecule targeted therapies and obviously, a legacy of supportive care treatment options as well. So that's given us a very rich history in oncology, and we've got just about every type of oncology specialty covered between legacy supportive care, biosimilars and, of course, more recently, the launch of LUMAKRAS. So we can go hematology, we can go solid tumor. Now when it comes to actual clinical development, our focus is really on precision medicine, immuno-oncology. And we've been able to -- if I take LUMAKRAS as an example, 40 years of not being able to drug RAS mutations and Amgen very quickly developed -- [ sold ] asset and very quickly moved through clinical development, secure regulatory approval and here we are in the market just a few months old. So I think that shows that we've got the internal capabilities to drug the undruggable, move quickly and commercialize successfully. So beyond that, we continue to have a lot of exciting opportunities, to your question of what else is in the pipeline that we're focused on. And I think we were interested in AMG 757, now known as tarlatamab. We are making these names very difficult for everybody. So with tarlatamab, AMG 757, which is our half-life extended by targeting DLL3. That's a Phase Ib for small cell lung cancer and neuroendocrine prostate cancer potentially initiating other pivotal Phase II small cell lung cancer trial in second line by year-end. So that one, really, really excited about with the early data that we've seen. The other one that we're very focused on moving quickly with is acapatamab, or AMG 160, that's our half-life extended BiTE for PSMA, and that's in Phase Ib for prostate cancer. And of course, you know that these are fairly large solid tumor malignancies that really, in large part, still have opportunity to improve upon the outcomes that we're able to get with currently approved therapy. So we think we're well-positioned. We like our ability to adjudicate how these drugs will perform. The last one I'll mention is bemarituzumab. I mentioned it earlier, we picked that product up when we acquired Five Prime FGFR2b antibody that we're developing initially in gastric cancer, gastroesophageal cancer. The Five Prime team did a randomized Phase II trial called the FIGHT trial and showed that there was indeed a nice effect there. And so we will replicate that in our own Phase III program. So that's a Phase III-ready drug going into clinic ready to go. So these are not 10 years in the future. These are drugs that could come in the medium term and really drive quite a bit of growth. And if they happen to be effective in some other malignancies as we explore signal-seeking Phase 1 cohorts, they could be really exciting for us.

Fantastic. So now I want to talk a little about LUMAKRAS specifically. So I know you talked a little bit about the launch, but I guess anything else you can kind of tell us about kind of the ongoing testing efforts, how that's going? And then also launch prep for x U.S. as well, that would be great.

Yes, sure. Really hot topic. We're just a few weeks old in our launch in the U.S., and I would have to say we're very, very pleased with what the team is doing out there. Our medical organization, our commercial teams, our payer teams, all doing exceptional work. The thinking on LUMAKRAS from the very beginning in our R&D organization and across Amgen was that there are patients out there who are KRAS G12C-positive who are progressing beyond frontline and getting suboptimal second-line treatment, and they could die unfortunately too quickly unless we move fast. And so that really was the driver for all of the things that we did, and it's the same sentiment in the launch where people are moving minute by minute, hour by hour or day by day to try and affect rapid uptake of this product for patients who have been tested and understand that they're KRAS G12C-positive. So that's the first barrier, right, testing. We've been able to change the testing dynamic from around 50%, 60% of lung cancer patients being tested, upwards now of 70%. In fact, the most recent data, close to 80% of patients being tested and that's, of course, with a solid tissue test and a blood-based test that we've codeveloped with our partners. So that's huge. That's really fast acceleration. I haven't seen that kind of solid tissue or lung cancer testing ramp that quickly. So the team has done well there. 46, 47 of the top 50 testing labs are now identifying KRAS G12C mutation as actionable. And usually, that means it's in the front section of the lab report, not buried in the back because, as you can imagine, with an NGS, you test for a lot of different mutations and sometimes they're not always made obvious to the treating physicians. So that's been changed quickly. That's great. We have over 2,000 patients who received LUMAKRAS worldwide, including commercial, clinical and our EAP program. So our medical team opened up EAP programs in countries where our regulatory review is underway and our approval is pending. And so being first to market, being once-a-day well-tolerated therapy, our established oncology presence I was alluding to earlier with providers and payers and the GPOs in the market, I think it's really afforded us a successful first few steps into the launch. And I think the pending regulatory approval should move quickly. I think our regulatory teams have handled a huge amount of work, making all those parallel submissions. So yes, it looks good. And we continue to drive impatiently because, unfortunately, many patients are going to progress off their first-line therapy and they're going to need LUMAKRAS.

Absolutely. I just want to get your take to kind of on competitive positioning, just given that there is another KRAS inhibitor, obviously, as you're aware of, that may enter the market kind of next year. So how are you kind of thinking about that?

Yes. I mean, clearly, it's a privilege to be first, but we are mindful that we'll have competition. I think we are looking at broadening out the profile of LUMAKRAS and doing additional clinical work and in early lines of non-small cell lung cancer as well as in colorectal. So I think, again, speed, moving quick, enrolling these trials quickly, managing, of course, patient safety effectively while we do that. I also think the global aspect of our launch, right? We're not just launching in the U.S. and maybe partnering with others outside the U.S. We, as Amgen, will launch this product globally, and we continue to be focused on how to do that at speed. Just as an example, we opened up an EAP program in France and enrolled over 400 patients because France provides biomarker testing for a number of mutations through their National Cancer Institute. So it's a well-established pattern of behavior. So patients were relatively easy to identify. And then those -- many of those patients will roll over into what we call an ATU program, which is a special mechanism while you're waiting on approval, while you're negotiating reimbursement, you can charge for that therapy. So eventually, we'll be able to recognize that as revenue. So these are things that we can do, as Amgen, given our global presence that we've been working on and building out over the last few years and build off of the success we've had in these markets with the rest of our portfolio. The last thing, of course, is the profile of the product. Having as much patient data as we have, including these we can easily describe the safety profile and the efficacy profile, including the durability of our efficacy to clinicians. And I think that will hopefully give confidence to prescribers that they can stay with LUMAKRAS. Last thing I'd say is there's a few differentiators. We are a once-a-day agent, and that safety profile is well understood. We haven't seen any QTC prolongation. So there's a few things, I think, that when you get down into the nitty gritty that will differentiate LUMAKRAS favorably.

Got it. So now I just want to move on to the inflammation and immunology portfolio. So you've got a number of events, obviously, coming up towards the end of this year and early next year. So I guess starting with the tezepelumab launch. Can you talk a little about just how you're thinking about the positioning of that product in the asthma market, just given the populations that you've studied, the data in hand and particularly in patients with low eosinophil counts? And then I'm also kind of particularly interested in hearing about kind of your thoughts on kind of the competitive landscape versus Dupixent, just given that you're not pursuing atopic derm and a lot of atopic derm patients have asthma or vice versa, yes, that would be great.

Yes. Tezepelumab is an exciting opportunity. It's -- when you can launch a first-in-class, highly differentiated product that addresses a severe unmet medical need like tezepelumab does, then all the rest is just a little bit easier. It's easier to secure payer coverage. It's easier to drive initial uptake with physicians. It's easier for patients to be able to adhere to their therapy. So that's what I really like about tezepelumab. So everybody is focused on the fact that we address lower eosinophilia level, asthma -- severe asthma patients, but the fact is we offer a much simpler treatment option to the physician community that treats severe asthma because you can treat the severe asthma patient irregardless or regardless, I should say, or irrespective of their eosinophilic levels. So that simplifies that initial diagnostic and phenotype and genotype of the patient. The population is also large here. You're talking about 2.5 million severe uncontrolled asthma patients across U.S., China, Japan and the EU 5, the big 5, about 1 million of those patients in the U.S. So you're going into a large population of patients, severe disease, a lot of negative sequelae to the disease, and you're not just treating the portion that's already advanced by other biologics but you're broadening that by bringing in the lower eosinophilic population. And no other biologics so far has demonstrated that ability. So I do think we've got a good opportunity here. I think the early uptake might be expected to be in that low eosinophilic population where nobody else is there. But our goal is to make a broad-based severe asthma treatment. And I hear you on the comorbid, but we know that the majority of patients are being treated first for the more severe condition, which is severe asthma. And then you can manage the atopic dermatitis using other options. So I feel confident about our ability to compete effectively there.

Got it. That makes sense. So on Otezla, I guess a couple of questions there. I guess we'll start off with can you talk a little about kind of some of the current commercial growth drivers for the product and then how we should think about kind of the growth trajectory post the potential label expansion coming up in the mild to moderate patients?

Yes. We're very pleased with what Otezla adds to our inflammation portfolio, and we're pleased that we were able to retain the vast majority of our former Celgene colleagues now Amgen employees, and bridged that integration very, very nicely. The sources of growth for Otezla continue to be bio-naive, post-topical patients who need something other than a nonsystemic treatment. And Otezla is really, really well positioned there and continues to be that kind of first systemic option for dermatologists. So I think that still is a strength of Otezla. What we have seen, though, is we've seen a bit of pressure on Otezla through the pandemic. We saw new patients because of that diagnosis misdiagnoses behavior that we've seen last year into this year because we rely on those bio-naive patients, and we're not sourcing patients switching from other biologics. We have seen a softness in that new patient acquisition. So recently, last couple of months, that's ticked back up, so that's the good news. But nonetheless, having several months of soft new patient acquisition, that's going to affect our business in the remainder of this year and partially into next year. But as I said, strong teams out there making sure that patients are diagnosed with Otezla continues to be that first systemic pre-biologic post-topical option. Of course, we've also got good news in that we're expecting an FDA decision on our mild-to-moderate indication. We had successful data readouts a few months back there. That expands our market and it expands it in a way that's really ideal for Otezla, that milder patient that's perhaps dissatisfied with the kind of relief for their psoriasis that they're getting with topicals or they're using topicals for some of their disease but they still see breakthrough flares, and they want something systemic or the physician wants to prescribe something. So Otezla has got nice source of growth there. We continue to expand reimbursement for the product globally. We have an approval in China, and so we'll commercialize that product in China next year. So overall, I think we're feeling good about Otezla, how we can grow it. I think we have to also be mindful and understand what the recent news on the JAK category means for the dermatology sector, including psoriasis. It may limit or change the competitiveness of other entrants into the category. So that could be a positive for us longer term.

Absolutely. Great. So I guess just thinking a little bit more about kind of the emerging psoriasis space, -- So there are a few other orals that are in development, such as the TYK2s and then there's also a few kind of topicals coming up here. I guess, what are your thoughts about kind of positioning, given some of the changes expected in the psoriasis landscape over the next 12 to 18 months?

Yes. I think the topicals we see is more complementary than competitive. I think there continues to be a need for effective topicals. And you see -- you actually see some innovation there with new mechanisms being launched. The thing we're watching there is the topicals, they're having -- sometimes they have a tougher time getting reimbursement because they're up against generic or OTC treatments. So sometimes that's a little bit tougher. So we're watching that space closely. But again, I think it's complementary rather than competitive. And sometimes people are on a systemic and they still use topicals for flares or breakthrough flares. Regarding other competitive entrants, I think the biologics definitely creating a lot more noise and have more promotional effort than in the past. And so our promotional effort needs to be really, really sharp to make sure that we -- that dermatologists are not confused about our positioning and that they remember that Otezla is the only oral-approved agent today. And then as other competitive entrants come in regarding TYK2 [indiscernible], we have to wait and see how the FDA's recent actions on the JAK class might affect labeling or approval of the TYK2 agent. I don't want to speculate on that, but we'll see there. I do think, regardless of that, the dermatology community tends to be a bit conservative with new treatment options. They tend to want to take risks on safety or try new agents until the safety profile is well understood through kind of real-world practical use. And of course, the cautionary tale here is what we saw with Xeljanz where it was many years and thousands of patients before the safety profile of that agent was really well described and has since led to pending class labeling for the JAK. So I like that we've got a very well-understood safety profile with Otezla. It's a broadly used product. It's one that dermatologists are comfortable with. We have broad commercially insured coverage. Greater than 90% of insured lives have biologic step-free coverage for Otezla. We continue to develop clinical trial data in pediatric psoriasis, general psoriasis, and in Japan, we're doing a study in palmoplantar pustulosis. So we really think that we've got a strong, good growth driver, which has been impacted to some extent in particular in the U.S. because of the pandemic. But hopefully, as other variants emerge, our ability to continue to be able to screen diagnose patients and treat them properly will improve the outlook there.

Absolutely. So just one more question on Otezla really quickly, actually, an e-mail question. Is there anything that you can kind of update us on regarding the patents for Otezla and the kind of pending decision there?

I think everybody else will know when we know. We're just waiting to see what the decision is.

Sure. No that makes sense. So just one more question about kind of the I&I portfolio, and then we'll move on. But -- so regarding the OX40 program that you mentioned earlier. I guess, can you talk a little bit about how you see that program fitting into the evolving atopic dermatitis landscape? Because that's another landscape, obviously, that is very active right now in R&D. Just yes, we'd love to get your thoughts on that.

Yes. Look, I think when we looked at the AD opportunity, we thought that there's room for other mechanisms. We actually had anticipated the JAK inhibitors will continue to make inroads in this disease area alongside Dupixent. And when we saw the opportunity to partner on the OX40 mechanism, we thought that was just a really good thing for us. It's a logical extension of our inflammation portfolio. We've got strength in dermatology through our experience with ENBREL and with now, Otezla. And I think it's a novel mechanism of action. It's -- It's one that I think can bring about real options maybe post 2P initially and eventually in a frontline setting. So I think we're very excited about that, and we'll have some data later in the year coming up, and we'll be able to talk more about what we think is a very exciting profile.

Absolutely. Great. So in the last couple of minutes here, I got a few additional e-mail questions, but I just want to run through quickly, hopefully. So first one is around EVENITY. So just kind of curious around the current trends that you're seeing with EVENITY and kind of how you're thinking about the peak kind of sales potential for that asset.

Yes. We're pleased with the EVENITY's launch. I think as people will remember, we've positioned this for high-risk post-fracture patients, so patients who have had a fracture and are at high risk of having additional fractures, and they need to build bone quickly. So that positioning, I think, has been very, very good. We see a lot of post-Prolia patients go on to EVENITY. We see post other antiresorptive treatment patients going on to EVENITY. And then we often see them come off of their 12-month course of EVENITY, and go on to Prolia for maintenance. So it's been such a synergistic fit with Prolia in our portfolio. And actually, both products have performed very well this year. As people will recall, the pandemic really had a big impact on Prolia last year because many of these patients are elderly. And in the lockdown period, kind of end of Q1 into Q2, nobody was going to their physician for their Prolia injection. And so we saw some real softness in our business in the first half of last year. Fortunately, many of those were delays and not cessation in treatment. And so they came back into care, and we're on a better trajectory this year. But EVENITY seems to kind of do better through that time frame and is continuing to hold up well. I wouldn't speculate on peak, but we think that we're just beginning to treat these high-risk patients. And then the other thing that we're looking at potentially doing is being more proactive in building on to try and prevent those fractures in the higher risk population. So we'll see how that evolves over time. But we do see EVENITY as a nice extension of our bone franchise long term.

Excellent. So then a question kind of going back to the LUMAKRAS launch. So the question is specifically around how you think about kind of benchmarks for the launch. So specifically, do you use other -- kind of benchmarks from other kind of targeted lung cancer launches like Tagrisso or other drugs like that when you're thinking about kind of the trajectory of the launch.

Yes, it works well for some elements of the launch. So for example, testing rates, absolutely. We look at how fast the PD-L1 testing ramp, how fast how eGFR and we look at all those. And I'd say we're on par possibly slightly ahead, which, quite frankly, in the midst of the pandemic, really good results and really nice work done by the medical and the commercial teams out there. For other things, it's tougher, right? So for actual revenue uptick, which I'm not going to get into right now, it's tougher because we're working with a different epidemiology, 13% second line or beyond patients. I think we're beginning to spool up routine testing, routine screening, routine evaluation of patients. For example, one of the things that we do is a look back. So we ask cancer networks or institutions or even commercial labs to look back in a patient's record when they were first diagnosed for their first-line treatment and look for their KRAS G12C status. So these patients may still be stable on their first-line therapy, but we want a flag in their file to be clear that they are KRAS G12C and should they, unfortunately, hopefully not, but if they progress, what treatment options do they have. And if that KRASG12C status is recorded in that EMR for that patient, that frontline patient, then LUMAKRAS becomes, hopefully, a reflexible option for them. So we're doing a lot of those kinds of things that in the past for some like you go back all the way to the beginning of the [indiscernible]. Technology and data capabilities wouldn't allow you to do that. So we're doing things now that wouldn't be possible in the past. I think we still have a long way to go with respect to NGS testing, anyone with a lung cancer diagnosis. And I think that should be the standard of care because there are so many different treatment options now that are focused on specific target mutations, and the sequencing of care for those patients becomes very, very important. And I think we need to do a better job there, and that's what we're trying to enable. So I think analogs are informative but not necessarily parallel or comparable.

Absolutely. No, that makes sense. All right. I think we're actually up on time, but I just want to say thank you so much for taking the time to join me today. It's been incredibly helpful and insightful. And yes, good luck in the rest of your meetings, and thank you again.

Thank you, Neena, once again for hosting, and thanks to Citi for having us all here. It's been a pleasure.

Absolutely. Same here. Thanks so much. Bye.