Amgen Inc. (AMGN) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us at the Goldman Sachs CEO and Scripted Conference 2022. We're pleased to have Bob Bradway, Chairman and CEO of Amgen. Bob, thank you for joining us, and let me turn it over to you for opening remarks.

Okay. Thank you, Salveen. Thanks for having us, and happy New Year to you and all of your guests at the conference. Let me just say a few remarks, Salveen, and then we can jump straight into Q&A. Obviously, we're excited about how things are setting up for us. We think we're in a position to deliver attractive results for the long term and that we expect will be built off the strong base that we've established now for Repatha, Otezla, our bone health franchise, which, of course, comprises Prolia and EVENITY. So we're excited about how we think those will contribute to long-term growth. And in addition, our biosimilars franchise, we think is really delivering now as well for shareholders, and we think that will be an important contributor to growth for us. So it's going to be an exciting few years at Amgen. Inflammation, for example, is a lot going on in our inflammation franchise. As you're aware, we've been a leader for the past 15, 20 years in inflammation, thanks to the strength of our ENBREL franchise, a product that will remain patented through the end of this decade. And in addition to ENBREL, of course, we have Otezla, which we expect to be an important growth driver for us, bolstered by the approval that we received from FDA in December for patients suffering from mild to moderate psoriasis. So we're now able, for the first time, to promote that product to all patients who suffer from the systemic autoimmune disorder that causes psoriasis. So that's an exciting development for us. We also, of course, received approval for Tezspire, first-in-class molecule that addresses the needs of patients suffering from severe asthma. So we're really excited about what we can help do for asthma patients with our inflammation progress there. And in addition, of course, when we think about the next few years, we'll be launching AMGEVITA in the United States, will be in the first wave of biosimilars for HUMIRA, and we're excited about what that represents. And then shortly thereafter, in the years that follow, we expect to be in the first wave for STELARA, for SOLIRIS, for EYLEA. So there'll be quite a lot going on in our inflammation franchise, including biosimilars. I just briefly remind you, in cancer, we also have a lot going on at the moment, Salveen. I know you are very focused on LUMAKRAS as many of our investors, but more broadly in lung cancer, we're excited about not just LUMAKRAS and the different combinations that we're exploring for that product, but in addition, we're excited about the data that we're seeing for our BiTE against DLL3, so an opportunity in small cell lung cancer. We're also starting a trial of our FGFR2b inhibitor in squamous cell, non-small cell lung cancer, which is a very large patient population with high unmet medical needs. So a lot going on in lung cancer. In gastric cancer, we're excited about, obviously, the FGFR2b program in gastric, and we have 2 Phase III studies already enrolling for that molecule. And in addition, we're intrigued by the combination of LUMAKRAS with our antibody, Vectibix in colorectal cancer in particular for patients with the appropriate mutational profile. So we've seen some intriguing results there that justify moving that into a registration-enabling trial, and we're excited about that. And then in pancreas, we have 3 very interesting programs, 2 of which are directed at PSMA and a third, which is directed at STEAP1. So those are, again, T cell-directed therapies capitalizing on our BiTE technologies and others like that, and we're excited about what those represent. So it will be an exciting few years we think now for the company, both in terms of the molecules that are already on the market, but as well as the things that are advancing through the late stage of clinical development. I don't want to fail to mention in cardiovascular disease, we'll be looking at our Phase II data for Olpasiran, which is our siRNA molecule directed at Lp(a), which is an important contributor to cardiovascular disease, and clearly, an area that requires an innovative new product like the one that we're seeking to rapidly advance in clinical development. I mentioned -- or you may have seen rather, Salveen, we announced a transaction earlier today with Generate, which I know was one of the companies that was featured in your recent conference about the intersection of technology and biology. So we're excited about not just the Generate transaction, but a series of moves that we've made in our early research, positioning us for what we see as a very exciting new wave of opportunities arising in our industry. So in fact, we are going to host in February, on February 8, an investor update. We want to, in particular, use that opportunity to reveal some of what we've been doing in research in order to capitalize on what we see as an emerging set of new opportunities at the intersection of technology and biology. So Generate will be part of what we want to talk about at that event, but there are a number of other things as well, Salveen. So we'll have that opportunity in a few weeks' time. And I'd just finally end by saying, our balance sheet remains strong. We have a balance sheet that enables us to do strategic and smart transactions. And as we enter 2022, we'll continue to be on the lookout for things that fit that description. So with those thoughts in mind, Salveen, maybe I can turn it over to you and respond directly to any questions you have.

So maybe just start here, Amgen is clearly an established large biotech company with diversified portfolio of commercial products and pipeline assets, as you mentioned. As you come up on 10 years as CEO, what are you proud of accomplishing during this period? And where do you see the company over the next decade?

Well, I don't know if I can talk about what I'm proud of accomplishing, Salveen, but I'm happy to reflect on what the company has accomplished. And I think it's been a really important decade for us. So over the past 10 years, as you may be aware, we launched 10 new innovative products. We launched our biosimilar franchise, which is now an industry-leading biosimilar franchise. We expanded from -- we were in 50 countries 10 years ago. We're in more than 100 countries now. So we did all of that while actually expanding margins and actually decreasing cycle times in our business. So we accomplished an awful lot over the course of the last decade, and again, it's reflected in the molecules that we now have and we expect to be growth drivers for us in the next 10 years, but it's also reflected in our financial results. So if you look just at the financials in the last decade, we added $8 billion of revenues. We grew earnings per share by 2.5x. We grew the dividend like 5x over that period of time. We increased shareholder value by about 3.5x over that period. So we've been busy delivering results, but we've been doing that off the back of innovative programs that are moving through our company faster than they ever have before. And we did that by expanding and capitalizing on our innovation globally. So as I said at the outset, I think the work that we've done over the past 10 years really helps position us well to be able to deliver long-term growth for the next 10 years.

And you've stated an interest in investing 50-50 in external innovation. Can you help frame your process when evaluating potential deals? How do you recognize when Amgen is the best buyer of an asset or technology?

Yes. And we're not -- we haven't said that 50-50 is the target. We've said that if you look over time, it's been about roughly half of our molecules have come from internal sources and half of our molecules have come from external. And so we expect the external will continue to be a very important source of opportunity for us. And we're -- frankly, we're agnostic as to whether the molecules were discovered internally or externally. We want our capital to be deployed against the most attractive opportunities. And if those opportunities are external, that's where we'll deploy the capital. We try to focus our efforts on the areas where we think we have an advantage versus the competition. Our bias is to try to earn a return for our shareholders, not for the target shareholders. And so we look at assets and have to ask ourselves how can we add value above and beyond what the shareholders who own those assets are able to do without us. And if you look at a molecule like OTEZLA, we were able to look at that and say, "Gosh, the seller has to sell it". And it's in a therapeutic area where we have more than a decade of expertise, it's in a therapeutic area where we expect to have a very important position for the future. And we thought Tesla fit very nicely. So we had some ideas about how we could continue to launch that globally. We had some ideas about how we could continue to expand the label. And I'm delighted to report that progress there has been better than what we expected, and we are even more excited now about what that represents for us than we were at the time when we acquired it. Another example, of course, Five Prime. We acquired a late-stage oncology molecule, novel first-in-class monoclonal antibody against a target that generated really appealing data in Phase II clinical trials. But the company was frankly struggling to produce enough material to do the clinical trials that made sense to conduct. And so we were able to come in and very rapidly make the kind of material that we need in order to be able to rapidly advance that through a variety of different clinical trials. And so those are examples of how we look at a target, and I think we see areas where our capabilities enable us to add value above and beyond what was going to be added in the original owner's hands. So we'll continue to look in our stated areas of interest, oncology, inflammation and general medicine. We'll look early stage, late stage. We have a very active business development effort that works between research development, our commercial organization to try to find the most attractive targets for us to try and add value to.

Is there a particular part of the portfolio that you think would benefit the most from in-licensed technologies? And maybe you could touch on what types of assets or technologies you're most interested in. Would you rather bring in first-in-class modalities or invest in second or third generation process, a more derisked or best-in-class? How do you think about that?

Yes. Our research and development strategy is heavily oriented towards the idea of being first-in-class or best-in-class. And I think we are at our best as an organization when we're pioneering novel biology. I think as a company, we take a lot of pride in being able to educate the scientific community, the clinical community, regulators, payers, patients, prescribers about novel mechanisms of action and novel medicines that address areas of unmet medical need. So whether that's Prolia for osteoporosis, Repatha for cardiovascular disease, LUMAKRAS for G12C mutated non-small cell lung cancer. Again, we think that that's what we do really well. So if you look at our Five Prime acquisition, that fits clearly with what our stated strategy is and what we think we've done well through our history. And so that's where we tend to focus on molecules that are innovative, different. And if they're not first-in-class, we'd like to feel we have an insight as to how we can help make them best in class.

And you talked about the transaction today with -- or the collaboration with Generate biomedicines. How does this partnership add to your strength in protein engineering? And what are you most excited about when you think about the potential for AI and machine learning to aid in drug discovery?

Yes. Well, I think we've entered a very exciting new era, and the hallmark of that was the set of announcements in July 22, from [ DeepMind ], obviously, from the University of Washington, revealing that for the first time by deploying the tools of AI and machine learning to the question of how can we predict protein structure from linear amino acid sequence. Two groups reported very promising results in that regard, and I think that was an exciting signal to those of us who are interested in proteins that we may be entering a new era here where we can move more quickly and more rationally than we've been able to through time. So if you take a step back and think about Amgen in our 41-year history, Amgen is probably as good or has done as much protein engineering and design over that period as any other company. So we have an enormous experience in what we call wet lab research for proteins, an enormous accumulated experience about what works, what doesn't work as we formulate drugs, as we design drugs, as we seek to make them not just efficacious but avoid neutralizing antibodies and other things. And what we hope is that the tools of machine learning will enable us to combine our wet lab data with the dry lab predictive expertise of companies like Generate in a way that enables us to shorten the cycle time between identifying a target and having a protein that interdicts or interacts with that target in a way that would help us create a medicine. So we're excited looking forward to collaborating with Generate, very optimistic about what that specific collaboration represents. We're also more generally excited about the era that we think we're entering. And again, that's an important reason why we want to host investors on February 8th. It will be a virtual gathering, but we want to have an opportunity to lay out what we've been doing in our research organization to position for this moment. We've spent a lot of time over the last decade actually automating our so-called wet lab to be ready for the moment when machine learning would produce the kind of breakthrough that we're talking about here on this call. So we've been doing a lot behind the scenes and we'd like to pull back the cards a little bit and share some more information about that.

And could you talk about your Asia strategy here to broaden the footprint but also to capture a very large market. How do you go about it that is different versus your peers? I believe you're currently at about $1 billion in China Japan sales were just 4% of total sales. How do you get to that long-term growth target that you're looking at?

What we've said is that we think Asia Pacific will contribute up to 1/4 of our growth over the next -- through the end of the decade. And I think the important thing to remember, Salveen, is that unlike a lot of our peers -- so we are a large biotechnology company, as you said at the outset, but unlike any of our large pharmaceutical peers, we didn't have a business of our own in the Asia Pacific region until very recently. So historically, when our company was founded, we out-licensed our products in Japan and in China and in other parts of Asia, which was not uncommon at the time. But over the course of the last decade, we've recognized that we need to be able to commercialize our own innovation in those markets. And so we've sought to retrieve rights that we historically had out-licensed, and we've sought to retain rights for our products in those markets, and it's going very well for us. We're really excited about the results that we're seeing in Japan and in China. And if you look at our portfolio, it's actually very well suited to that region of the world. So that's a region of the world where osteoporosis is a particularly challenging problem. We have the world's leading osteoporosis franchise. That's a part of the world where gastric cancer is a devastating disease, and of course, we have what looks to be a potentially leading therapy for gastric cancer. That's a part of the world where atherosclerosis is increasingly problematic, and we have what is the most effective medicine, we think, in the clinic for reducing the risk of atherosclerosis and with it, heart disease and stroke in the form of our Repatha. So we have medicines that we think are very well suited to the demographics of that region of the world, and we're in a position now and having built out the capabilities over the last decade to be harnessing that as a company individually. We'll continue to partner where we see value in that. We partnered, for example, in China with our friends at BeiGene and that collaboration is going very well. But fundamentally, the Asia Pacific region now is one where Amgen is operating as a standalone entity, and we've grown very rapidly, and we expect that to continue through the balance of the decade.

Can you characterize the risk that Amgen is facing from drug pricing reform and the proposals that have been set forth here in BBB, recognizing that it may be delayed or tweaked?

Yes. Again, I think it's hard to know what's actually going to emerge at this point in the potential BBBA legislation. I haven't seen anything that I would say is specifically a problem for Amgen. So I would look at this more from the industry perspective. I would say, I'm concerned that the proposed legislation did not do enough to address the needs of patients. We've advocated now for several years as a company and as an industry for the kinds of changes that we think make more sense for patients in the United States, and we think far too little of that, frankly, was incorporated in the potential legislation. So to the extent it resurfaces, we want to continue to advocate for things that will make medicines more accessible, more affordable to patients and in particular, to our senior citizens. And I personally think the -- some of the specific proposals around having the government negotiate or set price at the end of the life cycle of certain molecules. I think it's misplaced, probably not going to be effective and will ultimately look like in retrospect, will look like that policy. So I think there are some changes that could and should be made, if that resurfaces.

And a last question here before we jump into the portfolio, but at these levels, what do you think is underappreciated about Amgen by investors?

Well, I think as I said at the outset, there's an awful lot going on here at Amgen. We're a large diversified biotechnology company so we don't lend -- our business doesn't lend south well to sound bite. So we've got a lot going on in information, which I tried to summarize. We've got a lot going on in oncology, lung cancer, gastric cancers prostate cancer. We've got a lot going on in other disease areas. We're excited also again about cardiovascular disease. So what I would say is that there's a lot of innovation that's making its way through the clinic now. We'll continue to generate data as we have data. I think people appreciate that we have some exciting growth drivers in that pipeline for the second half of this decade. I think for the first half of the decade, the molecules that will be important to our growth are already in hand. We're already in the market with those. You saw through the course of this year, the steady volume growth in Medicines like Repatha and Prolia and EVENITY. So I think the groundwork is being laid. And I -- the other thing I would say, Salveen, is I think that the biosimilar franchise is probably not as well understood as it will be when people look back on it through time. I think as people look back on it through time, what they'll recognize is that franchise is an aggregate of 10, 11 molecules, and those 10, 11 molecules will launch in a sequence that enables us to drive revenue growth and earnings growth and cash flow growth for the company through the balance of the decade in a way that actually looks like a super blockbuster innovative product. So I think if you look back a decade from now and take the aggregate investments in biosimilars and the aggregate cash flows from biosimilars, say, gosh, it might have been 10 molecules, but in aggregate, it looks like a super innovative blockbuster in the returns that were generated for our shareholders. So that's how we look at that franchise, but I think still early days in biosimilars and not everybody else in the investment community looks at it that way.

And investors do appear focused on the loss of exclusivity for some of your key products that are still a few years out. When you think about some of your other programs that have lost patent exclusivity, can you remind us on the steps that you've taken to defend the product against generics or biosimilars? And how do you think about applying that to those strategies to the current portfolio and think about the tail of these products?

Yes. Again, you asked earlier about the last decade in Amgen and those who have been followers of Amgen for a while will remember that a decade ago, the concern was that 40% of our revenues were exposed to biosimilars and could we grow through that. And I've already addressed the answer. We added $8 billion of revenues. We increased earnings per share by more than 2.5x. And those products that were exposed to biosimilars went from being 40% of our total to today, 15% of our total. So we have experiences of working through biologic patent expirations. And we're fortunate, we don't have a patent expiration now still for some number of years, and the next patent expiration we face is a biologic. So the erosion curve for biologics after they go off patent is very different from small molecules. And again, that's something that investors have to get used to. The cash flow profile is attractive. The cash flows don't disappear overnight. But when you look at year-over-year compares, it makes us look different from those companies that have small molecules that disappear, enabling a reset of the numbers from which year-over-year growth comparisons can look attractive as opposed to what happens with biologics, which is the slow decay just makes it harder to show eye-popping year-over-year growth in revenue and earnings. But from a cash flow standpoint, we have the benefit of having a stable set of cash flows, and that's part of what has enabled us to continue to return capital to our shareholders. I think we generated north of $80 billion of free cash flow over the last decade, and we've been able to return, again, a large chunk of that to our shareholders in the form of buyback and growing dividends. So I think that what we face in prospect for patent expirations is nothing different in character from what we've already shown we can grow through in the past. And what we've said in the past is that we will continue to compete with our historic brands in the face of biosimilar competition. We did it very effectively, as you can see with EPOGEN and Neulasta, where we've retained significant last a share by innovating, for example, around the delivery device for that product. And if you look at our bone health franchise we think we have a very complementary franchise with Prolia and EVENITY, and we'll expect to continue to grow our bone health presence even in the wake of any challenges to our patents from Prolia or ultimately, XGEVA as well.

Great. And as we look to the inflammation portfolio here, Tezspire, as you mentioned, is the first approved biologic for severe asthma regardless of allergic status or biomarker status. To start, where do you stand with commercial availability of the drug for patients right now? How is the launch taking off?

So again, the approval came early, which we're delighted about. The drug is available now in commercial markets. It has been priced in line with other biologic therapies for asthma patients. And I'm really excited about how well our operations team and our commercial team and our regulatory team have worked together to get this product approved and now to get it on pharmacy shelves and to get it in the hands of doctors who need to use it for patients that are suffering from severe uncontrolled asthma. So remember, one of the huge costs for asthma patients is emergency department visits and then ultimately, hospitalizations that result from those emergency department visits. And we've shown we can very significantly reduce those, the exacerbations that lead to those emergency room visits and ultimately hospitalizations. So we have a therapy here that we think can improve the lives of the patients that suffer from this disease and also help the payers keep these patients out of the very costly emergency rooms and hospitals. So yes, we're excited. Early days here, still, but a very exciting opportunity for us.

And can you remind us who the initial prescribers are that you're targeting, and where you think this will ultimately fit in within the treatment paradigm?

Yes. So worldwide, there are a couple of million patients who suffer from severe uncontrolled asthma. And so the prescribing physician base here will be those who have experienced asthma practitioners. They will be physicians who are used to having these hard to manage patients in their care. And so again, the good news is, this is a group of physicians that are very aware of the ongoing need for better therapy, and these are physicians who we think will be very excited to have for the first time a biologic that works across a spectrum of asthma patients. So as you said, this is not a therapy where you need to know the eosinophilic status, which is eosinophils or class of immune cells. Physicians will not need to know whether they're patients have high or low levels of these immune cells because the data show that the therapy works irrespective of whether the patient is presenting with higher or lower levels of eosinophils. So it will, over time, we believe, become a therapy that enables doctors to skip that step that they otherwise have had to take, and they had to take it because the other biologics just don't work for the large fraction of the patients who are having asthma in a setting of low eosinophils.

And Otezla and mild to moderate psoriasis, how significant is the label? Is it now that the label captures the entire spectrum of disease severity?

Well, we're really excited about it, and there are 1.5 million or so patients that fall into that category of mild to moderate. But I think far more important than that, Salveen, is it gives us an opportunity to say to doctors that if you have patients that are suffering from psoriasis, we have a therapy that we've demonstrated through years of use, safe and effective in helping to treat the underlying systemic autoimmune disorder, which is causing that psoriasis. So whether the patient has a small patch of psoriasis on their body or whether the psoriasis is president over large portions of the skin on the body, the psoriasis is caused by a systemic disorder that this therapy treats. And so again, now for the first time, we can go in and talk to dermatologists about all those patients that are in need of something better than what they have otherwise had available. So another exciting example of our novel first-in-class opportunity for us in the information space.

And Bristol has a drug that's under review for moderate to severe psoriasis. Can you help us understand where you think Otezla's competitive differentiation would be versus that asset? And what steps do you think you would take on your side to position Otezla well here?

Yes. Well, I mean, for starters, Otezla is on the market. Otezla is a product that's been approved globally, been used by a large number of patients over many years. So it's a product for which there's an accumulated understanding of the safety and the benefit profile. And any product that's still in clinical development and under review by regulators suffers by comparison from that fact. So competitive products don't have the benefit of years of experience, and so we'll have to see. There are been some safety concerns about products that are in related areas to that product. And we'll just have to see if it gets approved with what kind of label and what profile. And I'm sure physicians and patients will want to understand the safety profile that emerges over time. But fundamentally, we're focused on what we can represent or what we can offer to patients, and we can offer the data that are represented in the package behind Otezla, which is a very strong package of efficacy and safety for -- again, for the psoriasis patients.

Great. And then just jumping over to oncology here. So LUMAKRAS, could you touch on how that launch is progressing, and where we are with KRAS testing and the feedback from the physician and patient population here?

Yes. I mean LUMAKRAS has been a really exciting story for us. Exciting because how quickly it moved through the clinic. I talked about the last decade, one of the things we did about a decade ago is, we said how fast could we go from start to finish. We had a truly breakthrough product, and we wanted to eliminate all downtime in the development of the molecule, and we characterize what we called our Fastlane process. And when we saw that LUMAKRAS looked like it worked, which is to say, was able to bind a particular part of a protein that had eluded scientists for 4 decades, we said, gosh, this looks like the molecule that we've all been waiting for, let's see how quickly we can advance it through our plan and get it in the hands of patients who need it. We were able to take something like 4, 4.5 years out of our normal cycle time for developing the molecule. And that reflects, again, our determination to get that novel medicine in the hands of patients, but it also reflects the recognition from physicians that these patients desperately needed something because for decades, there's been nothing available for them. So the reception to the product in the marketplace has been great. The team has done a terrific job in executing the launch. So we're really happy with that. So far, again, all signals are very positive. We are exploring it in 11 different combination settings. So we'll be generating data and learning from that data, what's the right way to use this to try and keep patients from having their disease progress. Clearly, the focus is on lung cancer, but as I've already indicated in my earlier remarks, based on the data that we generated for that product in combination with our Vectibix therapy, we want to explore that in colorectal cancer as well. And as you're aware, we're looking at other solid tumors in addition. So we think that LUMAKRAS is going to play a role in lung cancer and other disease settings as well. We're very excited about it.

Is there any additional color you can give us on the cadence of when we could get these data reads on the combinations or where...

Nothing new to report since we've said quite a bit about LUMAKRAS in all of our public settings over the course of last year, and there's nothing new. We're on track. The studies are enrolling. The experience with the medicine is accumulating. As I said, we're very encouraged by everything we see.

And also, I'm just curious, we've talked about the BiTE technology. How do you think about T-cell therapies more broadly as you think about CAR Ts and TCRs? And what we're seeing generally is that an area of interest as well?

Well, we've had a number of collaborations in the CAR T area, and we're the world's leader, as you know, in T-cell redirected -- T-cell-directed license in the cancer setting. So our BLINCYTO molecule is approved and has demonstrated overall survival advantage versus standard of care. And actually, over the course of the last year, some very exciting data were developed for BLINCYTO in acute lymphoblastic leukemia. So that's a molecule that we and I think the clinical community are steadily growing in confidence around, and that clearly is a medicine that has the potential to change how we think about acute lymphoblastic leukemia going forward. So we're very excited about that. But in addition to what it can represent for those leukemia patients, it underscores our confidence and belief in the power of being able to harness the T-cells in the fight against cancer. So we've shown in that liquid tumor setting that it works. We've shown it works and that we can achieve overall survival advantage. We can manage those patients in a way that they weren't previously able to be managed. So again, really exciting. The big question has been, can we do that in solid tumors? Or is there something about solid tumors that just makes it more difficult than liquid tumors? And we've said over the course of the last year, based on the data that we see in prostate cancer and in lung cancer, for example, that we are increasingly confident that we're having a real biologic effect that's meaningful in solid tumors. So we've said clearly, when it comes to small cell lung cancer, which is a disease where there's been very little progress now over many decades that we like the data we're seeing in advanced small cell lung cancer patients who have been heavily pretreated, and we're looking forward to moving as quickly as we can to put together a registration-enabling data for that disease setting. So again, very excited about the prospect of being able to use that technology in solid tumors, small cell lung cancer being a prime example. In addition, in prostate cancer, we've said that we have 3 T-cell-engaging molecules that look very promising. So we've demonstrated with PSMA that we can dramatically reduce PSA, which is a biomarker for prostate cancer. We've revealed data there to explain why we're excited about, again, trying to move that target forward. We have 2 different ways of going about it now. We have our traditional canonical BiTE technology as well as the heavy chain antibody technology that we acquired with TeneoBio. And we have a third molecule, which is directed at a different tumor marker called STEAP1. Again, the early data that we're seeing there encourage us to move as fast as possible for the benefit of patients. So those are the two that we'll see. We'll know a lot more about those in 2022. But it's not just Amgen, I think the field in general is anxious to see whether redirected license or T-cell engaging therapies can be successful across a range of tumors, and we're optimistic, but we need more data in order to convince you and everybody else.

And then on biosimilars, two questions here. One is, why is Amgen so well positioned to capitalize in this area? And secondly, you're annualizing about $2 billion in sales in 2021 with expectations of doubling that by the end of the decade. What assumptions around durability or biosimilar entrants are incorporated into that number?

Well, let me start with the why has this worked for us. And I say, it has worked for us -- again, we think we are earning returns here for our shareholders that are well above our cost of capital. And so we think we're going to look back on this and say, gosh, that was an effective use of capital for our share. What are we doing? We're capitalizing on 4 decades of experience in designing molecules, in manufacturing, these large molecules, proteins, and ensuring that we have a reliable quality supply of them. So the fundamentals of manufacturing biosimilars aren't simple, right? The process of designing them to actually be biosimilar aren't simple, and that's why you've seen many competitors stumble either in their time lines or even actually getting molecules approved. And then you've seen -- in addition, you've seen competitors stumble and not be able to supply biosimilars once they've been approved. So there's a first hurdle to jump, which is getting these molecules registered in a timely way. And then there's a second hurdle to jump, which is making them available for the payers, the buyers, those who are seeking to procure them. And we've done so far, touch wood, we've been very effective in both clearing the first hurdle, which is establishing biosimilarity and getting them made in a reliable way and then being able to safely, reliably produce some of the quantities required. So we're the leading share of AMGEVITA in international markets today, which is the biosimilar for HUMIRA. We're making an awful lot of that protein, and we're making an awful lot of Avastin, for example and we're making an awful lot of the other biosimilar molecules. And we're doing it successfully, safely and we're using the same facilities for that purpose that we use for our innovative medicines. So we're not treating it as a separate business, a step child that's not getting the same kind of attention from a process development or quality or manufacturing rigor that are innovative products again. The other thing that we're doing, which is a little different, Salveen, is we're saying we want our teams that are doing contract negotiations and that are out there advocating for innovative products to be able to offer the biosimilar products to their customer base. So we can go into customers and say, here are the innovative proprietary Amgen oncology drugs that we want to talk to you about and here are the biosimilars that we can provide to you as well. And so far, that has worked well for us. Similarly, in the inflammation space, we've been able to talk internationally, and in particular, we've been able to talk about more than just AMGEVITA. And over time, we expect that -- In fact, that we have Enbrel and Otezla and Tezspire and other inflammatory medicines, we have MG451 coming and other anti-inflammation medicines coming. We think that we will benefit from being able to have more than just innovative and not just similar, but to bring the 2 together. So again, it's working well for us. And when we look at the next decade, we think the sequence of launches that we have lined up will enable us to continue to grow this franchise for our investors. So again, we've said, Salveen, that where we have new products and new markets, we expect those launches to drive growth. So 2022, we don't have a big new markets or big new launches planned in 2022. In 2023, we obviously do. And then in the sequence of years after, beginning in 2023, we will have other launches as well. So we think this will steadily grow our business through the decade.

Maybe you could just touch on the pipeline for a little bit as well. What -- you're advancing OX40 into pivotal trials. Could you briefly just walk us through what attracted you to that asset and how you think about being positioned long term?

Yes. So again, consistent with our earlier discussions, Salveen. The anti-OX40 molecule that we licensed from Kyowa Kirin, our long-standing partners in Japan. It's novel, first-in-class, it addresses an important unmet medical need in atopic dermatitis. And it looks like, again, the therapy based on the Phase II data that we've seen, it looks like a therapy that will have a very attractive efficacy and safety profile. So we're rapidly advancing that with our partner into pivotal development and excited about generating those data and being in a position to launch that in the second half of the decade. And I can't recall whether we've said specifically when we expect to launch it, but my point is that's a molecule that will contribute. If we're thinking about growth from Amgen, that's a molecule that will contribute in the back half of the decade rather than in the front half of the decade. But it looks -- again, looks very attractive, sits well in our implant portfolios as well in our dermatology portfolio, and it's clearly strategic for us. It clearly matches the description of the kinds of things that we say we want to allocate capital to.

And what is your vision for incorporation of deCODE genetics into your research platform?

Well, first, I'd say, it's not just our research platform, but our development platform as well. And so we are very excited about the position that we've built in human genetics. And again, one of the reasons why we want to have some time with investors in February is to be able to lay out the pieces that we've assembled in genetics because when we acquired deCODE in 2012, we said 2 things. First, we said, we think that changes in sequencing technology will enable us to do this in a scale and a pace and at a cost that's very different from what was prevalent or what was possible in 2021, that happened. In fact, it happened much more quickly even than we had assumed. So by 2014, next-generation sequencing technologies have made it possible for us to do what we had dreamed about doing. So the idea was, we wanted to start with the world's leading human genetics organization, which was deCODE, which for a whole host of very interesting reasons represents a really important laboratory for understanding how genetic variation leads to disease or wellness in the population. But we knew when we acquired Decode that we had to do 2 things. First, we had to significantly expand the population of people whose genomes we were studying. We're talking about studying the level of single nucleotide to whole genome sequencing. And we knew that, that had to be possible through improvements in the engineering, the next-generation sequencing and also we need to bring in new patient populations. And we have substantially expanded the patient population since taking ownership of deCODE, and that's part of what we can talk about when we're together in February, but we have been, for example, central to the sequencing of the 500,000-plus people that are part of the U.K. Biobank. So we're able now to add that diversity that comes from that population to what we already had in Iceland. We've added substantially to human diversity in our data sets by collaborating with Intermountain in the United States. And we've done a variety of other collaborations, which again, in aggregate, enable us to see human diversity at the level of single nucleotide that we think is unmatched -- certainly unmatched in our industry, maybe unmatched anywhere in the world from a scientific perspective. And our belief is -- just to take you back the first principle, our belief is that to understand why humans developed disease and understand why medicines work in helping to improve or prevent those diseases, you have to be able to understand it at the molecular level. And the molecular level that we wanted to understand that is that which is created by the genome. So we wanted to be able to study this at the level of first principle, and that's what we are increasingly able to do. Now I said development as well. So not just discovery, not just for new target discovery, but it's also for being able to better understand how our medicines are going to work in different subsets of patient populations. And increasingly, we are able to use our genomics and our proteomics and our other human beta to better understand how to design clinical trials and to tailor molecules for subsets of patients that are going to get the biggest bang for their buck from those therapies. So when you think about something like LP(a), that, I think, will be an example where we're able to show that we can through human data, identify those patients that really are at greatest risk and therefore, most likely to benefit from intervention. So we think that this is an inevitable trend that this will continue to spread across the industry will continue to be an important part of what we do. And a large fraction of our pipeline, clinical pipeline is validated or in one way or another supported by the work that we're doing in human genetics.

And a last question here. What are you most excited about in your pipeline?

Well, obviously, there's a lot going on in the pipeline. I think the cancer portfolio right now is very exciting, and I'm hopeful that we can demonstrate some profound benefit with our BiTEs in solid tumors. And I say that because, again, that's been something of a holy grail of getting T-cells to engage reliably in the fight against these tumors and particularly, tumors like small-cell lung cancer. We just been so little progress or tumors like prostate cancer, where for whatever reason, checkpoint inhibition hasn't fulfilled its promise yet. So to the extent that we're able to do that, I think that will represent a major breakthrough. And I think we're seeing -- by major breakthrough, I think we're seeing that in acute lymphoblastic leukemia now. And so again, I'm hopeful. But there are lots of areas inside the pipeline where I think we have a chance to make a big difference for patients that are suffering from really tough challenges. So I'm excited for test fire to get out this year and for patients that live under the pressure of having to worry about their asthma, for example, to begin benefiting from that. But there are a lot of things actually that we're excited about over the next decade.

Great. Well, with that, Bob, thank you so much. Really appreciate your time today.

Okay, Salveen, thank you. Happy New Year.

You, too. Happy New Year.